The initial public offering class of 2014 was surely an elite group. 275 companies raised a combined $85 billion, the highest amount since 2000. High-profile companies such as Alibaba Group Holding Ltd. (NYSE: BABA) led the pack, scoring a sharp 38% first-day gain. Yet other notable IPOs that managed to generate impressive first-day gains eventually fell out of favor. Roughly six months ago, I cautioned against chasing shares of LendingClub Corp. (NYSE: LC), after shares had surged roughly 60% from the IPO price. “Investors may want to consider waiting for a better entry point as enthusiasm wanes,” I noted then. Read More

The initial public offering class of 2014 was surely an elite group. 275 companies raised a combined $85 billion, the highest amount since 2000. High-profile companies such as Alibaba Group Holding Ltd. (NYSE: BABA) led the pack, scoring a sharp 38% first-day gain. Yet other notable IPOs that managed to generate impressive first-day gains eventually fell out of favor. Roughly six months ago, I cautioned against chasing shares of LendingClub Corp. (NYSE: LC), after shares had surged roughly 60% from the IPO price. “Investors may want to consider waiting for a better entry point as enthusiasm wanes,” I noted then. Still, I have been keeping a close eye on the shares, as this banking game-changer held vast long-term potential. Although the stock has fallen nearly 40% from its post-IPO high, several deals subsequently signed with powerhouses like Google, Inc. (Nasdaq: GOOG) and Alibaba should boost growth over the next several years. Revenue is already expected to grow 85% this year and the company’s industry — peer-to-peer lending — is projected to grow 40% a year for the next decade. The Future Of Banking Is Online Peer lending has gone from being an internet curiosity to… Read More

It’s an old investing axiom that that many of the companies with the highest growth potential are private and thus out of reach for investors of the public markets. Venture Capital (VC) firms are the ones making investments in early stage growth companies, but it usually takes big bucks to get in on the action. GSV Capital Corp. (Nasdaq: GSVC) is a publicly traded VC that allows regular investors to invest in hyper-growth companies. Better yet, the firm’s stock trades at a discount and has several potential catalysts that could send shares higher. In early-stage investing, there are going to… Read More

It’s an old investing axiom that that many of the companies with the highest growth potential are private and thus out of reach for investors of the public markets. Venture Capital (VC) firms are the ones making investments in early stage growth companies, but it usually takes big bucks to get in on the action. GSV Capital Corp. (Nasdaq: GSVC) is a publicly traded VC that allows regular investors to invest in hyper-growth companies. Better yet, the firm’s stock trades at a discount and has several potential catalysts that could send shares higher. In early-stage investing, there are going to be hits and misses, that’s just the nature of the beast. However, GSV has shown it has a knack for picking winners. It invested in Facebook, Inc. (Nasdaq: FB) and Twitter, Inc. (NYSE: TWTR) prior to their initial public offerings (IPOs). This is a company that’s done very well for investors, steadily growing its net asset value per share over the last three years. Despite the company steadily growing assets per share, the stock price hasn’t followed suit. Despite trading for a slight premium to net asset value during the first few years of its existence, it now… Read More

Over the last decade, we’ve published thousands of in-depth research reports. Everything from high dividend payers, game-changing innovations, top stocks in emerging markets — you name it, we’ve told you how to profit from it. But the research I’m going to tell you about today stands head and shoulders above everything else we’ve ever done. In fact, it ranks as our single most popular report of all time. Each year, we update the report with our team’s most recent findings. And frankly, I think what we’ve come up… Read More

Over the last decade, we’ve published thousands of in-depth research reports. Everything from high dividend payers, game-changing innovations, top stocks in emerging markets — you name it, we’ve told you how to profit from it. But the research I’m going to tell you about today stands head and shoulders above everything else we’ve ever done. In fact, it ranks as our single most popular report of all time. Each year, we update the report with our team’s most recent findings. And frankly, I think what we’ve come up with this year represents a major breakthrough. We call it: “The 10 Stocks To Own For The Rest Of Your Life” #-ad_banner-#You’ve probably heard us talk about the idea of “Forever Stocks” before. Simply put, these are solid companies that we think you can feel confident buying and holding onto for years, even decades. And we believe they will continue rewarding investors for years on end… crushing the market over the long run. They’re the kinds of stocks you’d ideally want to own forever. Owning solid, stable companies… Read More

For those that don’t know, in addition to being the Chief Strategist behind StreetAuthority’s Stock of the Month newsletter, I’m also an avid poker player. I first picked up poker about a decade ago, well before it was all over television. But I wasn’t after the big jackpot like most of the people who’ve taken up the game. I simply thought poker could make me a better investor. Poker has a lot in common with investing — and no, I’m not talking about luck. In poker, you get only one move at a time. Read More

For those that don’t know, in addition to being the Chief Strategist behind StreetAuthority’s Stock of the Month newsletter, I’m also an avid poker player. I first picked up poker about a decade ago, well before it was all over television. But I wasn’t after the big jackpot like most of the people who’ve taken up the game. I simply thought poker could make me a better investor. Poker has a lot in common with investing — and no, I’m not talking about luck. In poker, you get only one move at a time. You don’t get the luxury of making your moves in a vacuum or without consideration for the dynamics other players bring to the game. It also takes patience and foresight to win consistently. And sometimes, it’s not about winning, but simply knowing when to cut your losses. When put in those terms, it’s easy to see how playing poker can make you a better investor. #-ad_banner-#It’s easy to spot an inexperienced player at a poker table. He’ll be the guy who plays nearly every hand. He’s probably grown up watching televised poker, where folded… Read More

Ask five investors to define a value stock, and you’ll get five different answers. Some like to use the price-to-earnings ratio, others prefer stocks that trade at a low price in relation to book value, while others deploy complex multi-variable models to find deeply hidden bargain stocks. To my mind, the best approach lies in free cash flow, which is operating cash flow minus capital expenditures. It’s the only tried and true way to know that a company is generating the cash to buy back stock, pay dividends, reduce debt or make acquisitions. Looking at companies in the S&P 500,… Read More

Ask five investors to define a value stock, and you’ll get five different answers. Some like to use the price-to-earnings ratio, others prefer stocks that trade at a low price in relation to book value, while others deploy complex multi-variable models to find deeply hidden bargain stocks. To my mind, the best approach lies in free cash flow, which is operating cash flow minus capital expenditures. It’s the only tried and true way to know that a company is generating the cash to buy back stock, pay dividends, reduce debt or make acquisitions. Looking at companies in the S&P 500, the average stock is valued at around 25 times trailing free cash flow. Said another way, such a value suggests a 4% free cash flow yield (100/25=4). If you can find good companies with a free cash flow yield in excess of 6%, then you are looking at a certifiable bargain. If you are in search of S&P 500 stock with a free cash flow yield in excess of 10%, then you have just three choices. Company TTM Free Cash Flow ($mill.) Market Cap ($mill.) Free Cash Flow Yield AGL Resources (GAS) $871 $6,030 14.4% Genworth Financial (GNW) $624 $3,934… Read More

When it comes to insider activities, actions speak louder than words. Too often, we see a company issue a bullish outlook while company executives and directors are unloading large blocks of stock. That kind of cognitive dissonance creates a big red flag. Yet when insiders speak bullishly and choose to buy rather than sell, the signal to investors is crystal clear.  Here are some companies that are noting bullish prospects, right at a time when insiders are getting more skin in the game.  (All data supplied by insiderinsights.com.) General Electric Co. (NYSE: GE) Insiders tend to spend a few… Read More

When it comes to insider activities, actions speak louder than words. Too often, we see a company issue a bullish outlook while company executives and directors are unloading large blocks of stock. That kind of cognitive dissonance creates a big red flag. Yet when insiders speak bullishly and choose to buy rather than sell, the signal to investors is crystal clear.  Here are some companies that are noting bullish prospects, right at a time when insiders are getting more skin in the game.  (All data supplied by insiderinsights.com.) General Electric Co. (NYSE: GE) Insiders tend to spend a few hundred thousand dollars when they are feeling bullish. Yet the directors at this conglomerate are taking much bolder action. William Beattie, a company director, acquired $20 million in stock in the open market in February.  #-ad_banner-#In early April, GE unveiled a far-reaching restructuring that would see the company exit the capital markets business and focus more squarely on the industrial side of the business. My colleague Chris Walczak recently predicted that “the long-term impact of divesting GE Capital’s assets will be a huge win for shareholders.” Insiders agree. Since April 20, four other directors have acquired another collective $2 million… Read More

Great opportunities in the stock market don’t come around too often and in those rare instance, they usually don’t last long. For example,  I highlighted three appealing real estate investment trusts a few months ago. My favorite industry pick at the time, Omega Healthcare Investors, Inc. (NYSE: OHI), has become an even more appealing value since then.   OHI is a pure-play REIT that focuses on skilled nursing facilities. A number of unique events in the last quarter have made investors uncertain about the stock and that uncertainty is contributing to the sell-off. First, Omega Healthcare… Read More

Great opportunities in the stock market don’t come around too often and in those rare instance, they usually don’t last long. For example,  I highlighted three appealing real estate investment trusts a few months ago. My favorite industry pick at the time, Omega Healthcare Investors, Inc. (NYSE: OHI), has become an even more appealing value since then.   OHI is a pure-play REIT that focuses on skilled nursing facilities. A number of unique events in the last quarter have made investors uncertain about the stock and that uncertainty is contributing to the sell-off. First, Omega Healthcare recently closed on the acquisition of Aviv REIT, announced last year. As partial payment, the REIT issued 9.5 million shares of common stock in February, and investors generally don’t like being diluted. However, with the purchase of Aviv, Omega Healthcare becomes the dominant player in skilled nursing facilities (SNF). Source: Company Presentation Omega Healthcare also used the proceeds of an equity offering to pay down debt and now has ample capital and credit to continue to add to its portfolio. The company notes that 87% of the $100 billion skilled nursing facility market is still privately-owned. As… Read More

More than a year after it was first proposed, the $45 billion  merger between Comcast Corp. (Nasdaq: CMCSA) and Time Warner Cable, Inc. (NYSE: TWC) was canceled last month. The deal would have been the answer to an aging cable communications industry, creating a giant with sufficient scale to withstand the slow decline of cable and satellite subscriptions. It turns out, the giant may have been too large for regulators to allow, and Comcast pulled its bid before Washington could kill it. #-ad_banner-#But it won’t stop the wave of industry consolidation. That’s because of rising competition from firms like Netflix,… Read More

More than a year after it was first proposed, the $45 billion  merger between Comcast Corp. (Nasdaq: CMCSA) and Time Warner Cable, Inc. (NYSE: TWC) was canceled last month. The deal would have been the answer to an aging cable communications industry, creating a giant with sufficient scale to withstand the slow decline of cable and satellite subscriptions. It turns out, the giant may have been too large for regulators to allow, and Comcast pulled its bid before Washington could kill it. #-ad_banner-#But it won’t stop the wave of industry consolidation. That’s because of rising competition from firms like Netflix, Inc. (Nasdaq: NFLX) and others, which has led to a 13% drop in live television viewership over the past year, according to Nomura Research.   Broadband Is The Future Of The Industry Regulators made it no secret that control over the broadband market was a big factor in their expected disapproval of the proposed Comcast-TWC deal. Comcast served 21 million internet customers and TWC had 11.4 million customers at the end of the first quarter. The combined entity  would have controlled 55% of the domestic broadband market, along with 30% of the cable TV market. (Though analysts had been comparing… Read More

Forty thousand-plus people flocked to Omaha, Neb., the first weekend of May for Berkshire Hathaway’s (NYSE: BRK-B) 50th-anniversary shareholder meeting. Along with many of my peers, I always spend a good deal of time dissecting what Warren Buffett says at these annual meetings. And one of the things I gleaned from this year’s event is that the Oracle of Omaha values stocks based on dynamic variables. Buffett appeared on CNBC’s “Squawk Box” the Monday after the meeting. When asked about whether stocks are overvalued, he told co-anchor Becky Quick that stocks look cheap as long… Read More

Forty thousand-plus people flocked to Omaha, Neb., the first weekend of May for Berkshire Hathaway’s (NYSE: BRK-B) 50th-anniversary shareholder meeting. Along with many of my peers, I always spend a good deal of time dissecting what Warren Buffett says at these annual meetings. And one of the things I gleaned from this year’s event is that the Oracle of Omaha values stocks based on dynamic variables. Buffett appeared on CNBC’s “Squawk Box” the Monday after the meeting. When asked about whether stocks are overvalued, he told co-anchor Becky Quick that stocks look cheap as long as interest rates remain low. He added, “If interest rates normalize, we’ll look back and say stocks weren’t so cheap.” This indicates Buffett values stocks based partly on interest rates. It also signals he is willing to pay more for a company when rates are low, and that companies deserve lower valuations when rates rise. #-ad_banner-#​Like Buffett, I also use dynamic variables when I value stocks. And my favorite dynamic variable is the PEG ratio.  The PEG ratio compares the price-to-earnings (P/E) ratio to the growth rate of earnings per share (EPS). A stock is considered fairly valued… Read More

When Applied Materials, Inc. (Nasdaq: AMAT), the world’s largest semiconductor equipment manufacturer announced plans in 2011 to acquire Varian Semi for more than $4 billion, many industry participants cried foul. After all, AMAT, as the company is known, was already so dominant in the industry that it seemed unfair for it to grow yet larger. So when AMAT announced in 2014 that it planned to absorb rival Tokyo Electron, for more than $9 billion, competitors pleaded with regulators to nix the deal. Six months later, those regulators indeed expressed serious anti-trust concerns, and AMAT’s management has quietly canceled its proposed… Read More

When Applied Materials, Inc. (Nasdaq: AMAT), the world’s largest semiconductor equipment manufacturer announced plans in 2011 to acquire Varian Semi for more than $4 billion, many industry participants cried foul. After all, AMAT, as the company is known, was already so dominant in the industry that it seemed unfair for it to grow yet larger. So when AMAT announced in 2014 that it planned to absorb rival Tokyo Electron, for more than $9 billion, competitors pleaded with regulators to nix the deal. Six months later, those regulators indeed expressed serious anti-trust concerns, and AMAT’s management has quietly canceled its proposed merger. Simply put, with roughly $10 billion in annual revenues, this company is now too large to make any more deals. And that’s a good thing. Management has a new plan, which could fuel 40% upside for this slumping stock. In a moment, I’ll explain the perfect entry point for this stock. One hint: it’s coming very soon. Go-It-Alone Makes Sense While management likely wishes the Tokyo Electron deal could have been consummated, not all investors think it made complete sense. Tokyo Electron has seen recent market share losses, and AMAT’s core growth rate would likely have dimmed once… Read More