When it comes to investing, many moves allow you to play offense or defense. But rarely can you play both angles.  Yet share buybacks hold that unique role. In the current bull market, companies that have been buying back stock have outperformed the pack, as the PowerShares Buyback Achievers ETF (NYSE: PKW) is up around 150% over the past five years, 50 points ahead of the S&P 500 Index.   Yet if the market heads south, buyback plans still have great value. They can be seen as havens of value because the companies conducting… Read More

When it comes to investing, many moves allow you to play offense or defense. But rarely can you play both angles.  Yet share buybacks hold that unique role. In the current bull market, companies that have been buying back stock have outperformed the pack, as the PowerShares Buyback Achievers ETF (NYSE: PKW) is up around 150% over the past five years, 50 points ahead of the S&P 500 Index.   Yet if the market heads south, buyback plans still have great value. They can be seen as havens of value because the companies conducting them usually have very strong balance sheets. And even if they do slump in value when the market sinks, the buyback plans are able to absorb even more stock. That can have an outsized impact on per-share profits.  In fact, the role that buybacks are playing in EPS growth is more significant than you realize: According to a J.P. Morgan study, a significant portion of EPS growth among S&P companies is attributable to buybacks.  I’ve been tracking the buyback activity for the second quarter, and compiled a short list of companies that have just… Read More

As an analyst who combines technical and fundamental analysis, I light up when I see a stock with solid fundamental growth on the verge of a technical breakout. That’s why I’m excited about the world’s largest coffee chain, Starbucks (Nasdaq: SBUX). A strong technical picture is backed by an upbeat revenue and earnings outlook and could provide double-digit returns. #-ad_banner-#Every week, Starbucks serves over 70 million customers in more than 21,000 stores in 65 countries around the world. Its global appeal, coupled with expanding food and beverage offerings, helped the company deliver better-than-expected third-quarter… Read More

As an analyst who combines technical and fundamental analysis, I light up when I see a stock with solid fundamental growth on the verge of a technical breakout. That’s why I’m excited about the world’s largest coffee chain, Starbucks (Nasdaq: SBUX). A strong technical picture is backed by an upbeat revenue and earnings outlook and could provide double-digit returns. #-ad_banner-#Every week, Starbucks serves over 70 million customers in more than 21,000 stores in 65 countries around the world. Its global appeal, coupled with expanding food and beverage offerings, helped the company deliver better-than-expected third-quarter results. Growth in the Asia-Pacific segment was the company’s strongest, with revenue in the region increasing 23% from a year ago. Europe, the Middle East and Africa (EMEA) are dramatically improving as well, rising from 1% sales growth in 2013 to a 13% increase during the quarter. The Americas saw a 10% rise in revenue from the year-earlier quarter. In total, Starbucks brought in $4.2 billion in revenue for the quarter, a solid 11% increase from the year-ago period. Starbucks’ worldwide store count is growing quickly. In the past year, it has opened the… Read More

Advertising is a business that’s been around for a long time. It’s perhaps become better known due to the hit show “Mad Men,” which focuses on the world of advertising in the 1960s. Back then, ad agencies made a great deal of money as companies rushed to increase their exposure to television, the hottest medium of the day. Today, the hottest medium is the Internet — and in particular, social media. But television still brings in the big bucks for ad agencies. However, the Internet has forced many ad agencies to adapt to changing times. One way that they have… Read More

Advertising is a business that’s been around for a long time. It’s perhaps become better known due to the hit show “Mad Men,” which focuses on the world of advertising in the 1960s. Back then, ad agencies made a great deal of money as companies rushed to increase their exposure to television, the hottest medium of the day. Today, the hottest medium is the Internet — and in particular, social media. But television still brings in the big bucks for ad agencies. However, the Internet has forced many ad agencies to adapt to changing times. One way that they have gone about this is through mergers. Back in the 1960s, the ad business was much more competitive and there were many competitors. Over the years, many sold out, leaving just a few big players left. (My colleague Adam Fischbaum recently profiled one such agency.) One ad company still standing is the Interpublic Group of Cos. (NYSE: IPG). The company was founded in 1902 and was known as McKann-Erickson before 1961. However, if billionaire Paul Singer gets his way, Interpublic Group won’t be standing alone for long.  He has amassed a 6.7% stake in the advertising giant and is pushing for… Read More

You may have noticed a consistent theme here at StreetAuthority in recent months: We love emerging markets.  My colleague Austin Hatley recently noted the strong gains investors are reaping this year with this asset class, and I weighed in on how well emerging market stocks have done over many decades. Yet here’s a curious disconnect: Emerging markets represent 33% of all global trading activity, yet few investors have nearly that much invested in emerging-market stocks (and bonds). That figure doesn’t likely exceed 5% or 10% for most of you. But these markets have such great long-term economic growth prospects —… Read More

You may have noticed a consistent theme here at StreetAuthority in recent months: We love emerging markets.  My colleague Austin Hatley recently noted the strong gains investors are reaping this year with this asset class, and I weighed in on how well emerging market stocks have done over many decades. Yet here’s a curious disconnect: Emerging markets represent 33% of all global trading activity, yet few investors have nearly that much invested in emerging-market stocks (and bonds). That figure doesn’t likely exceed 5% or 10% for most of you. But these markets have such great long-term economic growth prospects — relative to the U.S. and Europe — that you can’t afford to ignore them anymore. To be sure, it pays to have a little expertise when navigating distant markets. Back in April, for example, I recommended a pair of excellent mutual funds. Trouble is, they carry expense ratios of 1.50% and 1.51%, respectively. That’s like paying a 1.5% annual tax every year, just for the privilege of owning them. Of course, investors can save money by investing through exchange-traded funds (ETFs), many of which carry expense ratios in the 0.40% to 0.90% range. But you can do even better than… Read More

A sideways stock chart can be deceiving. Just because a stock is directionless doesn’t mean that a company is struggling to improve results. It’s often simply the case that investors are waiting until the stock becomes more timely.  #-ad_banner-#For banking giant Citigroup (NYSE: C), that time is now. Solid second-quarter results imply even better days to come in future quarters. I took a look at Citigroup last week and noted that the bank trades for less than 75% of tangible book value. In fact it hasn’t traded above book value in since 2010. As a point of reference, rival… Read More

A sideways stock chart can be deceiving. Just because a stock is directionless doesn’t mean that a company is struggling to improve results. It’s often simply the case that investors are waiting until the stock becomes more timely.  #-ad_banner-#For banking giant Citigroup (NYSE: C), that time is now. Solid second-quarter results imply even better days to come in future quarters. I took a look at Citigroup last week and noted that the bank trades for less than 75% of tangible book value. In fact it hasn’t traded above book value in since 2010. As a point of reference, rival Wells Fargo (NYSE: WFC) for nearly twice tangible book value. Citigroup’s pariah status among investors stems from a set of lingering problems. First, like all major U.S. banks, it has seen a drop-off in its trading and banking revenues, in part due to the crackdown associated with Dodd-Frank regulations. Second, its industry-leading emerging-markets exposure is seen as more of a liability than a virtue these days, especially as concerns about China hang over many other Asian economies as well. Third, a series of charges have led to very choppy quarterly results, and investors are clamoring for more predictability. On a… Read More

A “follow-up” market crash could be coming. I don’t mean to scare you, but it’s only a matter of time… The past two happened like clockwork — seven years apart. One happened just before 2001, after the dot-com burst. The other came with a vengeance in 2008, right after the housing collapse. It’s getting close to another seven years… so what about this time? Are we headed for a “follow-up” market crash? The very idea of losing more than half of your invested wealth in a market downturn is daunting. Market analysts claim to know exactly where the market is… Read More

A “follow-up” market crash could be coming. I don’t mean to scare you, but it’s only a matter of time… The past two happened like clockwork — seven years apart. One happened just before 2001, after the dot-com burst. The other came with a vengeance in 2008, right after the housing collapse. It’s getting close to another seven years… so what about this time? Are we headed for a “follow-up” market crash? The very idea of losing more than half of your invested wealth in a market downturn is daunting. Market analysts claim to know exactly where the market is going, and act like they know exactly when to buy or sell stocks. But how many analysts do you remember saying months before the 2008 financial crisis that the market was going to go down by 57%? Can you name one? And look at mutual fund managers’ records. According to Standard and Poor’s, just 14% of actively managed mutual funds have beaten the market over the past three years. The other 86% of them fail at beating the market, yet we pay them millions in fees every year and trust them to protect and grow our hard-earned money. Did even… Read More

Most investors have never heard of Central Securities Corp. (NYSE: CET). The investment firm was launched on Oct. 1, 1929, just weeks before an epic stock market crash — but it survived that era and has made it intact for more than 80 years, albeit in a low-key fashion. #-ad_banner-#Rather than offer a range of mutual funds, CET offers just one closed-end fund. Yet it’s the kind of fund that investors should always seek out: The stated value of its holdings is worth a lot more than the actual trading price. Said another way, this closed-end fund owns $28.20 a… Read More

Most investors have never heard of Central Securities Corp. (NYSE: CET). The investment firm was launched on Oct. 1, 1929, just weeks before an epic stock market crash — but it survived that era and has made it intact for more than 80 years, albeit in a low-key fashion. #-ad_banner-#Rather than offer a range of mutual funds, CET offers just one closed-end fund. Yet it’s the kind of fund that investors should always seek out: The stated value of its holdings is worth a lot more than the actual trading price. Said another way, this closed-end fund owns $28.20 a share worth of assets, but trades for less than $24. CET has a solid portfolio, holding companies such as Intel (Nasdaq: INTC), Citigroup (NYSE: C) and the Bank of New York Mellon (NYSE: BK). The management fee is 0.77%, which is tolerable when you consider the $4-a-share discount to net asset value (NAV). And this isn’t the only fund trading at a greater than 10% discount to NAV. I’ve dug through the Morningstar database, weeding out closed-end funds that hold little appeal, and found a few more of the discount-to-NAV gems. 1. Ellsworth Fund (NYSE: ECF )  … Read More

Two-in-five. That’s the number of mutual fund managers that have actually beaten the market over the past five years, according to the S&P Indices Versus Actives Funds Scorecard. Why, you might ask, do these “experts” so often fail to beat the market? Reasons vary widely, but there’s one simple thing these managers often fail to account for… a stock’s “Total Yield.” #-ad_banner-#And though there’s ample evidence to prove that this investing strategy beats the market — you’ll hardly ever hear about it in the mainstream financial press. I’ve been talking about the benefits of a Total Yield strategy for months… Read More

Two-in-five. That’s the number of mutual fund managers that have actually beaten the market over the past five years, according to the S&P Indices Versus Actives Funds Scorecard. Why, you might ask, do these “experts” so often fail to beat the market? Reasons vary widely, but there’s one simple thing these managers often fail to account for… a stock’s “Total Yield.” #-ad_banner-#And though there’s ample evidence to prove that this investing strategy beats the market — you’ll hardly ever hear about it in the mainstream financial press. I’ve been talking about the benefits of a Total Yield strategy for months now. In short, the strategy looks at all the ways a company rewards shareholders. It not only accounts for dividends, but also two other payment metrics: stock buybacks and debt reduction. (I talked about the importance of each of these “extra” payment methods in detail here and here.) It’s simple. Investing in companies that use all three of these shareholder-friendly practices can mean the difference between merely keeping pace with the market and beating it. To show you what I mean, I’d like to reveal one of my favorite Total Yield stocks. Since I recommended it to readers of my… Read More

Recent claims that stocks have reached the euphoria stage probably seem a bit out of touch to a lot of investors. While the market is at record highs and the bulls have mostly had their way for five or six years, I suspect many — maybe even most — investors are anything but euphoric. #-ad_banner-#That’s because there’s nothing to warrant euphoria — and investors know it. For instance, they’re well aware that not a whole lot has been done about the issues underlying the 2008 financial crisis. And the current recovery, while certainly a step up, is a big disappointment… Read More

Recent claims that stocks have reached the euphoria stage probably seem a bit out of touch to a lot of investors. While the market is at record highs and the bulls have mostly had their way for five or six years, I suspect many — maybe even most — investors are anything but euphoric. #-ad_banner-#That’s because there’s nothing to warrant euphoria — and investors know it. For instance, they’re well aware that not a whole lot has been done about the issues underlying the 2008 financial crisis. And the current recovery, while certainly a step up, is a big disappointment because millions of people have had to settle for lower-paying jobs and an eroding standard of living. For reasons like these, most investors remain deeply skeptical of stocks and the economy, in my view. And I think most know full well this market is loaded with risk. Still, the long-term outlook for stocks is very promising because so many companies have the resources, vision and market leadership necessary to prosper on a global scale over time. The key nowadays is knowing how best to gain exposure to them while minimizing risk. Of course, you could essentially run your own mini… Read More

With the second half of the year underway, it’s prudent to take stock on how your portfolio performed in the first six months of 2014.  #-ad_banner-#In the same vein, it’s also the perfect time to see where any value or growth opportunities may lie as we go into the end of 2014. One billionaire has decided to make the latter much easier for investors. Mario Gabelli, the renowned value manager and founder of the GAMCO family of funds, took to CNBC last month and shared some of his views on equity markets. With no shortage of commentary… Read More

With the second half of the year underway, it’s prudent to take stock on how your portfolio performed in the first six months of 2014.  #-ad_banner-#In the same vein, it’s also the perfect time to see where any value or growth opportunities may lie as we go into the end of 2014. One billionaire has decided to make the latter much easier for investors. Mario Gabelli, the renowned value manager and founder of the GAMCO family of funds, took to CNBC last month and shared some of his views on equity markets. With no shortage of commentary these days on financial news networks, why should you listen to Gabelli? For starters, Gabelli has been investing for nearly six decades now. He has come a long way since buying his first stock at the age of 13. Now at the age of 72, his firm, GAMCO Investors, currently manages some $48 billion in assets, with Gabelli amassing a personal fortune of $1.8 billion along the way. As such, his experience should cause some ears to perk up when he dishes free institutional research. Fortunately for us, Gabelli mentioned three of his top picks for the latter half of… Read More