Today’s kids are different than when you and I grew up. They’re computer-savvy, smartphone-savvy… in fact, at first glance, they almost resemble mini-adults. #-ad_banner-#It’s no surprise, then, that sales for toy makers have been sluggish over the past few years. Add in the fact that stagnant wages have parents watching their wallets when it comes to spending on toys for their kids, and it might seem wise for investors to stay away from this space. Big mistake. The toy industry is still a $22 billion business in the U.S. And with the licensing deals that come from movie and game… Read More

Today’s kids are different than when you and I grew up. They’re computer-savvy, smartphone-savvy… in fact, at first glance, they almost resemble mini-adults. #-ad_banner-#It’s no surprise, then, that sales for toy makers have been sluggish over the past few years. Add in the fact that stagnant wages have parents watching their wallets when it comes to spending on toys for their kids, and it might seem wise for investors to stay away from this space. Big mistake. The toy industry is still a $22 billion business in the U.S. And with the licensing deals that come from movie and game franchises, it can be a lucrative venture for the companies that can “get it right.” Toy maker Hasbro (Nasdaq: HAS) has been a perfect example of this. It makes toys and games featuring the popular Transformers, My Little Pony and G.I. Joe franchises, as well as Disney’s (NYSE: DIS) various Marvel and Star Wars properties. You can see how this has worked out for the company — and its investors: The company I want to talk about today — Mattel (Nasdaq: MAT) — sells toys in 150 countries and controls 17% of the U.S. toy market. But it… Read More

When it comes to investing, “the best house in a bad neighborhood” is not the right approach. You want to focus on “good neighborhoods” (meaning good industries) and then proceed to find the best (or at least best-priced) homes in that neighborhood. U.S. oil refiners are great example.  A confluence of factors, which I discussed last summer, was leading to rising and industry profits. In effect, the whole neighborhood held (and still holds) appeal. Some of the industry’s bigger players have really surged in price since my look at the group last August. The appeal of the… Read More

When it comes to investing, “the best house in a bad neighborhood” is not the right approach. You want to focus on “good neighborhoods” (meaning good industries) and then proceed to find the best (or at least best-priced) homes in that neighborhood. U.S. oil refiners are great example.  A confluence of factors, which I discussed last summer, was leading to rising and industry profits. In effect, the whole neighborhood held (and still holds) appeal. Some of the industry’s bigger players have really surged in price since my look at the group last August. The appeal of the biggest refiners becomes evident when you start to focus on their solid cash flow, which is fueling rising dividends and share buyback plans.   #-ad_banner-#These companies’ current dividend yields may seem skimpy, but the stage is set for fast dividend growth in coming years as well, as cash flow surges. Also, share buybacks have been especially impressive in recent years at three of these four major refiners.  But most smaller refiners are not yet witnessing such share price strength. Back in November, I noted that both Alon USA Partners (Nasdaq: ALDW) and CVR Refining (Nasdaq: CVRR) had been forced to… Read More

Rarely a day goes without someone in the financial media claiming there’s a stock bubble about to burst and set off an even worse crisis than the last one.  #-ad_banner-#Now, I wouldn’t be a bit surprised to see a harsh pullback in the short term, but I don’t get the sense a major crash is at hand. And I think all the bubble talk is way overgeneralized. While the market as a whole may be pretty pricey right now, there are still plenty of attractive values out there. But because of the long-running bull market, they’re just a… Read More

Rarely a day goes without someone in the financial media claiming there’s a stock bubble about to burst and set off an even worse crisis than the last one.  #-ad_banner-#Now, I wouldn’t be a bit surprised to see a harsh pullback in the short term, but I don’t get the sense a major crash is at hand. And I think all the bubble talk is way overgeneralized. While the market as a whole may be pretty pricey right now, there are still plenty of attractive values out there. But because of the long-running bull market, they’re just a little harder to find. But I think I’ve found one. I doubt most investors would recognize the name of this company even though it can trace its roots back nine decades. But I bet they’d know its products — raw and processed nuts of all sorts from peanuts, cashews and pecans to walnuts, macadamias and almonds. The firm sells other food products, too, like trail mixes, salad toppings, dried fruit and peanut butter. It has some top brands, including Fisher and Orchard Valley Harvest. The company, John B. Sanfilippo & Son (Nasdaq: JBSS), is one of the largest publicly traded… Read More

The stock market does not have to be complicated. There are some very basic investment components that work together to increase stock prices: profitability, low valuations, and bullish charts. Investors search far and wide for such stocks, scouring the Internet and following prominent investment gurus, hoping to discover unknown gems — but what if I told you that one such undervalued aggressive growth stock has been right under your nose — in your kitchen? Whirlpool Corp. (NYSE: WHR), the world’s largest home appliance manufacturer, has been increasing earnings at a pace that would make most… Read More

The stock market does not have to be complicated. There are some very basic investment components that work together to increase stock prices: profitability, low valuations, and bullish charts. Investors search far and wide for such stocks, scouring the Internet and following prominent investment gurus, hoping to discover unknown gems — but what if I told you that one such undervalued aggressive growth stock has been right under your nose — in your kitchen? Whirlpool Corp. (NYSE: WHR), the world’s largest home appliance manufacturer, has been increasing earnings at a pace that would make most companies blush. Net income more than doubled last year, to a record $827 million on revenue of $18.8 billion, propelled by global expansion, the U.S. housing recovery, cost-cutting efforts, and disciplined product pricing. Whirlpool makes all your standard large appliances — washers, dryers, refrigerators, freezers and dishwashers — as well as smaller kitchen appliances. Some of the many brands it produces include Whirlpool, Kenmore, Maytag and KitchenAid.  In 2012, the U.S. market accounted for 52% of Whirlpool’s sales. U.S. appliance sales are increasing in conjunction with rising housing starts and home prices, and increased home renovation activity. European sales are… Read More

As an investor, there are two things you need to know about the field of biotechnology. First, a number of established and newly public companies are making remarkable progress on various research fronts. #-ad_banner-#Second, almost all of these stocks have been placed in the bargain bin, as investors pull their money out of this once-hot sector. With those two factors in place, it’s time to double up on your biotech research efforts, which is why I’ve been giving these stocks more ink than usual in recent weeks.  One of the most interesting things about this group is how various companies… Read More

As an investor, there are two things you need to know about the field of biotechnology. First, a number of established and newly public companies are making remarkable progress on various research fronts. #-ad_banner-#Second, almost all of these stocks have been placed in the bargain bin, as investors pull their money out of this once-hot sector. With those two factors in place, it’s time to double up on your biotech research efforts, which is why I’ve been giving these stocks more ink than usual in recent weeks.  One of the most interesting things about this group is how various companies are clustering their research efforts around particular medical breakthroughs. Just last week, I took note of the group of companies looking to alter DNA mutations through the process of gene therapy.  There is also a cluster of companies working with RNA, which has a slightly different role in the human body. As is the case with DNA, companies working on RNA fixes also seek ways to block the impact of rogue genes, in a process known as RNA interference (RNAi). The basic idea is to cause the body to stop making bad proteins that can cause… Read More

When assessing a stock’s value, investors often apply a PEG ratio (price-to-earnings divided by the earnings growth rate). #-ad_banner-#And when it comes to fast-growing, richly valued stocks, both numbers in that equation can get pretty lofty. Netflix (Nasdaq: NFLX), for example, is expected to boost per-share profits at least 80% in 2014 and again in 2015, seemingly justifying the fact that shares trade for around 45 times projected 2015 profits. But such high numbers highlight the double-barreled vulnerability that such stocks have. If growth projections slow, not only will analysts have to lower their earnings assumptions, but they will have… Read More

When assessing a stock’s value, investors often apply a PEG ratio (price-to-earnings divided by the earnings growth rate). #-ad_banner-#And when it comes to fast-growing, richly valued stocks, both numbers in that equation can get pretty lofty. Netflix (Nasdaq: NFLX), for example, is expected to boost per-share profits at least 80% in 2014 and again in 2015, seemingly justifying the fact that shares trade for around 45 times projected 2015 profits. But such high numbers highlight the double-barreled vulnerability that such stocks have. If growth projections slow, not only will analysts have to lower their earnings assumptions, but they will have to lower target multiples on that growth as well. And when that happens, a stock can lose up to half its value — overnight.   That’s precisely what has happened to a pair of former high-fliers in the tech sector. A growth reset has led to sharply lower valuations, though a fresh look reveals that it’s time to buy.  Here’s a closer look at them. 1. Infoblox (Nasdaq: BLOX ) As the management of corporate networks grows ever more complex, niche business models have sprung up to help IT managers focus on various aspects of the networks. Infoblox, which made its public debut… Read More

Britain’s Queen Victoria left an unfortunate legacy: Her descendants, spread across numerous European royal families, all inherited a genetic mutation that causes hemophilia. In fact, one out of every 5,000 to 10,000 males in the world is born with the defect. #-ad_banner-#But hemophilia may soon be a relic of the past. Baxter International’s (NYSE: BAX) recent acquisition of Chatham Therapeutics has led doctors to anticipate a reworking of the genes that cause the disease. In fact, a wide range of genetic mutations hidden in human DNA are now being targeted by biotechnology researchers.  The notion of fixing… Read More

Britain’s Queen Victoria left an unfortunate legacy: Her descendants, spread across numerous European royal families, all inherited a genetic mutation that causes hemophilia. In fact, one out of every 5,000 to 10,000 males in the world is born with the defect. #-ad_banner-#But hemophilia may soon be a relic of the past. Baxter International’s (NYSE: BAX) recent acquisition of Chatham Therapeutics has led doctors to anticipate a reworking of the genes that cause the disease. In fact, a wide range of genetic mutations hidden in human DNA are now being targeted by biotechnology researchers.  The notion of fixing broken genes, so-called gene therapy, has been around since 1972 — and once seemed like a bad idea. Clinical trials involving the approach sometimes led to sudden and lethal outcomes for patients.   Yet over the past decade, as researchers have developed a better understanding of the human genome, major progress has been made. By 2012, the first gene therapy drug, Glybera, received regulatory approval, and the next half decade could bring dozens more.   The company behind Glybera, UniQure (Nasdaq: QURE), has a series of other gene therapies undergoing clinical testing as well. UniQure’s targets include… Read More

It usually pays to track which stocks are making new 52-week highs and new 52-week lows. #-ad_banner-#The new highs provide insights into what is working in the investing sphere at the moment. Scanning the list of new lows can help you spot which stocks are being deeply shunned by the crowd. But in recent years, it’s hardly been worth the effort. It seems that most stocks and sectors have been moving to new highs, quarter after quarter, and the list of new lows has been isolated to a handful of true dogs. However, the times are changing: This week alone,… Read More

It usually pays to track which stocks are making new 52-week highs and new 52-week lows. #-ad_banner-#The new highs provide insights into what is working in the investing sphere at the moment. Scanning the list of new lows can help you spot which stocks are being deeply shunned by the crowd. But in recent years, it’s hardly been worth the effort. It seems that most stocks and sectors have been moving to new highs, quarter after quarter, and the list of new lows has been isolated to a handful of true dogs. However, the times are changing: This week alone, we’ve seen more than 150 stocks make fresh 52-week lows. And buried among them are some high-quality companies that are simply enduring a temporary rough stretch. For farsighted investors with the patience to see such beaten-down stocks regain their footing, the upside could be significant. At a minimum, their downside is likely more muted, as any remaining bulls have been shaken out. Here are three I’m tracking right now. 1. Chart Industries (Nasdaq: GTLS ) This company’s ticker symbol, which is a reference to gas-to-liquids, represents Chart’s strong positioning in the field of liquefied natural gas (LNG). Thanks to strong demand… Read More

With the ink dry on 2013 financial results, investors can get a fresh gauge on how companies fared over the past year. #-ad_banner-#By and large, 2013 a very good year for corporate America, as profit margins hit all-time highs in many industries. Yet not every company manages to translate robust margins into cash in the bank. Many times, operating profits will be squandered and the actual free cash flow (operating cash flow minus capital expenditures) a company produces can be lacking. The real stars of 2013 are the companies that focused on delivering peak robust free cash flow (FCF), which… Read More

With the ink dry on 2013 financial results, investors can get a fresh gauge on how companies fared over the past year. #-ad_banner-#By and large, 2013 a very good year for corporate America, as profit margins hit all-time highs in many industries. Yet not every company manages to translate robust margins into cash in the bank. Many times, operating profits will be squandered and the actual free cash flow (operating cash flow minus capital expenditures) a company produces can be lacking. The real stars of 2013 are the companies that focused on delivering peak robust free cash flow (FCF), which sets the stage for a set of shareholder-friendly perks that we refer to as Total Yield. A company with solid FCF can boost the dividend, buy back stock, pay down debt — or all three. There’s often even enough money left over for acquisitions. Of course simply looking at FCF by itself isn’t always helpful. Google (Nasdaq: GOOG), for example, generated an impressive $11 billion in FCF in 2013, but that’s just a fraction of the company’s $376 billion market value. Instead, it’s wise to look at FCF in relation to a company’s value. If you can find a company… Read More

After a five-year bull market, can investors still find inexpensive blue-chip stocks? #-ad_banner-#Perhaps that’s the wrong question to ask. Some companies such as AT&T (NYSE: T) may hold value, by traditional metrics, but that doesn’t make shares a bargain. The company’s competitive positioning spells tough days ahead, making this Dow component more of a value trap. Still, it’s interesting to see where AT&T and its peers stand in terms of value metrics. Though many of them have risen sharply in the past five years, a firming U.S. economy could take them well higher over the next half-decade. So to rephrase… Read More

After a five-year bull market, can investors still find inexpensive blue-chip stocks? #-ad_banner-#Perhaps that’s the wrong question to ask. Some companies such as AT&T (NYSE: T) may hold value, by traditional metrics, but that doesn’t make shares a bargain. The company’s competitive positioning spells tough days ahead, making this Dow component more of a value trap. Still, it’s interesting to see where AT&T and its peers stand in terms of value metrics. Though many of them have risen sharply in the past five years, a firming U.S. economy could take them well higher over the next half-decade. So to rephrase their earlier question: Which stocks in the Dow currently hold the most appeal, based on both value and growth metrics? First, let’s look at the value side of things. Simply looking at price-to-earnings (P/E) ratios, based on projected 2015 profits, reveals a group of companies facing either low growth prospects or volatile earnings patterns that typically justify a lower multiple. (All data supplied by ThomsonReuters.) To be sure, telephone service providers are seeing a profit-sapping pricing environment that is unlikely to go away, and major oil companies are having to spend rising sums of money to tap into… Read More