Legendary fund manager Peter Lynch went out of his way to find companies that did yucky things because they were often great businesses. My approach takes that concept one step further: I’ve found one stock that provides an underlying service for a whole sector, a service the sector simply can… Read More

With Wednesday’s sharp rally, investors that like to short stocks were tripping over each other to get to the exit. And to unwind a short holding, they had to buy back shares of the companies in which they’ve made a negative bet, known as… Read More

In 2003, former President Bush signed into law the Jobs and Growth Tax Relief Reconciliation Act. One major provision of this law was to reduce the tax rates on certain dividends from nearly 40% for the highest income earners down to 15%. The dividend tax rate for the lowest tax brackets even reached as low as 0%! For us income investors, this tax break was a welcome sight. But the cuts were passed with the provision that they expire at the end of 2010. With the nation… Read More

In 2003, former President Bush signed into law the Jobs and Growth Tax Relief Reconciliation Act. One major provision of this law was to reduce the tax rates on certain dividends from nearly 40% for the highest income earners down to 15%. The dividend tax rate for the lowest tax brackets even reached as low as 0%! For us income investors, this tax break was a welcome sight. But the cuts were passed with the provision that they expire at the end of 2010. With the nation heavily in debt and having run large deficits for the past several years, it’s a foregone conclusion among the investment community that these dividend tax rates will have to rise. Just to be clear, I’m not taking sides. I’m simply trying to prepare you for what could lie ahead. President Obama has proposed only increasing the dividend tax rate to 20% for families making over $250,000. However, the recent healthcare package already tacks a 3.8% tax on investment income for this group starting in 2013. In other words, the highest earners… Read More

Ever notice how the simplest task is more complicated these days? Like buying cereal at the grocery store? I just popped in to get a box of Cheerios and was confronted with no less than 6 different varieties: honey, frosted, chocolate, multi-grain, banana nut and oat clusters. Read More

Investing in clean energy takes a very strong stomach. Share prices in this sector continually soar and plunge depending on whether investors are feeling optimistic or pessimistic. Although the industry may never live up to the grandest hopes that some had expected, it is clearly emerging as a viable business… Read More

If you were a shareholder in 3PAR (NYSE: PAR), McAfee (NYSE: MFE) or Cogent (Nasdaq: COGT) this summer, you’re likely quite pleased with the news that each of those companies will be acquired a nice premium. [Read: Why Today’s Intel Deal Makes Tech Even More Appealing] But the good news comes with a catch: should you take profits? Or should you hold on in hopes of further gains? The short answer: it depends. To figure out how to play the buyout game, we first need to separate… Read More

If you were a shareholder in 3PAR (NYSE: PAR), McAfee (NYSE: MFE) or Cogent (Nasdaq: COGT) this summer, you’re likely quite pleased with the news that each of those companies will be acquired a nice premium. [Read: Why Today’s Intel Deal Makes Tech Even More Appealing] But the good news comes with a catch: should you take profits? Or should you hold on in hopes of further gains? The short answer: it depends. To figure out how to play the buyout game, we first need to separate any buyout-related price spike into two camps. The first camp involves stocks trading below the price a buyer has offered. This indicates that the deal may not go through due to regulatory anti-trust reasons, or simply because the buyout target has made it clear that it has no intention of selling the company in the near-term. If the stock is at a discount because of anti-trust concerns, then try to assess how real those concerns are. The government would likely never allow a merger between two companies that control most of… Read More

A sleeping giant has awakened. One of the country’s oldest companies has reinvented itself. Once a stodgy old cyclical company, this Dow stock has used its deep pockets and global brand to create a juggernaut of earnings growth for the next… Read More

Heading into the trading week, we expected to see a flurry of economic releases that would have an outsized impact on the stock market this week. [See: 4 Can’t-Miss Items for Investors to Watch Next Week] Those data points are now rolling in, but… Read More

It’s important to maintain a watch list of stock ideas. Many of your investment ideas can be intriguing, but not quite tempting enough to merit your hard-earned dollars just yet. I like to check in on all of these investment ideas almost daily, waiting to see if the stock falls down to a level that I can’t resist, or if the company has announced new initiatives or quarterly results that make the stock a true bargain. But a stock’s downward move may be the result of bad news that has dimmed the investment picture. The question is… Read More

It’s important to maintain a watch list of stock ideas. Many of your investment ideas can be intriguing, but not quite tempting enough to merit your hard-earned dollars just yet. I like to check in on all of these investment ideas almost daily, waiting to see if the stock falls down to a level that I can’t resist, or if the company has announced new initiatives or quarterly results that make the stock a true bargain. But a stock’s downward move may be the result of bad news that has dimmed the investment picture. The question is whether the downward move is justified, or if it has sharply overshot the mark, well below where shares should trade. That scenario is playing out with DG FastChannel (Nasdaq: DGIT), which has run into some short-term growing pains after a long stretch of solid growth. Growth stalls out for now Following the dot-com boom, DG FastChannel was a perennially frustrating story. The company’s advanced media placement services, tailor made for the digital era, never saw the demand that investors had expected. In hindsight, the company arrived… Read More

Investors are always on the lookout for a competitive edge. The ability to peer slightly into the future is a key edge to exploit, be it company guidance for the next quarter or analyst projections over the next couple of years. But one company has gone a step further than… Read More