A weak fourth-quarter earnings release sent shares of Procter & Gamble (NYSE: PG) tumbling 3% in the last week of January, and the stock has gone nowhere since the end of 2016. A competitive environment, eroding market share, and little pricing power have had investors questioning the safety of their money in the consumer staples giant. The $226 billion consumer goods behemoth reported just 2% growth in sales from the same quarter last year, and that was entirely driven by volume with no pricing upside. Despite a cost-reduction plan that trimmed off 1.9%, the operating margin still lost 0.1% on… Read More

A weak fourth-quarter earnings release sent shares of Procter & Gamble (NYSE: PG) tumbling 3% in the last week of January, and the stock has gone nowhere since the end of 2016. A competitive environment, eroding market share, and little pricing power have had investors questioning the safety of their money in the consumer staples giant. The $226 billion consumer goods behemoth reported just 2% growth in sales from the same quarter last year, and that was entirely driven by volume with no pricing upside. Despite a cost-reduction plan that trimmed off 1.9%, the operating margin still lost 0.1% on a year-over-year basis. Against this abysmal report by a bellwether of the sector, companies in the consumer products group still trade for a lofty 25.6 times trailing earnings.  But not all was half-empty in the company’s earnings call. Looking deeper to the segment-level presented a different picture.  #-ad_banner-#Using P&G as a guide for the larger sector may reveal opportunities for investors in consumer staples. P&G Earnings As A Preview For The 2018 Consumer Staples Procter & Gamble is so massive and so diversified across consumer-packaged products that it can be used as a guide to the sector. Even after… Read More

More than 50 years ago, Charlie Munger told his partner that, “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” This would become a sort of guiding principle as Munger and Warren Buffett built their empire, Berkshire Hathaway. Like many fans of Munger and Buffett, I keep these sage words in mind when looking for my next investment. And of course, there’s no shortage of “wonderful businesses” in the stock market; the problem is that most of them are trading at a premium in today’s lofty market environment.  Last… Read More

More than 50 years ago, Charlie Munger told his partner that, “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” This would become a sort of guiding principle as Munger and Warren Buffett built their empire, Berkshire Hathaway. Like many fans of Munger and Buffett, I keep these sage words in mind when looking for my next investment. And of course, there’s no shortage of “wonderful businesses” in the stock market; the problem is that most of them are trading at a premium in today’s lofty market environment.  Last August, I told my premium Top Stock Advisor readers about the numerous indicators pointing toward high market valuations. More specifically, I mentioned that the S&P 500 was sporting a forward 12-month P/E ratio of 17.7, which is higher than the five-year average of 15.4 and the 10-year average of 14. On top of that, the cyclically adjusted price-to-earnings ratio, or CAPE, had surpassed the levels of 2008 and was nearing Great Depression-era levels. —Sponsored Link— Trump’s Set To Send This $0.24 Stock Exploding Higher! Investors in this tiny company will love Trump for what he’s… Read More

A strange thing happens during roaring bull markets. When the economy and stock market are booming, investors seem to forget the fundamentals of stock picking. With nearly every stock being carried higher as the major indexes break record after record, investors think that value no longer matters.  But nothing could be further from the truth. Using fundamentals to locate value stocks works in any type of market. While it is more difficult to locate value during times of extreme bullishness, the extra effort can pay off in spades.  Even in the most overstretched market, value cases still exist. Sometimes a… Read More

A strange thing happens during roaring bull markets. When the economy and stock market are booming, investors seem to forget the fundamentals of stock picking. With nearly every stock being carried higher as the major indexes break record after record, investors think that value no longer matters.  But nothing could be further from the truth. Using fundamentals to locate value stocks works in any type of market. While it is more difficult to locate value during times of extreme bullishness, the extra effort can pay off in spades.  Even in the most overstretched market, value cases still exist. Sometimes a company or industry falls out of favor for no apparent reason. A weak quarterly earnings report or an external event can depress a company’s stock price for a short time, creating an opportunity for sharp investors.  Here are seven signs a stock could be undervalued. #-ad_banner-#​1. The Current Ratio The current ratio is simply a company’s current assets divided by its current liabilities. Value investors should look for a current ratio over 1.50. This assures that the company has enough assets to survive even when bear markets rear their ugly heads.  2. Watch The Debt When searching for… Read More

Stocks appear to be overvalued, but there is still room for additional gains. In part, that is due to all the uncertainty in the markets at the beginning of the year. Even analysts at Wall Street’s biggest firms find themselves trying to understand the new environment. Tax reform is now being factored into earnings estimates. And while analysts still aren’t sure what the full impact will be, there is consensus that earnings will be higher.  —Sponsored Link— The ‘Picks And Shovels’ Of Marijuana The real money during the Gold Rush was in the picks and… Read More

Stocks appear to be overvalued, but there is still room for additional gains. In part, that is due to all the uncertainty in the markets at the beginning of the year. Even analysts at Wall Street’s biggest firms find themselves trying to understand the new environment. Tax reform is now being factored into earnings estimates. And while analysts still aren’t sure what the full impact will be, there is consensus that earnings will be higher.  —Sponsored Link— The ‘Picks And Shovels’ Of Marijuana The real money during the Gold Rush was in the picks and shovels. With California legalizing recreational use and Canada coming online this year, pot stocks are up over 400% in months. But which are best long term? Where is the real money and how can we profit? Read the full story. You can see that consensus in the chart below, which shows earnings per share (EPS) estimates for the S&P 500 from three large financial firms. To develop these estimates, analysts weight the earnings of individual companies using the same weights used in the price index. Increases range from just $7 per share… Read More

A recent report by Accenture highlights an amazing statistic. Its research shows that just 15 public, digital-ecosystem companies have a market capitalization totaling nearly $3 trillion. That’s an average size of roughly $200 billion each.  Even more amazing is the idea that the industry is expected to grow at a compound annual growth rate (CAGR) of more than 18% between now and 2026. That makes this a trend every investor should get behind.  So, what is a digital ecosystem? Gartner Research defines a digital ecosystem as “an interdependent group of enterprises… that… Read More

A recent report by Accenture highlights an amazing statistic. Its research shows that just 15 public, digital-ecosystem companies have a market capitalization totaling nearly $3 trillion. That’s an average size of roughly $200 billion each.  Even more amazing is the idea that the industry is expected to grow at a compound annual growth rate (CAGR) of more than 18% between now and 2026. That makes this a trend every investor should get behind.  So, what is a digital ecosystem? Gartner Research defines a digital ecosystem as “an interdependent group of enterprises… that share standardized digital platforms for a mutually beneficial purpose.” In English, it means some companies have built digital platforms that customers don’t want to leave. And the longer a person stays on a particular ecosystem, the more revenue that platform generates. #-ad_banner-#That’s how companies like Alphabet (Nasdaq: GOOG), Amazon (Nasdaq: AMZN), Tencent (OTC: TCEHY), and Facebook (Nasdaq: FB) have grown so big. More importantly, it’s the reason Yahoo! died and Twitter (NYSE: TWTR) is running out of time.  You see, Yahoo failed to learn the lessons of Facebook and Google. The company proved unable to create an ecosystem that would… Read More

In my September issue, I talked about how Ray Dalio started his fledgling company — Bridgewater Associates — out of his apartment in 1975 and went on to grow it into the largest hedge fund in the world. His accolades include consistently outperforming his peers (which is why his company is the world’s largest hedge fund) to sounding the alarm on the looming financial crisis in 2008. It was during the financial crisis — when few listened to him — that he really made his mark. While most of his peers were losing money or going belly-up, he turned a… Read More

In my September issue, I talked about how Ray Dalio started his fledgling company — Bridgewater Associates — out of his apartment in 1975 and went on to grow it into the largest hedge fund in the world. His accolades include consistently outperforming his peers (which is why his company is the world’s largest hedge fund) to sounding the alarm on the looming financial crisis in 2008. It was during the financial crisis — when few listened to him — that he really made his mark. While most of his peers were losing money or going belly-up, he turned a profit.  —Sponsored Link— New FCC Approval; Say Goodbye To Power Cords The FCC recently green lighted a stunning breakthrough device that will revolutionize electricity and get rid of the need for any plugs or cords. The Washington Times says that this technology “will change the world on a scale hardly seen in human history.” Even famed scientist Stephen Hawking agrees that “it’s about to change your life.” And this technology is set to pour $37.2 billion into this sector. But only one small company is at the center of this massive shift. Read More