After a tough 2016 due to political pressure, drug-makers looked to be having a good year. The SPDR S&P Pharmaceuticals ETF (NYSE: XPH) reached a 2017 high of $44.32 in late July, up nearly 14% on the year.  Even the hardest hit among the group were finding new life, such as when Valeant Pharmaceuticals (NYSE: VRX) (which had suffered from seemingly daily negative headlines) surged 96% from its April low through July. But second-quarter earnings have not been kind. A chorus of poor earnings reports, especially in generics makers, has wiped 6.3% of the value off XPH in just 10… Read More

After a tough 2016 due to political pressure, drug-makers looked to be having a good year. The SPDR S&P Pharmaceuticals ETF (NYSE: XPH) reached a 2017 high of $44.32 in late July, up nearly 14% on the year.  Even the hardest hit among the group were finding new life, such as when Valeant Pharmaceuticals (NYSE: VRX) (which had suffered from seemingly daily negative headlines) surged 96% from its April low through July. But second-quarter earnings have not been kind. A chorus of poor earnings reports, especially in generics makers, has wiped 6.3% of the value off XPH in just 10 trading days. New fears around increased competition and high levels of debt are dragging the entire industry lower. At the same time, this is an industry with an immense amount of support from multiple demographics. This could force government regulation that could start to clear the way for faster drug approvals. That means a rebound could be in the making for the best names in the group — those pulled lower with the industry but with strong fundamentals and upside potential. I’ve found three drug-makers trading at attractive valuations, without the debt that overhangs much of the group, and that… Read More

It wasn’t a surprise that the U.S. Federal Reserve didn’t hike interest rates its July meeting.  The Fed already hiked short-term interest rates twice this year, raising rates by a quarter percentage point in March and again in June.  After years of near-zero interest rate policies, the benchmark rate has now been hiked to a range between 1% and 1.25%. Of course, rates are still low by any historical measure. But they are significantly higher than just a year ago. Also important is the speed with which short-term interest rates have increased over the past year. The two charts below… Read More

It wasn’t a surprise that the U.S. Federal Reserve didn’t hike interest rates its July meeting.  The Fed already hiked short-term interest rates twice this year, raising rates by a quarter percentage point in March and again in June.  After years of near-zero interest rate policies, the benchmark rate has now been hiked to a range between 1% and 1.25%. Of course, rates are still low by any historical measure. But they are significantly higher than just a year ago. Also important is the speed with which short-term interest rates have increased over the past year. The two charts below show how fast a three-month Treasury note rate and a one-year rate have jumped:  3-Month Treasury  1-Year Treasury Unfortunately for income investors, these rate increases are being felt especially in closed-end funds, or funds that issue a fixed number of shares and can also borrow in order to enhance dividends and returns.  The mechanism is quite simple. Higher short-term rates are making the cost of leverage more expensive. And because many closed-end funds use leverage to enhance returns and dividends, the costs for these closed-end funds are also going up.  —Recommended Link— Why The… Read More

The number of S&P 500 companies paying a dividend just hit a new all-time high. As of July 1, 84% (424) of the S&P 500 companies paid a dividend — up from 74% 10 years ago.   That’s an extra 54 dividend payers to choose from in just the S&P. It means that, on average, you’ve had five new choices each year.   On one hand it’s great. These companies are building reputations as solid dividend payers. And investors have more options than ever.   #-ad_banner-#But on the other hand, not all dividends are created equally. On the surface two… Read More

The number of S&P 500 companies paying a dividend just hit a new all-time high. As of July 1, 84% (424) of the S&P 500 companies paid a dividend — up from 74% 10 years ago.   That’s an extra 54 dividend payers to choose from in just the S&P. It means that, on average, you’ve had five new choices each year.   On one hand it’s great. These companies are building reputations as solid dividend payers. And investors have more options than ever.   #-ad_banner-#But on the other hand, not all dividends are created equally. On the surface two stocks with a current yield of 2.6% may look similar, but underneath the hood they can be very different.   The newest dividend payers don’t have the history to demonstrate they can sustain a dividend through a recession, a depression, or a stock market crash, and certainly not through a couple of world wars.   If you want a dividend payer with that kind of resume, you need to zero in on the most reliable dividend payers on earth, companies that are in one of the most exclusive clubs in the entire global stock market.    Companies That Have Been… Read More

Change can be difficult. I was reminded of this when I saw Spencer Johnson’s obituary in The New York Times.  I didn’t recognize the name at first, but after reading the headline, I immediately knew who he was:  If you’ve ever worked for the government or in a large company, you probably read one of the 28 million copies that have been sold.  This was a short book — 94 pages of very large type. According to the article, the book “told the story of two mice, Sniff and Scurry, and two tiny people, Hem and Haw, looking… Read More

Change can be difficult. I was reminded of this when I saw Spencer Johnson’s obituary in The New York Times.  I didn’t recognize the name at first, but after reading the headline, I immediately knew who he was:  If you’ve ever worked for the government or in a large company, you probably read one of the 28 million copies that have been sold.  This was a short book — 94 pages of very large type. According to the article, the book “told the story of two mice, Sniff and Scurry, and two tiny people, Hem and Haw, looking for cheese in a maze. When the cheese supply runs out at Cheese Station C, the mice leave without angst to find more. But Hem and Haw resist, refusing to accept change. Haw overcomes his anxiety and ventures out of his comfort zone — at first timidly, but then, gradually, with more confidence — in search of a new supply of cheese.”  “Before long, he knew why he felt good,” Mr. Johnson wrote about Haw. “He stopped to write again on the wall: ‘When you stop being afraid, you feel good!'”  Johnson’s obituary noted that although the book was short,… Read More

I am a confirmed contrarian when it comes to the stock market. Investment contrarians take the opposite position of the prevailing wisdom when it comes to choosing stocks, buying picks that no one else seems to want.  Bad news is a contrarian’s best friend, as it pushes prices lower into the deep-value zone. But even better is good news that results in a selloff. Many times, positive earnings or other good news is not quite good enough to satisfy investors who expected more. Shares are dumped despite the seemingly positive news, depressing prices. Savvy contrarian investors wait for these selloffs… Read More

I am a confirmed contrarian when it comes to the stock market. Investment contrarians take the opposite position of the prevailing wisdom when it comes to choosing stocks, buying picks that no one else seems to want.  Bad news is a contrarian’s best friend, as it pushes prices lower into the deep-value zone. But even better is good news that results in a selloff. Many times, positive earnings or other good news is not quite good enough to satisfy investors who expected more. Shares are dumped despite the seemingly positive news, depressing prices. Savvy contrarian investors wait for these selloffs in the face of improving fundamentals to build long term positions.  The iconic American automobile company Ford (NYSE: F) is set up to be such an ideal contrarian buy right now. The overall bearish sentiment combined with bullish fundamental and technical metrics has skewed the risk/reward ratio solidly to the reward side.   Why Ford Should Be Your Next Buy 1. Solid Fundamentals And Performance Ford has just hit its highest free cash flow level in the last 10 years at just under $13 billion. Free cash flow is a very critical fundamental metric. In fact, as I argued in… Read More

If you fly for business or pleasure, you know that buying a plane ticket has almost become an art form.  And when it comes to your final ticket price, it turns out that when you buy may matter more than where you fly.  According to Cheapair.com, the average fare difference between the best day to buy your airline ticket and the worst is more than $200 — and that’s not counting the premium fares you’ll see if you’re purchasing a ticket within seven days of travel.  That’s because airlines don’t have a fixed ticket-price system. They change fares constantly, as… Read More

If you fly for business or pleasure, you know that buying a plane ticket has almost become an art form.  And when it comes to your final ticket price, it turns out that when you buy may matter more than where you fly.  According to Cheapair.com, the average fare difference between the best day to buy your airline ticket and the worst is more than $200 — and that’s not counting the premium fares you’ll see if you’re purchasing a ticket within seven days of travel.  That’s because airlines don’t have a fixed ticket-price system. They change fares constantly, as their goal is twofold: sell the most tickets for every flight (a goal best achieved with lower fares) and maximize the total amount received (a seemingly contradictory goal best achieved with higher ticket prices).  —Sponsored Link— Were You Born Before 1969? See if you qualify for Reagan’s secret 702(j) Retirement Plan. It could pay you $2,194 a month, tax-free… Learn more. Introducing: Revenue Management Instead, airlines utilize a system called “revenue management” — a process that looks at consumer demand patterns and the company’s business trends to ultimately determine best… Read More

To say retailers have had a tough time this year is an understatement. The SPDR S&P Retail ETF (NYSE: XRT) is down more than 6%, underperforming the S&P 500 by almost 17% to date. The weakness across the group doesn’t begin to illustrate the pain felt by brands like Under Armor (NYSE: UA), down 31% this year, and Ralph Lauren (NYSE: RL), down 17%. The meme has been that apparel stocks and other traditional retailers are facing a difficult road simply on the shift from department stores to online shopping. Many investors have stuck with branded retailers and analysts continue… Read More

To say retailers have had a tough time this year is an understatement. The SPDR S&P Retail ETF (NYSE: XRT) is down more than 6%, underperforming the S&P 500 by almost 17% to date. The weakness across the group doesn’t begin to illustrate the pain felt by brands like Under Armor (NYSE: UA), down 31% this year, and Ralph Lauren (NYSE: RL), down 17%. The meme has been that apparel stocks and other traditional retailers are facing a difficult road simply on the shift from department stores to online shopping. Many investors have stuck with branded retailers and analysts continue to talk up the power of brand recognition to rationalize a target price.  While the shift to online shopping means incremental losses in sales, it’s masking a larger trend. Many of these once-valued brands may not have a shot even if they can execute on an online strategy. The Retail Nightmare Isn’t Just Online Vs. The Mall Scott Galloway has been studying the evolution of consumer brands and the digital revolution for decades, first as the founder of Prophet Brand Strategy and Red Envelope and now as a marketing professor at the NYU Stern School of Business.  #-ad_banner-#He’s been… Read More

Peter Lynch gave very good advice when he told investors to invest in what they know. And while I’ve found that many people still tend to ignore this most logical adage, it’s one rule I simply will not break.  To that end, I have found great success in going back again and again to the stocks I know best (and have made my Profit Amplifier subscribers and me money).  Michael Kors Holdings (NYSE: KORS) is one of those very stocks. About two weeks ago, we closed a quick trade in the luxury fashion brand for a 20.4% gain, and now… Read More

Peter Lynch gave very good advice when he told investors to invest in what they know. And while I’ve found that many people still tend to ignore this most logical adage, it’s one rule I simply will not break.  To that end, I have found great success in going back again and again to the stocks I know best (and have made my Profit Amplifier subscribers and me money).  Michael Kors Holdings (NYSE: KORS) is one of those very stocks. About two weeks ago, we closed a quick trade in the luxury fashion brand for a 20.4% gain, and now it is once again flashing a bearish signal after a recent rally. The recent jump in price means we can get back into a put options trade at the level we did before, and that makes me feel pretty good because I know things are only getting worse for KORS.  Investor sympathy and a hot market are what drove shares back up despite analysts becoming even more bearish. It’s this very equation that often produces the best results.  —Sponsored Link— Free Report: 7 Dividend Growth Stocks For 100 Percent-Plus Gains Forget about recent… Read More