Today I’d like to dust off one of our favorite strategies for dealing with a pullback: getting paid to buy stocks at a discount. If you’ve followed along with StreetAuthority Daily for a while, then you’re probably familiar with my colleague Amber Hestla and the put-selling strategy she uses in her premium newsletter, Income Trader. For those that are unfamiliar, you can in effect get paid for the chance to buy stocks at a discount by utilizing a conservative strategy that involves selling put options contracts. And in a market making new all-time highs week after week, I don’t have… Read More

Today I’d like to dust off one of our favorite strategies for dealing with a pullback: getting paid to buy stocks at a discount. If you’ve followed along with StreetAuthority Daily for a while, then you’re probably familiar with my colleague Amber Hestla and the put-selling strategy she uses in her premium newsletter, Income Trader. For those that are unfamiliar, you can in effect get paid for the chance to buy stocks at a discount by utilizing a conservative strategy that involves selling put options contracts. And in a market making new all-time highs week after week, I don’t have to tell you that the available “discounts” on quality companies are far and few between. Here’s how it works. Let’s say you really want to buy software giant Microsoft (Nasdaq: MSFT). But at a recent price of just over $57.50 per share, you feel like the stock is a little expensive. At that price, the stock has a price-to-earnings ratio of 27.6, which is pretty rich when compared to its five-year average of 20. Consequently, that P/E is also a good deal above the broader market’s current valuation (the S&P 500’s P/E is about 20). You’d feel a lot… Read More

Ah, the unmistakable growl of a Harley… Here in Wisconsin, it’s Harley country. We’ve even got a museum that lauds the Milwaukee-based company. #-ad_banner-#But on August 18, 2016, Harley had a little less defiance in its growl. Harley-Davidson (NYSE: HOG) agreed to pay a $12 million fine for selling after-market parts designed to increase performance and power, but had the unlucky effect of emitting more emissions than was allowable under EPA rules. It’s a tricky rule… Harley believed it was following the law by stating that the “super tuner” part was only to be used for competition. The EPA investigation… Read More

Ah, the unmistakable growl of a Harley… Here in Wisconsin, it’s Harley country. We’ve even got a museum that lauds the Milwaukee-based company. #-ad_banner-#But on August 18, 2016, Harley had a little less defiance in its growl. Harley-Davidson (NYSE: HOG) agreed to pay a $12 million fine for selling after-market parts designed to increase performance and power, but had the unlucky effect of emitting more emissions than was allowable under EPA rules. It’s a tricky rule… Harley believed it was following the law by stating that the “super tuner” part was only to be used for competition. The EPA investigation found that most of them were being used on public roads. The company sold some 340,000 of them. In the settlement with the EPA, the company did not admit to wrongdoing, but did agree to stop selling the super tuners in its dealerships, buy back and destroy the dealerships’ stocks of super tuners and deny customers’ warranty claims if they are in use of the part. There has been no official word on how much that will cost Harley, though I don’t think it’ll be as big a blow to the company as the emissions scandal was for Volkswagon (OTC:… Read More

When it comes to income, I’m a fan of real estate investment trusts (REITs). After all, what’s not to like? This sector was almost custom-made for dividend investors.  It’s still a relatively young asset class, with main legislative documents regulating its functioning only signed in 1960. The general idea: allow individuals with smaller capital an opportunity to invest in commercial real estate and benefit from its income generation and other opportunities without actually buying properties.  This income has the potential to grow — as does the value of the properties. By law, REITs are required to pay out at least… Read More

When it comes to income, I’m a fan of real estate investment trusts (REITs). After all, what’s not to like? This sector was almost custom-made for dividend investors.  It’s still a relatively young asset class, with main legislative documents regulating its functioning only signed in 1960. The general idea: allow individuals with smaller capital an opportunity to invest in commercial real estate and benefit from its income generation and other opportunities without actually buying properties.  This income has the potential to grow — as does the value of the properties. By law, REITs are required to pay out at least 90% of their annual taxable income to investors. This too is attractive, especially today, as bond yields continue to slide.  —Sponsored Link— 6% Yields On Stocks That Doubled Only the strongest stocks pay regular 4% to 6% yields while growing your savings, too. Discover 9 stocks with a solid record of raising dividends on a regular basis — and each one passed tests with flying colors. Get the list, free. REITs are also excellent portfolio diversifiers. This asset class has relatively low correlation with other financial assets, which is unique. This… Read More

The U.S. stock market looked sluggish for the second consecutive week, with all major indices moving 1% or less. The best performer thus far in 2016 has been the small-cap Russell 2000, which closed last week up 8.9% year to date.  The two strongest sectors of the S&P 500 last week were energy (2.5%) and materials (1.2%). This is more evidence of the strength in the commodity space that I have been talking about since the first quarter. Of the 38 commodity-related ETFs that I track, only grains and solar remain in major downtrends, as defined by their… Read More

The U.S. stock market looked sluggish for the second consecutive week, with all major indices moving 1% or less. The best performer thus far in 2016 has been the small-cap Russell 2000, which closed last week up 8.9% year to date.  The two strongest sectors of the S&P 500 last week were energy (2.5%) and materials (1.2%). This is more evidence of the strength in the commodity space that I have been talking about since the first quarter. Of the 38 commodity-related ETFs that I track, only grains and solar remain in major downtrends, as defined by their 200-day moving averages. #-ad_banner-#​Where’s The Pullback? For the past several weeks, I have been warning of the stock market’s vulnerability to a pullback or correction before prices move appreciably higher. While the market hasn’t yet declined, it hasn’t moved meaningfully higher either. In the past month, the benchmark S&P 500 is up just 0.5%.   So, what’s holding the market up? In our first chart, we see that daily total net assets invested in the SPDR S&P 500 ETF (NYSE: SPY) have been above their 21-day moving average since July 1, indicating a trend of monthly expansion that my research… Read More

Seven years into a bull run and stocks are undeniably expensive. FactSet Research finds that every sector but one is trading above its five- and ten-year average price-to-earnings ratio on a forward basis.  There’s good reason for higher P/E ratios, stock prices keep rising even as the companies in the S&P 500 have reported five consecutive quarters of lower earnings. As investors rush in to send the market to new highs, their share of earnings is getting smaller. #-ad_banner-#And stocks may be set to get even more expensive throughout the rest of the year. Analysts expect earnings to decline for… Read More

Seven years into a bull run and stocks are undeniably expensive. FactSet Research finds that every sector but one is trading above its five- and ten-year average price-to-earnings ratio on a forward basis.  There’s good reason for higher P/E ratios, stock prices keep rising even as the companies in the S&P 500 have reported five consecutive quarters of lower earnings. As investors rush in to send the market to new highs, their share of earnings is getting smaller. #-ad_banner-#And stocks may be set to get even more expensive throughout the rest of the year. Analysts expect earnings to decline for a sixth straight quarter when reports start coming out in October. The question is, how much more expensive can stocks get before investor enthusiasm starts to crumble? Is there any value left in the market? How Much More Expensive Can Stocks Get? Companies in the S&P 500 are trading at a 20% premium to the average 10-year forward P/E multiple. Nine of the ten sectors in the index trade above their five- and ten-year average multiples with premiums on 10-year multiples ranging from 24.6% (consumer staples) to 7% (information technology).  Investors will need to remain exuberantly optimistic if the… Read More

Investor ratings can be a bit confusing… Confusing because they can be somewhat arbitrary. It’s not that they are fickle, per se. It’s just that different analysts place different weights on factors that could result in a vastly different rating. That said, ratings do have an effect on the markets, and they can give individual investor a sense of overall sentiment or trajectory. #-ad_banner-#I ran investor ratings through one of my favorite market screeners to find the top five U.S. stocks with a market cap higher than $10 billion. I then sorted them by trading ratings, followed by revenue growth,… Read More

Investor ratings can be a bit confusing… Confusing because they can be somewhat arbitrary. It’s not that they are fickle, per se. It’s just that different analysts place different weights on factors that could result in a vastly different rating. That said, ratings do have an effect on the markets, and they can give individual investor a sense of overall sentiment or trajectory. #-ad_banner-#I ran investor ratings through one of my favorite market screeners to find the top five U.S. stocks with a market cap higher than $10 billion. I then sorted them by trading ratings, followed by revenue growth, profitability and valuation. These top five companies beat out famous names like Amazon, Inc. (Nasdaq: AMZN), ranked 8th, Facebook, Inc. (Nasdaq: FB), ranked 18th, Google’s parent company Alphabet, Inc. (Nasdaq: GOOGL), ranked 31st, and China’s Baidu (Nasdaq: BIDU), ranked 32nd. Let’s take a look at them: 5. Raytheon Company (NYSE: RTN) With a five-star investor rating and a five-star trading rating, Raytheon boasts strong profitability. RTN develops and manufactures engineering technology for government and commercial uses, in sectors such as defense, IT and electronics. Analysts rate RTN as a very strong buy, and technical analysis indicates bullishness in both the… Read More

The commodities frenzy in 2007-2008 drove energy and mining stocks up to astronomical heights before the ensuing bear market erased all of those gains. While energy stocks and precious metals miners were able to rally back, miners of industrial metals stalled. The Dow Jones U.S. Industrial Metals & Mining Index still trades more than 65% below its 2008 peak even after nearly doubling from its worst levels this year. In short, industrial miners have been portfolio killers for years, and sentiment is predictably rather dour. However, the short-term condition is much improved and the index is on the verge of… Read More

The commodities frenzy in 2007-2008 drove energy and mining stocks up to astronomical heights before the ensuing bear market erased all of those gains. While energy stocks and precious metals miners were able to rally back, miners of industrial metals stalled. The Dow Jones U.S. Industrial Metals & Mining Index still trades more than 65% below its 2008 peak even after nearly doubling from its worst levels this year. In short, industrial miners have been portfolio killers for years, and sentiment is predictably rather dour. However, the short-term condition is much improved and the index is on the verge of a long-term breakout. One of its larger component stocks, Australia-based Rio Tinto (NYSE: RIO), echoes these improvements and is also on the verge of a major breakout. At first glance, it is easy to see that the stock now trades above its key 50-day and 200-day moving averages, and the 50-day recently crossed above the 200-day in what some might label a “golden cross.” While this signal is really meant to apply to the broader market, it still tells us that the major trend has likely changed to the upside. Read More

Around our research office, we just call them our “Forever” stocks. We’ve talked about them so much over the past few years, the nickname is just easier. Everyone here knows exactly what we’re talking about. Put simply, this is the set of stocks you could buy today and hold for the long haul. With these stocks in your portfolio, you will worry less about things like inflation or deflation… bear markets or recessions… flash-crashes or rising interest rates.  —Sponsored Link— JFK Predecessor’s Chilling Warning Right before JFK took office, General Eisenhower warned him about a… Read More

Around our research office, we just call them our “Forever” stocks. We’ve talked about them so much over the past few years, the nickname is just easier. Everyone here knows exactly what we’re talking about. Put simply, this is the set of stocks you could buy today and hold for the long haul. With these stocks in your portfolio, you will worry less about things like inflation or deflation… bear markets or recessions… flash-crashes or rising interest rates.  —Sponsored Link— JFK Predecessor’s Chilling Warning Right before JFK took office, General Eisenhower warned him about a secretive segment of the U.S. government. Kennedy tried to take them on…and failed. Today, this hidden branch has only grown in power, threatening your wealth and access to your savings. Here’s the whole story… For example…  “Forever” Stock #8 owns the world’s most valuable brand for the fifth consecutive year, according to the latest rankings published by Forbes. In fact, this brand is so iconic, it is worth more than twice as much as the runner-up — Microsoft (Nasdaq: MSFT) — according to Forbes.  “Forever” Stock #3 is nearly two times more profitable than some of… Read More

The current bull run in stocks has lasted longer than any other, save the tech bubble of the 90s.  That in itself shouldn’t be cause for alarm — bull markets don’t die of old age. What should worry investors, however, is the massive disconnect between economic fundamentals and stock valuations.  From weakening retail sales to corporate America heading for its sixth consecutive quarter of declining earnings, the fundamentals of the market conflict with the record highs we’re seeing nearly every day. But missing out on further upside isn’t an option for most investors either. #-ad_banner-#What to do when all the… Read More

The current bull run in stocks has lasted longer than any other, save the tech bubble of the 90s.  That in itself shouldn’t be cause for alarm — bull markets don’t die of old age. What should worry investors, however, is the massive disconnect between economic fundamentals and stock valuations.  From weakening retail sales to corporate America heading for its sixth consecutive quarter of declining earnings, the fundamentals of the market conflict with the record highs we’re seeing nearly every day. But missing out on further upside isn’t an option for most investors either. #-ad_banner-#What to do when all the data screams crash but the market keeps moving higher?  You find stocks that beat the market during a crash.  A Tale Of Two Worlds, Exuberant Markets Versus Dismal Economics Profit expectations have come down for the third quarter, which is likely to mark six consecutive quarters of falling earnings for companies in the S&P 500. The global economy is struggling and the only thing keeping the United States out of recession has been auto sales and housing. Auto sales are weakening and uncertainty around Brexit may be enough to push the United States into a recession over the next… Read More