The search for income takes investors to diverse places, and tobacco stocks have been a favorite for many months. However, all trends eventually come to an end, and that seems to be the case for the rally in Reynolds American (NYSE: RAI). #-ad_banner-# Since its early July peak, the stock is down about 7%. This includes a rather sharp sell-off on July 26 following the cigarette maker’s disappointing second-quarter earnings report. The company missed both revenue and earnings estimates, and the post-earnings sell-off… Read More

The search for income takes investors to diverse places, and tobacco stocks have been a favorite for many months. However, all trends eventually come to an end, and that seems to be the case for the rally in Reynolds American (NYSE: RAI). #-ad_banner-# Since its early July peak, the stock is down about 7%. This includes a rather sharp sell-off on July 26 following the cigarette maker’s disappointing second-quarter earnings report. The company missed both revenue and earnings estimates, and the post-earnings sell-off resulted in a technical breakdown through a rather important trendline. This week, Cowen and Company reaffirmed its “outperform” rating on the stock, saying that weak guidance was already priced in, but the market is saying otherwise.  RAI has been lagging the broader market since February and shows no signs on the charts that this condition will change. There are plenty of other technical warnings in place, including the non-confirmation of the July high by momentum and volume indicators, but let’s focus on the pure and simple trend break.   Reynolds started its long-term bull market in 2009 when… Read More

It’s easy to like Warren Buffett. Despite amassing a nearly $66 billion fortune, he remains folksy and accessible. He’s not perfect — but then again, he’s also rarely wrong.  But one important thing to keep in mind when studying Warren Buffett is understanding that Buffett would not be where he is today without Charlie Munger, his business partner.  Munger may not be as famous as Buffett, but he has been instrumental in not only Berkshire Hathaway’s success — but also Buffett’s evolution as an investor. #-ad_banner-# Warren Buffett came up as a disciple of Ben Graham, the father of “value… Read More

It’s easy to like Warren Buffett. Despite amassing a nearly $66 billion fortune, he remains folksy and accessible. He’s not perfect — but then again, he’s also rarely wrong.  But one important thing to keep in mind when studying Warren Buffett is understanding that Buffett would not be where he is today without Charlie Munger, his business partner.  Munger may not be as famous as Buffett, but he has been instrumental in not only Berkshire Hathaway’s success — but also Buffett’s evolution as an investor. #-ad_banner-# Warren Buffett came up as a disciple of Ben Graham, the father of “value investing”. This can be basically defined as buying stocks trading for dirt-cheap valuations. And it was this approach that led Buffett’s investment partnership to acquire Berkshire Hathaway in 1965. Back then, Berkshire was a failing textile manufacturer. The stock was selling for around $7.50 per share, a major discount from the per-share working capital of $10.25 and book value of $20.20. Buffett also noticed that the company was using the proceeds from closing down some of its plants to repurchase shares.  So Buffett quietly began purchasing shares until Berkshire’s then-CEO issued a tender offer to buy back shares for $11.375. Read More

If you own a smartphone you are probably familiar with automated notifications. From convenient reminders that you’ve used up almost all of your data for the month, to messages asking you to verify an account, to alerts from health apps, these notifications help make everyday life easier.  Not only is this issue’s Project Alpha pick the secret behind these communications services, but it also dominates this niche market despite its small market cap. West Corporation (Nasdaq: WSTC)is a global telecommunications provider with a broad portfolio of product offerings ranging from 9-1-1 call processing to enterprise conferencing services to notification… Read More

If you own a smartphone you are probably familiar with automated notifications. From convenient reminders that you’ve used up almost all of your data for the month, to messages asking you to verify an account, to alerts from health apps, these notifications help make everyday life easier.  Not only is this issue’s Project Alpha pick the secret behind these communications services, but it also dominates this niche market despite its small market cap. West Corporation (Nasdaq: WSTC)is a global telecommunications provider with a broad portfolio of product offerings ranging from 9-1-1 call processing to enterprise conferencing services to notification systems in healthcare facilities.  West operates in five main segments generating sales of more than $2.2 billion, with its conferencing and collaboration services segment contributing to roughly half of the firm’s revenue. As the largest provider of conferencing and collaboration solutions in the world, West managed over 65 billion telephony minutes and facilitated over 167 million conference calls in 2015 for prominent clients such as IBM (NYSE: IBM), Alphabet (Nasdaq: GOOGL), Microsoft (Nasdaq: MSFT), and Cisco (Nasdaq: CSCO).  In 2015, the unified communications segment generated $1.5 billion in revenues and contributed to 82.9% of the firm’s operating income. Read More

Growing up in Philly, I developed an appreciation for the “little guy.” My father, uncle and grandmother were all small business owners, and some of my fondest memories were the times I spent working with them and the people I met along the way. I vividly remember our neighborhoods lined with small row homes, many with businesses on the bottom floor where you could get anything from a good cheesesteak to a loan from one of the many regional banks.  Back in the day, small businesses were the soul of the city (and America), and banks often supplied the capital… Read More

Growing up in Philly, I developed an appreciation for the “little guy.” My father, uncle and grandmother were all small business owners, and some of my fondest memories were the times I spent working with them and the people I met along the way. I vividly remember our neighborhoods lined with small row homes, many with businesses on the bottom floor where you could get anything from a good cheesesteak to a loan from one of the many regional banks.  Back in the day, small businesses were the soul of the city (and America), and banks often supplied the capital to keep them going. At the time, the business landscape wasn’t dominated by gigantic banks, big-box stores or mega chains. It was a menagerie of boutique business owners from every background, all with the same vision: to make their version of the American dream come true. Small business is still at the core of our economy and accounts for 54% of all sales in the United States. But one key component of small business commerce in America is dying. —Sponsored Link— Revealed: The Investing Secret That Turned Amateur Investors Into Millionaires How did a group of amateur investors crush… Read More

About two months ago, I showed you this chart: It showed front-month oil future rebounding in a solid uptrend, but heading for a ceiling. I warned that oil producers could see a short-term pop, but that it would be temporary. I also said that higher oil prices would positively affect quarterly earnings reports. I was mostly right… Take a look. This first snapshot is of Exxon Mobil’s (NYSE: XOM) quarterly income: This second snapshot is of ConocoPhillips’ (NYSE: COP) income: Both showed substantial growth in gross profits quarter over quarter. Year over year, XOM’s… Read More

About two months ago, I showed you this chart: It showed front-month oil future rebounding in a solid uptrend, but heading for a ceiling. I warned that oil producers could see a short-term pop, but that it would be temporary. I also said that higher oil prices would positively affect quarterly earnings reports. I was mostly right… Take a look. This first snapshot is of Exxon Mobil’s (NYSE: XOM) quarterly income: This second snapshot is of ConocoPhillips’ (NYSE: COP) income: Both showed substantial growth in gross profits quarter over quarter. Year over year, XOM’s revenues grew 18.45% in the quarter ending June 30, while COP revenues grew 11.17%. COP released earnings on July 28 and XOM released earnings three days later. Since the earnings release, stock prices have climbed about 4.6% and 2.3% respectively, with some volatility. But I wasn’t entirely right in my article… You see, oil prices did some tricky dance moves since early June. This chart shows the same trendlines from the ones I included in my chart back in early June. I’ve marked when my article hit the airwaves with a blue circle. In that article,… Read More

All major U.S. stock indices except the small-cap Russell 2000 posted a slight weekly gain. Despite last week’s poor showing, the Russell 2000 is actually leading the market higher this year, up 8.3% versus 6.9% for the benchmark S&P 500. #-ad_banner-# The week’s best-performing sectors were financials, which have benefitted from the recent rebound in long-term interest rates, and energy, thanks to oil’s rally from major underlying support near $41.  While I remain positive on the stock market between now and early next year, my research continues to warn that… Read More

All major U.S. stock indices except the small-cap Russell 2000 posted a slight weekly gain. Despite last week’s poor showing, the Russell 2000 is actually leading the market higher this year, up 8.3% versus 6.9% for the benchmark S&P 500. #-ad_banner-# The week’s best-performing sectors were financials, which have benefitted from the recent rebound in long-term interest rates, and energy, thanks to oil’s rally from major underlying support near $41.  While I remain positive on the stock market between now and early next year, my research continues to warn that near-term downside risk exceeds upside potential.  Another Major Obstacle For Market-Leading Technology In last week’s Market Outlook, I pointed out that the Nasdaq Composite had just posted its first weekly close above its 5,133 tech-bubble high. I said this boded well for a significant advance in the index over the next one to several quarters.  While the Composite managed another close above this important level on Friday, the chart below shows that its large-cap cousin, the Nasdaq 100, finished last week at 4,807, just below its corresponding high from March 2000 at 4,816. This… Read More

I’ve always had a soft spot for asset manager stocks, especially mutual fund managers. As an advisor/portfolio manager, I’ve been dealing with them on a daily basis for over two decades. Honestly, I don’t use a lot of mutual funds in my practice, but it’s a stylistic choice, not an indictment of the product.  That said, over the years I have owned a decent handful of mutual fund management company stocks. They can be great businesses and, in turn, great investments. I’ve written about asset managers off and on over the years. Here’s a piece from a few years back. … Read More

I’ve always had a soft spot for asset manager stocks, especially mutual fund managers. As an advisor/portfolio manager, I’ve been dealing with them on a daily basis for over two decades. Honestly, I don’t use a lot of mutual funds in my practice, but it’s a stylistic choice, not an indictment of the product.  That said, over the years I have owned a decent handful of mutual fund management company stocks. They can be great businesses and, in turn, great investments. I’ve written about asset managers off and on over the years. Here’s a piece from a few years back.  Recently, another asset manager has piqued my interest, primarily on a yield and valuation basis. Running $86.5 billion out of their Overland Park, KS headquarters, Waddell and Reed Financial (NYSE: WDR) has a fund complex and distribution model that merits a look. The stock has had a bit of a ride over the last few years, climbing over 200% only to give it all back. But it just might be time to get back in. Here’s why. #-ad_banner-#At its core, the asset management business is pretty simple, at least from a model standpoint. You take in… Read More

In the world of income investing, dividends reign supreme. Treasuries and CDs are offering historically low yields and are no longer considered the ultra-safe cash generators that they once were.  —Sponsored Link— Meet The Man Who Could Soon Put 2,800% In Your Pocket Imagine the type of money you could make with a powerful CEO in your hip pocket. Imagine a man with over 100 IPOs behind him and an almost half-billion dollar revenue stream working for you — see how to profit here. There’s a little-known… Read More

In the world of income investing, dividends reign supreme. Treasuries and CDs are offering historically low yields and are no longer considered the ultra-safe cash generators that they once were.  —Sponsored Link— Meet The Man Who Could Soon Put 2,800% In Your Pocket Imagine the type of money you could make with a powerful CEO in your hip pocket. Imagine a man with over 100 IPOs behind him and an almost half-billion dollar revenue stream working for you — see how to profit here. There’s a little-known group of stocks that offer huge dividend payouts, but their yields are not displayed to the public on financial websites like Yahoo! Finance or Morningstar. This phenomenon is due to a glitch in the way the financial media reports certain companies’ financial information.  I call this group of stocks “Hidden High Yielders.” And if you know where to look, you can find companies yielding three, six, even seven times more than the yield posted on financial websites.  #-ad_banner-#​ For Hidden High Yielders, their true payout is actually much higher because there are dozens… Read More

When Walt Disney moved to Los Angeles in 1923 and created Disney Brothers Studio, he had little to his name, having already failed with a previous studio company.  His legacy is now worth a market cap of $157 billion, spanning film, TV, sports and theme parks. In the last five years alone, shares of The Walt Disney Company (NYSE: DIS) have jumped 235% as the entertainment powerhouse uses its reach to dominate multiple industries. #-ad_banner-#The rise of China and 1.35 billion consumers could bring the next Disney story, and one of the world’s richest men already has plans for creating his… Read More

When Walt Disney moved to Los Angeles in 1923 and created Disney Brothers Studio, he had little to his name, having already failed with a previous studio company.  His legacy is now worth a market cap of $157 billion, spanning film, TV, sports and theme parks. In the last five years alone, shares of The Walt Disney Company (NYSE: DIS) have jumped 235% as the entertainment powerhouse uses its reach to dominate multiple industries. #-ad_banner-#The rise of China and 1.35 billion consumers could bring the next Disney story, and one of the world’s richest men already has plans for creating his empire.  He’s got the ear of the Chinese government and a $30 billion-plus head start on building the next global entertainment dynamo. From Property Development To Entertainment Empire The Dalian Wanda Group is already the world’s largest property developer, and now has its sight set on developing a global entertainment business to rival any other. The company is developing six theme parks in China, as well as hotel and tourism properties internationally.   The company also owns Infront Sports & Media, a media and marketing company for international sporting events and federations. The company represents 170 rights holders, including… Read More