Despite a strong rebound on Friday, the major U.S. indices closed lower again last week. Leading the way down were the small-cap Russell 2000 and blue-chip Dow Jones Industrial Average, which each lost 1.4% for the week. #-ad_banner-# The week’s most important technical event was the S&P 500’s ability to once again test and hold major support at 1,821, triggering a rebound Friday. I identified this level in the Jan. 19 Market Outlook as being critical to the market’s intermediate-term direction.  As I said last week, this “is where the S&P 500 should stabilize and begin an eventual… Read More

Despite a strong rebound on Friday, the major U.S. indices closed lower again last week. Leading the way down were the small-cap Russell 2000 and blue-chip Dow Jones Industrial Average, which each lost 1.4% for the week. #-ad_banner-# The week’s most important technical event was the S&P 500’s ability to once again test and hold major support at 1,821, triggering a rebound Friday. I identified this level in the Jan. 19 Market Outlook as being critical to the market’s intermediate-term direction.  As I said last week, this “is where the S&P 500 should stabilize and begin an eventual retest of the May 2015 highs… if the recent decline was just a correction within a healthy bull market. If the market cannot stabilize at this level, it warns equities are in the midst of an emerging bear market.” The only sector of the S&P 500 to post a gain last week was consumer staples, which rose just 0.9%. Financials and utilities were among the weakest sectors, each down 2.2%.  Not surprisingly, Asbury Research’s own metric shows the biggest outflows from sector bet-related ETFs over the past one-week, one-month and three-month periods came from financials. This fueled last… Read More

Last week, I provided updates on three recommended stocks. Today, let’s follow suit with three of the income-oriented stocks I’ve recommended in recent months.  Emerson Electric (NYSE: EMR), which I recommended in this article, is a diversified electrical-equipment conglomerate that sells products and services in industrial process management, automation, climate control, network support, power technology, motors and construction and maintenance tools. The company markets its products in more than 150 countries. It’s been hurt by the oil and gas sector’s weakness; declining demand from China, Brazil and other emerging markets; and the strong dollar, which boosts relative prices of Emerson’s… Read More

Last week, I provided updates on three recommended stocks. Today, let’s follow suit with three of the income-oriented stocks I’ve recommended in recent months.  Emerson Electric (NYSE: EMR), which I recommended in this article, is a diversified electrical-equipment conglomerate that sells products and services in industrial process management, automation, climate control, network support, power technology, motors and construction and maintenance tools. The company markets its products in more than 150 countries. It’s been hurt by the oil and gas sector’s weakness; declining demand from China, Brazil and other emerging markets; and the strong dollar, which boosts relative prices of Emerson’s products for international buyers. #-ad_banner-#Emerson is unlikely to stage a strong earnings rebound until the oil and gas sector recovers. But analysts think that could happen this year, and in the meantime Emerson will muddle through just fine thanks to its strong market shares in myriad businesses. I also expect surprisingly good results from its electrical equipment used in the renewable energy industry. And as I wrote in December, with Emerson you get paid while you wait. Emerson shares yield 4.2%, supported by strong cash flows. The company has increased its dividend for 59 years in a row, a streak… Read More

The mini-rally in stocks at the end of January has turned back into a full-blown selloff and investors are once again wondering if the seven-year bull market has run its course. Oil prices continue to crash lower and few are left touting the future of America’s revolution in energy production.  Stocks in the S&P 500 have fallen more than 14% from their 52-week high — now well past a correction and approaching the 20% bear market signal as fourth quarter earnings give investors little to cheer.  #-ad_banner-#But we’ve been here before. Several times in fact. There have been three other… Read More

The mini-rally in stocks at the end of January has turned back into a full-blown selloff and investors are once again wondering if the seven-year bull market has run its course. Oil prices continue to crash lower and few are left touting the future of America’s revolution in energy production.  Stocks in the S&P 500 have fallen more than 14% from their 52-week high — now well past a correction and approaching the 20% bear market signal as fourth quarter earnings give investors little to cheer.  #-ad_banner-#But we’ve been here before. Several times in fact. There have been three other corrections of 10% or more since 2009. And in their despair, investors are overlooking some powerful catalysts that could take shares back up and beyond old highs.  And I think it looks especially likely that this will happen in two of the hardest-hit sectors. Is The Bull Market Stampede Officially Over? Corporate earnings are set to decline for three consecutive quarters, a trend not seen since 2009, and reported sales are down for four straight quarters according to FactSet Research. Slowing growth from China and the near collapse of the energy sector have got investors worried that the bull… Read More

The Chinese government thought it could outwit investors and foreign governments with its overblown economic growth figures, currency manipulation and complex market meddling… but the country’s game of smoke and mirrors is finally coming to an end. Bearish bets are piling up, and it’s only a matter of time before the house of cards comes tumbling down.  #-ad_banner-#My subscribers and I watched — and profited — as the country’s stock market collapsed in 2015. Here’s how we’ll profit again from a similar situation… China’s currency, the yuan, has been on the decline against the dollar and other currencies for some… Read More

The Chinese government thought it could outwit investors and foreign governments with its overblown economic growth figures, currency manipulation and complex market meddling… but the country’s game of smoke and mirrors is finally coming to an end. Bearish bets are piling up, and it’s only a matter of time before the house of cards comes tumbling down.  #-ad_banner-#My subscribers and I watched — and profited — as the country’s stock market collapsed in 2015. Here’s how we’ll profit again from a similar situation… China’s currency, the yuan, has been on the decline against the dollar and other currencies for some time. The currencies of weak countries can lose a tremendous amount of value relative to the currencies of countries with strong economies and less “accommodating” monetary policies (like the United States). Perhaps the most ironic piece of this story is the fact that, for years, the Chinese government purposefully kept the yuan artificially weak relative to other currencies in order to stoke its export market and drive competition away. A relatively cheap currency is good for exports because countries with relatively stronger currencies — like the United States — can afford to buy more goods. Big exporting countries like China… Read More

There is blood in the streets in the energy sector.  Oil- and gas-related stocks have been pummeled for the better part of the past year and a half. Yet, economists and analysts continue to lower their forecasts for energy prices and downgrade stocks in the group.  The latest rout came this week on bankruptcy rumors surrounding Chesapeake Energy (NYSE: CHK) — once one of the world’s largest natural gas producers — which seemed to call into question the survival of some companies in the space. However, there is little question regarding long-term demand in the sector. Natural gas… Read More

There is blood in the streets in the energy sector.  Oil- and gas-related stocks have been pummeled for the better part of the past year and a half. Yet, economists and analysts continue to lower their forecasts for energy prices and downgrade stocks in the group.  The latest rout came this week on bankruptcy rumors surrounding Chesapeake Energy (NYSE: CHK) — once one of the world’s largest natural gas producers — which seemed to call into question the survival of some companies in the space. However, there is little question regarding long-term demand in the sector. Natural gas accounted for 35% of U.S. power generation last year, up from just 20% in 2010. And BP (NYSE: BP) estimates natural gas consumption will grow 13.4% through 2020. #-ad_banner-# Energy companies that can survive the current storm could thrive when the clouds clear. In the current market, though, one natural gas heavyweight could offer traders a chance to book a 174% annualized return. Why I’m Bullish On A Sector The Market Loves To Hate With oil and gas producers burdened by huge debt loads thanks to years of heavy capital investment and falling energy prices, it’s not surprising that… Read More

I used to be a notorious Apple (Nasdaq: AAPL) hater. From the roll out of the first overpriced iPhone, I’d look for any opportunity to rile up the fan boys. I’d yell at the television when they’d show file footage of the legions of fans standing in line at the Manhattan Apple store. I wrote bear cases for the stock.  That was then. This is now. I’ve grown up and so has Apple. And I believe it should be a core holding in your equity portfolio. #-ad_banner-#​Apple Is A Huge Bargain At Current Prices Simply… Read More

I used to be a notorious Apple (Nasdaq: AAPL) hater. From the roll out of the first overpriced iPhone, I’d look for any opportunity to rile up the fan boys. I’d yell at the television when they’d show file footage of the legions of fans standing in line at the Manhattan Apple store. I wrote bear cases for the stock.  That was then. This is now. I’ve grown up and so has Apple. And I believe it should be a core holding in your equity portfolio. #-ad_banner-#​Apple Is A Huge Bargain At Current Prices Simply defined, a stock’s margin of safety is the difference between the intrinsic value of a stock and its market price. For example, if you determine that a stock’s intrinsic value is $10 per share and your purchase price is $7 per share, you’re getting $3 worth of upside and enough cushion if the intrinsic value of the stock winds up being $9. This valuation method was pioneered by Warren Buffett’s mentor, Benjamin Graham; the godfather of securities analysis. The concept of margin of safety is the foundation of Berkshire Hathaway’s (NYSE: BRK-A) investment process. AAPL would totally fall under their… Read More

After many years in the investment newsletter business, I’ve been fortunate enough to build quite a following — particularly in my premium income advisory, The Daily Paycheck. And one thing I’ve learned in this business is that even after personally spending countless hours researching income securities to recommend to my subscribers, sometimes the best recommendations come from the readers themselves. Back in May of last year, I encouraged my readers to submit the names of securities I didn’t already hold in my portfolio. I promised to research each and every one of them and then offer my take on whether… Read More

After many years in the investment newsletter business, I’ve been fortunate enough to build quite a following — particularly in my premium income advisory, The Daily Paycheck. And one thing I’ve learned in this business is that even after personally spending countless hours researching income securities to recommend to my subscribers, sometimes the best recommendations come from the readers themselves. Back in May of last year, I encouraged my readers to submit the names of securities I didn’t already hold in my portfolio. I promised to research each and every one of them and then offer my take on whether they were suitable candidates for the kind of dividend reinvestment strategy I use each month in my newsletter. #-ad_banner-#Many of my subscribers suggested the names of some great real estate investment trusts (known as “REITS”). If you’re not familiar with these investments, they’re tax-advantaged companies that own income-producing real estate assets — usually in the form of things like apartments, retail space, medical facilities or office buildings. And because they are legally required to pass along at least 90% of earnings to shareholders, they usually offer market-beating dividend yields for investors. But one REIT suggestion from a subscriber stood out… Read More

While a strong stock can rise on its own merits, it is easier when it is part of a rising sector. Conversely, when an entire sector is falling, even stocks that are not quite so weak can be taken down with it. #-ad_banner-# The latter is the case for the computer services sector and VeriSign (Nasdaq: VRSN) in particular. This domain name registry and Internet security stock has already fallen more than 20% from its December high, but given weakness in the sector, there is likely more pain ahead. Selling a stock that has already dipped… Read More

While a strong stock can rise on its own merits, it is easier when it is part of a rising sector. Conversely, when an entire sector is falling, even stocks that are not quite so weak can be taken down with it. #-ad_banner-# The latter is the case for the computer services sector and VeriSign (Nasdaq: VRSN) in particular. This domain name registry and Internet security stock has already fallen more than 20% from its December high, but given weakness in the sector, there is likely more pain ahead. Selling a stock that has already dipped into official bear market territory may seem risky. However, in addition to its falling sector, VeriSign’s chart offers ample evidence for another double-digit drop. It does not hurt that the broader market is struggling either. Let’s start with the big picture. Amazingly, we can draw a trendline on a log-scaled monthly chart that connects the start of the bull markets in 2002 and 2009 with major lows in 2011, 2012 and 2014. That line is currently in the $64 area, roughly 10 points below recent trading.  On its own, that would be an enticing downside target. But let’s… Read More

The market’s ups and downs this year show no sign of abating — in fact, S&P 500 volatility is in a strong uptrend that may continue for some time. Until calm prevails, a smart investor’s best bet is to pick up shares of stocks that have been unfairly beaten down and use their high quality to ride out the waves. Of course, such a strategy takes some fortitude and patience. A few weeks of high volatility, including nausea-inducing market drops of several percentage points a day, can seem like years. But a few months from now, we may well look… Read More

The market’s ups and downs this year show no sign of abating — in fact, S&P 500 volatility is in a strong uptrend that may continue for some time. Until calm prevails, a smart investor’s best bet is to pick up shares of stocks that have been unfairly beaten down and use their high quality to ride out the waves. Of course, such a strategy takes some fortitude and patience. A few weeks of high volatility, including nausea-inducing market drops of several percentage points a day, can seem like years. But a few months from now, we may well look back at the prices created by this correction and wonder why we didn’t buy more. #-ad_banner-#In recent months, I’ve pointed out many high-quality bargain stocks — market leaders with strong brands, rock-solid balance sheets, robust cash flows and other sterling qualities. Some have performed well; others are testing our patience. Let’s take a look at how three of them have performed — and whether or not they remain “Buys” today. 3M (NYSE: MMM), which I profiled here, has rallied impressively from its January lows and has performed fairly steadily even on major down days in the market. I expect the… Read More