Some of the best long-term investments are in companies that dominate a niche market. As an example, I recently highlighted the strong appeal of auto parts supplier Dorman Products (Nasdaq: DORM).  Investors should consider Ball Corp (NYSE: BLL) as another market niche dominator. The company makes metal packaging products, has a similarly profitable past, and an equally bright future. #-ad_banner-#You probably use Ball Corp’s products every day. It makes metal cans and containers for companies like Anheuser-Busch (NYSE: BUD), PepsiCo Inc. (NYSE: PEP), The Coca-Cola Company (NYSE: KO), and Unilever Plc (NYSE: UL). The operational dynamics at work in Ball’s… Read More

Some of the best long-term investments are in companies that dominate a niche market. As an example, I recently highlighted the strong appeal of auto parts supplier Dorman Products (Nasdaq: DORM).  Investors should consider Ball Corp (NYSE: BLL) as another market niche dominator. The company makes metal packaging products, has a similarly profitable past, and an equally bright future. #-ad_banner-#You probably use Ball Corp’s products every day. It makes metal cans and containers for companies like Anheuser-Busch (NYSE: BUD), PepsiCo Inc. (NYSE: PEP), The Coca-Cola Company (NYSE: KO), and Unilever Plc (NYSE: UL). The operational dynamics at work in Ball’s industry are quite appealing. Metal cans and bottles for the food, beverage and personal care industries represent huge markets, for which there are few good substitutes. Despite the huge market, the risk of technological disruption is low, and Ball’s products require minimal new investment in product improvements. After all, does a can of cola look any different today than it did a decade or two ago? Furthermore, Ball has already reached the size and scale that would make it difficult for new companies to enter the market. In the company’s 2014 10-K filing, Ball noted that only “Five companies manufacture… Read More

Although the S&P 500 has made a substantial recovery off its late-August lows, the technical condition of the broader market is still shaky. For starters, the death cross (200-day moving average crosses below the 50-day) is still in force on the index. The same technical configuration applies to both the Dow Jones industrials and transports as well. Further, overhead resistance on the S&P 500 looms close by. The declining 50-day moving average is at 2,039. Slightly above is strong lateral resistance near 2,045, which was the previous support level. For the cherry on top, many technicians believe a… Read More

Although the S&P 500 has made a substantial recovery off its late-August lows, the technical condition of the broader market is still shaky. For starters, the death cross (200-day moving average crosses below the 50-day) is still in force on the index. The same technical configuration applies to both the Dow Jones industrials and transports as well. Further, overhead resistance on the S&P 500 looms close by. The declining 50-day moving average is at 2,039. Slightly above is strong lateral resistance near 2,045, which was the previous support level. For the cherry on top, many technicians believe a double-bottom will need to be traced out before any all-clear signal can be given. #-ad_banner-# In this environment, weak stocks make good shorts, and one of the most vulnerable is XenoPort (Nasdaq: XNPT). The California-based biopharmaceutical firm focuses on developing treatments for neurological and autoimmune disorders.  The stock suffered an enormous blow on Sept. 15, when shares plummeted 28% on staggering volume following news the company’s psoriasis drug, XP23829 — currently in a mid-stage, Phase II trial — caused negative and potentially harmful side effects, including diarrhea, stomach pain and vomiting. Due to these health risks, nearly a third of… Read More

The major U.S. indices finished last week mixed, but a closer look reveals some subtle positive signs. The two strongest were the small-cap Russell 2000, which gained 0.5%, and the tech-heavy Nasdaq 100, which was unchanged.   Since small-cap and technology indices typically lead the broader market higher and lower, last week’s performance could be the early stages of some upcoming market stability. This is especially true as we close in on October, a month that has historically led a strong seasonal rebound into year end. #-ad_banner-# From a sector standpoint, however, the market is not showing any… Read More

The major U.S. indices finished last week mixed, but a closer look reveals some subtle positive signs. The two strongest were the small-cap Russell 2000, which gained 0.5%, and the tech-heavy Nasdaq 100, which was unchanged.   Since small-cap and technology indices typically lead the broader market higher and lower, last week’s performance could be the early stages of some upcoming market stability. This is especially true as we close in on October, a month that has historically led a strong seasonal rebound into year end. #-ad_banner-# From a sector standpoint, however, the market is not showing any signs of life just yet. The only sectors to post gains last week were defensive: utilities, health care and consumer staples. If and when a market bottom emerges, it is likely to be fueled by strength in more offensive sectors like technology and consumer discretionary, perhaps with a little help from cyclical sectors like energy and materials.  Watch Semis For Clue To Near-Term Direction In previous Market Outlooks, I discussed signs of an emerging stock market bottom including a bearish extreme in investor sentiment and historically weak market breadth. But I also said that overhead resistance levels needed to be… Read More

Large swings in the Dow Jones Industrial Average and other major market averages always seem to increase the level of fear in business news headlines. Here are some good ones we’ve seen in the past few weeks: “Panic selling returns to fragile markets” “Investors urged to avoid panic moves as markets plunge” “Panic grips markets on ‘Bloody Monday’; global contagion keeps markets under pressure” “Chart shows the peak of US investor panic today” “European shares tumble as China panics investors” I don’t… Read More

Large swings in the Dow Jones Industrial Average and other major market averages always seem to increase the level of fear in business news headlines. Here are some good ones we’ve seen in the past few weeks: “Panic selling returns to fragile markets” “Investors urged to avoid panic moves as markets plunge” “Panic grips markets on ‘Bloody Monday’; global contagion keeps markets under pressure” “Chart shows the peak of US investor panic today” “European shares tumble as China panics investors” I don’t think these headlines truly reflect the attitude of most individual investors, though. Personally, I believe recent experience has taught many individual investors to take market pullbacks in stride. We’ve gone through two major bear markets in a little more than 15 years, and both times the markets have recovered. In the middle of the last major recession, Warren Buffett — one of the world’s greatest investors — wrote an op-ed for The New York Times explaining why he was still buying stocks. It wasn’t because he thought the market had bottomed. In fact, he clearly stated that… Read More

It’s been five years since the Financial Times first made use of one of the less flattering economic acronyms: PIIGS. Back then, Portugal, Ireland, Italy, Greece and Spain were seen as economic basket cases, and it was widely assumed that one or several of them would eventually default on their massive debt burdens. While such an event has yet to pass, Greece remains quite sickly, and Portugal and Italy continue to wrestle with profound economic dislocation. To varying degrees, these countries have failed to embrace the badly-needed economic reforms that are essential to sow the seeds of a lasting economic… Read More

It’s been five years since the Financial Times first made use of one of the less flattering economic acronyms: PIIGS. Back then, Portugal, Ireland, Italy, Greece and Spain were seen as economic basket cases, and it was widely assumed that one or several of them would eventually default on their massive debt burdens. While such an event has yet to pass, Greece remains quite sickly, and Portugal and Italy continue to wrestle with profound economic dislocation. To varying degrees, these countries have failed to embrace the badly-needed economic reforms that are essential to sow the seeds of a lasting economic recovery. Yet despite heavy odds, Ireland and Spain are clearly on the comeback trail. Thanks to broad-based reform packages, their economies have begun to turn the corner. And with the aid of a very competitive currency, their futures are looking far brighter than most would have suspected just a few years ago. For investors, exposure to these dynamic turnaround stories can be had through a pair of country-specific exchange-traded funds (ETFs). Ireland Is Back In Business Ireland and its citizens are remarkably resilient. They have been through myriad crises over the past two centuries, and always manage to bounce… Read More

I’ve found what really works when it comes to income investing. It’s a secret that could help you earn returns nearly triple most regular income stocks. In 2010, with $200,000 in actual cash fronted by StreetAuthority, I was given the go-ahead to build a real-money portfolio using the Daily Paycheck strategy. #-ad_banner-# The strategy is straightforward. I select the best income investments on the market, reinvest every cent of dividends I receive, and then watch my paychecks grow. It’s a simple way to invest, and many investors have probably heard about it… Read More

I’ve found what really works when it comes to income investing. It’s a secret that could help you earn returns nearly triple most regular income stocks. In 2010, with $200,000 in actual cash fronted by StreetAuthority, I was given the go-ahead to build a real-money portfolio using the Daily Paycheck strategy. #-ad_banner-# The strategy is straightforward. I select the best income investments on the market, reinvest every cent of dividends I receive, and then watch my paychecks grow. It’s a simple way to invest, and many investors have probably heard about it before. But until now, most have only seen this sort of strategy backtested — not put into practice in real life. The good news is that while we all know being paid dividends regularly — and reinvesting those payments — is “supposed” to work, the actual results have been much more exciting than even I expected. For instance, I’m now averaging more than $1,592 per month in dividends and have earned more than $87,000 in total dividends. But this strategy has also uncovered something surprising that could have a big impact… Read More

Last month was the worst August for the venerable Dow Jones Industrial Average in more than 16 years. For the S&P 500, it was the worst August since 2001.The volatility since has been almost sickening, but I believe the most intense portion of the selling is behind us. The AIM sentiment indicator, which I discussed last week, has plunged even further into bearish territory. In fact, it’s dropped so far it’s more bearish now than it was during the 2008 financial crash.  As I explained then, market sentiment is a classic contrarian indicator that can help spot changes… Read More

Last month was the worst August for the venerable Dow Jones Industrial Average in more than 16 years. For the S&P 500, it was the worst August since 2001.The volatility since has been almost sickening, but I believe the most intense portion of the selling is behind us. The AIM sentiment indicator, which I discussed last week, has plunged even further into bearish territory. In fact, it’s dropped so far it’s more bearish now than it was during the 2008 financial crash.  As I explained then, market sentiment is a classic contrarian indicator that can help spot changes in financial trends. When too many people are thinking one way, the market is primed to move in the opposite direction. From a sentiment perspective, this market downturn is a giant vise squeezing out all the bears. #-ad_banner-# When it’s over, I expect the ensuing bottom to provide solid profit opportunities in stocks with high Alpha Scores (more on this later). And from what I’m seeing, those outperforming stocks are likely to be based in the United States. Relative to the rest of the world, U.S. stocks are doing the “least poorly.” You can see this clearly in the Relative… Read More

Even in the beaten down commodities sector, you can find stocks with clear upside catalysts. Case in point: shares of metals miner Glencore surged more than 10% last week (on the London Stock Exchange) on news that the firm planned to  suspend operations at a pair of African copper mines, issue new shares, cut its dividend and sell assets in an attempt to  preserve cash and cash flow. The move is seen as an inflection point for the industry and similar steps may soon be taken by other commodities producers. Industry wide output cuts of various commodities could set the… Read More

Even in the beaten down commodities sector, you can find stocks with clear upside catalysts. Case in point: shares of metals miner Glencore surged more than 10% last week (on the London Stock Exchange) on news that the firm planned to  suspend operations at a pair of African copper mines, issue new shares, cut its dividend and sell assets in an attempt to  preserve cash and cash flow. The move is seen as an inflection point for the industry and similar steps may soon be taken by other commodities producers. Industry wide output cuts of various commodities could set the stage for supply and demand to come back into equilibrium, which would boost pricing. Copper, in particular, may be subject to a brightening pricing picture. Are Commodities About To Head Higher? Of course, demand from China remains as the clearest headwind for commodity producers. Chinese imports of raw and finished goods have now fallen for 10 straight months, which has led to speculation of further policy easing by the Chinese government. Zhou Xiaochuan, governor of China’s central bank, told the G20 finance ministers earlier this month that the recent correction in stock prices is nearly over. Remarks like these… Read More

The past couple of weeks have sent investors into a frenzy.  I know most aren’t surprised by this market hiccup, but volatility like what we’ve seen recently can still be tough to stomach. It’s times like these that it becomes important to get back to the basics. In fact, I’d venture to say that anyone can follow just four simple steps to invest successfully. They’re not difficult concepts, and they’re most important when the market is in flux. 1. Have a system.  There are too many securities in the world to approach… Read More

The past couple of weeks have sent investors into a frenzy.  I know most aren’t surprised by this market hiccup, but volatility like what we’ve seen recently can still be tough to stomach. It’s times like these that it becomes important to get back to the basics. In fact, I’d venture to say that anyone can follow just four simple steps to invest successfully. They’re not difficult concepts, and they’re most important when the market is in flux. 1. Have a system.  There are too many securities in the world to approach the market without some framework for making rational choices. For instance, my newsletter, Game-Changing Stocks, has a simple system — put 80% of the portfolio into predictable stocks or index-tracking vehicles and allocate the remaining 20% to aggressive growth securities with greater potential returns than the overall market offers. This system is backstopped by millions of data points that offer a reliable statistical underpinning for predictable results over the long term.  Over the long term, corrections are going to happen. That’s reality. But we go in knowing that, and we do not panic when the arrows on Wall Street start… Read More