If you had bought shares of Amazon.com (Nasdaq: AMZN) in April 2012, you’d be up 175%. That’s an impressive return, especially considering the S&P 500 is only up roughly 50% during that time. But if you’d followed my Amazon trade last week, then you would have made the same amount in three days. And no, the 175% return is not an annualized gain. #-ad_banner-#I spotted the trade using my earnings algorithm. It’s a system that helps me predict — with impressive odds — whether a company… Read More

If you had bought shares of Amazon.com (Nasdaq: AMZN) in April 2012, you’d be up 175%. That’s an impressive return, especially considering the S&P 500 is only up roughly 50% during that time. But if you’d followed my Amazon trade last week, then you would have made the same amount in three days. And no, the 175% return is not an annualized gain. #-ad_banner-#I spotted the trade using my earnings algorithm. It’s a system that helps me predict — with impressive odds — whether a company will beat or miss earnings estimates. It helped me become one of the youngest successful traders on the Philadelphia Stock Exchange, and I continue to use it to this day to give me an edge in the markets. So when my algorithm signaled that Amazon had good odds of beating analysts’ estimates when it reported on July 23, I immediately sent an alert to my readers. I recommended they purchase call options on Amazon, which would allow us to amplify our gains if shares moved higher. Read More

While momentum stocks can be unbeatable when they’re on a roll, they can also quickly shift course and unwind recent gains. But I don’t see that happening any time soon for one widely-owned momentum stock. Shares of leading video game maker Electronic Arts, Inc. (Nasdaq: EA) have surged more than 500% in the past three years, yet a set of catalysts should take shares yet higher in coming quarters. Don’t assume that strong stock price gains translate into an overvalued stock. EA’s profits have quickly risen in tandem with the share price, and the stock is actually more than… Read More

While momentum stocks can be unbeatable when they’re on a roll, they can also quickly shift course and unwind recent gains. But I don’t see that happening any time soon for one widely-owned momentum stock. Shares of leading video game maker Electronic Arts, Inc. (Nasdaq: EA) have surged more than 500% in the past three years, yet a set of catalysts should take shares yet higher in coming quarters. Don’t assume that strong stock price gains translate into an overvalued stock. EA’s profits have quickly risen in tandem with the share price, and the stock is actually more than 20% undervalued relative to peers, with a price-to-earnings ratio of 27 versus the industry average of 34. Look for that profit momentum to continue. EA is garnering a great deal of buzz for a November 2015 launch of a new Star Wars game, which will be released a month before the next instalment of the popular movie franchise. Management projects that the game will sell nine-to-10 million units in fiscal (March) 2016. #-ad_banner-#UBS analyst Eric Sheridan is even more optimistic. He sees unit sales of 12-to-14 million based on consumer surveys and an enthusiastic response to the new Star Wars… Read More

The other morning, I drove myself half-crazy looking for my car keys. It must have taken me almost a half hour to find them. And when I did, they were sitting — in plain sight — on my hall table. The reason I had trouble finding my keys, of course, was that they weren’t where I usually put them. I’m so used to looking in the same places that I walked right by my hall table without a glance. #-ad_banner-#The same thing happens to securities that pay irregular — or special — dividends. Read More

The other morning, I drove myself half-crazy looking for my car keys. It must have taken me almost a half hour to find them. And when I did, they were sitting — in plain sight — on my hall table. The reason I had trouble finding my keys, of course, was that they weren’t where I usually put them. I’m so used to looking in the same places that I walked right by my hall table without a glance. #-ad_banner-#The same thing happens to securities that pay irregular — or special — dividends. I call them “Wall Street Irregulars.” These dividend payers offer above-average yields, yet most investors skip right over them. That’s because popular investment resources like Yahoo! Finance rarely reflect the total yield these companies offer. Most brokerage and investment websites only take a stock’s most recent dividend payment and multiply it times the payment frequency to get a stock’s annual dividend. The websites then use the computed annual dividend to calculate the yield. So while the “posted yield” — the yield investors see listed — may… Read More

As the stock market spews volatility in the face of a Chinese rout, continued Greek uncertainty and economic reports that may change the Federal Reserve’s plans, it is getting difficult to sleep at night.  However, as per their unofficial mandate, consumer staples stocks are acting like a welcome island of calm in the storm. This sector has been outperforming the broader market all summer and has even made an arguable technical breakout. #-ad_banner-# As commodities in general remain weak, it was interesting to find cocoa of all things ending a rebound with a downside trend break. While I… Read More

As the stock market spews volatility in the face of a Chinese rout, continued Greek uncertainty and economic reports that may change the Federal Reserve’s plans, it is getting difficult to sleep at night.  However, as per their unofficial mandate, consumer staples stocks are acting like a welcome island of calm in the storm. This sector has been outperforming the broader market all summer and has even made an arguable technical breakout. #-ad_banner-# As commodities in general remain weak, it was interesting to find cocoa of all things ending a rebound with a downside trend break. While I cannot offer statistically sound proof that companies using cocoa as an input, namely chocolate makers, perform better as the commodity falls it certainly could not hurt. What I see now in Hershey (NYSE: HSY) is an upside trend break that occurred three days after the breakdown in cocoa. And I see a chance for traders to pick up a double-digit profit over the next few weeks. Hershey is indeed a member of the consumer staples group, where companies’ fortunes are not closely tied to the ups and downs of the economy. People will continue to buy products such as soap,… Read More

#-ad_banner-#When a company stumbles repeatedly, investors eventually throw in the towel and sell their shares. Paradoxically, that may be the very best time to consider such a stock. With few supporters and legions of detractors, the bad news is mostly priced in and any potential good news is heavily discounted. Of course you need to identify the potential positive catalysts that are coming down the pike. And you need to see management take action, not simply issue empty promises. Bring these factors together and you may be looking at a great turnaround stock. I’ve found two such stocks that appear… Read More

#-ad_banner-#When a company stumbles repeatedly, investors eventually throw in the towel and sell their shares. Paradoxically, that may be the very best time to consider such a stock. With few supporters and legions of detractors, the bad news is mostly priced in and any potential good news is heavily discounted. Of course you need to identify the potential positive catalysts that are coming down the pike. And you need to see management take action, not simply issue empty promises. Bring these factors together and you may be looking at a great turnaround stock. I’ve found two such stocks that appear poised to finally move up from their multi-year lows. The potential six-to-12 month upside: 50% or more once these factors come into play. Testing Icahn’s Patience The first turnaround candidate ranks as one of Carl Icahn’s rare missteps. Last summer, his investment firm acquired 38.8 million shares of Hertz Global Holdings, Inc. (NYSE: HTZ) at an average price $28.48 a share. Soon after that major purchase, Hertz’s board announced that a seemingly minor set of accounting problems were actually quite extensive.  Almost the entire management team was replaced, and in the fourth quarter of 2014, Icahn boosted his stake… Read More

Last year, I was reminded of one of the most important keys to building a successful income-generating portfolio. The epiphany came when I was stuck at the airport while on a family vacation, of all things. #-ad_banner-#Most of us wait to board our plane with little thought to the activity going on outside the terminal. While we check our email one last time, a bevy of critical activities are taking place to ensure our flight arrives and leaves in a safe and timely fashion. This may seem arbitrary, but in fact… Read More

Last year, I was reminded of one of the most important keys to building a successful income-generating portfolio. The epiphany came when I was stuck at the airport while on a family vacation, of all things. #-ad_banner-#Most of us wait to board our plane with little thought to the activity going on outside the terminal. While we check our email one last time, a bevy of critical activities are taking place to ensure our flight arrives and leaves in a safe and timely fashion. This may seem arbitrary, but in fact it’s the premise of a highly profitable, often overlooked business. You may not know this, but these vital services are commonly performed by private contractors known as fixed base operators (FBOs). In addition to the sale of aviation fuel, FBOs also handle parking, hangaring and tie-down. In some cases, they offer ancillary services ranging from maintenance and repair to in-flight food and beverage catering. Imagine a town with only one gas station, and you appreciate the advantageous position that these FBOs are exploiting. Most (but not all) airport operating authorities grant a single FBO… Read More

Recent market commentary is starting to remind me of the periods in 2000 and 2008 just before the bottom dropped out of the market. Leading up to the bursting of the tech bubble, for example, analysts increasingly ignored valuation and warnings that earnings expectations were too high.  Similarly, housing prices peaked well before the stock market’s top in 2007, while the Fed had raised rates four times in 2006. Still, no one believed that the economy could slow.  #-ad_banner-# This time around, earnings for the second quarter are looking weak, the U.S. economy contracted 0.2% in the… Read More

Recent market commentary is starting to remind me of the periods in 2000 and 2008 just before the bottom dropped out of the market. Leading up to the bursting of the tech bubble, for example, analysts increasingly ignored valuation and warnings that earnings expectations were too high.  Similarly, housing prices peaked well before the stock market’s top in 2007, while the Fed had raised rates four times in 2006. Still, no one believed that the economy could slow.  #-ad_banner-# This time around, earnings for the second quarter are looking weak, the U.S. economy contracted 0.2% in the first quarter of 2015 and estimates for the second quarter are as low as a tepid 2% growth… yet no one seems to care.  Take Apple (NASDAQ: AAPL), for example. Only one analyst of the 20 covering its earnings release cut expectations for the stock, despite the fact that the company forecast next quarter sales that fell short of expectations. Piper Jaffray (NYSE: PJC) analyst Gene Munster even raised his price target by 6% to $172 per share, more than 37% above the current trade. Apple is just one example, and while I won’t attempt to predict a stock market… Read More

#-ad_banner-#”Big Picture” investors like to focus on major themes, and a pair of them are emerging that could serve as key catalysts for the stock market in the next decade. These themes will be underpinned by trillions in spending, enough to lift entire sectors. And certain companies are very well-positioned to take advantage of the trends. In fact, one in particular should benefit from both mega trends. Climate Change And The Economic Impact The U.S. National Oceanic and Atmospheric Administration (NOAA) recently released its State of the Climate report highlighting record heat across the globe. Read More

#-ad_banner-#”Big Picture” investors like to focus on major themes, and a pair of them are emerging that could serve as key catalysts for the stock market in the next decade. These themes will be underpinned by trillions in spending, enough to lift entire sectors. And certain companies are very well-positioned to take advantage of the trends. In fact, one in particular should benefit from both mega trends. Climate Change And The Economic Impact The U.S. National Oceanic and Atmospheric Administration (NOAA) recently released its State of the Climate report highlighting record heat across the globe. Last year was the hottest in 135 years of record-keeping, and four of the five hottest months on record have occurred in 2015. Because of the El Nino phenomenon, researchers now think above-average temperatures will continue through the spring of 2016. One clear impact will be ongoing and profound droughts in places like  California and Australia. As a result, sales of irrigation equipment should see strong support well into the future. Infrastructure Is A Ticking Time Bomb Sluggish global growth and lingering problems from the financial crisis have put off needed infrastructure projects around… Read More