With so many stocks trading at all-time highs, avoiding those with sky-high price-to-earnings (P/E) ratios now seems to be a prudent strategy. But it’s a decision to make on a case-by-case basis. On closer inspection, it becomes apparent that some seemingly richly valued stocks have the fundamentals to support plenty more price appreciation. The nation’s third-largest fast-food chain, Wendy’s Co. (Nasdaq: WEN), is such a stock. Its shares trade for more than 40 times earnings, a multiple that is well above the broader market multiple. Yet investors should anticipate continued outperformance.  Looking for a catalyst that will send… Read More

With so many stocks trading at all-time highs, avoiding those with sky-high price-to-earnings (P/E) ratios now seems to be a prudent strategy. But it’s a decision to make on a case-by-case basis. On closer inspection, it becomes apparent that some seemingly richly valued stocks have the fundamentals to support plenty more price appreciation. The nation’s third-largest fast-food chain, Wendy’s Co. (Nasdaq: WEN), is such a stock. Its shares trade for more than 40 times earnings, a multiple that is well above the broader market multiple. Yet investors should anticipate continued outperformance.  Looking for a catalyst that will send this stock yet higher? A multi-year re-branding effort that is still bearing fruit is a clear one. Initiatives include logo and tagline revamps, as well as serious efforts to establish a meaningful digital presence (TV advertising was traditionally the preferred marketing method). There have also been wise menu changes that reflect evolving demographics and consumer preferences. Menu innovations tend to target the enormous millennial generation, which is expected to be the economy’s main growth driver in the coming decades. Thus, Wendy’s is increasing its lineup of very spicy fare, a food category that’s favored by many millennials and should also… Read More

One of the best income strategies in the world involves a market some investors completely ignore. It allows individual investors to generate income from the best companies in the world without buying stocks most of the time. I’ve been recommending trades in this market for over two years. And so far, the results have been astounding — each of the 85 trades I’ve closed has been a winner. I don’t want to beat around the bush or make this sound like some super-secret investing strategy only I can tell you about. I am talking… Read More

One of the best income strategies in the world involves a market some investors completely ignore. It allows individual investors to generate income from the best companies in the world without buying stocks most of the time. I’ve been recommending trades in this market for over two years. And so far, the results have been astounding — each of the 85 trades I’ve closed has been a winner. I don’t want to beat around the bush or make this sound like some super-secret investing strategy only I can tell you about. I am talking about selling options. Now, before you decide that you never want to try options trading, let me show you what a recent subscriber to my Income Trader newsletter, which focuses on selling options, had to say about my strategy: “When I first started using [Amber’s] picks, my goal was to earn $500. Then I quickly realized I can earn at least $1,000 per month. I use the profits to buy more… Not only are your picks excellent with low risk, it teaches you to look for other options on your own, which I have… Read More

It’s not often that a stock suffers technical destruction and repairs itself in just a few weeks. But that is what seems to be happening to professional social media site LinkedIn (NASDAQ: LNKD). And the way it has performed recently suggests it has plenty of gas in the tank. On April 30, the company issued a warning that Q2 revenue and earnings would fall short of expectations. The next day the stock cratered 19% to smash through its one-year trendline and 200-day moving average on huge volume, which is often the case when a stock purges. The question… Read More

It’s not often that a stock suffers technical destruction and repairs itself in just a few weeks. But that is what seems to be happening to professional social media site LinkedIn (NASDAQ: LNKD). And the way it has performed recently suggests it has plenty of gas in the tank. On April 30, the company issued a warning that Q2 revenue and earnings would fall short of expectations. The next day the stock cratered 19% to smash through its one-year trendline and 200-day moving average on huge volume, which is often the case when a stock purges. The question on many investors’ minds is, “Is LNKD now on sale?” In my experience, a stock that makes such a huge break is damaged goods and not a bargain. It can take weeks, months and in some cases years for the market to forgive the company’s transgressions. And that manifests in the charts as a long trading range with little action and low turnover. #-ad_banner-# Basically, the trading range allows both bulls and bears to rethink their strategies. Many traders move on to other stocks because there is nothing happening in the fallen. But when interest is low… Read More

Investment bankers are having a field day. They’ve been helping their clients pursue a stunning amount of deals, pushing the phrase “Merger Mondays” back on to the front page. What kind of volume are we talking about? More than $1 trillion worth of deals have been announced thus far in 2015, according to Dealogic. That puts us on pace for the second-busiest year of M&A activity ever (though still trailing the pace seen in 2007, a record-setting year). The tech sector can always be counted on for a vigorous pace of deals, and this year is no exception. And the… Read More

Investment bankers are having a field day. They’ve been helping their clients pursue a stunning amount of deals, pushing the phrase “Merger Mondays” back on to the front page. What kind of volume are we talking about? More than $1 trillion worth of deals have been announced thus far in 2015, according to Dealogic. That puts us on pace for the second-busiest year of M&A activity ever (though still trailing the pace seen in 2007, a record-setting year). The tech sector can always be counted on for a vigorous pace of deals, and this year is no exception. And the hottest industries within technology — adtech and datacenters — are leading the way. That makes this a fine time to focus on the companies that might soon catch a bid. Digital Marketing From 2008 through 2012, major tech firms such as Facebook, Inc. (Nasdaq: FB), Google, Inc. (Nasdaq: GOOG) and Yahoo, Inc. (Nasdaq: YHOO) spent a combined $6 billion in cash and stock to acquire small, privately-held advertising technology firms. Fast forward to 2014 and that level of adtech deals took place in just one year. And the industry M&A has already surpassed $5 billion thus far in 2015,… Read More

Investors hate this industry. Pension funds do, too. In fact, the industry is so hated that some funds aren’t allowed to own the companies involved. But for the last 115 years, these companies have been the best performing stocks in the United States — despite stiff competition from sectors like healthcare, technology and energy. And today, while most investors shun these stocks, you could use them to earn more than 20% annualized. And here’s the best part… you won’t even have to buy shares. Let me explain. Investment bank Credit Suisse recently conducted a study on the best-performing industries in… Read More

Investors hate this industry. Pension funds do, too. In fact, the industry is so hated that some funds aren’t allowed to own the companies involved. But for the last 115 years, these companies have been the best performing stocks in the United States — despite stiff competition from sectors like healthcare, technology and energy. And today, while most investors shun these stocks, you could use them to earn more than 20% annualized. And here’s the best part… you won’t even have to buy shares. Let me explain. Investment bank Credit Suisse recently conducted a study on the best-performing industries in the United States since 1900. Here’s what they found: One dollar invested in the U.S. stock market in 1900 would have been worth $35,255 at the end of 2014. That comes out to an average annual return of 9.6%. Not bad. However, one dollar invested in the tobacco industry in 1900 would have ballooned to $6.28 million by the end of 2014. That’s an average annual return of 14.6%. No other industry has come even close to delivering that kind of return. The second-best performing group was electrical equipment, but tobacco outperformed these stocks by a factor of 10. It… Read More

Higher interest rates are setting up to be one of the major market themes of 2015. Global rates are surging, and despite the fact that the International Monetary Fund (IMF) urged the Federal Reserve to hold off on increasing the fed funds rates, investors remain on edge. This is wreaking havoc on the bond market, sending prices plummeting as investors sell bonds with lower fixed rates. The iShares 20+ Year Treasury Bond ETF (NYSE: TLT) has lost more than 10% over the past two months. #-ad_banner-# Stocks in the S&P 500 are not doing that much better,… Read More

Higher interest rates are setting up to be one of the major market themes of 2015. Global rates are surging, and despite the fact that the International Monetary Fund (IMF) urged the Federal Reserve to hold off on increasing the fed funds rates, investors remain on edge. This is wreaking havoc on the bond market, sending prices plummeting as investors sell bonds with lower fixed rates. The iShares 20+ Year Treasury Bond ETF (NYSE: TLT) has lost more than 10% over the past two months. #-ad_banner-# Stocks in the S&P 500 are not doing that much better, down 2% from their May high, and investors are scrambling to cover their portfolios in the event of higher rates. But one sector stands to benefit from the increase in yields. It booked the second highest earnings growth in the first quarter and could jump when second-quarter results come out. Risks remain but options traders can take advantage of a powerful strategy to minimize losses while amplifying potential returns into 50%-plus profits by the end of summer. Interest rates can be a mixed bag for companies in the financial sector. While low rates drive down borrowing costs, they also limit… Read More

Although the housing market activity has shown periodic signs of life, we’re still awaiting a more vigorous and sustained rebound. Yet a glimpse of recent trends brings fresh hope. Real estate information firm RealtyTrac reported the resurgence of a once-popular trend: house flipping. Buyers that seek to purchase a home, fix it and sell it for a quick profit, are once again making money. Last year, the average gross profit from flipping a property was $72,400, the highest figure since 2011. The news has largely escaped media attention, but it is an important vital sign for the industry. You see,… Read More

Although the housing market activity has shown periodic signs of life, we’re still awaiting a more vigorous and sustained rebound. Yet a glimpse of recent trends brings fresh hope. Real estate information firm RealtyTrac reported the resurgence of a once-popular trend: house flipping. Buyers that seek to purchase a home, fix it and sell it for a quick profit, are once again making money. Last year, the average gross profit from flipping a property was $72,400, the highest figure since 2011. The news has largely escaped media attention, but it is an important vital sign for the industry. You see, flipping helps boost the supply of available homes, which in turn draws more buyers. In 2015, the average gross margin on house flipping has increased above 40%, with many major cities posting gross profitability on flips of 50% and higher. Pending home sales in April were up an impressive 14% from a year ago, which bodes well for the rest of the year. Pending sales are a leading indicator and the return of flipping can mean multiple sales in a year for the same property. While the recovery will help boost players in the sector, one company is set to… Read More

There’s a little-known indicator that’s making a small group of investors a lot of money. I call this indicator the “Alpha Score,” because it consistently beats the market and often with less risk than buy-and-hold investing. It can flag exactly which stocks are about to jump double and triple digits in the coming days… weeks… and months. I’ll tell you more about the Alpha Score in a second, but just know that the indicator can range from 0 to 200. The higher the number, the more potential the stock has. For… Read More

There’s a little-known indicator that’s making a small group of investors a lot of money. I call this indicator the “Alpha Score,” because it consistently beats the market and often with less risk than buy-and-hold investing. It can flag exactly which stocks are about to jump double and triple digits in the coming days… weeks… and months. I’ll tell you more about the Alpha Score in a second, but just know that the indicator can range from 0 to 200. The higher the number, the more potential the stock has. For example, you’ve probably never heard of Westmoreland Coal (Nasdaq: WLB). It operates six surface coal mines and two power generating units in the western United States. The company looked promising when we recommended it on Dec. 18, 2013. Westmoreland had sold 95% of its future production under long-term contracts, and the market for coal looked stable. But that’s not what attracted us to the stock. What most investors didn’t know about WLB is that it had an Alpha Score of 158. Less than 1% of stocks have a score that high at any given time. … Read More

“Sell in May and go away” is one of those trite pieces of investment advice that traders would be wise to not follow blindly. This year, the Dow and S&P 500 finished up 1% in May, and the Nasdaq rose nearly 3%. That being said, I did warn my Profit Amplifier readers of one thing they definitely should sell in May. It wasn’t a stock, but a country that is struggling to sustain economic growth — and I saw a chance to make big profits. #-ad_banner-# Weak Economic Foundation Makes This Market Susceptible GDP… Read More

“Sell in May and go away” is one of those trite pieces of investment advice that traders would be wise to not follow blindly. This year, the Dow and S&P 500 finished up 1% in May, and the Nasdaq rose nearly 3%. That being said, I did warn my Profit Amplifier readers of one thing they definitely should sell in May. It wasn’t a stock, but a country that is struggling to sustain economic growth — and I saw a chance to make big profits. #-ad_banner-# Weak Economic Foundation Makes This Market Susceptible GDP growth in China and Hong Kong has been steadily declining since December 2011. Hong Kong’s growth dropped from 8% in the first quarter of 2012 to 2.1% in the first quarter of 2015. As a quick note, the city of Hong Kong is part of the country of China, reverting to Chinese rule from British rule in 1997. Hong Kong and China’s legal and governmental relationship is complex but they are economically intertwined, with Hong Kong and Shanghai being the financial hubs of the country. The chart below shows the trajectories of year-over-year GDP growth for China, Hong Kong and… Read More