It’s often helpful to glance at the key moves made by hedge fund managers when in search of new investment ideas. And right now, many of these savvy investors are buying shares of a behind-the-scenes industrial play. The company in question: Macquarie Infrastructure Co. LLC (NYSE: MIC), which owns  a collection of assets primarily in the materials and energy sector. #-ad_banner-#Macquarie Infrastructure’s biggest asset is International-Matex Tank Terminals (IMTT), a company that owns and manages bulk liquid storage facilities on ports and railways. IMTT handles products like petroleum; renewable fuels; vegetable and animal oils; and other chemicals essential to everyday… Read More

It’s often helpful to glance at the key moves made by hedge fund managers when in search of new investment ideas. And right now, many of these savvy investors are buying shares of a behind-the-scenes industrial play. The company in question: Macquarie Infrastructure Co. LLC (NYSE: MIC), which owns  a collection of assets primarily in the materials and energy sector. #-ad_banner-#Macquarie Infrastructure’s biggest asset is International-Matex Tank Terminals (IMTT), a company that owns and manages bulk liquid storage facilities on ports and railways. IMTT handles products like petroleum; renewable fuels; vegetable and animal oils; and other chemicals essential to everyday life. While bulk liquid storage doesn’t sound like a high growth industry, the company has managed to grow revenue 10% and operating earnings (EBITDA) 11% annually over the last two years. In mid 2014, Macquarie acquired the other 50% of the business it didn’t already own, making it the crown jewel of Macquarie’s portfolio. The firm’s other assets include Hawaii Gas, which distributes natural and synthetic gas on the islands of Hawaii,  and Contracted Power and Energy, which owns controlling interests in five solar power generating facilities, a recently purchased gas-powered energy facility and two wind power generating… Read More

The recipe for a top-performing IPO is quite simple: Bring in a broad cross section of investment banks to underwrite the deal, ensuring an ample number of bullish research reports; deliver knockout results in your first quarter as a public company; and steer clear of any sort of controversy. The executives at Etsy, Inc. (Nasdaq: ETSY) heeded none of those lessons. And quite predictably, the company’s shares have already been tossed in the dust bin. Yet as the company finds its footing in coming quarters, this operator of an online crafts-oriented marketplace, could still turn out to be… Read More

The recipe for a top-performing IPO is quite simple: Bring in a broad cross section of investment banks to underwrite the deal, ensuring an ample number of bullish research reports; deliver knockout results in your first quarter as a public company; and steer clear of any sort of controversy. The executives at Etsy, Inc. (Nasdaq: ETSY) heeded none of those lessons. And quite predictably, the company’s shares have already been tossed in the dust bin. Yet as the company finds its footing in coming quarters, this operator of an online crafts-oriented marketplace, could still turn out to be one of the hottest IPOs of 2015. A 50% Downdraft To understand this stock’s rebound potential, we should first review the litany of bad news that has beset this stock. On April 16, shares of Etsy opened for trading at $31 a share, and within a few hours, moved above $35. In many respects, the Wall Street hype machine was not engaged in the offering. Etsy’s management decided to mostly place shares among retail investors (many of whom are Etsy’s clients) and as a result, major institutions such as mutual fund firms like Fidelity Investments weren’t in a position to get a big part… Read More

Only once a lifetime — twice, if you’re lucky — does an invention come along that truly changes the world. The wheel. The plow. The printing press. The combustion engine. The semiconductor. The wheel increased the speed and efficiency of transportation and was the foundation of future ingenuities likes railroads and automobiles. The plow allowed farmers to achieve economies of scale and produce more food than humans needed to survive. The printing press spread literacy from select nobles, elites and holy figures to the common man. An enormity of information could be recorded and proliferated, at relatively low cost. The… Read More

Only once a lifetime — twice, if you’re lucky — does an invention come along that truly changes the world. The wheel. The plow. The printing press. The combustion engine. The semiconductor. The wheel increased the speed and efficiency of transportation and was the foundation of future ingenuities likes railroads and automobiles. The plow allowed farmers to achieve economies of scale and produce more food than humans needed to survive. The printing press spread literacy from select nobles, elites and holy figures to the common man. An enormity of information could be recorded and proliferated, at relatively low cost. The combustion engine connected the globe physically via ships, trains, automobiles and airplanes. And the semiconductor united the world intellectually with instant mass communication between anyone, no matter the geographic distance. But with the benefits that come from mankind’s past and future achievements, there will always be exploitation. #-ad_banner-#The wheel — and eventually the combustion engine — became (amongst other uses) weapons of war and oppression. The printing press can be used to spread propaganda, libel and plagiarism. Over-plowing depletes a soil’s nutrients and makes farmland infertile. Not only were these problems not solved overnight, but many of them are largely… Read More

Mirror, mirror on the wall, which freight company is the fastest growing of them all? While you might guess it’s FedEx (NYSE: FDX) or United Parcel Service (NYSE: UPS), since they are both household names, the answer is the relatively unknown XPO Logistics (NYSE: XPO).  When it comes to revenue growth, it’s no contest. Last year, while FedEx grew sales at a 2.9% year-over-year pace and UPS’ revenues were up 5%, XPO’s sales soared 236%.  True, XPO’s revenues totaled $2.4 billion in 2014, while FexEx had more than $45 billion and UPS more than $58 billion. But if you’re looking… Read More

Mirror, mirror on the wall, which freight company is the fastest growing of them all? While you might guess it’s FedEx (NYSE: FDX) or United Parcel Service (NYSE: UPS), since they are both household names, the answer is the relatively unknown XPO Logistics (NYSE: XPO).  When it comes to revenue growth, it’s no contest. Last year, while FedEx grew sales at a 2.9% year-over-year pace and UPS’ revenues were up 5%, XPO’s sales soared 236%.  True, XPO’s revenues totaled $2.4 billion in 2014, while FexEx had more than $45 billion and UPS more than $58 billion. But if you’re looking for growth, XPO is the place to be. #-ad_banner-# Traders have taken notice, and the stock has more than doubled in the past year and is up more than 300% in less than three years. While organic growth has been solid, a large reason for increased revenues is XPO’s furious pace of acquisition. It bought three key companies in 2014: Pacer International, New Breed Logistics and Atlantic Central Logistics. In fact, XPO has been on a buying spree, acquiring 16 different firms between… Read More

More than two decades have passed since research scientists first announced a method to identify every strand of a human’s DNA. In the early years of gene sequencing research, progress was slow. However, many investors may be shocked to learn just how far this industry has come in just the past few years. Equipment advances now permit rapid and accurate mapping of virtually every type of organism from microbes and plants to animals and humans. The genetic data obtained with these technologies have numerous public health applications, such as developing better infectious disease therapies, screening for cancer or birth defects… Read More

More than two decades have passed since research scientists first announced a method to identify every strand of a human’s DNA. In the early years of gene sequencing research, progress was slow. However, many investors may be shocked to learn just how far this industry has come in just the past few years. Equipment advances now permit rapid and accurate mapping of virtually every type of organism from microbes and plants to animals and humans. The genetic data obtained with these technologies have numerous public health applications, such as developing better infectious disease therapies, screening for cancer or birth defects and studying population-wide patterns of illness. Early last year, the gene sequencing industry finally attained an ambitious goal that it had been pursuing for years: the ability to rapidly map an entire human genome for just $1,000. A decade ago, the process took months and cost many millions of dollars. Still, the achievement didn’t receive much media attention, and neither did the firm responsible for the breakthrough. It’s time that investors know more about Illumina, Inc. (Nasdaq: ILMN). Rarely does a company so thoroughly dominate its niche, especially where such exciting growth opportunities still abound. Indeed, the gene… Read More

Despite its blue-chip status, it’s been a long time since International Business Machines (NYSE: IBM) was an elite stock. Since peaking in March 2013, long-term investors saw their holdings shrink 30% into the December 2014 low, highlighted by a massive price collapse in October.  Big Blue was more black and blue. However, the good news is that after months of sideways trading, the stock started to heal. Indeed, the trend has been to the upside all year. Stocks that suffer the damage seen here are rarely instant… Read More

Despite its blue-chip status, it’s been a long time since International Business Machines (NYSE: IBM) was an elite stock. Since peaking in March 2013, long-term investors saw their holdings shrink 30% into the December 2014 low, highlighted by a massive price collapse in October.  Big Blue was more black and blue. However, the good news is that after months of sideways trading, the stock started to heal. Indeed, the trend has been to the upside all year. Stocks that suffer the damage seen here are rarely instant buys. In the stock market, low price does not necessarily mean “on sale.” Indeed, IBM rested for a few weeks before tumbling one more time into its final low. It was so damaged on the charts that traders seemed to stop caring. Never mind that it carried a hefty dividend yield at that point. Even today, it yields 3%, making it of great interest to long-term holders and income seekers. #-ad_banner-# But how will we know whether… Read More

As the S&P 500 delivered a 19.7% annualized gain over the past six years, talk of a market bubble has emerged. Concerns of a bubble in prices are not just being voiced by perma-bears like Nouriel Roubini and “Dr. Doom” Marc Faber. Nobel laureate Robert Shiller also recently questioned asset prices in the second edition of his book, “Irrational Exuberance.” For many investors, it’s tempting to think about locking in gains. While bull markets last an average 3.8 years, this one is already more than 50% longer. Selling stocks around their October 2007 highs would have protected a 119% gain… Read More

As the S&P 500 delivered a 19.7% annualized gain over the past six years, talk of a market bubble has emerged. Concerns of a bubble in prices are not just being voiced by perma-bears like Nouriel Roubini and “Dr. Doom” Marc Faber. Nobel laureate Robert Shiller also recently questioned asset prices in the second edition of his book, “Irrational Exuberance.” For many investors, it’s tempting to think about locking in gains. While bull markets last an average 3.8 years, this one is already more than 50% longer. Selling stocks around their October 2007 highs would have protected a 119% gain since the 2002 low and avoided a 55% plunge in prices to 2009. Where’s The Next Market Bubble? Trying to perfectly time the eventual correction would be a folly, but investors can start taking profits in bubbly assets while positioning in less expensive investments. Citigroup Research recently published a report, “It’s Bubble Time,” that measured valuations in the market and across sectors. The report found four themes that are driving bubbles in different assets and investments. #-ad_banner-#First, they note the story of a “new normal” where low economic growth, inflation and interest rates continue to drive bond prices higher even… Read More

At the end of February, I made the case for a looming market correction based on slowing economic data, downward revisions in corporate earnings growth and the S&P 500’s high price-to-earnings (P/E) ratio.  Over the following two weeks, the S&P 500 dropped more than 3% before trading back up and hitting new all-time highs. But I don’t think we’re in the clear yet. Here’s why I foresee a market correction in the coming weeks and a potential way to profit. During the first quarter, the companies of the S&P 500 delivered another lackluster performance, with net earnings rising a paltry… Read More

At the end of February, I made the case for a looming market correction based on slowing economic data, downward revisions in corporate earnings growth and the S&P 500’s high price-to-earnings (P/E) ratio.  Over the following two weeks, the S&P 500 dropped more than 3% before trading back up and hitting new all-time highs. But I don’t think we’re in the clear yet. Here’s why I foresee a market correction in the coming weeks and a potential way to profit. During the first quarter, the companies of the S&P 500 delivered another lackluster performance, with net earnings rising a paltry 2.4% year over year while revenue contracted 3.7%. Take out financial stocks and total earnings growth would have actually contracted 1.2% year over year. And it doesn’t look like things are getting better. #-ad_banner-#Second-quarter earnings growth expectations have fallen over the past four months from 1.1% to a loss of 6.4%, according to Zacks estimates. What concerns me even more is that markets have moved higher while earnings growth is basically flat and future earnings estimates are dropping. This has caused the S&P 500’s forward P/E to increase from 17.62 in February to 18.02 today. That’s the highest reading in… Read More

As a resident of New York State’s Hudson Valley, I have met dozens of local citizens who worked for International Business Machines Corp. (NYSE: IBM) in its heyday. A massive set of layoffs in 1993 meant that Big Blue’s local presence is now almost gone, and the local economy has yet to recover. Two decades later, IBM is still backpedaling. A current initiative, known as Project Chrome, is culling another 100,000 employees from IBM’s global employment base. In some respects, CEO Ginni Rometty has no choice. IBM’s revenue base has already peaked and is expected to drop a precipitous 10%… Read More

As a resident of New York State’s Hudson Valley, I have met dozens of local citizens who worked for International Business Machines Corp. (NYSE: IBM) in its heyday. A massive set of layoffs in 1993 meant that Big Blue’s local presence is now almost gone, and the local economy has yet to recover. Two decades later, IBM is still backpedaling. A current initiative, known as Project Chrome, is culling another 100,000 employees from IBM’s global employment base. In some respects, CEO Ginni Rometty has no choice. IBM’s revenue base has already peaked and is expected to drop a precipitous 10% this year to around $83.5 billion. IBM has few fans among Wall Street analysts.  As Goldman Sachs’ Bill Shope wrote, “the company faces many secular pressures and transformation costs ahead. His $146 price target represents roughly 15% downside.” Why is IBM so unpopular with many tech analysts? The company’s focus on slashing expenses and buying back massive amounts of stock to maintain earnings per share is considered to be a last-ditch attempt to artificially maintain investor support. But it’s not working. Shares of IBM have lagged the Nasdaq Composite index by 91 percentage points over the past three years. Read More

Did it really work? It’s a question many investors are pondering seven months after the conclusion of the Federal Reserve’s massive quantitative easing (QE) program, in which trillions of dollars were pumped into the banking system from 2008 to 2014. The aim was to shock the ailing economy into recovery by providing a flood of cash for banks to lend at ultra-cheap rates. It was an unprecedented move that possibly forestalled a more severe economic downturn, perhaps even a depression. However, the program continued long after the U.S. economy was out of crisis, mainly because of the belief that QE… Read More

Did it really work? It’s a question many investors are pondering seven months after the conclusion of the Federal Reserve’s massive quantitative easing (QE) program, in which trillions of dollars were pumped into the banking system from 2008 to 2014. The aim was to shock the ailing economy into recovery by providing a flood of cash for banks to lend at ultra-cheap rates. It was an unprecedented move that possibly forestalled a more severe economic downturn, perhaps even a depression. However, the program continued long after the U.S. economy was out of crisis, mainly because of the belief that QE could generate robust, sustainable long-term growth by facilitating lending, business investment and hiring. The economy is so complex that such a hypothesis may take years to confirm or disprove. But in the meantime, there are plenty of compelling signs that QE is nothing near the growth driver that policymakers had hoped. Vulnerable Economy Perhaps the most obvious sign of QE’s limits is how quickly the economy lost steam when the program ended. After surging by a 5% annual rate in the third quarter of 2014, gross domestic product (GDP) rose just 2.2% in the fourth quarter. The slump in growth… Read More