With interest rates at extreme lows for the past few years and looking likely to remain that way for some time, it’s tempting to think that finding opportunities to profit would be like shooting fish in a barrel. Indeed, former Federal Reserve Chairman Ben Bernanke recently wrote in a blog post: “If the real interest rate were expected to be negative indefinitely, almost any investment is profitable.” #-ad_banner-#We’ve certainly seen this play out with the stock market. But it’s also been great news for companies undertaking big ticket construction projects. #-ad_banner-#Businesses… Read More

With interest rates at extreme lows for the past few years and looking likely to remain that way for some time, it’s tempting to think that finding opportunities to profit would be like shooting fish in a barrel. Indeed, former Federal Reserve Chairman Ben Bernanke recently wrote in a blog post: “If the real interest rate were expected to be negative indefinitely, almost any investment is profitable.” #-ad_banner-#We’ve certainly seen this play out with the stock market. But it’s also been great news for companies undertaking big ticket construction projects. #-ad_banner-#Businesses use accounting models to assess the feasibility of such projects. Models show a higher expected return on investment (ROI) when rates are low. Higher ROIs mean more investment projects will meet minimum requirements for approval. Indeed, non-residential construction spending in the United States is estimated to rise 5.6% this year to just over $390 billion, according to Statista, and continue at about that growth rate over the next several years. I’m looking at investment opportunities in the companies that can help businesses complete these projects. AECOM (NYSE: ACM) is one such… Read More

Although it may sound cliche, the trend truly is your friend. Throughout this bull market, stocks in rising trends have continued to rise and stocks in falling trends continued to fall. We can see this stark contrast in two coffee stocks.  Last month, Starbucks (NASDAQ: SBUX) gapped up 4% the morning after its strong fiscal second-quarter earnings. Keurig Green Mountain (NASDAQ: GMCR) missed estimates Thursday and gapped down nearly 12% on the day’s open. #-ad_banner-#The difference was the prevailing trend for each stock. Starbucks was rising nicely while Green Mountain was in a bear market. Before I get… Read More

Although it may sound cliche, the trend truly is your friend. Throughout this bull market, stocks in rising trends have continued to rise and stocks in falling trends continued to fall. We can see this stark contrast in two coffee stocks.  Last month, Starbucks (NASDAQ: SBUX) gapped up 4% the morning after its strong fiscal second-quarter earnings. Keurig Green Mountain (NASDAQ: GMCR) missed estimates Thursday and gapped down nearly 12% on the day’s open. #-ad_banner-#The difference was the prevailing trend for each stock. Starbucks was rising nicely while Green Mountain was in a bear market. Before I get to today’s trade, I want to call out a great trade made by my colleague, Jared Levy. Earlier this year, he capitalized on GMCR’s downtrend with a put option trade that only cost $2,390 and returned 34% in just 56 days on an 11% drop in the stock. That’s a 221% annualized return. Options are the best way to amplify your returns on any stock move — up or down. And at the end of this article, Jared will provide you with an option trade that could turn an 11% move up in SBUX into 150% profits in just over… Read More

For the companies that own cellphone towers, business has been brisk. American Tower Corp. (NYSE: AMT), SBA Communications Corp. (Nasdaq: SBAC) and Crown Castle International Corp. (NYSE: CCI) have generated 17%-to-22% compound annual sales growth over the past five years.   The business model is fairly simple. Each cell tower can handle equipment and traffic for as many as four or five telecom carriers and transmit a signal anywhere from 22 to 45 miles. Leases of ten years and annual rent increases of around 3% mean the towers are great cash flow machines. #-ad_banner-#As telecom carriers race to compete and… Read More

For the companies that own cellphone towers, business has been brisk. American Tower Corp. (NYSE: AMT), SBA Communications Corp. (Nasdaq: SBAC) and Crown Castle International Corp. (NYSE: CCI) have generated 17%-to-22% compound annual sales growth over the past five years.   The business model is fairly simple. Each cell tower can handle equipment and traffic for as many as four or five telecom carriers and transmit a signal anywhere from 22 to 45 miles. Leases of ten years and annual rent increases of around 3% mean the towers are great cash flow machines. #-ad_banner-#As telecom carriers race to compete and raise money selling off their tower infrastructure, they’re finding eager buyers in the tower operators. Verizon Communications, Inc. (NYSE: VZ) announced a long-term lease and sale of 11,500 towers, one of the last remaining large carrier portfolios, to American Tower in February for $5.06 billion. Since cash flows are all but certain, debt is easy to come by and tower operators are loading up to make capital investments for years to come. American Tower has more than two-thirds of its capital structure (68%) in debt and a BBB credit rating by Morningstar, just one level above non-investment grade. Crown Castle… Read More

Later this year, there will be a rare passing of the demographic baton, as millennials surpass the baby boomers as the nation’s largest living generation. Millennials are those born from 1981 to 1997, while the baby boomer generation arose from 1946 to 1964. By year end, there will be more than 75 million millennials and just under 75 million baby boomers, according to projections by the Pew Research Center, a Washington, DC-based think tank. Moreover, that gap will widen over time, thanks to immigration and an eventual reduction in the number of baby boomers. For investors,… Read More

Later this year, there will be a rare passing of the demographic baton, as millennials surpass the baby boomers as the nation’s largest living generation. Millennials are those born from 1981 to 1997, while the baby boomer generation arose from 1946 to 1964. By year end, there will be more than 75 million millennials and just under 75 million baby boomers, according to projections by the Pew Research Center, a Washington, DC-based think tank. Moreover, that gap will widen over time, thanks to immigration and an eventual reduction in the number of baby boomers. For investors, the implications are clear: Millennials are set to become the nation’s main growth engine, taking over the role baby boomers began to assume in the mid-1960s. To be sure, millennials face their share of obstacles to prosperity such as a tepid economy, somewhat gloomy job prospects and, in many cases, heavy student loan debt. But they have two powerful factors in their favor: the sheer size of their generation and the U.S. economy’s renowned resilience. Together, these factors should translate to progressively greater spending power, which sooner or later, will rival that of the baby boomers. That backdrop warrants a… Read More

You wouldn’t think this was an opportunity. In the last three months, only the Euro dropped further than the Canadian dollar. Canada’s currency recently hit a five-and-a-half year low. And because of two powerful catalysts — which I’ll tell you more about in a moment — I expect its value to remain depressed at least through the end of 2015. But this is good news in disguise. If history is any guide, then foreign investors could be positioned for major profit opportunities from this country in the months ahead. Read More

You wouldn’t think this was an opportunity. In the last three months, only the Euro dropped further than the Canadian dollar. Canada’s currency recently hit a five-and-a-half year low. And because of two powerful catalysts — which I’ll tell you more about in a moment — I expect its value to remain depressed at least through the end of 2015. But this is good news in disguise. If history is any guide, then foreign investors could be positioned for major profit opportunities from this country in the months ahead. In the first quarter of 2015, the Canadian dollar fell 7.14%. #-ad_banner-#Two powerful trends have been holding down the country’s dollar. I don’t expect either of them to change soon, but together they’re creating a clear divide in the country’s economy. One side is making major profits right now, the other is losing out. I can show you how to profit from the winners, but first let me show you what’s going on. Interest Rate Increases The Federal Reserve is the only major central bank in the world considering… Read More

It has been a long time since banks were among the market’s leading groups. And while the broad market is trading near all-time highs, the SPDR S&P Bank ETF (NYSE: KBE), which tracks regional banks, has barely recovered half of what it lost during the financial crisis. It is truly a forsaken group. Or at least it was.  For the first time in a year, the relative performance of banks versus the S&P 500 has turned positive. And on an absolute basis, KBE is on the verge of a major upside breakout from a sideways pattern that has… Read More

It has been a long time since banks were among the market’s leading groups. And while the broad market is trading near all-time highs, the SPDR S&P Bank ETF (NYSE: KBE), which tracks regional banks, has barely recovered half of what it lost during the financial crisis. It is truly a forsaken group. Or at least it was.  For the first time in a year, the relative performance of banks versus the S&P 500 has turned positive. And on an absolute basis, KBE is on the verge of a major upside breakout from a sideways pattern that has trapped it since late 2013. Breakouts in both relative and absolute terms signify a positive shift for any sector and tell us that the group is now one of the strongest in a rising market. Most investment pros would tell us that finding the strongest sectors is the best starting point for selecting the best stocks to buy.  To be sure, the market as a whole is still working out some issues and has yet to make a clean break to the next level. But the bias in the overall market is still to the upside, and so is the… Read More

When one group has disproportionate authority over another, there is little leeway for the characteristics that make us uniquely human — carelessness, bigotry, emotion, error in judgment, ignorance. That truth has never been more evident than in recent months, which have been plagued with high-profile incidents of law enforcement fatally using force to apprehend suspected lawbreakers. The deaths of Michael Brown in Ferguson, Missouri and Freddie Gray in Baltimore, Maryland, among others, spurred outcries of police negligence, followed by protests and riots in major cities. #-ad_banner-#The trouble arises when an officer resorts to violence, but there is little or no… Read More

When one group has disproportionate authority over another, there is little leeway for the characteristics that make us uniquely human — carelessness, bigotry, emotion, error in judgment, ignorance. That truth has never been more evident than in recent months, which have been plagued with high-profile incidents of law enforcement fatally using force to apprehend suspected lawbreakers. The deaths of Michael Brown in Ferguson, Missouri and Freddie Gray in Baltimore, Maryland, among others, spurred outcries of police negligence, followed by protests and riots in major cities. #-ad_banner-#The trouble arises when an officer resorts to violence, but there is little or no evidence to substantiate or discredit the need for an escalation in tactics. This often leads investigators to rely on eyewitness testimony and official police statements, both of which have potential for biases. Incidents like this foster distrust in the justice system and in the police. This is not a new problem, but it is one that finally has a solution. The answer: offer nonlethal weapons and hold all parties accountable by strapping a camera to every officer. A recent study by the San Diego Police Department concluded that the presence of body cameras reduced complaints against… Read More

The roaring 1990s brought a new phrase to the investing lexicon: “market melt-up.” It is described by some as a “buy first, ask questions later” mentality, as legions of investors piggyback on a winning trade. Yet such melt-ups invariably end badly. Once some investors start to book profits, a cascade effect takes place, where selling begets further selling. We surely saw that in evidence at the start of the past decade. From peak to trough, the Nasdaq composite index fell a stunning 78.4% from 2000 to 2002. #-ad_banner-#U.S. investors were so badly burned by that event that there is still… Read More

The roaring 1990s brought a new phrase to the investing lexicon: “market melt-up.” It is described by some as a “buy first, ask questions later” mentality, as legions of investors piggyback on a winning trade. Yet such melt-ups invariably end badly. Once some investors start to book profits, a cascade effect takes place, where selling begets further selling. We surely saw that in evidence at the start of the past decade. From peak to trough, the Nasdaq composite index fell a stunning 78.4% from 2000 to 2002. #-ad_banner-#U.S. investors were so badly burned by that event that there is still a lingering distrust of stocks. And that’s a good thing. Such caution likely means we’ll stop ourselves before collectively creating another market melt-up. Unfortunately, investors in China can’t draw from past experience and are setting themselves up for the same bit of misery. Chinese stocks rose at a measured pace in 2014, but have been absolutely on fire in the past few months. These investors have been buying shares with abandon, even in the face of an increasingly apparent economic slowdown. They aren’t conducting rigorous investment analysis, but are instead simply chasing success. The economic backdrop in China… Read More

Apple is a “no brainer” investment, and it has been for years. The company’s first quarter earnings for 2015 only drive home that point. The firm’s new products and features are wildly popular, the company is growing sales in markets outside the United States and every year Apple sells a greater quantity of devices than it did the year prior. What’s interesting about Apple is that for all the hype surrounding the company and its products, it still remains undervalued. Consider this: analysts expect Apple to earn $8.79 per share in 2015. That’s a 38.6% increase over the prior year. Read More

Apple is a “no brainer” investment, and it has been for years. The company’s first quarter earnings for 2015 only drive home that point. The firm’s new products and features are wildly popular, the company is growing sales in markets outside the United States and every year Apple sells a greater quantity of devices than it did the year prior. What’s interesting about Apple is that for all the hype surrounding the company and its products, it still remains undervalued. Consider this: analysts expect Apple to earn $8.79 per share in 2015. That’s a 38.6% increase over the prior year. Putting aside for a moment the fact that analysts consistently underestimate Apple’s earnings potential (the company hasn’t had a consensus “miss” on quarterly earnings since 2012), the stock trades at a forward price-to-earnings of 14.6. #-ad_banner-#Companies in the S&P 500 as a whole are expected to grow earnings by 4.2%, giving the broader index a forward multiple of 17.9. So what we have is the largest company by market capitalization expected to outpace the market’s earnings growth this year by more than nine fold, yet it trades at a discount (of more than 18%) to the market. Read More