After four decades trotting the globe in search of investing insights, Franklin Templeton’s Mark Mobius has built a reputation as the “Dean of Emerging Markets.” Although Mobius oversees 18 different mutual funds, focusing on emerging markets like China, Indonesia and Thailand, his current favorite way to play emerging market economies is an unusual one: Japan.   #-ad_banner-#The approach makes sense. The Japanese economy is on an upswing, thanks in large part to aggressive monetary stimulus. A weakening yen also helps, as exports rose 17% in the past 12 months. That’s a higher growth rate than many economists had expected just… Read More

After four decades trotting the globe in search of investing insights, Franklin Templeton’s Mark Mobius has built a reputation as the “Dean of Emerging Markets.” Although Mobius oversees 18 different mutual funds, focusing on emerging markets like China, Indonesia and Thailand, his current favorite way to play emerging market economies is an unusual one: Japan.   #-ad_banner-#The approach makes sense. The Japanese economy is on an upswing, thanks in large part to aggressive monetary stimulus. A weakening yen also helps, as exports rose 17% in the past 12 months. That’s a higher growth rate than many economists had expected just a few quarters ago. And the key boost is coming from emerging markets. Take Kawasaki Heavy Industries Ltd. (OTC: KWHIY), a $9-billion industrial firm that produces heavy machinery. Shipbuilding and defense contracting are a pair of strengths for the company. The firm projects annual revenue from emerging markets will more than double to $5.4 billion by 2020 from $2.5 billion in 2012. Annual revenue from all sources is currently just over $12 billion. Lately, Kawasaki has seen especially strong orders for industrial robots in China, India and Southeast Asia, which use the robots mainly in auto manufacturing and other factory… Read More

The banking industry is still in recovery mode after an era of heavy fines and a greatly-increased level of regulatory scrutiny. But the industry is also grappling with major technological shifts that are upending the old ways of doing business. Smaller, more nimble firms are taking non-traditional approaches to banking, which is creating headaches and headwinds for big banks. The Vast, Costly Branch Network The idea of a physical bank location on every street corner is dying. 30% of the U.S. population hasn’t visited a bank branch in more than six months, according to a study by Bankrate.com. As… Read More

The banking industry is still in recovery mode after an era of heavy fines and a greatly-increased level of regulatory scrutiny. But the industry is also grappling with major technological shifts that are upending the old ways of doing business. Smaller, more nimble firms are taking non-traditional approaches to banking, which is creating headaches and headwinds for big banks. The Vast, Costly Branch Network The idea of a physical bank location on every street corner is dying. 30% of the U.S. population hasn’t visited a bank branch in more than six months, according to a study by Bankrate.com. As a result, established banks are slowly adjusting to the new paradigm. The PNC Financial Services Group, Inc. (NYSE: PNC), the seventh largest bank by assets, reduced its number of retail branches by 6% over the last two years. JPMorgan Chase & Co. (NYSE: JPM) is spending millions to revamp current branches to be more automated and need fewer employees. Still, large retail banks can’t move quick enough to shrink their branch networks, which will result in additional costs for years to come. On the other end of the spectrum, the banks that never bothered to build a branch network now… Read More

For more than a decade, the business of making memory chips was a lousy one. The industry had ample excess capacity and pricing power was non-existent. And then the management team at Micron Technology, Inc. (Nasdaq: MU) decided to change all that. They correctly understood that by acquiring rivals — and then closing down excess manufacturing capacity — they could drive up prices and profits. I looked at this issue in 2012 and shares of Micron eventually soared to $36 from around $6. #-ad_banner-#A healthy supply/demand environment similarly created robust gains for rival chip-maker SanDisk Corp. (Nasdaq: SNDK). Not only… Read More

For more than a decade, the business of making memory chips was a lousy one. The industry had ample excess capacity and pricing power was non-existent. And then the management team at Micron Technology, Inc. (Nasdaq: MU) decided to change all that. They correctly understood that by acquiring rivals — and then closing down excess manufacturing capacity — they could drive up prices and profits. I looked at this issue in 2012 and shares of Micron eventually soared to $36 from around $6. #-ad_banner-#A healthy supply/demand environment similarly created robust gains for rival chip-maker SanDisk Corp. (Nasdaq: SNDK). Not only have these firms benefited from more rational supply trends, they are also benefiting from a powerful growth driver: surging demand, as solid state memory (also known as “flash memory”) is used in a proliferating number of electronic devices. Even personal computer manufacturers are making the switch from disk drive storage to solid state storage in many high-end machines. Yet even the best industries experience temporary headwinds. A recent modest pullback in demand and pricing has led to sharp share price pullbacks for both Micron and SanDisk. In my mind, only one of these two firms is poised for a solid… Read More

The first Saturday in May this year will herald an extraordinary annual event — one that we will likely not have the chance to witness on many more occasions in our lifetime. The event is widely celebrated in the financial press, marking a time where investors come together to celebrate, speculate about and witness one of the great masters of investing in the flesh. #-ad_banner-#I’m talking, of course, about Warren Buffett and the annual Berkshire Hathaway shareholder meeting. At 84 years old, this will be one of the remaining few times we’ll have the chance to hear straight from the… Read More

The first Saturday in May this year will herald an extraordinary annual event — one that we will likely not have the chance to witness on many more occasions in our lifetime. The event is widely celebrated in the financial press, marking a time where investors come together to celebrate, speculate about and witness one of the great masters of investing in the flesh. #-ad_banner-#I’m talking, of course, about Warren Buffett and the annual Berkshire Hathaway shareholder meeting. At 84 years old, this will be one of the remaining few times we’ll have the chance to hear straight from the famous “Oracle of Omaha” about his thoughts on the market, where the U.S. economy is headed, and what it means to be a successful investor. Many of our analysts here at StreetAuthority have had the chance to attend Berkshire meetings over the years. I’ve had conversations with many of them about the spectacle, which seems to grow with each passing year. But one thing has always stuck with me that I think is worth mentioning, and it’s that while the event always makes for good television, what often seems to be lost is what Buffett actually says… or more importantly,… Read More

By the end of 2015, it’s estimated that nearly 4.9 billion people worldwide will use mobile phones, up 5% from last year. By 2018, it’s projected there will be 5.5 billion users, a 12% increase in a three-year period. This growth provides a strong tailwind for select telecom stocks. I say “select” because mobile phone usage is not evenly divided across the world. In many countries, the market is already close to saturated. China, India and the United States, for example, have the highest mobile usage, in that order. In the United States, there are more mobile phones in use… Read More

By the end of 2015, it’s estimated that nearly 4.9 billion people worldwide will use mobile phones, up 5% from last year. By 2018, it’s projected there will be 5.5 billion users, a 12% increase in a three-year period. This growth provides a strong tailwind for select telecom stocks. I say “select” because mobile phone usage is not evenly divided across the world. In many countries, the market is already close to saturated. China, India and the United States, for example, have the highest mobile usage, in that order. In the United States, there are more mobile phones in use than there are people living in the country, as many people have more than one active phone. The U.S. market is also fragmented. There are five major wireless providers and dozens of smaller ones. #-ad_banner-#The picture is much different north of the border. In Canada, there is far less competition. In fact, there are only three main providers: BCE (NYSE: BCE), formerly known as Bell Canada Enterprises, Rogers Communications (NYSE: RCI) and Telus (NYSE: TU).  Although Canada’s population and market is smaller than that of the United States, several factors point to strong mobile phone growth ahead. Currently, only about… Read More

#-ad_banner-#Over the past few months, the S&P 500 has traded in a narrow 80-point range, and a familiar refrain is again making the rounds: “Sell in May and go away.” That axiom highlights the seasonal underperformance that the summer months often bring. The market’s detractors are pointing to the weakest earnings expectations since the recession and calling for a correction or even a full-blown bear market.  The force of the herd may send stocks down marginally over the next few months, but several stronger forces are lining up to make this another positive year for investors.  I’ve found… Read More

#-ad_banner-#Over the past few months, the S&P 500 has traded in a narrow 80-point range, and a familiar refrain is again making the rounds: “Sell in May and go away.” That axiom highlights the seasonal underperformance that the summer months often bring. The market’s detractors are pointing to the weakest earnings expectations since the recession and calling for a correction or even a full-blown bear market.  The force of the herd may send stocks down marginally over the next few months, but several stronger forces are lining up to make this another positive year for investors.  I’ve found one way to hedge against a market correction, while still benefiting from higher prices through the end of the year. Here Come The Perma-Bears A surging dollar and plummeting oil prices are setting the market up for one of the worst earnings seasons since the recession. Earnings for companies in the S&P 500 are expected to drop by 4.6% in the first quarter compared to the same period last year. Expectations for earnings have fallen by more than 8% since the end of the fourth quarter, the largest decline in estimates since the first quarter of 2009.  The glum… Read More

Although ‘wide moat’ isn’t a term often applied to small cap investments, this unusual combination does exist. Take US Ecology, Inc. (Nasdaq: ECOL), a relatively small waste-management firm that handles hazardous, non-hazardous and radioactive waste. With only about $1 billion in market value and sales of $447 million last year, US Ecology is dwarfed by industry giant Waste Management, Inc. (NYSE: WM). That firm is worth nearly $25 billion and boasts annual revenue of $14 billion. Yet US Ecology displays consistency more often associated with much larger companies. Indeed, revenue and net income grew every year during the past decade… Read More

Although ‘wide moat’ isn’t a term often applied to small cap investments, this unusual combination does exist. Take US Ecology, Inc. (Nasdaq: ECOL), a relatively small waste-management firm that handles hazardous, non-hazardous and radioactive waste. With only about $1 billion in market value and sales of $447 million last year, US Ecology is dwarfed by industry giant Waste Management, Inc. (NYSE: WM). That firm is worth nearly $25 billion and boasts annual revenue of $14 billion. Yet US Ecology displays consistency more often associated with much larger companies. Indeed, revenue and net income grew every year during the past decade (except 2009 and 2010 when the economy was in bad shape). Plus, this year will be the firm’s eleventh straight with a dividend. Free cash flow, now $43 million annually, is at an all-time high, which bodes well for dividend growth. And despite large acquisition costs last year, US Ecology is in solid financial shape, with debt levels not much greater than the industry average. Such results would be impossible to achieve without a formidable moat, a term coined by investing legend Warren Buffett to describe hard-to-penetrate economic defenses typically surrounding the strongest companies. US Ecology boasts several. Recurring Revenue… Read More

Two of the most important lessons I’ve learned in more than 20 years of professional analysis and trading are:  1. The market nearly always overreacts, and  2. Investors are blind to the writing on the wall when fundamentals turn.  And I’m glad this is the case, because betting against market overreactions is one of the best ways to make money in the market. It’s how I plan to make 67% with today’s trade and how we recently closed a 69% winner in Profitable Trading’s Trade of the Week.  Less than a… Read More

Two of the most important lessons I’ve learned in more than 20 years of professional analysis and trading are:  1. The market nearly always overreacts, and  2. Investors are blind to the writing on the wall when fundamentals turn.  And I’m glad this is the case, because betting against market overreactions is one of the best ways to make money in the market. It’s how I plan to make 67% with today’s trade and how we recently closed a 69% winner in Profitable Trading’s Trade of the Week.  Less than a month ago, I told readers about an opportunity in Valero Energy (NYSE: VLO). Shares were trading at dirt-cheap valuations thanks in part to oil’s sell-off. The market was clearly overreacting by punishing all stocks in the sector, even if they didn’t deserve it.  “The real opportunity lies in the fact that Valero is now buying oil 50% cheaper than last year, but has only had to reduce its selling price by 35%. Incredibly, shares are actually lower than where they were last year, despite the cheaper costs, increased consumption and improved margin.” Shares started moving higher almost immediately after… Read More

The great thing about the stock market is that it provides many ways for traders to express their opinions. And for all traders believing, as I do, that energy stocks are in the midst of a rebound, there are ways to participate that suit everyone’s convictions and risk tolerance. For those looking for total return — capital gains and dividends — a more stable big-cap name would be the right choice. #-ad_banner-#And for those who are a bit more contrarian and able to handle higher levels of risk, what could be better than a smaller stock in an extremely out-of-favor… Read More

The great thing about the stock market is that it provides many ways for traders to express their opinions. And for all traders believing, as I do, that energy stocks are in the midst of a rebound, there are ways to participate that suit everyone’s convictions and risk tolerance. For those looking for total return — capital gains and dividends — a more stable big-cap name would be the right choice. #-ad_banner-#And for those who are a bit more contrarian and able to handle higher levels of risk, what could be better than a smaller stock in an extremely out-of-favor subsector? Let’s dig in. The first stock is integrated international oil giant BP (NYSE: BP). The former British Petroleum is still feeling the stain on its reputation from the 2010 Deepwater Horizon disaster in the Gulf of Mexico, and its stock price reflects it. In fact, it trades well below where it was before the accident.  But there is good news in that the technicals now point to a short-term rally. I am not suggesting BP will head back to pre-incident highs, but it is poised to make up some ground relative to its sector and the market as… Read More