In the world of income investing, dividends reign supreme. Treasuries and CDs are offering historically low yields and are no longer considered the ultra-safe cash generators that they once were. #-ad_banner-#In previous issues of StreetAuthority Daily, I detailed the raw power of dividend investing (here) and taught you my method for finding these high yielders (here), but this isn’t the whole story. You see, there’s a little-known group of stocks that offer huge dividend payouts, but their yields are not displayed to the public on financial websites like Yahoo! Finance or Morningstar. This phenomenon… Read More

In the world of income investing, dividends reign supreme. Treasuries and CDs are offering historically low yields and are no longer considered the ultra-safe cash generators that they once were. #-ad_banner-#In previous issues of StreetAuthority Daily, I detailed the raw power of dividend investing (here) and taught you my method for finding these high yielders (here), but this isn’t the whole story. You see, there’s a little-known group of stocks that offer huge dividend payouts, but their yields are not displayed to the public on financial websites like Yahoo! Finance or Morningstar. This phenomenon is due to a glitch in the way the financial media reports certain companies’ financial information. We call this group of stocks “Hidden High Yielders.” And if you know where to look, you can find companies yielding three, six… even seven times more than the yield posted on financial websites. For Hidden High Yielders, their true payout is actually much higher because there are dozens of supplemental dividends that go unreported each quarter. But by “unreported,” I don’t mean some secret way of transferring cash to a select group of well-connected insiders. Read More

When a member of the blue-chip Dow Jones Industrial Average becomes a chronic underperformer, it often is at risk for removal from the index. Bank stocks after the financial crisis were prime examples. However, one laggard that should not worry about banishment right now is retail giant Wal-Mart (NYSE: WMT).  The world’s largest publicly traded employer has been lagging the domestic market since mid-2012 with a bout of strength seen in the fourth quarter of last year. Since notching its all-time highest close on Jan. 8 at $90.47, shares slid rather steadily to their March 11 closing low of $80.69. Read More

When a member of the blue-chip Dow Jones Industrial Average becomes a chronic underperformer, it often is at risk for removal from the index. Bank stocks after the financial crisis were prime examples. However, one laggard that should not worry about banishment right now is retail giant Wal-Mart (NYSE: WMT).  The world’s largest publicly traded employer has been lagging the domestic market since mid-2012 with a bout of strength seen in the fourth quarter of last year. Since notching its all-time highest close on Jan. 8 at $90.47, shares slid rather steadily to their March 11 closing low of $80.69. That was an 11% decline in eight weeks while the Dow was down just 1.5%.  With WMT sitting on top of a rather firm price floor, it may now be a great bargain. But it is more than just support on the chart that piques my interest.  The decline in shares this year seemed rather sedate — the steady erosion of a forgotten stock. And throughout the fall, on-balance volume did not budge, which is a bullish sign. #-ad_banner-# On-balance volume… Read More

The six year-old bull market is widely attributed to both stimulative policies from the Federal Reserve and a rebounding U.S. economy. Yet the Fed, the most powerful central bank in the world, may soon be taking the punch bowl away from the party.   #-ad_banner-#Does the Fed’s presumed move to begin lifting interest rates this summer mean it’s time to book profits and take a more defensive posture?  Then again, can you afford to do that when fixed-income investments earn just one or two percentage points above inflation? It’s a tough choice that many investors are pondering.  … Read More

The six year-old bull market is widely attributed to both stimulative policies from the Federal Reserve and a rebounding U.S. economy. Yet the Fed, the most powerful central bank in the world, may soon be taking the punch bowl away from the party.   #-ad_banner-#Does the Fed’s presumed move to begin lifting interest rates this summer mean it’s time to book profits and take a more defensive posture?  Then again, can you afford to do that when fixed-income investments earn just one or two percentage points above inflation? It’s a tough choice that many investors are pondering.   Bubble Or Rich Valuation  —  Bad For Investors Either Way One warning sign for risk-averse investors: The tech-heavy Nasdaq is now valued at 32 times trailing earnings, a premium of 68% to the stocks in the S&P 500.   Bond King Bill Gross recently joined the growing list questioning valuations saying that the index was in “a bit of a bubble,” and negative real interest rates have caused people to mindlessly pile into equities.   While the Nasdaq is nowhere near its 175 times earnings valuation it reached in 2000, a price-to-earnings of 32… Read More

As key indices continually reach new all-time highs, some analysts predict that we are in an unstoppable bull market. #-ad_banner-#But others argue that valuations are being manipulated by easy money policies and share buyback programs, which will result in an imminent market crash. As an average investor, it is hard to forecast where the market is going and, thus, where to invest. My answer: ignore the talking heads and follow my secret signal to solid investments and outsized gains. This signal is based on one simple truism: humans are wired… Read More

As key indices continually reach new all-time highs, some analysts predict that we are in an unstoppable bull market. #-ad_banner-#But others argue that valuations are being manipulated by easy money policies and share buyback programs, which will result in an imminent market crash. As an average investor, it is hard to forecast where the market is going and, thus, where to invest. My answer: ignore the talking heads and follow my secret signal to solid investments and outsized gains. This signal is based on one simple truism: humans are wired to act in their own self interest. No one invests their own hard-earned money — or even the money they’ve earned easily — in the hope of anything other than the best possible return. Where your heart lies, there your treasure will be also. That bit of investing wisdom, paraphrased from the Book of Matthew, was true when it was written and is still true today. Consider the CEO of Company X. His stock price is in the proverbial toilet. He can’t get a break on Wall Street, and the problems… Read More

The market is overvalued and most near-term catalysts are bearish. Last week, I told you we could be weeks away from a 10%-plus correction. But there’s an easy way to profit when the correction arrives. The secret is buying puts. It’s a type of option that goes up in value when the underlying security drops. Some of the best opportunities I’m seeing right now involve buying puts on stocks likely to be hit the hardest in a correction.  High earnings multiples, slowing growth and a cyclical business model are all traits that make a… Read More

The market is overvalued and most near-term catalysts are bearish. Last week, I told you we could be weeks away from a 10%-plus correction. But there’s an easy way to profit when the correction arrives. The secret is buying puts. It’s a type of option that goes up in value when the underlying security drops. Some of the best opportunities I’m seeing right now involve buying puts on stocks likely to be hit the hardest in a correction.  High earnings multiples, slowing growth and a cyclical business model are all traits that make a stock especially susceptible to corrections. To that end, there is one popular stock in particular that’s looking frothy and ripe for a pullback. The best part is that no one seems to see it that way… yet. #-ad_banner-# You may be familiar with Keurig Green Mountain (NASDAQ: GMCR) and may even own one of its products. Keurig produces and sells single-serving countertop coffee brewers and beverage makers. Keurig also sells K-Cups — individual servings of coffee and tea that can be brewed with… Read More

A classic Twilight Zone episode entitled “A Most Unusual Camera” posed an interesting question. If you could take pictures of events that have not yet happened, then what kind of pictures would you take? The characters in that episode took the camera to the race track and snapped photos of the race results — from tomorrow’s races. Investors might be tempted to take pictures of tomorrow’s stock prices. #-ad_banner-#Well, some investors do try to game the system that way, using historical data to predict tomorrow’s hot stocks. It’s called seasonal investing and can involve anything from how a specific set… Read More

A classic Twilight Zone episode entitled “A Most Unusual Camera” posed an interesting question. If you could take pictures of events that have not yet happened, then what kind of pictures would you take? The characters in that episode took the camera to the race track and snapped photos of the race results — from tomorrow’s races. Investors might be tempted to take pictures of tomorrow’s stock prices. #-ad_banner-#Well, some investors do try to game the system that way, using historical data to predict tomorrow’s hot stocks. It’s called seasonal investing and can involve anything from how a specific set of stocks perform around a certain event, to how specific industries perform during certain times of the year.  There has actually been a great deal of analysis on this subject. Ontario, Canada-based investment adviser Brooke Thackray publishes an annual guide entitled “How to Profit from Seasonal Market Trends.” This year’s version, which spans more than 200 pages and can be bought on Amazon.com, runs through a broad range of trading strategies that can be deployed month after month. In fact, this approach underpins the Horizons Seasonal Rotation ETF (Toronto: HAC), which trades on the Toronto Stock Exchange. (Call your broker… Read More

  Investors often have difficulty letting go of outperforming growth stocks, even if there are clear signs it’s time to cash out. Case in point: the seemingly unstoppable rise in shares of The Kroger Co. (NYSE: KR), the nation’s largest supermarket chain by revenue.       With such bullish-looking technicals, Kroger may seem like an investment you can buy and hold, especially after the company’s recent quarterly report. In early March, Kroger announced that Q4 earnings grew 23% (from the year ago quarter), well ahead of consensus forecasts.   The quarterly report caps off an impressive… Read More

  Investors often have difficulty letting go of outperforming growth stocks, even if there are clear signs it’s time to cash out. Case in point: the seemingly unstoppable rise in shares of The Kroger Co. (NYSE: KR), the nation’s largest supermarket chain by revenue.       With such bullish-looking technicals, Kroger may seem like an investment you can buy and hold, especially after the company’s recent quarterly report. In early March, Kroger announced that Q4 earnings grew 23% (from the year ago quarter), well ahead of consensus forecasts.   The quarterly report caps off an impressive five-year surge, which saw revenues jump more than 40% to nearly $109 billion and net earnings soar more than 30-fold to $3.44 a share during the past five years.   #-ad_banner-#However, it would be unwise to assume Kroger will keep outperforming. With the company’s stock perched at record highs, now is a perfect time to determine if fundamentals can support current prices. And from where I’m sitting, this popular stock looks set to boil over.   Investor Overexuberance In the fiscal year ended February 1, earnings rose about 19%. Yet Kroger’s stock gained nearly 90% during the same period. This… Read More

Right now, we’re facing one of the most challenging environments for income investors in history. #-ad_banner-#The average one-year CD yields just 0.28%. Yields on 20-year Treasuries have dipped below 2.5%. Even so-called high-yield “junk” bonds are paying just 6% — a far cry from what they once paid. Stocks aren’t much better, either. The average yield in the S&P 500 is only 1.9%. With rates like that, it would take you nearly 40 years to double your money, after accounting for inflation. And that’s only if the market… Read More

Right now, we’re facing one of the most challenging environments for income investors in history. #-ad_banner-#The average one-year CD yields just 0.28%. Yields on 20-year Treasuries have dipped below 2.5%. Even so-called high-yield “junk” bonds are paying just 6% — a far cry from what they once paid. Stocks aren’t much better, either. The average yield in the S&P 500 is only 1.9%. With rates like that, it would take you nearly 40 years to double your money, after accounting for inflation. And that’s only if the market doesn’t fall, which is never a guarantee. Of the 13,980 stocks listed on U.S. exchanges, a mere 166 yield 10% or above. And most of them are companies like Seadrill (NYSE: SDRL), which cut its dividend in 2012 and is down nearly 75% over the past 12 months. Don’t get me wrong. I’m not against dividends, CDs and the like. You’d probably be wise to have some money in them. I’m simply pointing out that market conditions have made it very difficult to produce sufficient income from these investments alone. Yet 99% of… Read More