For sufferers of Rheumatoid Arthritis, Crohn’s Disease, psoriasis, colitis and other auto-immune diseases, AbbVie, Inc.’s (Nasdaq: ABBV) Humira has been an utter godsend. The drug has proven so successful in reducing inflammation associated with these maladies that it is now the world’s third-largest best-seller. #-ad_banner-#But success doesn’t come cheap. AbbVie charges thousands per dose, which can have a costly impact on insurers and their clients’ insurance premiums. AbbVie, which makes more than $12 billion a year from sales of Humira, is able to charge so much for a simple reason — at least in the United States: It has limited… Read More

For sufferers of Rheumatoid Arthritis, Crohn’s Disease, psoriasis, colitis and other auto-immune diseases, AbbVie, Inc.’s (Nasdaq: ABBV) Humira has been an utter godsend. The drug has proven so successful in reducing inflammation associated with these maladies that it is now the world’s third-largest best-seller. #-ad_banner-#But success doesn’t come cheap. AbbVie charges thousands per dose, which can have a costly impact on insurers and their clients’ insurance premiums. AbbVie, which makes more than $12 billion a year from sales of Humira, is able to charge so much for a simple reason — at least in the United States: It has limited competition. Humira is in a class of drugs, known as biologics, which are drugs that can’t be simply synthesized in a lab, but instead must be genetically engineered with living cells. The Food & Drug Administration (FDA) has always known that such biologic drugs are hard to engineer and as a result, has historically kept the door closed to generic competition. When the FDA established the ground rules for bioloigic production, it was a niche market. Such drugs now account for roughly 30% of the entire U.S. pharmaceutical industry. In light of the meteoric growth for these pricey drugs, the… Read More

Currently, the Federal Reserve is crushing savers and income investors by keeping interest rates near zero. #-ad_banner-#But the good news is that there are dozens of safe ways to make 10 times more than you would by investing in a CD or a Treasury bill. In fact, there are currently 288 stocks that yield more than 10%, 173 that yield more than 12% and 95 yielding 15% or more. While not all stocks yielding double digits are good investments, owning a handful of reliable dividend payers is the safest, easiest way to build wealth. Read More

Currently, the Federal Reserve is crushing savers and income investors by keeping interest rates near zero. #-ad_banner-#But the good news is that there are dozens of safe ways to make 10 times more than you would by investing in a CD or a Treasury bill. In fact, there are currently 288 stocks that yield more than 10%, 173 that yield more than 12% and 95 yielding 15% or more. While not all stocks yielding double digits are good investments, owning a handful of reliable dividend payers is the safest, easiest way to build wealth. n fact, 156 years of data prove that owning dividend paying stocks and reinvesting those dividends beats all other investment approaches hands down. If you’re skeptical consider this: Anyone who invested $1,000 in the S&P 500 in 1950 would have $1,033,799 today as long as they reinvested the dividends. Without dividend reinvestment, that figure shrinks to a measly $117,471. So why does investing in dividend payers make such a difference? Because these are the stocks that often perform the best, even during periods of extreme market turmoil. Take… Read More

The anomaly I see today has only occurred twice before in the past decade.  #-ad_banner-#The last time this indicator flashed its current reading was at the end of 2009, and within six months, the market had undergone a correction.  The previous time it was even close to this high was in October 2007, when stocks began a 17-month, 57% decline. Needless to say, I’m concerned. Under-promise and over-deliver has been the mantra on Wall Street for the past few years. Companies have done an excellent job setting the earnings bar low so they can leap over it and please investors. Read More

The anomaly I see today has only occurred twice before in the past decade.  #-ad_banner-#The last time this indicator flashed its current reading was at the end of 2009, and within six months, the market had undergone a correction.  The previous time it was even close to this high was in October 2007, when stocks began a 17-month, 57% decline. Needless to say, I’m concerned. Under-promise and over-deliver has been the mantra on Wall Street for the past few years. Companies have done an excellent job setting the earnings bar low so they can leap over it and please investors. But what happens when the bar can’t go any lower? What if valuations are richer than they were in 2007 when the bubble was about to burst? And what if estimates for earnings growth turn negative?  Pepper in an increasing interest rate environment and some global economic stress and you have a recipe for a correction. Now, I’m not forecasting the next recession, but there is cause for concern. Based on my research, I anticipate an 8% pullback in the S&P 500 over the next few months. In addition to using this knowledge to do some proactive portfolio… Read More

  When is bad news seen as good news? When the bad news is not quite as bad as had been feared.   #-ad_banner-#So when beverage maker The Coca-Cola Co. (NYSE: KO) posted flat quarterly results (compared to a year ago) that were still a few pennies ahead of consensus forecasts, shares received a nice 3% one-day pop. Pretty soon, that pop will turn into fizz.   That’s because investors are overlooking a dire warning by management regarding further weakness in the company’s core business. Coke has been a laggard for some time now. Shares have underperformed the S&P 500… Read More

  When is bad news seen as good news? When the bad news is not quite as bad as had been feared.   #-ad_banner-#So when beverage maker The Coca-Cola Co. (NYSE: KO) posted flat quarterly results (compared to a year ago) that were still a few pennies ahead of consensus forecasts, shares received a nice 3% one-day pop. Pretty soon, that pop will turn into fizz.   That’s because investors are overlooking a dire warning by management regarding further weakness in the company’s core business. Coke has been a laggard for some time now. Shares have underperformed the S&P 500 by nearly 24% over the last two years, and the road ahead looks equally daunting.   Coke’s Recent Performance Has Fizzled Coke’s beverage volumes grew 2% in 2013 and 2014, a downshift from the 4% growth rate seen in prior years. Demand for its carbonated beverages has been especially tepid. In fact, sparkling beverages have slid to 73% of total revenues, from 77% in 2009.   While global unit volumes increased 2% in 2014, net sales dropped 2% to $46 billion on a tough pricing environment. Operating income slumped an even deeper 5% as the company waits for its cost-cutting… Read More

Most of the companies in the S&P 500 have now delivered Q4 results (with the exception of retailers), and insiders are free to buy and sell shares in their companies. This is the time in the quarter when insider buying and selling tends to cluster, because in a matter of weeks, a Q1-related “quiet period” will compel these insiders to cease their trading activities. #-ad_banner-#I tend to closely study the daily moves of insiders while it’s the active part of the quarter. First, I identify any massive clusters of coordinated selling. When a group of… Read More

Most of the companies in the S&P 500 have now delivered Q4 results (with the exception of retailers), and insiders are free to buy and sell shares in their companies. This is the time in the quarter when insider buying and selling tends to cluster, because in a matter of weeks, a Q1-related “quiet period” will compel these insiders to cease their trading activities. #-ad_banner-#I tend to closely study the daily moves of insiders while it’s the active part of the quarter. First, I identify any massive clusters of coordinated selling. When a group of insiders head for the exits at the same time, so should you. Such a bearish move often signals either tougher times ahead, or at least a fully valued stock. Second, I like to see which stocks hold buying appeal for insiders. Please note that I don’t consider a decision to exercise stock options and then retain shares as a form of insider buying, as some insider trackers do. Also, I often (but not always) ignore the move of major outside shareholders, even though their purchases can often portend a bullish move in a stock. I look at these investors, and… Read More

These days, investors are bombarded with a lot of chatter from the market. #-ad_banner-#The internet, TV and radio are flooded with so-called “experts” claiming to know the future of the economy and offering varying opinions on where investors should place their hard earned dollars. On any given day, you might come across a dozen articles online claiming the market is in-store for a major bull run, only to see a news report claiming the next recession is just around the corner, not even an hour later. With the market presenting you… Read More

These days, investors are bombarded with a lot of chatter from the market. #-ad_banner-#The internet, TV and radio are flooded with so-called “experts” claiming to know the future of the economy and offering varying opinions on where investors should place their hard earned dollars. On any given day, you might come across a dozen articles online claiming the market is in-store for a major bull run, only to see a news report claiming the next recession is just around the corner, not even an hour later. With the market presenting you such a mixed bag of opinions, how are you to know what investments you can actually trust? Simple: just ignore it completely. Now, I know that might sound like a stretch, but trust me, it isn’t. The market — and its thousands of pundits — often panders to what I think is an investor’s absolute worst enemy: their emotions. Whether its fear, optimism, excitement or panic, many investors have a way of letting their emotions completely cloud their judgments. And often times, that can cost them a big… Read More

When interest rates bottomed last month, bonds and several interest rate sensitive sectors of the stock market started to fall.  #-ad_banner-#​I was looking for a substantial correction in the utilities sector, and it appears to be well on its way to completing one. But some stocks in the group fell harder than others and may already be ripe for the picking.  My favorite right now is Atlanta-based Southern Company (NYSE: SO). This utility company generates electricity through coal, nuclear, oil and gas, and hydro resources and distributes it in the states of… Read More

When interest rates bottomed last month, bonds and several interest rate sensitive sectors of the stock market started to fall.  #-ad_banner-#​I was looking for a substantial correction in the utilities sector, and it appears to be well on its way to completing one. But some stocks in the group fell harder than others and may already be ripe for the picking.  My favorite right now is Atlanta-based Southern Company (NYSE: SO). This utility company generates electricity through coal, nuclear, oil and gas, and hydro resources and distributes it in the states of Alabama, Georgia, Florida and Mississippi. Since peaking at $53.16 in late January as investors sought the relative safety of utilities, the stock has fallen 14% in less than three weeks’ time. That is a very large move for a member of a normally staid sector, but it is good news for investors looking to buy now.  I have been waiting for the utility sector as a whole to retrace 50% of its rather sharp rally that began in August.  SO has already completed a 61.8% Fibonacci retracement… Read More

It’s not always easy to go against the crowd, especially when it comes to investing.   #-ad_banner-#But some of the best investments ever have been made when markets are paralyzed by fear.   Warren Buffett is the poster child for this style of contrarian investing. Just look back to 2011 when Buffett’s Berkshire Hathaway  invested $5 billion in then-struggling Bank of America (NYSE: BAC). While most investors were fleeing, questioning the bank’s solvency, Buffett saw an opportunity. Today the market value of his investment has more than doubled in just over three years.   And when it comes… Read More

It’s not always easy to go against the crowd, especially when it comes to investing.   #-ad_banner-#But some of the best investments ever have been made when markets are paralyzed by fear.   Warren Buffett is the poster child for this style of contrarian investing. Just look back to 2011 when Buffett’s Berkshire Hathaway  invested $5 billion in then-struggling Bank of America (NYSE: BAC). While most investors were fleeing, questioning the bank’s solvency, Buffett saw an opportunity. Today the market value of his investment has more than doubled in just over three years.   And when it comes to another one of Buffett’s well-known investments, we have a similar opportunity to profit tremendously today. In the 1960s, American Express made a series of bad loans in a scandal dubbed “The Salad Oil Scandal.” Essentially, American Express was the victim of fraud by a company that obtained loans based on its far-overstated inventory of salad oil. When all was said and done American Express shares dropped more than 50%.   Seeing a tremendous value, Buffet stepped in and bought a 5% stake in American Express Co. (NYSE: AXP) for about $20 million. As the years went… Read More

No matter how well run a company is, sometimes there is nothing management can do to avoid steep losses. Sometimes these outside forces are so strong that investors write a stock off altogether and wonder if the industry will ever be profitable again. #-ad_banner-#Few industries were hit as hard by the Great Recession as recreational vehicles. The plummeting stock market could not have come at a worse time for baby boomers approaching retirement, and fear over retirement savings caused motorhome shipments to drop more than 50% between 2007 and 2009. Even when gasoline prices fell during the recession, they quickly… Read More

No matter how well run a company is, sometimes there is nothing management can do to avoid steep losses. Sometimes these outside forces are so strong that investors write a stock off altogether and wonder if the industry will ever be profitable again. #-ad_banner-#Few industries were hit as hard by the Great Recession as recreational vehicles. The plummeting stock market could not have come at a worse time for baby boomers approaching retirement, and fear over retirement savings caused motorhome shipments to drop more than 50% between 2007 and 2009. Even when gasoline prices fell during the recession, they quickly recovered, making cross-country trips unrealistic for many Americans. One company has been a symbol of the industry for more than 50 years, but it came close to bankruptcy during the recession. Now shares look ready to move higher as some of the forces that worked against it change in its favor. Back From the Dead and Ready for 2 Strong Catalysts Winnebago Industries (NYSE: WGO) has been a leader in recreational vehicles since 1958. It has been the top-selling motorhome brand every year since 1974, but even its status as an American icon looked like it might not be enough… Read More