As many readers know, I’ve been an avid student of Warren Buffett for many years. Studying his investment methods and applying them to my own analysis has paid off in spades. One of his most famous adages is, “invest in what you know”. #-ad_banner-#For better or for worse, something that I know all too well about is diabetes. It’s a condition I deal with every day, and I’ve candidly written about it several times my premium newsletter, Game-Changing Stocks. Diabetes isn’t something that normally comes up during conversations about investing, but today there’s a… Read More

As many readers know, I’ve been an avid student of Warren Buffett for many years. Studying his investment methods and applying them to my own analysis has paid off in spades. One of his most famous adages is, “invest in what you know”. #-ad_banner-#For better or for worse, something that I know all too well about is diabetes. It’s a condition I deal with every day, and I’ve candidly written about it several times my premium newsletter, Game-Changing Stocks. Diabetes isn’t something that normally comes up during conversations about investing, but today there’s a good reason why I bring it up. You see, as I’ve previously mentioned inpast articles on StreetAuthority.com , the United States is currently facing a diabetes epidemic. About 3 million Americans currently live with Type I juvenile onset diabetes, including myself. And in 2013, as many as 29 million Americans were living with Type II diabetes. Today, two-in-three Americans are categorized as overweight or obese and nearly half of adults have either pre-diabetes or diabetes. This condition cost the U.S. economy $245 billion in 2013, according to the American Diabetes Association. And the problem is only getting… Read More

The Chinese government’s crackdown on corruption, increased high-roller scrutiny and a partial smoking ban have put a serious damper on the Asian gambling mecca of Macau. #-ad_banner-#Gaming revenue in the former Portuguese colony fell for the eighth consecutive month in January, down 17.4% year over year. February is expected to be much worse — the worst on record, in fact, with analysts anticipating a 35% to 42% decline over 2014 levels. U.S.-based casino operators are also seeing lower gaming revenue from Sin City. After four years of annual gains, gambling revenue on the Las Vegas Strip fell 2.1% in 2014,… Read More

The Chinese government’s crackdown on corruption, increased high-roller scrutiny and a partial smoking ban have put a serious damper on the Asian gambling mecca of Macau. #-ad_banner-#Gaming revenue in the former Portuguese colony fell for the eighth consecutive month in January, down 17.4% year over year. February is expected to be much worse — the worst on record, in fact, with analysts anticipating a 35% to 42% decline over 2014 levels. U.S.-based casino operators are also seeing lower gaming revenue from Sin City. After four years of annual gains, gambling revenue on the Las Vegas Strip fell 2.1% in 2014, according to the Gaming Control Board. While gaming stocks in general seem unattractive against this backdrop, one in particular already appears to be against the ropes with lofty valuations, high debt levels and poor technicals. This makes it a prime target for a sell-off after next week’s earnings report. MGM Resorts International (NYSE: MGM) currently trades at 40 times forward earnings, almost double its peer group average of 23. While companies that are growing earnings faster than their peers often deserve a higher P/E ratio, analysts are only forecasting EPS growth of 12.5% a year for MGM for the next… Read More

  To paraphrase Isaac Newton’s First Law of Motion, “a company that exceeds earnings forecasts tends to keep exceeding earnings forecasts.” That’s because Wall Street analysts tend to only incrementally adjust their forecasts in light of new information. So these companies keep on delivering better-than-expected results, and investors can profit by positioning their investments ahead of the next quarterly upside. #-ad_banner-#The key to finding such stocks: look for those companies that manage to not only exceed quarterly forecasts, but raise forward guidance as well. These “beat and raise” stocks are often excellent momentum investments. Of course, momentum investing has a… Read More

  To paraphrase Isaac Newton’s First Law of Motion, “a company that exceeds earnings forecasts tends to keep exceeding earnings forecasts.” That’s because Wall Street analysts tend to only incrementally adjust their forecasts in light of new information. So these companies keep on delivering better-than-expected results, and investors can profit by positioning their investments ahead of the next quarterly upside. #-ad_banner-#The key to finding such stocks: look for those companies that manage to not only exceed quarterly forecasts, but raise forward guidance as well. These “beat and raise” stocks are often excellent momentum investments. Of course, momentum investing has a clear drawback. Investors may be catching such stocks at a time when they are already sporting lush valuations. Growth is nice, but not growth-at-any-price. In that light, I’ve been reviewing Q4 reports, looking for companies that exceeded profit forecasts by at least 15%. I ignored any stocks that didn’t receive a boost to their 2015 and 2016 earnings per share forecasts. Lastly, I decided to only focus on those stocks that trade for less than 18 times projected 2016 profits. Here are a dozen stocks that fit those criteria.   Company Q4 Beat (%) 2015 EPS 2016… Read More

  We expect the stock market to show occasional volatility, but even the staid bond market has been delivering some jolts recently.   #-ad_banner-#Rising bond price volatility reflects the growing concern about the timing, frequency and magnitude of upcoming interest rate hikes by the Federal Reserve. The risk of loss of principal has rarely been higher, especially for income investors that have boosted their exposure to high-yield corporate debt and other riskier types of bonds, in search of better returns.   With global political and economic turmoil apt to worsen, investors are understandably looking to the world’s leading money managers… Read More

  We expect the stock market to show occasional volatility, but even the staid bond market has been delivering some jolts recently.   #-ad_banner-#Rising bond price volatility reflects the growing concern about the timing, frequency and magnitude of upcoming interest rate hikes by the Federal Reserve. The risk of loss of principal has rarely been higher, especially for income investors that have boosted their exposure to high-yield corporate debt and other riskier types of bonds, in search of better returns.   With global political and economic turmoil apt to worsen, investors are understandably looking to the world’s leading money managers for insight into how best to navigate increasingly choppy markets. In the fixed-income arena, you might want to keep a close eye on 55-year-old Jeffrey Gundlach, CEO of Los Angeles-based DoubleLine Capital.   Gundlach is widely seen as the new “bond king,” replacing Bill Gross. That bond fund manager — and bond market prognosticator — had often been seen as the “Warren Buffett of bonds.” The passing of the torch to Gundlach occurred after Gross stepped down as chief investment officer of the Pacific Investment Management Company (PIMCO), a firm he co-founded in 1971.   DoubleLine, which Gundlach co-founded in… Read More

The new year hasn’t been kind to investors. In the first two weeks of January, the S&P 500 Index dropped 2.3% and every trading day has been filled with drama. #-ad_banner-#What started as a precipitous drop in oil prices — primarily driven by increased supply, the increased relative value of the U.S. dollar and speculators’ margin calls — has morphed into uncertainty about the strength of the global economy. And the one thing that the market hates is uncertainty. It’s not easy to make decisions and take action in a pessimistic and uncertain market. Read More

The new year hasn’t been kind to investors. In the first two weeks of January, the S&P 500 Index dropped 2.3% and every trading day has been filled with drama. #-ad_banner-#What started as a precipitous drop in oil prices — primarily driven by increased supply, the increased relative value of the U.S. dollar and speculators’ margin calls — has morphed into uncertainty about the strength of the global economy. And the one thing that the market hates is uncertainty. It’s not easy to make decisions and take action in a pessimistic and uncertain market. But it’s often the tough decisions that allow us to sleep better at night. Here are some of the things I focus on in times like this: Evaluate Your Cash Balance As investors, we have been made to feel guilty about holding cash. It’s as if we’re shirking our responsibilities. We feel like we should always have our entire portfolio working for us. But cash does work for us. Cash holds up pretty darn well in a downturn. Cash helps us sleep better at night, no matter what the market throws at us. Cash allows… Read More

One of my favorite strategies is to buy stocks that remain below prior highs but are in sectors that are already showing strength. As long as the stock is technically sound, it is ripe to play catch-up. #-ad_banner-#Most technical analysts will agree that a good deal of any stock’s potential for gains depends on the overall strength of its sector. Fundamentally, it makes sense that if there is enough business to go around in the industry then any individual company can take advantage of the demand. Again, the company has to be sound and also prove that it can rally,… Read More

One of my favorite strategies is to buy stocks that remain below prior highs but are in sectors that are already showing strength. As long as the stock is technically sound, it is ripe to play catch-up. #-ad_banner-#Most technical analysts will agree that a good deal of any stock’s potential for gains depends on the overall strength of its sector. Fundamentally, it makes sense that if there is enough business to go around in the industry then any individual company can take advantage of the demand. Again, the company has to be sound and also prove that it can rally, because stocks with terrible charts can easily get left behind. Just take a look at RadioShack (OTC: RSHCQ) in a soaring consumer electronics group.  The hotel sector has generally outperformed the S&P 500 since the entire market corrected in 2011. It stalled in December but now looks to be getting its mojo back on the heels of strong earnings reports from several of the larger-cap member stocks.  Many stocks in the group show positive technical signs, including rising on-balance volume and up gaps. The former suggests continued demand for shares. The latter proves that demand with a rush… Read More

StreetAuthority expert Jimmy Butts made a prescient forecast in October 2014 when he warned investors about the perils of initial public offerings (IPOs).   #-ad_banner-#To be sure, 2014 was a banner year for IPOs.   In his report, Jimmy laid bare the process by which Wall Street creates fervor for upcoming share issues through “road shows” and media hype.   Investors buy the newly issued shares from company insiders and underwriters and get left holding the bag when they are unable to find the proverbial “greater fool.”   Facebook, Inc. (Nasdaq: FB) is… Read More

StreetAuthority expert Jimmy Butts made a prescient forecast in October 2014 when he warned investors about the perils of initial public offerings (IPOs).   #-ad_banner-#To be sure, 2014 was a banner year for IPOs.   In his report, Jimmy laid bare the process by which Wall Street creates fervor for upcoming share issues through “road shows” and media hype.   Investors buy the newly issued shares from company insiders and underwriters and get left holding the bag when they are unable to find the proverbial “greater fool.”   Facebook, Inc. (Nasdaq: FB) is the prime example, with shares surging on the first day of trading, only to drop by more than 50% over the following three months of trading. But just as Facebook may be the poster child for not getting caught up in the IPO frenzy, it’s also the perfect illustration of a stock that can turn itself around after the post-IPO swoon.   And one mega-IPO from last year may have just found its Facebook moment.   This Global Powerhouse Has Lost Its IPO-Shine In his look at IPO froth, Jimmy took note of Alibaba Group Holding Ltd… Read More

When companies such as Cisco Systems, Inc. (Nasdaq: CSCO) and Microsoft Corp. (Nasdaq: MSFT) began issuing debt in the past decade, some investors were left scratching their heads. After all, these companies carried a hefty amount of cash on their balance sheet and seemingly had no use for more money. #-ad_banner-#The key reason: much of their cash was locked up in foreign banks. These and many other companies have been playing a waiting game with the U.S. government. The government has sought to tax those foreign-earned funds when they are repatriated back home. For many companies, we’re talking about a… Read More

When companies such as Cisco Systems, Inc. (Nasdaq: CSCO) and Microsoft Corp. (Nasdaq: MSFT) began issuing debt in the past decade, some investors were left scratching their heads. After all, these companies carried a hefty amount of cash on their balance sheet and seemingly had no use for more money. #-ad_banner-#The key reason: much of their cash was locked up in foreign banks. These and many other companies have been playing a waiting game with the U.S. government. The government has sought to tax those foreign-earned funds when they are repatriated back home. For many companies, we’re talking about a tax rate in excess of 30% (offset by any amount of taxes already levied by foreign entities on those earnings). These companies figured they would just bide their time until the government agreed to a lower tax rate. Well, that time may have finally come. Reports are circulating that the Obama administration, as part of a broad corporate tax overhaul, will offer a lowered tax rate for repatriated funds. President Obama’s reported opening gambit: a 14% tax rate on cash brought home now and a 19% tax rate on future foreign-sourced profits. Congressional Republicans will likely counter-offer with a lower… Read More