Discount retailer Target (NYSE: TGT), which operates more than 1,900 stores in the United States and Canada, has fallen more than 20% since its summer highs. The selling has been especially pronounced since the company announced, on Jan. 10, that the massive credit card breach that occurred during the holiday shopping season was even worse than originally reported. In addition to the original 40 million people that had card numbers stolen, up to 70 million had their personal information compromised in some way. TGT sold off more than 13%, hitting a new 52-week low of $54.66… Read More

Discount retailer Target (NYSE: TGT), which operates more than 1,900 stores in the United States and Canada, has fallen more than 20% since its summer highs. The selling has been especially pronounced since the company announced, on Jan. 10, that the massive credit card breach that occurred during the holiday shopping season was even worse than originally reported. In addition to the original 40 million people that had card numbers stolen, up to 70 million had their personal information compromised in some way. TGT sold off more than 13%, hitting a new 52-week low of $54.66 on Feb. 5 before recovering slightly. #-ad_banner-#In my opinion, the breach did not warrant such a big drop. (My colleague Marshall Hargrave offered a similar take last month.) And in addition to the market’s overreaction, keep in mind that TGT was caught up in the broader market selling that hit almost all equities in the latter half of January. On the fundamental side, TGT’s price-to-earnings (P/E) ratio of 15 is in line with the SPDR S&P 500 (NYSE: SPY), and its forward P/E is just over 13. Additionally, its price/sales (P/S) ratio of 0.49 is superb. The company pays… Read More

Nothing feels worse for investors than missing the boat, and I’m sure there’s plenty of regret to go around these days. Stung by huge losses during the financial crisis, so many investors abandoned equities completely and stayed on the sidelines during what has been one of the most impressive stock market rebounds in decades. #-ad_banner-#But one of the things I’ve always liked about the stock market is it usually gives lots of second chances. They come in the form of corrections, declines of 10% or more.  Like many market watchers (like my colleague David Sterman, who gave his macroeconomic outlook… Read More

Nothing feels worse for investors than missing the boat, and I’m sure there’s plenty of regret to go around these days. Stung by huge losses during the financial crisis, so many investors abandoned equities completely and stayed on the sidelines during what has been one of the most impressive stock market rebounds in decades. #-ad_banner-#But one of the things I’ve always liked about the stock market is it usually gives lots of second chances. They come in the form of corrections, declines of 10% or more.  Like many market watchers (like my colleague David Sterman, who gave his macroeconomic outlook earlier this month), I strongly suspect we’re overdue for a correction because of things like overblown price-to-earnings (P/E) ratios, ongoing economic uncertainty domestically and abroad, and continued investor skittishness. Plus, the market has been showing the kind of increased volatility it often displays right before a major pullback. If the market does undergo a correction, I encourage investors to see it as a second chance — possibly a really good one — to get back into equities. With the level of mistrust in the stock market still so high, a typical sell-off could easily turn into a major rout. Indeed,… Read More

A long time ago, in a financial world very unlike today’s, investors could earn decent returns with just a savings account and certificates of deposit issued by the local bank. #-ad_banner-#Many of you likely remember these days — and you likely remember that the downside of these generous but low-risk yields was double-figure mortgage rates and spiking inflation. In contrast, today’s easy-money policies and near-zero interest rates have made things much easier for borrowers. However, the flip side is that decent yields have all but vanished from the risk-free landscape, forcing investors to look to unusual and often high-risk instruments. Read More

A long time ago, in a financial world very unlike today’s, investors could earn decent returns with just a savings account and certificates of deposit issued by the local bank. #-ad_banner-#Many of you likely remember these days — and you likely remember that the downside of these generous but low-risk yields was double-figure mortgage rates and spiking inflation. In contrast, today’s easy-money policies and near-zero interest rates have made things much easier for borrowers. However, the flip side is that decent yields have all but vanished from the risk-free landscape, forcing investors to look to unusual and often high-risk instruments. One such instrument has been known to provide yields in excess of 50% — yet owns no assets, has no employees and doesn’t pay any federal income taxes. In fact, yields on these investments are tax-advantaged and may offer unique tax credits.  Called royalty trusts, these instruments are corporate entities that focus on natural resources such as oil, gas or mining. They own the rights to royalties on the production and sale of natural resources rather than the resources or infrastructure. The trusts have no physical operations and no management or employees. Royalty trusts are financing vehicles that trade like… Read More

Wouldn’t it be great to have a crystal ball to see into the future? You could know when the next market crash will be, what stocks to buy, and which companies will be the fastest growing. While crystal balls remain a fantasy, there is a group of unique companies that have the next best thing. You see, there is a handful of companies that have been quietly developing what I call “Prediction Plants” — ultra-secret facilities with sophisticated technology that allow them to predict certain events before they happen.  You read that right. #-ad_banner-#These companies have built secret facilities thousands… Read More

Wouldn’t it be great to have a crystal ball to see into the future? You could know when the next market crash will be, what stocks to buy, and which companies will be the fastest growing. While crystal balls remain a fantasy, there is a group of unique companies that have the next best thing. You see, there is a handful of companies that have been quietly developing what I call “Prediction Plants” — ultra-secret facilities with sophisticated technology that allow them to predict certain events before they happen.  You read that right. #-ad_banner-#These companies have built secret facilities thousands of miles from Wall Street that hold the key to predicting the future. As a result, some of them have already seen gains as high as 650% and 884% over the past decade. And experts believe that these companies will create $14 trillion in new wealth by 2018. That’s why I believe these companies are in a growth trend still in its infant stages.  They’ve already predicted flu outbreaks… what book customers are most likely to buy… where the next vacation hotspot will be… and a whole lot more. And in some cases, instead of predicting what you want to… Read More

Professional short sellers often like to work alone — at least until they’ve built a sizable short position in a stock.  They realize that a large short interest from other short sellers can create real trouble. Heavily-shorted stocks (also known as “crowded shorts”) can lead to a massive short squeeze that creates havoc for all short sellers as they all start to cover their positions at once.  Case in point: Radio Shack (NYSE: RSH), the beleaguered electronics retailer, which had a 40 million short sale wager against it as of Jan. 31. That short position represents more than 40% of… Read More

Professional short sellers often like to work alone — at least until they’ve built a sizable short position in a stock.  They realize that a large short interest from other short sellers can create real trouble. Heavily-shorted stocks (also known as “crowded shorts”) can lead to a massive short squeeze that creates havoc for all short sellers as they all start to cover their positions at once.  Case in point: Radio Shack (NYSE: RSH), the beleaguered electronics retailer, which had a 40 million short sale wager against it as of Jan. 31. That short position represents more than 40% of the trading float and the equivalent of 12 days’ worth of trading volume (known as “days to cover”). #-ad_banner-#Yet for every RadioShack that causes headaches for short sellers due to a short squeeze, many other heavily-shorted stocks turn into big paydays for short sellers. As an example, I noted a very large short position in Uni-Pixel (Nasdaq: UNXL) back in October, and shares have plunged 47% since then. The key takeway is that heavily shorted stocks often have a binary outcome. So it pays to look at the most heavily shorted stocks on a regular basis and pursue… Read More

I have a small television in my office tuned to CNBC. I keep the sound off. It’s not that I rely on it for information — rather, I like to have some idea of what the herd is thinking and what they’re being told. As always, the whole story isn’t being discussed. #-ad_banner-#So far this year, the Dow Jones Industrial Average and the broader S&P 500 Index are off about 3.7% and 1.6%, respectively. Although these seem like modest pullbacks, many investors remain nervous for a couple of reasons.  First, 2013 brought the type of outsize gains that haven’t been… Read More

I have a small television in my office tuned to CNBC. I keep the sound off. It’s not that I rely on it for information — rather, I like to have some idea of what the herd is thinking and what they’re being told. As always, the whole story isn’t being discussed. #-ad_banner-#So far this year, the Dow Jones Industrial Average and the broader S&P 500 Index are off about 3.7% and 1.6%, respectively. Although these seem like modest pullbacks, many investors remain nervous for a couple of reasons.  First, 2013 brought the type of outsize gains that haven’t been enjoyed in many years. Second, many investors are still shell-shocked from 2008-2009, so any volatility whatsoever sends them running for cover. If a low-single-digit pullback makes them nervous, the pullbacks I’m about to discuss might really freak them out.  I’ve found a handful of high-quality stocks that are trading at an average discount of 16% to their 52-week highs, with an average dividend yield close to 5%. These are well-run companies — two in high-growth industries — with strong business models. Held as a basket, all three provide excellent diversification. Olin Corp. (NYSE: OLN ) Olin is one of… Read More

It’s been more than two years since gold prices peaked. Since then, precious metal prices have been in a well-defined bear market despite the widespread belief that the Federal Reserve’s stimulus programs would naturally send them higher. #-ad_banner-#Ironically, as the Fed finally begins to taper its bond purchasing program, precious metal prices now appear to be bottoming. Although it may seem counterintuitive at first, the fact that gold is rallying right now actually makes perfect sense. For quite some time, the Fed has kept interest rates artificially low and injected capital into the U.S. economy by purchasing massive… Read More

It’s been more than two years since gold prices peaked. Since then, precious metal prices have been in a well-defined bear market despite the widespread belief that the Federal Reserve’s stimulus programs would naturally send them higher. #-ad_banner-#Ironically, as the Fed finally begins to taper its bond purchasing program, precious metal prices now appear to be bottoming. Although it may seem counterintuitive at first, the fact that gold is rallying right now actually makes perfect sense. For quite some time, the Fed has kept interest rates artificially low and injected capital into the U.S. economy by purchasing massive amounts of Treasury bonds and mortgage-backed securities. Gold bugs claimed that these capital injections would lead to high levels of inflation as more dollars were forced into the financial system. This didn’t happen because the velocity of money was so very low. Despite the low interest rates, banks were not lending capital to borrowers, and businesses were not borrowing money for growth investments. In short, the cash was just sitting stagnant instead of being put to work to help the economy grow. Today, however, the tide is beginning to turn. The U.S. economy is finally showing signs of a recovery,… Read More

Over the past few years, I’ve been conducting quarterly reviews of companies that are aggressive repurchasers of their own stock. #-ad_banner-#I’ve tended to focus on companies that announced a share repurchase plan that represents at least 5% of shares outstanding. Anything smaller may not have much of an impact on earnings per share (EPS). Yet in recent months, we here at StreetAuthority have broadened our measure of corporate generosity to focus not just on buybacks but also dividends and debt reductions. These three pillars combine to form what we call our Total Yield strategy, and we’re always on the prowl… Read More

Over the past few years, I’ve been conducting quarterly reviews of companies that are aggressive repurchasers of their own stock. #-ad_banner-#I’ve tended to focus on companies that announced a share repurchase plan that represents at least 5% of shares outstanding. Anything smaller may not have much of an impact on earnings per share (EPS). Yet in recent months, we here at StreetAuthority have broadened our measure of corporate generosity to focus not just on buybacks but also dividends and debt reductions. These three pillars combine to form what we call our Total Yield strategy, and we’re always on the prowl for companies that can deliver a total yield in excess of 10%. Below you’ll find a group of companies that meet the criteria, based on share buyback announcements during the current earnings season. A few notes about this table. First, not all of these buybacks will be completed over the next 12 months, so the total yield analysis may cover a multi-year period. Second, only some of these companies are also reducing debt. In those instances, the total yield is even higher than the figures you see above.  Also, many of these companies are buying… Read More

Going “short” a company involves selling shares that you have borrowed from another investor (for a fee) with the expectation that you can buy them back at a lower price in the future. #-ad_banner-#People who short shares of a company are betting that those shares are going to drop in price.   Short selling is a much riskier business than owning shares of companies.   If you buy shares of a company, the most you can lose is the full amount you have invested.  If you invest $5,000, the worst thing that can happen is that the stock… Read More

Going “short” a company involves selling shares that you have borrowed from another investor (for a fee) with the expectation that you can buy them back at a lower price in the future. #-ad_banner-#People who short shares of a company are betting that those shares are going to drop in price.   Short selling is a much riskier business than owning shares of companies.   If you buy shares of a company, the most you can lose is the full amount you have invested.  If you invest $5,000, the worst thing that can happen is that the stock goes to zero and you lose your investment. Meanwhile, if you were to short $5,000 worth of shares of the same company, your potential for loss is much greater. A stock price can double, triple — or go up 10 times in price. In fact, there is no limit to what your potential loss could be. Because short selling is such a risky business, the people who practice it are generally some of the smartest people in the market. They have to be, because if they don’t do their homework, they usually get taken to the cleaners — quickly. For… Read More