The start of a new year is a time of reckoning for retailers. A quick reassessment of the post-holiday landscape can reveal bloated inventories, unsustainably weak profit margins and a need to radically alter the business model.#-ad_banner-# Indeed, J.C. Penney (NYSE: JCP) has already started the process of shrinking its store base, and other retailers are likely to make similar moves in coming months. In the face of the Amazon.com (Nasdaq: AMZN) juggernaut and still-weak consumer spending, the nation simply has too many brick-and-mortar stores. But there is a contrarian case to be made for the nation’s retail sector. Many retail… Read More

The start of a new year is a time of reckoning for retailers. A quick reassessment of the post-holiday landscape can reveal bloated inventories, unsustainably weak profit margins and a need to radically alter the business model.#-ad_banner-# Indeed, J.C. Penney (NYSE: JCP) has already started the process of shrinking its store base, and other retailers are likely to make similar moves in coming months. In the face of the Amazon.com (Nasdaq: AMZN) juggernaut and still-weak consumer spending, the nation simply has too many brick-and-mortar stores. But there is a contrarian case to be made for the nation’s retail sector. Many retail stocks have stumbled badly and now sport solid value. More importantly, the slowing improving employment picture should help lift retail spending, perhaps moderately in 2014, and more robustly in 2015, when economists think the national unemployment rate may fall towards 6%. With that in mind, I’ve been tracking the retail stocks I’ve covered in the past six to 12 months. Here’s an update for those picks that are on my radar for the quarters ahead. 1. Best Buy (NYSE: BBY )​ I profiled this fallen retailer nearly two years ago, noting that it still generated impressive cash flow, even it had to… Read More

Many people don’t believe that disconnects like the one I’m about to tell you about can happen. They believe that with all of the eyeballs on Wall Street, someone (and likely many people) would surely spot a rising star like this. But that’s not at all true. And I can prove it to you. #-ad_banner-#Just look at the stats on a stock I’ve uncovered earlier this month in my premium advisory, Top 10 Stocks. This firm is one of the most established companies in the metals business. But it’s not resting on its laurels. In 2009, management set out a… Read More

Many people don’t believe that disconnects like the one I’m about to tell you about can happen. They believe that with all of the eyeballs on Wall Street, someone (and likely many people) would surely spot a rising star like this. But that’s not at all true. And I can prove it to you. #-ad_banner-#Just look at the stats on a stock I’ve uncovered earlier this month in my premium advisory, Top 10 Stocks. This firm is one of the most established companies in the metals business. But it’s not resting on its laurels. In 2009, management set out a program of cost-cutting and efficiency improvements designed to boost this company’s profitability. Since that time, margins have jumped to a projected 21.9% for 2013, up an astonishing 65% from 2009 levels. Growth like this should send stock buyers scrambling to call their brokers. But here’s the incredible thing: Today, you can buy this firm for 45% less than when it started its relentless margin improvements. This sounds too good to be true. Surely there must be something wrong. Perhaps there’s a hidden defect that’s causing investors to drop the stock? The reason for this disconnect has nothing to do with… Read More

Shares of T-Mobile US (NYSE: TMUS) popped almost 9% last month on news that Sprint (NYSE: S) would seek a buyout of the wireless carrier. Coming less than a year after Japanese giant Softbank (OTC: SFTBF) acquired Sprint, the move heats up the battle for telecom supremacy.#-ad_banner-#​ Investors are cheering on both sides of the potential deal, but they may be in for a rude awakening when the Federal Communications Commission (FCC) weighs in.  Four has always been a magic number for telecom carriers. The idea is that if the industry consolidated… Read More

Shares of T-Mobile US (NYSE: TMUS) popped almost 9% last month on news that Sprint (NYSE: S) would seek a buyout of the wireless carrier. Coming less than a year after Japanese giant Softbank (OTC: SFTBF) acquired Sprint, the move heats up the battle for telecom supremacy.#-ad_banner-#​ Investors are cheering on both sides of the potential deal, but they may be in for a rude awakening when the Federal Communications Commission (FCC) weighs in.  Four has always been a magic number for telecom carriers. The idea is that if the industry consolidated to fewer than four carriers, an oligopoly would form and prices would go up. That’s part of the reason regulators jumped in when AT&T (NYSE: T) tried to buy T-Mobile in 2011. While a Sprint/T-Mobile combination would still be smaller than either AT&T or Verizon (NYSE: VZ), it would still put considerable pricing power in the hands of just three companies. I alerted investors in October to T-Mobile’s great turnaround story and the success in its Uncarrier program. TMUS is up more than 25% since that article — but the valuation looks stretched, especially if regulators put the kibosh on an… Read More

This just in: The Department of Agriculture warns that record droughts in Texas and the Midwest may drop beef production to 20-year lows in 2014. I can just see the writing on the wall over the next few days about how you should steer clear of McDonald’s (NYSE: MCD), that higher costs to the burger empire will strangle its already tight margins.#-ad_banner-# Expect analysts to dwell on its mere 2.5% growth in profits last year and MCD’s 4% gain on the year — pathetic in the context of a record bull run.  Analysts may focus on McDonald’s’ struggles… Read More

This just in: The Department of Agriculture warns that record droughts in Texas and the Midwest may drop beef production to 20-year lows in 2014. I can just see the writing on the wall over the next few days about how you should steer clear of McDonald’s (NYSE: MCD), that higher costs to the burger empire will strangle its already tight margins.#-ad_banner-# Expect analysts to dwell on its mere 2.5% growth in profits last year and MCD’s 4% gain on the year — pathetic in the context of a record bull run.  Analysts may focus on McDonald’s’ struggles in China and Europe or the absence of restaurants in a number of emerging markets. Some could even bring up past menu disasters like the McDLT, McLean Deluxe, McSalad Shakers and McLobster… and the recent switch from Heinz ketchup. But my argument for investing in McDonald’s is based on one simple trait that the Big Mac maker shares with Big Pharma and Big Tobacco — but has nothing to do with food, drugs or cigarettes. They’re all experts at converting revenue into cash — and regularly divvying up portions to shareholders.  Between 2008 and the third quarter of last year,… Read More

Gold and silver prices have taken a dive in the past two and a half years. Silver prices have been cut in half since their 2011 highs, while gold has “only” shed about a third of its value since then.  Currently, silver is trading around $20 an ounce, and gold is trading at about $1,250 an ounce. Silver Standard Resources (Nasdaq: SSRI) is a major producer of silver, zinc and gold, based in Vancouver, British Columbia. Its main business is the exploration, development and acquisition of silver-dominant properties in the Americas. As you can see in… Read More

Gold and silver prices have taken a dive in the past two and a half years. Silver prices have been cut in half since their 2011 highs, while gold has “only” shed about a third of its value since then.  Currently, silver is trading around $20 an ounce, and gold is trading at about $1,250 an ounce. Silver Standard Resources (Nasdaq: SSRI) is a major producer of silver, zinc and gold, based in Vancouver, British Columbia. Its main business is the exploration, development and acquisition of silver-dominant properties in the Americas. As you can see in the chart below, SSRI (black line) sold off with the price of silver. But the stock seems to have hit bottom in October, with a low just above $5. Since mid-December, SSRI has been in an uptrend. It also appears to lead the metal (in both directions). #-ad_banner-#​SSRI is currently trading around $7.50, which is about 45% off its 52-week high. Instead of simply buying the shares and hoping that they will move up, we can use a covered call strategy to reduce our net cost and lock in a gain should shares rise… Read More

In my look last summer at what makes for a great brand, I alerted StreetAuthority readers to a rapidly growing, dividend-paying company that happens to be steeped in American legend and lore.#-ad_banner-#​ Gonzo journalist Hunter S. Thompson, actors Dennis Hopper and Peter Fonda, and the outlaw motorcycle club Hells Angels have all had a part in building the powerful mythos around this company — one that has translated into massive profits for its investors. When that article was published Aug. 1, this stock was trading around $57. Since that time, it has surpassed my… Read More

In my look last summer at what makes for a great brand, I alerted StreetAuthority readers to a rapidly growing, dividend-paying company that happens to be steeped in American legend and lore.#-ad_banner-#​ Gonzo journalist Hunter S. Thompson, actors Dennis Hopper and Peter Fonda, and the outlaw motorcycle club Hells Angels have all had a part in building the powerful mythos around this company — one that has translated into massive profits for its investors. When that article was published Aug. 1, this stock was trading around $57. Since that time, it has surpassed my target price, soaring close to 20% to a 52-week high near $70 in less than six months. Fortunately, it’s not too late to capture additional upside in this 110-year-old company.  This company is continuing to post fantastic numbers, pays an unswerving dividend and participates in an aggressive share buyback program — not to mention the fanatical loyalty it inspires in its customers. If you haven’t guessed, I’m talking about Harley-Davidson (NYSE: HOG). The famed motorcycle company posted a blowout third quarter with a nearly 24% increase in diluted earnings per share and U.S. motorcycle sales revving up more than 20%… Read More

The old saying “one bad apple spoils the bunch” can apply to most facets of life, including investing.#-ad_banner-#​ But it doesn’t always hold true. I don’t think it holds true at all for a certain entertainment company notorious for its news channel’s decidedly conservative political bent. In fact, I’ve heard investors say they’d never buy the company’s stock simply because of the news channel. But they might be more inclined to reconsider if they realized what they’re passing up — a chance at triple-digit gains from an industry leader that offers much more than news programming. As I’m… Read More

The old saying “one bad apple spoils the bunch” can apply to most facets of life, including investing.#-ad_banner-#​ But it doesn’t always hold true. I don’t think it holds true at all for a certain entertainment company notorious for its news channel’s decidedly conservative political bent. In fact, I’ve heard investors say they’d never buy the company’s stock simply because of the news channel. But they might be more inclined to reconsider if they realized what they’re passing up — a chance at triple-digit gains from an industry leader that offers much more than news programming. As I’m sure you’ve guessed, the “bad apple” I’m referring to is Fox News. “The bunch” is the media and entertainment conglomerate that controls it, Twenty-First Century Fox (Nasdaq: FOXA), which was spun off from News Corp. (Nasdaq: NWS) last June. Actually, it’s not fair to label Fox News a bad apple if you consider its value purely from an investing standpoint. The channel has tens of millions of regular viewers and generates more than $1.2 billion in annual revenue. Whatever your opinion of Fox News, I suggest you put aside your political leanings for a few moments and take a closer… Read More

It’s turned scores of investors into millionaires. It goes against everything taught in business school… and against conventional wisdom… yet it’s helped many businesses go from nothing to a billion dollars in a few years.  We’ve all heard sayings like:  “Customer is king.”  “The customer is always right.”  “You’ve got to give the people what they want.”  If you search the Internet, you’ll find thousands of articles with headlines like this from Forbes: “Listening to Your Customers Yields Success.” But what truly great investors realize is…  If you want the potential for life-altering profits, you have to invest in companies… Read More

It’s turned scores of investors into millionaires. It goes against everything taught in business school… and against conventional wisdom… yet it’s helped many businesses go from nothing to a billion dollars in a few years.  We’ve all heard sayings like:  “Customer is king.”  “The customer is always right.”  “You’ve got to give the people what they want.”  If you search the Internet, you’ll find thousands of articles with headlines like this from Forbes: “Listening to Your Customers Yields Success.” But what truly great investors realize is…  If you want the potential for life-altering profits, you have to invest in companies that forget about customers. #-ad_banner-#That’s the great secret.  It’s the opposite of what you’d expect. But when you think about it, it’s absolutely true. And when you find a company doing this, you know you’re in luck. Ford Motors is good example. Henry Ford showed a total disregard for customers. When asked about adding color variety to cars, he famously quipped, “Any customer can have a car painted any color that he wants so long as it is black.”  He’s also alleged to have said, “If I’d asked people what they wanted, they would have said, ‘faster horses.'” And he’s… Read More

Despite the ongoing technological revolution in farming, Mother Nature has her limitations.  Nutrient-rich topsoil continues to erode, limited water resources remain depleted, and natural disasters continue to wreak havoc on production.#-ad_banner-# Compounding those issues, demand worldwide — particularly from emerging markets — is projected to increase drastically in the next few decades. The United Nations estimates that the global population will grow from 7.2 billion to 10 billion over the next 30 years. That growth will come mostly from emerging markets. The population in developed countries is expected to stay about the same at 1.3 billion, but the… Read More

Despite the ongoing technological revolution in farming, Mother Nature has her limitations.  Nutrient-rich topsoil continues to erode, limited water resources remain depleted, and natural disasters continue to wreak havoc on production.#-ad_banner-# Compounding those issues, demand worldwide — particularly from emerging markets — is projected to increase drastically in the next few decades. The United Nations estimates that the global population will grow from 7.2 billion to 10 billion over the next 30 years. That growth will come mostly from emerging markets. The population in developed countries is expected to stay about the same at 1.3 billion, but the combined population of the 49 least-developed countries is expected to double, to 2 billion.  That sets the stage for the emergence of a 3 billion-person global middle class that is going to need a lot of food. The U.N.’s Food and Agriculture Organization (FAO) projects food production will have to increase almost 70% in the next 30 years just to keep pace with demand. The Best Way To Cash In On A Global Food Crisis But investing in food companies is a terrible way to invest in the growing demand for food. That’s because rising prices at the grocery… Read More