With stocks at all times highs, we’re starting to hear a lot of experts tout that equities are trading at “premium valuations” — which is financial lingo meaning stocks are expensive relative to their underlying earnings. While those pundits are partially correct, there’s more to the story… #-ad_banner-#The recent rally has pushed the price-to-earnings ratio (P/E) ratio for the S&P 500 from 13 in 2011 to its current value of 16. While the move is dramatic, valuations are still nowhere near the soaring levels we normally see during most market bubbles. For example, before the 2001 “Dot Com” collapse, the… Read More

With stocks at all times highs, we’re starting to hear a lot of experts tout that equities are trading at “premium valuations” — which is financial lingo meaning stocks are expensive relative to their underlying earnings. While those pundits are partially correct, there’s more to the story… #-ad_banner-#The recent rally has pushed the price-to-earnings ratio (P/E) ratio for the S&P 500 from 13 in 2011 to its current value of 16. While the move is dramatic, valuations are still nowhere near the soaring levels we normally see during most market bubbles. For example, before the 2001 “Dot Com” collapse, the S&P’s P/E ratio reached 46.1 before crashing back down. So while the recent rally is impressive, there’s still little reason to believe we’re nearing a “market crash” similar to that which we experienced in 2001 and 2008… Until that starts to change, we remain bullish on stocks. Sure, many stocks have become expensive, but a few remain absolute bargains. For example, certain small-cap stocks still have plenty of upside potential when compared to the broader market. No, I’m not talking about fly-by-night penny stocks — I’m talking about companies that are on the ground floor of a promising new trend… Read More

Even with the rapid rise in new and exciting technological devices, one thing’s for sure: People love watching TV. It doesn’t matter when or where — or on what device.#-ad_banner-# The companies that provide the infrastructure for viewing content across a large and growing variety of devices are frequently overlooked. Harmonic (Nasdaq: HLIT), a market leader in video-on-demand services, is one such company. Harmonic has many opportunities to expand its market share, especially with the proliferation of video on demand and high-definition TV. Yet the biggest opportunity for Harmonic is in the expansion of pay-TV services in international markets. The… Read More

Even with the rapid rise in new and exciting technological devices, one thing’s for sure: People love watching TV. It doesn’t matter when or where — or on what device.#-ad_banner-# The companies that provide the infrastructure for viewing content across a large and growing variety of devices are frequently overlooked. Harmonic (Nasdaq: HLIT), a market leader in video-on-demand services, is one such company. Harmonic has many opportunities to expand its market share, especially with the proliferation of video on demand and high-definition TV. Yet the biggest opportunity for Harmonic is in the expansion of pay-TV services in international markets. The emergence of the global middle class is leading the demand for pay-TV services, which has compelled providers to expand their content offerings. Harmonic sells high-performance video infrastructure products that enable content providers to efficiently create and deliver a full range of video services to consumer devices, including TVs, PCs, tablets and smartphones. Its revenues are generated from selling video processing solutions to various media companies and providers, including broadcasters (HBO, NBC, ESPN), satellite providers (Dish (Nasdaq: DISH), DirecTV (Nasdaq: DTV)), telcos (SingTel, Vodafone (Nasdaq: VOD)), cable providers (Charter (Nasdaq: CHTR), Cox, Comcast (Nasdaq: CMCSA)) and new media (Amazon.com… Read More

They say investing in the stock market is all about forward thinking. That’s certainly the case with the biotech sector. A biotech’s pipeline can mean the difference between boom and bust.#-ad_banner-# The Medicines Co. (Nasdaq: MDCO) is a global biotech company with seven drugs in the pipeline that could prove to be big hits in the acute and intensive care hospital product market. The company’s key legacy product and top revenue generator, Angiomax, continues to bring in profits, and in addition to its robust in-house development pipeline, the company also recently teamed up with two major drug companies and made… Read More

They say investing in the stock market is all about forward thinking. That’s certainly the case with the biotech sector. A biotech’s pipeline can mean the difference between boom and bust.#-ad_banner-# The Medicines Co. (Nasdaq: MDCO) is a global biotech company with seven drugs in the pipeline that could prove to be big hits in the acute and intensive care hospital product market. The company’s key legacy product and top revenue generator, Angiomax, continues to bring in profits, and in addition to its robust in-house development pipeline, the company also recently teamed up with two major drug companies and made a key acquisition — all of which should only further accelerate  its growth. The biggest factor keeping Medicines below what I consider its fair value is its ongoing lawsuit with Hospira (NYSE: HSP). In 2010, Hospira sued to market its generic version of Angiomax before Medicines’ patents expire. A decision is expected next year, but regardless of the outcome, Medicines could lose its Angiomax exclusivity as soon as mid-2015. What many investors are missing is that Medicines appears to have a bright future despite its legal fight over Angiomax, thanks to the clinical successes within its pipeline. When Angiomax does… Read More

For many folks in Latin America, 2011 seems like an awfully long time ago. Just two years ago, regional economies were booming, and growth in middle-class consumption was off the charts. That proved to be a fortuitous time for Arcos Dorados (NYSE: ARCO) to go public.#-ad_banner-#​ At the time, the company operated more than 1,700 McDonald’s (NYSE: MCD) franchises in 19 countries across Latin America and the Caribbean, and in many respects was firing on all cylinders. Sales, earnings and net income were all rising at an impressive clip, and analysts expected more of the same in the… Read More

For many folks in Latin America, 2011 seems like an awfully long time ago. Just two years ago, regional economies were booming, and growth in middle-class consumption was off the charts. That proved to be a fortuitous time for Arcos Dorados (NYSE: ARCO) to go public.#-ad_banner-#​ At the time, the company operated more than 1,700 McDonald’s (NYSE: MCD) franchises in 19 countries across Latin America and the Caribbean, and in many respects was firing on all cylinders. Sales, earnings and net income were all rising at an impressive clip, and analysts expected more of the same in the years to come. And then the wheels fell off. Many Latin American economies eventually hit an air pocket, most notably in Brazil, which accounts for more than half of this company’s sales and EBITDA (earnings before interest, taxes, depreciation and amortization). And as these economies have slowed, analysts have repeatedly lowered their profit forecasts. Shares, which surged after the April 2011 IPO, now remain in a deep funk. How badly has the economic slump affected financial results? Let’s examine a pair of 2013 forecasts by Brazilian investment firm Itau: one made in June 2011, the other issued Aug. Read More

A still-slow economy is making it quite hard for companies to grow. As I noted earlier this week, just a few dozen companies in the S&P 500 are expected to boost sales more than 20% in 2014, and many of those firms are doing so only with the aid of… Read More

There are some 75 million small and midsize businesses around the world. If they plan on competing in an increasingly connected world of mobile devices and e-commerce, they’ll all need to have an online presence.  More than three-fourths of these 75 million SMBs don’t have a basic website — so this market is grossly underserved. Endurance International Group (Nasdaq: EIGI), which recently went public, is looking to change this.#-ad_banner-# Endurance is one of the U.S.’s top hosting companies, with a number of brands, including HostGator and Bluehost. Since its October IPO, EIGI is up 10%, and a number… Read More

There are some 75 million small and midsize businesses around the world. If they plan on competing in an increasingly connected world of mobile devices and e-commerce, they’ll all need to have an online presence.  More than three-fourths of these 75 million SMBs don’t have a basic website — so this market is grossly underserved. Endurance International Group (Nasdaq: EIGI), which recently went public, is looking to change this.#-ad_banner-# Endurance is one of the U.S.’s top hosting companies, with a number of brands, including HostGator and Bluehost. Since its October IPO, EIGI is up 10%, and a number of positive aspects make the company a compelling growth investment.  Endurance estimates its share of the SMB website market at 5%, which means there’s a lot of room for growth. But the company offers more than just website hosting. Endurance’s variety of products and services — including Web hosting, on-demand computing, security, marketing solutions and site analytics — is relatively unrivaled in the space, allowing it to serve a broad array of companies.  In addition to the services listed above, Endurance also has its Mojo Marketplace product, which allows companies to develop software solutions and sell them to any number… Read More

People ask me about my most profitable investment. It was an investment I made back in October 1999. Today, it pays me a yield equivalent to 27%, and it has forever changed how I look for income opportunities. #-ad_banner-#In 1999, I was speaking at an economic conference in New York. During one of the breaks, I struck up a conversation with two gentlemen who both happened to work in the oil and gas business. At the time, I was doing some consulting work for a lawsuit involving a number of large oil companies and had been knee-deep in oil price… Read More

People ask me about my most profitable investment. It was an investment I made back in October 1999. Today, it pays me a yield equivalent to 27%, and it has forever changed how I look for income opportunities. #-ad_banner-#In 1999, I was speaking at an economic conference in New York. During one of the breaks, I struck up a conversation with two gentlemen who both happened to work in the oil and gas business. At the time, I was doing some consulting work for a lawsuit involving a number of large oil companies and had been knee-deep in oil price and production data. Oil and natural gas prices had been on a steady 20-year decline following the “oil shock” of 1979. By the time 1999 rolled around, analysts had universally soured on the sector. Prices were going lower, they said. In March 1999, The Economist devoted a whole issue to the glut of world oil.  Discussing the future price for oil, The Economist said, “$10 [per barrel] might actually be too optimistic. We may be heading for $5.” In October 1999, I didn’t agree with the analysts or the common view that oil prices were going to sink lower. As… Read More

Gold is getting hammered, and the pain in the sector is putting gold bulls in a panic. The yellow metal is down more than 27% year to date, and in just the past month, gold prices have tumbled more than 7%.#-ad_banner-#​ The latest decline in gold came on Tuesday, when it traded lower by as much as 2.7%, breaking down below very weak support levels around $1,225. About the only hope for gold longs here is to pray for a bad jobs number Friday, as that may keep the Federal Reserve from tapering sooner rather than later. Yet… Read More

Gold is getting hammered, and the pain in the sector is putting gold bulls in a panic. The yellow metal is down more than 27% year to date, and in just the past month, gold prices have tumbled more than 7%.#-ad_banner-#​ The latest decline in gold came on Tuesday, when it traded lower by as much as 2.7%, breaking down below very weak support levels around $1,225. About the only hope for gold longs here is to pray for a bad jobs number Friday, as that may keep the Federal Reserve from tapering sooner rather than later. Yet aside from prayer, what can a precious metal investor do if he wants to stay in metals but get out of the sinking ship that is gold? One answer would be to seek shelter in another precious metal, one that’s also benefiting from strong industrial demand tailwinds, and that metal is palladium. Rather than trading palladium on the commodities futures market, a prospect I find fraught with difficulty, I prefer to use exchange-traded funds (ETFs) such as the ETFS Physical Palladium Shares (NYSE: PALL). PALL has held up very well this year when compared with other precious metals. The ETF… Read More

Let the jockeying begin. Strategists are predicting a major change in interest rates in 2014 and 2015, and have already begun to identify the fallout — positive and negative — on a wide range of stocks. As long as you follow the game plan, your portfolio is likely to benefit.#-ad_banner-#​ There are two extremely likely scenarios for 2014. First, the Federal Reserve is expected to keep the federal funds rate near zero, which will keep interest rates on shorter-term lending rates very low. Second, the Fed will ease off its massive stimulus program (known as quantitative easing, or… Read More

Let the jockeying begin. Strategists are predicting a major change in interest rates in 2014 and 2015, and have already begun to identify the fallout — positive and negative — on a wide range of stocks. As long as you follow the game plan, your portfolio is likely to benefit.#-ad_banner-#​ There are two extremely likely scenarios for 2014. First, the Federal Reserve is expected to keep the federal funds rate near zero, which will keep interest rates on shorter-term lending rates very low. Second, the Fed will ease off its massive stimulus program (known as quantitative easing, or QE), which is likely to allow long-term rates to rise to levels that truly reflect global economic activity. (The QE program has kept a lid on long-term rates.) I discussed this notion a few weeks ago in my look at the soon-to-change yield curve. Historical trends suggest that certain sectors are likely to benefit while other sectors are likely to lose some appeal with investors. And even within sectors, clear winners and losers will emerge. Not All Yield Plays Are The Same First, let’s get the obvious impacts out of the way. Any income-producing investments such as utilities, real estate… Read More