We’ve all accidently cut ourselves and stuck a bandage on it to stop the bleeding, then gone about our business. Usually the wound heals after a couple of days, and all is good. On occasion, though, a simple cut can turn complicated.#-ad_banner-# Say I’ve cut my finger and it begins to fester. I go to a doctor’s office and have a blood sample drawn and shipped to a lab for analysis. The doctor makes an educated guess as to which antibiotic might clear the infection and prescribes a 10-day supply. By the time your blood has gone through the routine… Read More

We’ve all accidently cut ourselves and stuck a bandage on it to stop the bleeding, then gone about our business. Usually the wound heals after a couple of days, and all is good. On occasion, though, a simple cut can turn complicated.#-ad_banner-# Say I’ve cut my finger and it begins to fester. I go to a doctor’s office and have a blood sample drawn and shipped to a lab for analysis. The doctor makes an educated guess as to which antibiotic might clear the infection and prescribes a 10-day supply. By the time your blood has gone through the routine tests to identify the infection and determine the correct antibiotic, five days have passed. But after a few days — and pills — you feel better. This time the doctor guessed right, averting a possible crisis. However, more than 250,000 people die from sepsis — the spread of bacteria from a point of infection — every year. A simple infection from a cut, or pneumonia, or any number of sources can quickly turn to sepsis — which can be deadly without prompt and proper treatment. Until recently, doctors had to rely on antiquated tests that took days to deliver results… Read More

Legendary activist investor Carl Icahn has had a tremendous run. In recent years, he’s made a quick fortune on many of his investments, thanks to a combination of savvy stock-picking and occasional cage-rattling.#-ad_banner-# But even Icahn has an off day. Earlier this year, he bought 6 million shares of oil refiner CVR Refining (NYSE: CVRR) just as the entire refinery industry was at a multi-year peak. Shares were trading above $30 when Icahn bough CVR, though as I cautioned in this mid-summer article, refinery stocks subsequently took it on the chin as pricing spreads narrowed between Brent crude and West… Read More

Legendary activist investor Carl Icahn has had a tremendous run. In recent years, he’s made a quick fortune on many of his investments, thanks to a combination of savvy stock-picking and occasional cage-rattling.#-ad_banner-# But even Icahn has an off day. Earlier this year, he bought 6 million shares of oil refiner CVR Refining (NYSE: CVRR) just as the entire refinery industry was at a multi-year peak. Shares were trading above $30 when Icahn bough CVR, though as I cautioned in this mid-summer article, refinery stocks subsequently took it on the chin as pricing spreads narrowed between Brent crude and West Texas Intermediate (WTI) crude. Although other refiners such as Valero (NYSE: VLO), HollyFrontier (NYSE: HFC) and Marathon Petroleum (NYSE: MPC) have stabilized or risen since I wrote that piece, Icahn’s pick has really fallen out of bed. The fund manager is now sitting on a 28% loss on CVRR. At this point, Icahn shouldn’t think of selling CVRR. Instead, he should be backing up the truck, as better days lay ahead, both in terms of potential gains and the projected divided yield. A Perfect Storm As I noted this summer, refiners were hurt by a narrowing spread… Read More

I like buying stocks, not selling stocks — unless, of course, I am selling them for a big profit. And while I suspect that this market is headed higher over the next couple of months, and that you should be buying the “air pockets,” I also think there are certain stocks that need to be jettisoned from your holdings due to a lack of upside catalysts in the short and/or intermediate term.#-ad_banner-# One of the stocks I think is headed lower is tech giant Cisco Systems (Nasdaq: CSCO). The network equipment maker has long been a… Read More

I like buying stocks, not selling stocks — unless, of course, I am selling them for a big profit. And while I suspect that this market is headed higher over the next couple of months, and that you should be buying the “air pockets,” I also think there are certain stocks that need to be jettisoned from your holdings due to a lack of upside catalysts in the short and/or intermediate term.#-ad_banner-# One of the stocks I think is headed lower is tech giant Cisco Systems (Nasdaq: CSCO). The network equipment maker has long been a stalwart in the tech space, and I’ve been buying and selling CSCO shares with very good results since the late 1990s. So far this year, Cisco shares are up 20.5%. Unfortunately, over the past three months, the stock has tumbled more than 11%. The trouble with CSCO shares started midway through August, which not coincidentally was when the company reported fiscal fourth-quarter earnings. Although it managed to beat earnings expectations, Cisco’s sales were less than impressive. Perhaps more importantly, Cisco announced plans to slash about 5% of its workforce, presumably in an effort to maintain profit margins in the wake… Read More

In the go-go days of 1999, Warren Buffett grew very concerned. Not because his value style of investing had grown unpopular, but because investors were becoming delusional in their zeal for further gains.#-ad_banner-# In a speech he made to friends, as recounted in a 1999 article in Fortune magazine (that was published just a few months before the market peaked and then plunged), Buffett warned that “once you reach the point where everybody has made money no matter what system he or she followed, a crowd is attracted into the game that is responding not to… Read More

In the go-go days of 1999, Warren Buffett grew very concerned. Not because his value style of investing had grown unpopular, but because investors were becoming delusional in their zeal for further gains.#-ad_banner-# In a speech he made to friends, as recounted in a 1999 article in Fortune magazine (that was published just a few months before the market peaked and then plunged), Buffett warned that “once you reach the point where everybody has made money no matter what system he or she followed, a crowd is attracted into the game that is responding not to interest rates and profits but simply to the fact that it seems a mistake to be out of stocks.” A simple test of how much stocks were loved: The aggregate value of the largest 5,000 U.S. companies (as measured by the Wilshire 5000) exceeded the GNP of the U.S. economy. In fact, a market melt-up took this ratio up to 150% by early 2000 (meaning the Wilshire 5000 was 50% larger than the U.S. economy), which set the stage for one of the most painful corrections ever for investors. This ratio eventually dipped well below 100%, which for Buffett, has… Read More

When I was 14, my grandmother gave me 200 shares of a small insurance company called Statesman Group, which eventually became American International Group (NYSE: AIG). The certificates were buried somewhere in my father’s law office, but dividend checks appeared in my mailbox every three months. (I remember they were usually for about $50. That was big money for a teenager in the early 1980s.) I always thought — and still do — that that was the neatest thing in the world: getting paid just to own stock. Historically, many equity investors have felt the same way — especially after… Read More

When I was 14, my grandmother gave me 200 shares of a small insurance company called Statesman Group, which eventually became American International Group (NYSE: AIG). The certificates were buried somewhere in my father’s law office, but dividend checks appeared in my mailbox every three months. (I remember they were usually for about $50. That was big money for a teenager in the early 1980s.) I always thought — and still do — that that was the neatest thing in the world: getting paid just to own stock. Historically, many equity investors have felt the same way — especially after the drubbing of the dot-com bubble burst, the 2001-’02 bear market and the most recent bear market resulting from the financial crisis and Great Recession. Companies that have consistently paid and increased their dividends tend to perform well in times of market uncertainty. The iShares Select Dividend ETF (NYSE: DVY) is proof positive of that sentiment. From trough to peak, investors who felt brave enough to buy have done quite well. Conventional wisdom would say maybe it’s time to take money off of the table. While playing defense and taking some profits is never a bad thing, investors… Read More

This company has grown its dividend 11% a year since 2003. It’s also one of my favorite dividend stocks on the market today. In the uncertain world of investing, a regular stream of dividend payments is the closest thing investors have to a guaranteed return. We all buy common stocks in anticipation the shares will increase in value at some point, but dividend stocks can provide us with a steady paycheck while we wait for shares to increase in value. And while it’s hard to know what has “real” value in the stock market, dividends are undoubtedly real money. This… Read More

This company has grown its dividend 11% a year since 2003. It’s also one of my favorite dividend stocks on the market today. In the uncertain world of investing, a regular stream of dividend payments is the closest thing investors have to a guaranteed return. We all buy common stocks in anticipation the shares will increase in value at some point, but dividend stocks can provide us with a steady paycheck while we wait for shares to increase in value. And while it’s hard to know what has “real” value in the stock market, dividends are undoubtedly real money. This is why stocks that distribute reliable, recurring dividend payments year after year should form the core of an income investor’s portfolio. And I’ll show you exactly why… #-ad_banner-#Today, speculators often look to make a quick fortune on the next Microsoft — some fast-growing company operating in an exciting new industry. But it would be misguided to focus entirely on volatile, unproven industries or companies while overlooking the numerous benefits offered by well established dividend-paying companies. While the current 2% yield offered by the S&P 500 might seem trivial, it would be a huge mistake to dismiss dividends entirely. Read More

The bungled initial public offering (IPO) for Facebook (Nasdaq: FB) was a real eye-opener for any company looking to go public.#-ad_banner-# Facebook’s shares famously plunged soon after they started trading, in large part because the $16 billion offering was so large that it created a great deal of investor confusion as share allocations were misdirected.  Lesson learned. Twitter’s (NYSE: TWTR) IPO valued the company at just $1.8 billion. Sure, that’s far higher than the initial $1 billion planned offering, but still a much smaller fish for the markets to digest. In a sure sign that investors must own this company,… Read More

The bungled initial public offering (IPO) for Facebook (Nasdaq: FB) was a real eye-opener for any company looking to go public.#-ad_banner-# Facebook’s shares famously plunged soon after they started trading, in large part because the $16 billion offering was so large that it created a great deal of investor confusion as share allocations were misdirected.  Lesson learned. Twitter’s (NYSE: TWTR) IPO valued the company at just $1.8 billion. Sure, that’s far higher than the initial $1 billion planned offering, but still a much smaller fish for the markets to digest. In a sure sign that investors must own this company, shares were initially set to be priced at around $20, the deal was eventually bumped to around $26, and opened at an eye-popping $45.10 a share. At that price, Twitter is now valued at more than $25 billion. Most of the company is still in private hands. Look for Twitter to slowly offer more shares in various secondary offerings, but the initial scarcity factor is going to make huge instant profits for some investors. But if you missed out on this morning’s offering, then you should wait. Twitter is now valued at more than 30 times projected 2014 sales, a… Read More

There are two major concerns facing investors right now. First, the global economy is not yet showing signs of a long-awaited upturn. Indeed, the U.S. is shaping up to be on much more solid footing than its peers (at least as evidenced by U.S. corporate profit growth in the current earnings season). That argues for companies that more squarely focused on the U.S., which usually means small-cap stocks.#-ad_banner-# Second, the rising market tide has lifted many boats, and it’s getting harder to find true bargains. But they still exist. I went scanning for GARP (growth at a reasonable… Read More

There are two major concerns facing investors right now. First, the global economy is not yet showing signs of a long-awaited upturn. Indeed, the U.S. is shaping up to be on much more solid footing than its peers (at least as evidenced by U.S. corporate profit growth in the current earnings season). That argues for companies that more squarely focused on the U.S., which usually means small-cap stocks.#-ad_banner-# Second, the rising market tide has lifted many boats, and it’s getting harder to find true bargains. But they still exist. I went scanning for GARP (growth at a reasonable price) stocks among the S&P 600 (small-cap index) and found more than a dozen stocks that are poised for robust profit growth in 2014, while trading at reasonable earnings multiples. (I only included companies with a market value between $250 million and $1 billion to exclude micro-caps or mid-caps that may be hiding in this small-cap index). A quick review of the list reveals no clear themes. We don’t find a cluster of stocks in any given industry, and instead need to look at these companies on a case-by-case basis. Here’s the select group. GARP Small Caps… Read More

Muddy Waters Research is an investment research firm that specializes in uncovering companies whose financial statements are inflated by questionable accounting practices. The firm was in the news again when it initiated coverage on NQ Mobile (NYSE: NQ), a company that provides software and services for mobile device users. Although NQ claims to have customers all around the world, the company is headquartered in China, and most of its revenue is generated in that country.#-ad_banner-# NQ was one of the biggest gainers a week before the negative research report, but the stock price fell by more than 50% within hours… Read More

Muddy Waters Research is an investment research firm that specializes in uncovering companies whose financial statements are inflated by questionable accounting practices. The firm was in the news again when it initiated coverage on NQ Mobile (NYSE: NQ), a company that provides software and services for mobile device users. Although NQ claims to have customers all around the world, the company is headquartered in China, and most of its revenue is generated in that country.#-ad_banner-# NQ was one of the biggest gainers a week before the negative research report, but the stock price fell by more than 50% within hours of the release. According to Muddy Waters’ analysts, NQ’s financial statements are completely fictitious. Their analysis indicates that the company’s sales and assets are overstated. They claim at least 72% of the company’s security revenue from China is fabricated, and the revenue generated in other countries is even “less real.” This means the profits are also overstated. If Muddy Waters is correct, there is no way to determine what NQ actually earns. Creating false financials seems like it should be impossible, but if the allegations are true, NQ fooled at least four Wall Street brokerage firms that rate the stock… Read More