With so many stocks trading at all-time highs, avoiding those with sky-high price-to-earnings (P/E) ratios now seems to be a prudent strategy. But it’s a decision to make on a case-by-case basis. On closer inspection, it becomes apparent that some seemingly richly valued stocks have the fundamentals to support plenty more price appreciation. The nation’s third-largest fast-food chain, Wendy’s Co. (Nasdaq: WEN), is such a stock. Its shares trade for more than 40 times earnings, a multiple that is well above the broader market multiple. Yet investors should anticipate continued outperformance.  Looking for a catalyst that will send… Read More

With so many stocks trading at all-time highs, avoiding those with sky-high price-to-earnings (P/E) ratios now seems to be a prudent strategy. But it’s a decision to make on a case-by-case basis. On closer inspection, it becomes apparent that some seemingly richly valued stocks have the fundamentals to support plenty more price appreciation. The nation’s third-largest fast-food chain, Wendy’s Co. (Nasdaq: WEN), is such a stock. Its shares trade for more than 40 times earnings, a multiple that is well above the broader market multiple. Yet investors should anticipate continued outperformance.  Looking for a catalyst that will send this stock yet higher? A multi-year re-branding effort that is still bearing fruit is a clear one. Initiatives include logo and tagline revamps, as well as serious efforts to establish a meaningful digital presence (TV advertising was traditionally the preferred marketing method). There have also been wise menu changes that reflect evolving demographics and consumer preferences. Menu innovations tend to target the enormous millennial generation, which is expected to be the economy’s main growth driver in the coming decades. Thus, Wendy’s is increasing its lineup of very spicy fare, a food category that’s favored by many millennials and should also… Read More

Investment bankers are having a field day. They’ve been helping their clients pursue a stunning amount of deals, pushing the phrase “Merger Mondays” back on to the front page. What kind of volume are we talking about? More than $1 trillion worth of deals have been announced thus far in 2015, according to Dealogic. That puts us on pace for the second-busiest year of M&A activity ever (though still trailing the pace seen in 2007, a record-setting year). The tech sector can always be counted on for a vigorous pace of deals, and this year is no exception. And the… Read More

Investment bankers are having a field day. They’ve been helping their clients pursue a stunning amount of deals, pushing the phrase “Merger Mondays” back on to the front page. What kind of volume are we talking about? More than $1 trillion worth of deals have been announced thus far in 2015, according to Dealogic. That puts us on pace for the second-busiest year of M&A activity ever (though still trailing the pace seen in 2007, a record-setting year). The tech sector can always be counted on for a vigorous pace of deals, and this year is no exception. And the hottest industries within technology — adtech and datacenters — are leading the way. That makes this a fine time to focus on the companies that might soon catch a bid. Digital Marketing From 2008 through 2012, major tech firms such as Facebook, Inc. (Nasdaq: FB), Google, Inc. (Nasdaq: GOOG) and Yahoo, Inc. (Nasdaq: YHOO) spent a combined $6 billion in cash and stock to acquire small, privately-held advertising technology firms. Fast forward to 2014 and that level of adtech deals took place in just one year. And the industry M&A has already surpassed $5 billion thus far in 2015,… Read More

I hate to say this, but as an investor the deck is stacked against you. There are literally tens of thousands of investments out there for you to choose between, each with their own market capitalization, earnings multiple, dividend yield and a whole host of other facts that dictate how they might perform. And given the set of infinite potential outcomes, the odds of successful investment sustained over time are likewise infinitesimal. Luckily though, my Game-Changing Stocks strategy can reverse the odds dramatically in your favor. In fact, it’s as close… Read More

I hate to say this, but as an investor the deck is stacked against you. There are literally tens of thousands of investments out there for you to choose between, each with their own market capitalization, earnings multiple, dividend yield and a whole host of other facts that dictate how they might perform. And given the set of infinite potential outcomes, the odds of successful investment sustained over time are likewise infinitesimal. Luckily though, my Game-Changing Stocks strategy can reverse the odds dramatically in your favor. In fact, it’s as close to a sure thing as anything I’ve ever seen. “Now, Andy,” I can just hear you respond, “of course you’d say that. It’s your strategy.” #-ad_banner-#But the truth is, the Game-Changing Stocks strategy isn’t really “mine.” It’s based on the work of an Italian mathematician named Vilfredo Pareto, who posited that 20% of all effort will yield 80% of the results. That’s why I preach letting 20% of your portfolio do the heavy lifting and capture all the big gains, while the remaining 80% sits in solid blue-chip investments earning you… Read More

If you’re like me, then you never want to worry about money again… whether that means merely being financially independent or becoming filthy rich is beside the point. And while blue-chip stocks, index funds and dividend payers can keep the income flowing, the truth is these securities will take decades to amass real wealth. You’ll need something else if you’re after a seven-figure bank account: a “swing for the fences” strategy. So today I’m going to show you how to position yourself for “out-of-the-park” gains without jeopardizing your safer investments. I… Read More

If you’re like me, then you never want to worry about money again… whether that means merely being financially independent or becoming filthy rich is beside the point. And while blue-chip stocks, index funds and dividend payers can keep the income flowing, the truth is these securities will take decades to amass real wealth. You’ll need something else if you’re after a seven-figure bank account: a “swing for the fences” strategy. So today I’m going to show you how to position yourself for “out-of-the-park” gains without jeopardizing your safer investments. I call it the “20% solution.” The idea behind it is simple: dedicate a portion of your portfolio to aggressive growth stocks. Let me explain. My daughter is in private school. In a few years she may go to college. Eventually she’ll need a car, an apartment and someday a wedding. All of which cost money. For her and the rest of my family, I’ve allocated 80% of my portfolio to safe, reliable assets. These are securities that I know will allow me to keep living comfortably and adequately provide for my family. We want this money to grow hands-free. So… Read More

Although large American firms were able to post a strong rebound in sales after the financial crisis, top-line growth for many firms has recently slowed considerably. More rapid profit gains are partially attributable to rock-bottom interest rates, which have helped lower interest expenses.  In the new paradigm of low sales growth, companies are cutting costs and seeking to increase operating efficiency. The trend has provided a strong tailwind for companies in business outsourcing services as corporations look to outsource jobs that can be handled more cheaply by someone else. Research firm IDC estimates sales growth for the industry… Read More

Although large American firms were able to post a strong rebound in sales after the financial crisis, top-line growth for many firms has recently slowed considerably. More rapid profit gains are partially attributable to rock-bottom interest rates, which have helped lower interest expenses.  In the new paradigm of low sales growth, companies are cutting costs and seeking to increase operating efficiency. The trend has provided a strong tailwind for companies in business outsourcing services as corporations look to outsource jobs that can be handled more cheaply by someone else. Research firm IDC estimates sales growth for the industry at a compound annual rate of 5.6%, to $209 billion, over the five years through 2017. In fact, shares of Automatic Data Processing, Inc. (Nasdaq: ADP), have surged 45% over the last two years. There is strong demand for the payroll services of this outsourcing market leader, which is reflected in strong investor sentiment. #-ad_banner-#With a market capitalization of roughly $40 billion, twice the size of the next largest competitor, ADP dominates business payroll services and holds nearly 7% of global market share with 2014 revenue of $12.2 billion. However, ADP is almost entirely focused in payroll management, where IDC… Read More

The recipe for a top-performing IPO is quite simple: Bring in a broad cross section of investment banks to underwrite the deal, ensuring an ample number of bullish research reports; deliver knockout results in your first quarter as a public company; and steer clear of any sort of controversy. The executives at Etsy, Inc. (Nasdaq: ETSY) heeded none of those lessons. And quite predictably, the company’s shares have already been tossed in the dust bin. Yet as the company finds its footing in coming quarters, this operator of an online crafts-oriented marketplace, could still turn out to be… Read More

The recipe for a top-performing IPO is quite simple: Bring in a broad cross section of investment banks to underwrite the deal, ensuring an ample number of bullish research reports; deliver knockout results in your first quarter as a public company; and steer clear of any sort of controversy. The executives at Etsy, Inc. (Nasdaq: ETSY) heeded none of those lessons. And quite predictably, the company’s shares have already been tossed in the dust bin. Yet as the company finds its footing in coming quarters, this operator of an online crafts-oriented marketplace, could still turn out to be one of the hottest IPOs of 2015. A 50% Downdraft To understand this stock’s rebound potential, we should first review the litany of bad news that has beset this stock. On April 16, shares of Etsy opened for trading at $31 a share, and within a few hours, moved above $35. In many respects, the Wall Street hype machine was not engaged in the offering. Etsy’s management decided to mostly place shares among retail investors (many of whom are Etsy’s clients) and as a result, major institutions such as mutual fund firms like Fidelity Investments weren’t in a position to get a big part… Read More

Only once a lifetime — twice, if you’re lucky — does an invention come along that truly changes the world. The wheel. The plow. The printing press. The combustion engine. The semiconductor. The wheel increased the speed and efficiency of transportation and was the foundation of future ingenuities likes railroads and automobiles. The plow allowed farmers to achieve economies of scale and produce more food than humans needed to survive. The printing press spread literacy from select nobles, elites and holy figures to the common man. An enormity of information could be recorded and proliferated, at relatively low cost. The… Read More

Only once a lifetime — twice, if you’re lucky — does an invention come along that truly changes the world. The wheel. The plow. The printing press. The combustion engine. The semiconductor. The wheel increased the speed and efficiency of transportation and was the foundation of future ingenuities likes railroads and automobiles. The plow allowed farmers to achieve economies of scale and produce more food than humans needed to survive. The printing press spread literacy from select nobles, elites and holy figures to the common man. An enormity of information could be recorded and proliferated, at relatively low cost. The combustion engine connected the globe physically via ships, trains, automobiles and airplanes. And the semiconductor united the world intellectually with instant mass communication between anyone, no matter the geographic distance. But with the benefits that come from mankind’s past and future achievements, there will always be exploitation. #-ad_banner-#The wheel — and eventually the combustion engine — became (amongst other uses) weapons of war and oppression. The printing press can be used to spread propaganda, libel and plagiarism. Over-plowing depletes a soil’s nutrients and makes farmland infertile. Not only were these problems not solved overnight, but many of them are largely… Read More

More than two decades have passed since research scientists first announced a method to identify every strand of a human’s DNA. In the early years of gene sequencing research, progress was slow. However, many investors may be shocked to learn just how far this industry has come in just the past few years. Equipment advances now permit rapid and accurate mapping of virtually every type of organism from microbes and plants to animals and humans. The genetic data obtained with these technologies have numerous public health applications, such as developing better infectious disease therapies, screening for cancer or birth defects… Read More

More than two decades have passed since research scientists first announced a method to identify every strand of a human’s DNA. In the early years of gene sequencing research, progress was slow. However, many investors may be shocked to learn just how far this industry has come in just the past few years. Equipment advances now permit rapid and accurate mapping of virtually every type of organism from microbes and plants to animals and humans. The genetic data obtained with these technologies have numerous public health applications, such as developing better infectious disease therapies, screening for cancer or birth defects and studying population-wide patterns of illness. Early last year, the gene sequencing industry finally attained an ambitious goal that it had been pursuing for years: the ability to rapidly map an entire human genome for just $1,000. A decade ago, the process took months and cost many millions of dollars. Still, the achievement didn’t receive much media attention, and neither did the firm responsible for the breakthrough. It’s time that investors know more about Illumina, Inc. (Nasdaq: ILMN). Rarely does a company so thoroughly dominate its niche, especially where such exciting growth opportunities still abound. Indeed, the gene… Read More

After many years of neglect, the pipeline for new antibiotic drugs is finally beginning to ramp up again. The catalyst: the rise of “superbugs,” which are bacteria that have developed resistance to some or all of the currently available antibiotics. Infections with such bacteria can be extremely difficult or even impossible to treat, and they’re often far more severe than those caused by non-resistant organisms. In the latest government budget proposal, which allocates $1.2 billion to combatting antibiotic resistance, the Obama administration estimated that superbugs now cause two million illnesses and 23,000 deaths annually in the United States. The failure… Read More

After many years of neglect, the pipeline for new antibiotic drugs is finally beginning to ramp up again. The catalyst: the rise of “superbugs,” which are bacteria that have developed resistance to some or all of the currently available antibiotics. Infections with such bacteria can be extremely difficult or even impossible to treat, and they’re often far more severe than those caused by non-resistant organisms. In the latest government budget proposal, which allocates $1.2 billion to combatting antibiotic resistance, the Obama administration estimated that superbugs now cause two million illnesses and 23,000 deaths annually in the United States. The failure to address antibiotic resistance (by creating new antibiotics, among other measures) could lead to 300 million premature deaths worldwide and shear up to $100 trillion off of the global economy over the next 35 years, notes economist Jim O’Neill. #-ad_banner-#Despite the gravity of the issue, large pharmaceutical companies devote virtually no resources to antibiotic development and haven’t for years. “Big Pharma” largely quit the antibiotics business back in the 1990s, deterred mainly by high R&D costs and low perceived profit potential. To help stimulate new advances, the federal government passed the Generating Antibiotic Incentives Now (GAIN) Act. The 2012 legislation… Read More

The initial public offering class of 2014 was surely an elite group. 275 companies raised a combined $85 billion, the highest amount since 2000. High-profile companies such as Alibaba Group Holding Ltd. (NYSE: BABA) led the pack, scoring a sharp 38% first-day gain. Yet other notable IPOs that managed to generate impressive first-day gains eventually fell out of favor. Roughly six months ago, I cautioned against chasing shares of LendingClub Corp. (NYSE: LC), after shares had surged roughly 60% from the IPO price. “Investors may want to consider waiting for a better entry point as enthusiasm wanes,” I noted then. Read More

The initial public offering class of 2014 was surely an elite group. 275 companies raised a combined $85 billion, the highest amount since 2000. High-profile companies such as Alibaba Group Holding Ltd. (NYSE: BABA) led the pack, scoring a sharp 38% first-day gain. Yet other notable IPOs that managed to generate impressive first-day gains eventually fell out of favor. Roughly six months ago, I cautioned against chasing shares of LendingClub Corp. (NYSE: LC), after shares had surged roughly 60% from the IPO price. “Investors may want to consider waiting for a better entry point as enthusiasm wanes,” I noted then. Still, I have been keeping a close eye on the shares, as this banking game-changer held vast long-term potential. Although the stock has fallen nearly 40% from its post-IPO high, several deals subsequently signed with powerhouses like Google, Inc. (Nasdaq: GOOG) and Alibaba should boost growth over the next several years. Revenue is already expected to grow 85% this year and the company’s industry — peer-to-peer lending — is projected to grow 40% a year for the next decade. The Future Of Banking Is Online Peer lending has gone from being an internet curiosity to… Read More