The blue-chip Dow industrials were hit hard by the emotional selling that rocked the market in the past month. From its all-time high on Sept. 19 to its Oct. 15 low, the index gave up almost 1,500 points. It regained about half of those losses in less than a week, before giving back some of the gains in Wednesday’s sell-off. Year to date, the Dow is flat, and more than half of its 30 components are in the red, including American Express (NYSE: AXP). Shares of the credit card company are off 7.5% so far in 2014 and down 10%… Read More

The blue-chip Dow industrials were hit hard by the emotional selling that rocked the market in the past month. From its all-time high on Sept. 19 to its Oct. 15 low, the index gave up almost 1,500 points. It regained about half of those losses in less than a week, before giving back some of the gains in Wednesday’s sell-off. Year to date, the Dow is flat, and more than half of its 30 components are in the red, including American Express (NYSE: AXP). Shares of the credit card company are off 7.5% so far in 2014 and down 10% in the past three months.  The stock bounced from its lows last week after the company reported better-than-expected third-quarter earnings thanks to higher spending by its U.S. cardholders and an increase in interest income. AXP has largely traded between $78 and $94 for the past year. A move above midpoint resistance at $86 targets a run back to the channel top. The $94 target is about 12% higher than recent prices, but traders who use a capital-preserving, stock substitution strategy could make more than 80% on a move to that level. #-ad_banner-#​… Read More

It’s been a great year for any lawyer or banker working in the field of mergers and acquisitions (M&A). The sheer volume of deals taking place this year has been stunning. Consider just one stat: In 2013, there was only one deal announced in excess of $25 billion (Verizon Communications Inc.’s (NYSE: VZ) move to regain the half of Verizon Wireless it did not own). Thus far in 2014, six deals worth $25 billion or more have been announced (not counting AbbVie’s (Nasdaq: ABBV) deal for Shire (Nasdaq: SHPGY), which was terminated on Monday). #-ad_banner-#Below those… Read More

It’s been a great year for any lawyer or banker working in the field of mergers and acquisitions (M&A). The sheer volume of deals taking place this year has been stunning. Consider just one stat: In 2013, there was only one deal announced in excess of $25 billion (Verizon Communications Inc.’s (NYSE: VZ) move to regain the half of Verizon Wireless it did not own). Thus far in 2014, six deals worth $25 billion or more have been announced (not counting AbbVie’s (Nasdaq: ABBV) deal for Shire (Nasdaq: SHPGY), which was terminated on Monday). #-ad_banner-#Below those mega-deals, dozens more billion-dollar transactions have been announced. One that caught my eye: Germany’s Siemens plans to acquire Dresser-Rand Group, Inc. (NYSE: DRC) for $7.6 billion. Dresser-Rand makes machines that help pump and process oil and gas as its coming out of the ground. Siemens sees the deal as a chance to play an even larger role in the U.S. shale revolution and likely wants Dresser-Rand’s expertise and product list as shale exploration starts to take root in other parts of the world. This deal, which came at a 37% premium to the prior day’s closing price, values Dresser Rand… Read More

One smart way to screen for stocks is to find the ones that are still going up when most other stocks are going down. These are stocks with investors who have strong conviction about the true value of the company and don’t get scared amid a declining market. #-ad_banner-#These stocks are often conspicuous — when looking at a heat map of the S&P 500 on a down day, they are the few green dots in a sea of red. In that vein, I found three promising stocks that managed to finish in the green for the first half of October,… Read More

One smart way to screen for stocks is to find the ones that are still going up when most other stocks are going down. These are stocks with investors who have strong conviction about the true value of the company and don’t get scared amid a declining market. #-ad_banner-#These stocks are often conspicuous — when looking at a heat map of the S&P 500 on a down day, they are the few green dots in a sea of red. In that vein, I found three promising stocks that managed to finish in the green for the first half of October, despite the volatility that roiled the broader market from top to bottom. The three are the kinds of companies that typically prosper later in an economic cycle, and each are components of the Barron’s 400 Index, a gauge of promising U.S. companies that tends toward a growth-at-a-reasonable-price (GARP) bent. Snap-on, Inc. (NYSE: SNA) Snap-on’s product lineup — in the industrial machinery category — includes hand and power tools, diagnostics and shop equipment for professional markets, including vehicle dealerships, repair centers, aviation and the military. The company has 4,800 mobile stores nationwide. A novel model, mobile stores are trucks or… Read More

Growing up in the 1970’s, I learned a lot from my dad about stereo systems. He’s an engineer (and self-professed audiophile), and he spent hours explaining the virtues of various system designs. He also owned only one stereo brand: Harman Kardon. The company’s receivers and amplifiers delivered concert hall-quality sound. It was the “Mercedes-Benz of stereos,” as my dad liked to say. Today, investors know the company as Harman International Industries, Inc. (NYSE: HAR). Though it remains a technology leader in the audio field, housing other brands such as JBL and Inifinity, Harman has also emerged as one of the… Read More

Growing up in the 1970’s, I learned a lot from my dad about stereo systems. He’s an engineer (and self-professed audiophile), and he spent hours explaining the virtues of various system designs. He also owned only one stereo brand: Harman Kardon. The company’s receivers and amplifiers delivered concert hall-quality sound. It was the “Mercedes-Benz of stereos,” as my dad liked to say. Today, investors know the company as Harman International Industries, Inc. (NYSE: HAR). Though it remains a technology leader in the audio field, housing other brands such as JBL and Inifinity, Harman has also emerged as one of the leading providers of cutting-edge automotive dashboard systems, in a field known as “telematics.” #-ad_banner-#And a quick glance at the future direction of telematics — and Harman’s role in that eco-system — tells you that this company may soon play as large a technology role in your life as more well-known consumer electronics firms like Apple, Inc. (Nasdaq: AAPL). It’s just that role will be buried behind the dashboard. Meanwhile, as I’ll explain in a moment, shares of Harman have been placed in the bargain bin, after a steady sell-off. The Connected Car If you bought a car in the… Read More

If there ever were a teaching moment in the stock market, it was this week. Earnings, trendlines and whizbang strategies take a backseat to sentiment when fear in the market turns to panic. But to paraphrase Warren Buffett, when everyone is fearful perhaps there is an opportunity to be greedy.  Airline stocks took a big hit as two health care workers treating the country’s first Ebola patient also contracted the disease. It was not that these workers caught the deadly virus while flying, but that one flew in a regular passenger jet just a day before showing symptoms. Suddenly “everyone” thought… Read More

If there ever were a teaching moment in the stock market, it was this week. Earnings, trendlines and whizbang strategies take a backseat to sentiment when fear in the market turns to panic. But to paraphrase Warren Buffett, when everyone is fearful perhaps there is an opportunity to be greedy.  Airline stocks took a big hit as two health care workers treating the country’s first Ebola patient also contracted the disease. It was not that these workers caught the deadly virus while flying, but that one flew in a regular passenger jet just a day before showing symptoms. Suddenly “everyone” thought that flyers are at risk and airline profits would nosedive. #-ad_banner-#I cannot address the health concerns, but when I see a stock such as Delta Air Lines (NYSE: DAL) down more than 20% in just the past few weeks, I tend to believe the selling is overdone. That can be an opportunity to play the rebound. Be careful to note that I am not looking for the start of a major bull run, as this chart is not very different in form, aside from its extreme sentiment, from the market itself. The 2012 rising trendline is broken to the downside,… Read More

One of my favorite screens for stock ideas is to look at the most heavily shorted companies in the market. For one reason or another, the market has gotten severely pessimistic on these stocks and traders are borrowing millions of shares to sell short.  Most of the time, the short attack on the company is for good reason. Maybe management has squandered an advantage or the company just operates in a deteriorating industry. But every once in a while, I come across a company that does not deserve the negative sentiment and is actually a strong buy rather than a… Read More

One of my favorite screens for stock ideas is to look at the most heavily shorted companies in the market. For one reason or another, the market has gotten severely pessimistic on these stocks and traders are borrowing millions of shares to sell short.  Most of the time, the short attack on the company is for good reason. Maybe management has squandered an advantage or the company just operates in a deteriorating industry. But every once in a while, I come across a company that does not deserve the negative sentiment and is actually a strong buy rather than a sell target.  #-ad_banner-#That is exactly what I found when I looked at my screen of heavily shorted companies this week. Not only is today’s pick a leader in two of the three markets it covers, but it just announced plans to triple the size of one of those markets. A Market Leader Opening New Markets ADT Corporation (NYSE: ADT) is a leader in security and automation. Its 25% share of the $11 billion residential security market gives it more than six times the share of its next largest competitor in a market with just 19% penetration.  The company also holds… Read More

If you’re looking for investment ideas, it’s hard to go wrong by checking in on Warren Buffett. Just about every week, it seems, Buffett and his well-known conglomerate Berkshire Hathaway (NYSE: BRK.A) announce yet another major stock purchase or business acquisition with dollar signs written all over it. In an interview with CNBC a couple weeks ago, for example, Buffett revealed an all-cash buyout of privately held Van Tuyl Group, the nation’s fifth largest auto dealership with annual revenue of about $9 billion and 78 locations in 10 states. Van Tuyl will be renamed Berkshire Hathaway Automotive, and the current… Read More

If you’re looking for investment ideas, it’s hard to go wrong by checking in on Warren Buffett. Just about every week, it seems, Buffett and his well-known conglomerate Berkshire Hathaway (NYSE: BRK.A) announce yet another major stock purchase or business acquisition with dollar signs written all over it. In an interview with CNBC a couple weeks ago, for example, Buffett revealed an all-cash buyout of privately held Van Tuyl Group, the nation’s fifth largest auto dealership with annual revenue of about $9 billion and 78 locations in 10 states. Van Tuyl will be renamed Berkshire Hathaway Automotive, and the current owner, Larry Van Tuyl, will stay on as chairman. For individual investors, the most important revelation was that Buffett sees value in the auto dealership industry overall and plans to buy “a lot more car dealers” in coming years. You see, a huge factor in favor of auto dealerships right now is pent up demand. Because of tougher times in the economy, many people have been putting off new vehicle purchases and keeping their old cars pretty much until the bitter end. According to Mr. Van Tuyl, who was with Buffett at the CNBC interview, the vehicles serviced at his… Read More

In this five-year bull market, growth stocks have come in two flavors: those known as growth at a reasonable price and those known as growth at any price. Examples of the latter include Salesforce.com, Inc. (NYSE: CRM), Chipotle Mexican Grill, Inc. (NYSE: CMG) and Tesla Motors, Inc. (Nasdaq: TSLA). Such hot stocks are disconnected from any fundamental value and are seen by their backers as such game-changers that they must be bought and held, no matter what. Of course, some of these stock set-ups can end badly. Roughly a year ago, I asked if 3-D printing firm 3D Systems Corp. Read More

In this five-year bull market, growth stocks have come in two flavors: those known as growth at a reasonable price and those known as growth at any price. Examples of the latter include Salesforce.com, Inc. (NYSE: CRM), Chipotle Mexican Grill, Inc. (NYSE: CMG) and Tesla Motors, Inc. (Nasdaq: TSLA). Such hot stocks are disconnected from any fundamental value and are seen by their backers as such game-changers that they must be bought and held, no matter what. Of course, some of these stock set-ups can end badly. Roughly a year ago, I asked if 3-D printing firm 3D Systems Corp. (NYSE: DDD) was the most overvalued stock on the market. Aggressive accounting practices and a risky growth-through-acquisition strategy gave me pause. However, many growth-at-any price investors dismissed such concerns in subsequent months, pushing shares ever higher until they surpassed $90. I looked at the stock five months later and shares had tumbled back into the $60s, though I noted that “this remains a very expensive stock.” High valuations, looming patent expirations, rising competition, a lack of organic growth and margin pressures were just some of my concerns. Since then, shares have “re-rated lower,” as traders like to say. Read More

Elon Musk, the charismatic founder and CEO of Tesla Motors (Nasdaq: TSLA), is many things to people: Brilliant engineer, clever designer and corporate pitch man, all rolled in to one. He’ll be the first to say that you can’t build a $30 billion company (in market value) from scratch by thinking like a bureaucrat. #-ad_banner-#Trouble is, government bureaucrats may be ready to ruin Musk’s winning streak. A set of policies, put in place a few years ago, could put Musk — and Tesla — on the wrong end of a key battle shaping the auto industry. It’s No BS… Read More

Elon Musk, the charismatic founder and CEO of Tesla Motors (Nasdaq: TSLA), is many things to people: Brilliant engineer, clever designer and corporate pitch man, all rolled in to one. He’ll be the first to say that you can’t build a $30 billion company (in market value) from scratch by thinking like a bureaucrat. #-ad_banner-#Trouble is, government bureaucrats may be ready to ruin Musk’s winning streak. A set of policies, put in place a few years ago, could put Musk — and Tesla — on the wrong end of a key battle shaping the auto industry. It’s No BS In an October 2013 speech to auto technicians in Germany, Musk showed his usual flair for the dramatic: “Oh god, a fuel cell is so bullshit.” His subsequent rant focused on how fuel cell vehicles (FCVs) received a huge amount of hype, consumed millions in government research dollars, but have been a total dud in the marketplace. As far as he is concerned, battery-powered vehicles hold the key to the future. As a final zinger, he quipped that “Hydrogen is quite a dangerous gas. You know, it’s suitable for the upper stage of rockets, but not for cars.” What Musk… Read More

I’m sure this was on many people’s minds a few months ago:       “An outbreak of the deadly Ebola virus is currently raging in Africa. More than 700 people have died and hundreds more are infected. This outbreak is a nasty one — such to the point that the new concern should be about — wait for it — international travel. In one of those moves that make me wonder, “Who thought THAT was a smart idea?” some of the infected have even been sent to the United States for treatment. The virus, though contained, is on our… Read More

I’m sure this was on many people’s minds a few months ago:       “An outbreak of the deadly Ebola virus is currently raging in Africa. More than 700 people have died and hundreds more are infected. This outbreak is a nasty one — such to the point that the new concern should be about — wait for it — international travel. In one of those moves that make me wonder, “Who thought THAT was a smart idea?” some of the infected have even been sent to the United States for treatment. The virus, though contained, is on our soil…” That’s what our resident expert, Andy Obermueller, wrote back in his August 2014 issue of Game-Changing Stocks. The controversial move to allow travel from an infected region in Africa to other countries seemed like a dangerous idea to many. It was only a matter of time before the virus would spread to other countries. #-ad_banner-#Since August, we’ve heard about a nurse who was recently diagnosed with the virus in Spain, after coming home from treating Ebola patients in Africa. We’ve also seen the first diagnosed case, and… Read More