There’s a reason why some investors focus only on tech stocks. It’s the only sector that creates winners and losers every year — thanks to rapid technology change — creating an opening for investors in search of the next breakout stock. Last year’s laggard can be this year’s leader. #-ad_banner-#Case in point: Cisco Systems (Nasdaq: CSCO), which had lagged behind the broader tech sector for several years, but has now rallied 20% since mid-March (against the Nasdaq’s 7% gain in that time). The key catalyst for Cisco: a looming set of new product launches that are expected to help invigorate… Read More

There’s a reason why some investors focus only on tech stocks. It’s the only sector that creates winners and losers every year — thanks to rapid technology change — creating an opening for investors in search of the next breakout stock. Last year’s laggard can be this year’s leader. #-ad_banner-#Case in point: Cisco Systems (Nasdaq: CSCO), which had lagged behind the broader tech sector for several years, but has now rallied 20% since mid-March (against the Nasdaq’s 7% gain in that time). The key catalyst for Cisco: a looming set of new product launches that are expected to help invigorate growth. Analysts at Cantor Fitzgerald just boosted their target price to $31, noting that the company’s “bottom in the profit cycle dovetails with a ramp in the product cycle.” Indeed, the best time to catch a tech stock when it is on the cusp of new product releases, or is on the cusp of greater adoption for its technology. And it’s best to find such companies when they still represent solid value, as was the case with Cisco this past winter. That setup is now in place for one of my favorite tech stocks for the next few years: Universal… Read More

The United States has a corporate tax rate of 35% — the highest in the developed world, and not exactly a competitive advantage for companies trying to return profits and value to stockholders. It may seem unlikely, but there is actually a way for smart investors to profit from this high tax burden. #-ad_banner-#It involves following the logic of billionaire hedge funder Bill Ackman in his bruising takeover battle for Allergan (NYSE: AGN). (It is so promising that fellow hedge fund rival John Paulson is joining forces with Ackman on this deal.) The secret to Ackman’s strategy is that he… Read More

The United States has a corporate tax rate of 35% — the highest in the developed world, and not exactly a competitive advantage for companies trying to return profits and value to stockholders. It may seem unlikely, but there is actually a way for smart investors to profit from this high tax burden. #-ad_banner-#It involves following the logic of billionaire hedge funder Bill Ackman in his bruising takeover battle for Allergan (NYSE: AGN). (It is so promising that fellow hedge fund rival John Paulson is joining forces with Ackman on this deal.) The secret to Ackman’s strategy is that he is using a Quebec pharmaceutical firm as the takeover vehicle. The name of this company is Valeant Pharmaceuticals (NYSE: VRX), but that’s only incidental to this story. The real story is that Canada’s corporate tax rate is 15% — less than half of the U.S. rate mentioned above – and other developed countries share a similar tax advantage. Presuming Ackman’s hostile takeover happens, it means that when Allergan’s tax domicile moves from the U.S. to Canada, Allergan’s corporate tax burden — the company paid $519 million in 2013 — will go way, way down in future years. The resulting gain… Read More

It wasn’t long ago that SINA Corp. (Nasdaq: SINA) was trading near $90 per share, but it has been a brutal 2014 to date for this big Chinese Internet stock. SINA bottomed in May just under $43 for a nasty 50%-plus drop in just over six months. This stock was left for dead and long forgotten. But SINA has seen hard times like these before; its fall between 2011 and 2012 was much worse. The good news for shareholders today is that the stock bottomed not far from its 2014 low, and that tells us that there are buyers at… Read More

It wasn’t long ago that SINA Corp. (Nasdaq: SINA) was trading near $90 per share, but it has been a brutal 2014 to date for this big Chinese Internet stock. SINA bottomed in May just under $43 for a nasty 50%-plus drop in just over six months. This stock was left for dead and long forgotten. But SINA has seen hard times like these before; its fall between 2011 and 2012 was much worse. The good news for shareholders today is that the stock bottomed not far from its 2014 low, and that tells us that there are buyers at this level. No matter how high the stock flies and how hard it falls, there seems to be a floor underneath. #-ad_banner-#The stock’s May 22 dip appeared to be a selling climax, coming on heavy volume. The next day, SINA scored a big move to the upside, also on exceptionally heavy volume. I liken this to the tide rushing out and then rushing back in again. The water was at an unsustainably low level and, for a stock, extreme panic left a vacuum of demand that “had” to be filled. The worst is now over, and I think… Read More

The recovery in U.S. housing has been the pervasive theme since the financial collapse and has offered some of the best returns in the market. Extreme uncertainty over subprime loans and falling real estate prices drove homebuilders and building products to fire-sale prices by 2011. Hindsight, curse that it is, has most of us looking back at the triple-digit gains in some housing-related companies over the two years to mid-2013 and wondering why we couldn’t see the writing on the wall. #-ad_banner-#But you shouldn’t beat yourself up too badly — you just might get another chance. The SPDR S&P Homebuilders… Read More

The recovery in U.S. housing has been the pervasive theme since the financial collapse and has offered some of the best returns in the market. Extreme uncertainty over subprime loans and falling real estate prices drove homebuilders and building products to fire-sale prices by 2011. Hindsight, curse that it is, has most of us looking back at the triple-digit gains in some housing-related companies over the two years to mid-2013 and wondering why we couldn’t see the writing on the wall. #-ad_banner-#But you shouldn’t beat yourself up too badly — you just might get another chance. The SPDR S&P Homebuilders Index Fund (NYSE: XHB) has underperformed the market with a gain of just 11% over the last year and a loss of 1% over the past six months. The weakness is in stark contrast to the 60% gain the index posted in the two years to mid-2013, along with triple-digit gains in shares of homebuilders like KB Homes (NYSE: KBH) and Hovanian Enterprises (NYSE: HOV). Weakness in housing-related stocks follows abysmal housing data over the last six months of 2013 and the first quarter of this year. Against winter weakness and the disappointing spring selling season comes strong evidence of… Read More

After a prolonged worldwide economic slump, we’re finally seeing some consistent growth. #-ad_banner-#Growth in corporate sales and earnings, and in U.S. stock market averages, is on an undeniable upward trend. The benchmark S&P, Dow and Nasdaq indices all broke out of trading ranges during the past six weeks and are reaching annual highs. Yet this growth isn’t happening rapidly — and that’s good news for investors, because rapid upward swings in the stock market often lead to rapid market corrections.  Instead, the market’s made slow progress this year, going through a couple of corrections in February and April, then… Read More

After a prolonged worldwide economic slump, we’re finally seeing some consistent growth. #-ad_banner-#Growth in corporate sales and earnings, and in U.S. stock market averages, is on an undeniable upward trend. The benchmark S&P, Dow and Nasdaq indices all broke out of trading ranges during the past six weeks and are reaching annual highs. Yet this growth isn’t happening rapidly — and that’s good news for investors, because rapid upward swings in the stock market often lead to rapid market corrections.  Instead, the market’s made slow progress this year, going through a couple of corrections in February and April, then trading sideways in apparent preparation for the current upward move. One of the market sectors heading upward is specialty metals — and in that sector, I love Allegheny Technologies (NYSE: ATI), an undervalued gem (and one that I happen to hold in a personal model portfolio comprising what I think are this year’s best stocks for growth and income). Allegheny is a global leader in specialty metals and components. Its products include titanium and nickel alloys and a variety of steel products and other metals. The aerospace and defense industries make up Allegheny’s biggest customer base,… Read More

Although many well-known stocks have been generating fantastic returns, a lot of money has also been made in the last places you might expect… Like kitchen appliances, for instance. I mean, who’d ever think they could still propel a company’s stock to massive gains? #-ad_banner-#Well, they sure have for one obscure mid-cap company that’s actually a leading manufacturer of ovens, ranges and other cooking equipment for commercial and residential use. The company’s stock is up more than 800% in the past 10 years, so you’d think it would be all over the financial news. But it’s… Read More

Although many well-known stocks have been generating fantastic returns, a lot of money has also been made in the last places you might expect… Like kitchen appliances, for instance. I mean, who’d ever think they could still propel a company’s stock to massive gains? #-ad_banner-#Well, they sure have for one obscure mid-cap company that’s actually a leading manufacturer of ovens, ranges and other cooking equipment for commercial and residential use. The company’s stock is up more than 800% in the past 10 years, so you’d think it would be all over the financial news. But it’s not one you really hear much about, and even some top mutual funds haven’t paid it much mind. For instance, it’s nowhere to be found in the top 10 holdings list of Neuberger Berman Genesis (Nasdaq: NBGNX), a famous small- and mid-cap equity fund that’s beaten the market handily over the years (including expenses and fees). In fact, the stock is only #38 in NBGNX’s 100-holding, $14.7 billion portfolio. And its overall weighting of barely 1% is far too small to have much of an effect on fund performance. Now, I certainly don’t mean to knock Neuberger Berman Genesis. It’s… Read More

Investors saw some bullish fireworks as the Dow exploded past 17,000 for the first time last week just before they checked out to celebrate the Fourth of July. #-ad_banner-#The breaching of this psychologically significant threshold is quite a feat for a market that just five years ago was knocked silly by the worst economic downturn since the Great Depression. In fact, the Dow closed at 8,280.74 before Independence Day in 2009. That means that the Dow has more than doubled in five years. So far in 2014, the bull market has not only been in stocks, it’s also been in… Read More

Investors saw some bullish fireworks as the Dow exploded past 17,000 for the first time last week just before they checked out to celebrate the Fourth of July. #-ad_banner-#The breaching of this psychologically significant threshold is quite a feat for a market that just five years ago was knocked silly by the worst economic downturn since the Great Depression. In fact, the Dow closed at 8,280.74 before Independence Day in 2009. That means that the Dow has more than doubled in five years. So far in 2014, the bull market has not only been in stocks, it’s also been in bonds and commodities. This is an unusual situation, because usually when stock prices rise, bond prices falter, and/or commodity prices fall. Sure, stocks, bonds and commodities can move up together for short periods of time, but through the first half of 2014, all three asset classes are higher, which hasn’t occurred since 1993. In the first six months of 2014, the S&P 500 index rose 6.1%. Commodities, as measured by the PowerShares DB Commodity Index Tracking (NYSE: DBC), saw a year-to-date gain of 3.4%. And bonds, as measured by the iShares 20+ Year Treasury Bond (NYSE: TLT), spiked 11.5%.  The… Read More

Steady, reliable growth — that’s what characterizes America’s biggest garbage collection and disposal company, Waste Management (NYSE: WM).  #-ad_banner-#Over the past five years, revenue has steadily risen, hitting $14 billion in 2013. During this same period, the annual dividend increased 29%, going from $1.16 to $1.50 per share, while shares rose more than 65%. What captures my attention right now is that technically the stock has broken out of a cup-and-handle pattern and is edging toward key resistance at $45. If WM breaks through this key resistance level, shares should quickly run to $50. This… Read More

Steady, reliable growth — that’s what characterizes America’s biggest garbage collection and disposal company, Waste Management (NYSE: WM).  #-ad_banner-#Over the past five years, revenue has steadily risen, hitting $14 billion in 2013. During this same period, the annual dividend increased 29%, going from $1.16 to $1.50 per share, while shares rose more than 65%. What captures my attention right now is that technically the stock has broken out of a cup-and-handle pattern and is edging toward key resistance at $45. If WM breaks through this key resistance level, shares should quickly run to $50. This consistent growth has caught the attention of Bill Gates. According to Nasdaq’s ownership summary, the Bill & Melinda Gates Foundation Trust is one of the top five holders of WM, with 18.6 million shares — a 4% stake in the company. As my colleague Marshall Hargrave said in his recent article on the company, “One of the richest men in the world is finding value in one of the dirtiest industries in the world.” But while WM is known for turning trash into cash, it’s the company’s innovation in green technology that is moving revenue forward. In 2013, Waste Management… Read More

The impressive early gains for camera maker GoPro (Nasdaq: GPRO) didn’t come in a vacuum. The company’s IPO was launched in the midst of a veritable frenzy of new issues.  #-ad_banner-#In just the past few weeks, a wide variety of companies have come public, and plans are in place to maintain the frenzied pace throughout July as well. Anytime you see such a large group of new IPOs in a short period of time, a trading opportunity invariably emerges: The stocks start trading, often shoot higher, and then momentum investors start to lose interest, leading shares to drift lower.  That’s where… Read More

The impressive early gains for camera maker GoPro (Nasdaq: GPRO) didn’t come in a vacuum. The company’s IPO was launched in the midst of a veritable frenzy of new issues.  #-ad_banner-#In just the past few weeks, a wide variety of companies have come public, and plans are in place to maintain the frenzied pace throughout July as well. Anytime you see such a large group of new IPOs in a short period of time, a trading opportunity invariably emerges: The stocks start trading, often shoot higher, and then momentum investors start to lose interest, leading shares to drift lower.  That’s where Wall Street analysts come in. If they are affiliated with the firm that underwrote the IPO, then these analysts can issue their new research coverage on these firms after an appropriate waiting period (25 calendar days after the IPO for companies with less than $1 billion in revenue and 40 days for larger firms).  Such research often gives new stocks a boost (known as the “quiet period bounce”) because the analysts’ target prices are often higher than the current trading price. Of course, any IPO that has already sharply surged in price may not see such a bounce. GoPro is… Read More

Whatever your take on health care in America, one thing’s for sure: The U.S. health care system creates a lot of waste — millions of tons each year of the nastiest stuff you can imagine.  #-ad_banner-#Soiled wound dressings and surgical gloves, used syringes, discarded surgical instruments… even human tissue left over from surgery. The same goes for plenty of other countries, too. Sounds like just the investment opportunity you were looking for, right? Well, it actually could be. Somebody’s got to collect, treat, and properly dispose of all that odious and potentially hazardous medical waste — and there’s… Read More

Whatever your take on health care in America, one thing’s for sure: The U.S. health care system creates a lot of waste — millions of tons each year of the nastiest stuff you can imagine.  #-ad_banner-#Soiled wound dressings and surgical gloves, used syringes, discarded surgical instruments… even human tissue left over from surgery. The same goes for plenty of other countries, too. Sounds like just the investment opportunity you were looking for, right? Well, it actually could be. Somebody’s got to collect, treat, and properly dispose of all that odious and potentially hazardous medical waste — and there’s a whole industry devoted to that. The nice thing is you don’t have to research a bunch of different medical waste management firms just to pick the one or two you think are worth your investment dollars. In the decidedly unappealing world of medical waste, there’s one undisputed champ. This firm’s stock has at least 70% upside and is a good bet to beat the market in coming years, in my opinion. It certainly has a history of market trouncing, delivering more than 27% a year for the past 15 years, compared with a 4.4% rate of return for the… Read More