$142 million for a Francis Bacon triptych. $120 million for a pastel by Edvard Munch. $106 million for an oil painting by Picasso. After a slow 2012, the fine-art market is back. Stock market gains worldwide and growing wealth in Asia have lifted prices to new all-time highs. That includes the recent $142 million for the Francis Bacon triptych, eclipsing last year’s record $120 million for Munch’s “The Scream.”#-ad_banner-# The fine-art market is trading just like the stock market. Buyers are stepping out and lifting the bid. That’s putting a lot of cash into the pockets of investors with rare… Read More

$142 million for a Francis Bacon triptych. $120 million for a pastel by Edvard Munch. $106 million for an oil painting by Picasso. After a slow 2012, the fine-art market is back. Stock market gains worldwide and growing wealth in Asia have lifted prices to new all-time highs. That includes the recent $142 million for the Francis Bacon triptych, eclipsing last year’s record $120 million for Munch’s “The Scream.”#-ad_banner-# The fine-art market is trading just like the stock market. Buyers are stepping out and lifting the bid. That’s putting a lot of cash into the pockets of investors with rare collections. But art connoisseurs aren’t the only ones cashing in. I want to tell you about a global leader in the auctioneer business that is also cashing in on these nine-figure masterpieces. Not only does the company generate big commissions from conducting auctions for the world’s rarest art and wealthiest individuals, it enjoys a duopoly with just one competitor, is protected by high barriers to entrance, is highly leveraged against growth in Asia and also pays a quarterly dividend. That has fueled an outsize gain of 80% in the past two years. Take a look below. Sotheby’s (NYSE:… Read More

When chip equipment maker Applied Materials (Nasdaq: AMAT) surpassed $10 billion in annual revenue for the first time in fiscal 2011, its competitors could only sigh. The company’s industry leadership was never in doubt, but a series of acquisitions gave it such a broad suite of offerings that rivals wondered if they could ever take market share again. Applied Materials’ massive market presence eventually led its two biggest rivals, Lam Research (Nasdaq: LRCX) and Novellus Systems to join forces in 2011, but even that combined entity has yet to crack the $5 billion annual revenue barrier. KLA-Tencor (Nasdaq: KLAC) is… Read More

When chip equipment maker Applied Materials (Nasdaq: AMAT) surpassed $10 billion in annual revenue for the first time in fiscal 2011, its competitors could only sigh. The company’s industry leadership was never in doubt, but a series of acquisitions gave it such a broad suite of offerings that rivals wondered if they could ever take market share again. Applied Materials’ massive market presence eventually led its two biggest rivals, Lam Research (Nasdaq: LRCX) and Novellus Systems to join forces in 2011, but even that combined entity has yet to crack the $5 billion annual revenue barrier. KLA-Tencor (Nasdaq: KLAC) is also in Applied Materials’ rearview mirror, with only $3 billion in annual sales. And a handful of smaller companies bring up the rear, none of which have even $1 billion in annual revenue. (Note: Only U.S. companies have been considered here.) Lost in the crowd is little-known Axcelis Technologies (Nasdaq: ACLS), which had $400 million to $500 million in annual sales a decade ago, but has slumped badly in recent years, with sales falling to just $200 million in 2012. Rivals such as Applied Materials used their financial firepower to acquire or develop the products that Axcelis had been… Read More

I grew up in and still live in the South. During the dog days of summer in July and August, when folks say, “It’s not the heat, it’s the humidity,” believe me, it’s the heat AND the humidity. Everything wilts. People move more slowly. Business slows down a little, too. There’s a real and noticeable effect. The fixed-income markets — represented by Treasurys, corporate and municipal bonds, and other income-oriented investments — experienced the dog days firsthand this summer as investors fretted over the prospect of the Federal Reserve scaling back its bond purchases, also known as tapering. Look what… Read More

I grew up in and still live in the South. During the dog days of summer in July and August, when folks say, “It’s not the heat, it’s the humidity,” believe me, it’s the heat AND the humidity. Everything wilts. People move more slowly. Business slows down a little, too. There’s a real and noticeable effect. The fixed-income markets — represented by Treasurys, corporate and municipal bonds, and other income-oriented investments — experienced the dog days firsthand this summer as investors fretted over the prospect of the Federal Reserve scaling back its bond purchases, also known as tapering. Look what happened to the 10-year Treasury: #-ad_banner-#Over the summer, yields nearly doubled, shooting from 1.6% to almost 3%. Naturally, this caused plenty of chaos in the bond market. However, chaos always brings opportunity. When it comes to adding a fixed-income component to an investor’s asset allocation and providing an above-average income stream, preferred stocks are one of the most useful tools available. Preferred stocks are typically classified as part of the issuing company’s debt structure. However, unlike bonds, preferreds are issued in face values smaller than $1,000 and are junior to bank loans and bonds. Preferreds are, however, senior… Read More

In this market, finding a stock with strong upside that also happens to have come down well off of its 52-week high isn’t as easy as it may seem.#-ad_banner-# But thanks to what I call the performance protection trade, there are high-fliers that have pulled back. Stocks such as Tesla Motors (Nasdaq: TSLA) and Facebook (Nasdaq: FB) fit this description well, as does auto and equipment rental giant Hertz Global Holdings (NYSE: HTZ). HTZ has rewarded shareholders with a 40% gain in 2013, easily besting the benchmark S&P 500 Index’s 24% year-to-date showing. However, at the time… Read More

In this market, finding a stock with strong upside that also happens to have come down well off of its 52-week high isn’t as easy as it may seem.#-ad_banner-# But thanks to what I call the performance protection trade, there are high-fliers that have pulled back. Stocks such as Tesla Motors (Nasdaq: TSLA) and Facebook (Nasdaq: FB) fit this description well, as does auto and equipment rental giant Hertz Global Holdings (NYSE: HTZ). HTZ has rewarded shareholders with a 40% gain in 2013, easily besting the benchmark S&P 500 Index’s 24% year-to-date showing. However, at the time of its 52-week high of $27.75 in mid-July, HTZ was up more than 70%. Shares sold off through the rest of the summer before retesting that high in September. Then, in late September, HTZ suffered a huge one-day sell-off that drove it below both the 50-day and 200-day moving averages. HTZ currently trades near $22.80, about 17% off its recent highs and right about where it traded in mid-April.   The massive sell-off in HTZ came swiftly following the company’s downward revision of guidance for 2013. The company said it now expects full-year revenue will be between $10.8 billion and… Read More

In the world of identity theft, it doesn’t pay to assume “it won’t happen to me.”#-ad_banner-# In fact, with an average of a new victim every three seconds in 2012 — and the rate of breaches seeming to increase at a faster pace than the national debt — you might as well assume that it will happen to you and be prepared when it does. Identity theft can dig you a debt ditch deeper than the Mariana Trench. But I’ve found a $1.4 billion company — a mere pollywog among the multi-billion-dollar big fish in this… Read More

In the world of identity theft, it doesn’t pay to assume “it won’t happen to me.”#-ad_banner-# In fact, with an average of a new victim every three seconds in 2012 — and the rate of breaches seeming to increase at a faster pace than the national debt — you might as well assume that it will happen to you and be prepared when it does. Identity theft can dig you a debt ditch deeper than the Mariana Trench. But I’ve found a $1.4 billion company — a mere pollywog among the multi-billion-dollar big fish in this sector — that’s throwing out lifelines to consumers and dishing out profits to investors. In fact, this little gem just reported record revenues and hundreds of thousands of new customers in the third quarter. Its IPO went for $9 just over a year ago, and newcomers to the stock are basking in 75% gains. We’ll take a closer look at the company in a moment, but first, let’s talk about what drives this crime today, how big the business of identity theft has become, and what is being done to protect people like you and me. A $21 Million Violation… Read More

Home furnishings retailer Restoration Hardware Holdings (NYSE: RH) hasn’t been publicly traded for long, but so far, the company has made the most of it. Since it went public on Nov. 2, 2012, the stock has rallied more than 200%. For its initial public offering, the company sold 5.2 million shares at $24 apiece, which valued the deal at about $124 million. Leading up to its IPO, the company saw double-digit revenue growth for 10 consecutive quarters, and over the past 12 months, top-line growth has continued. Many analysts have adjusted their price targets higher. Jefferies, for example, raised its… Read More

Home furnishings retailer Restoration Hardware Holdings (NYSE: RH) hasn’t been publicly traded for long, but so far, the company has made the most of it. Since it went public on Nov. 2, 2012, the stock has rallied more than 200%. For its initial public offering, the company sold 5.2 million shares at $24 apiece, which valued the deal at about $124 million. Leading up to its IPO, the company saw double-digit revenue growth for 10 consecutive quarters, and over the past 12 months, top-line growth has continued. Many analysts have adjusted their price targets higher. Jefferies, for example, raised its price target from $68 to $88 in September. The company’s next earnings announcement is scheduled for mid-December. The fact that a company selling high-end home furnishings can flourish in a slowly recovering economy is a good sign not only for Restoration Hardware, but also for the housing market. While certainly not sporting as spectacular gains as RH, other home furnishings retailers have also rallied. Bed Bath & Beyond (Nasdaq: BBBY) and Williams-Sonoma (NYSE: WSM) have seen their share prices rise about 25% to 30% in the past year, reflecting improvements in the housing market.    Restoration Hardware caught the attention… Read More

It goes without saying that the stock market is an extremely competitive arena. Money management firms spend millions to find profitable niches, strategies and tactics. Where short-term trading is concerned, the advent of high-frequency trading has made speed more important than ever. This niche has become so competitive that some firms have relocated their operations to their stock exchange’s facilities to get their orders to the exchange before the competition’s.#-ad_banner-# Fortunately, long-term investors don’t have to concern themselves with the arms race in high-frequency trading. While large firms fight it out for microsecond advantages, long-term investors can exploit time-tested niches. Read More

It goes without saying that the stock market is an extremely competitive arena. Money management firms spend millions to find profitable niches, strategies and tactics. Where short-term trading is concerned, the advent of high-frequency trading has made speed more important than ever. This niche has become so competitive that some firms have relocated their operations to their stock exchange’s facilities to get their orders to the exchange before the competition’s.#-ad_banner-# Fortunately, long-term investors don’t have to concern themselves with the arms race in high-frequency trading. While large firms fight it out for microsecond advantages, long-term investors can exploit time-tested niches. One such niche outperformed the S&P 500 Index by an average of 13% from January 1995 to July 2012, including a period of 45% outperformance between 2000 and 2005. However, the success of this strategy hasn’t captured investors’ interest. One reason, to be frank, is that it’s a little boring in comparison to other investing strategies. Another is that after the catalyst for this strategy occurs, shares often trade lower for the first month or so. A third is that this strategy was decimated during the 2008 financial crisis. These factors appear to work in unison to spook many investors… Read More

Who says that the market doesn’t trade off of inside information? The short interest in glass and fiber maker Corning (NYSE: GLW) more than doubled in the two weeks ended Oct. 31, to 83 million shares. (Data were released Nov. 11.) The short-interest surge came just days before Apple (Nasdaq: AAPL) said Nov. 5 that it was going to work with GT Advanced Technologies (Nasdaq: GTAT) in the production of touch screens at an Apple manufacturing facility. To be sure, the deal was a great win for GTAT, as my colleague David Goodboy noted a few… Read More

Who says that the market doesn’t trade off of inside information? The short interest in glass and fiber maker Corning (NYSE: GLW) more than doubled in the two weeks ended Oct. 31, to 83 million shares. (Data were released Nov. 11.) The short-interest surge came just days before Apple (Nasdaq: AAPL) said Nov. 5 that it was going to work with GT Advanced Technologies (Nasdaq: GTAT) in the production of touch screens at an Apple manufacturing facility. To be sure, the deal was a great win for GTAT, as my colleague David Goodboy noted a few days ago. But GTAT’s win shouldn’t be seen as a real impediment to Corning. And short sellers, even as they traded on this news early, will still likely get burned — because Corning is shaping up to be both a deep value play and a growth play. Merrill Lynch’s Wamsi Mohan was one of the first analysts to weigh on the Apple/GTAT linkup: “This announcement does not change our opinion of the current limitations of Sapphire (or of) the price and feature advantage of Gorilla Glass. In our view the applications are likely to be more niche and Gorilla’s position… Read More

A steady scan of the financial headlines these days implies that it’s the golden era of dividend investing. But it’s not true.#-ad_banner-# Though many companies are boosting their dividends at a solid pace, dividend yields remain far below the levels seen back in the 1970s. Back then, companies earmarked the vast majority of their profits for dividends. Today, payout ratios usually hover below 35%. If one investment theme is surely at a high point, it’s stock buybacks. As I noted two months ago, companies have bought back more than $1 trillion since 2009, and the pace of buyback activity has… Read More

A steady scan of the financial headlines these days implies that it’s the golden era of dividend investing. But it’s not true.#-ad_banner-# Though many companies are boosting their dividends at a solid pace, dividend yields remain far below the levels seen back in the 1970s. Back then, companies earmarked the vast majority of their profits for dividends. Today, payout ratios usually hover below 35%. If one investment theme is surely at a high point, it’s stock buybacks. As I noted two months ago, companies have bought back more than $1 trillion since 2009, and the pace of buyback activity has actually grown stronger in 2012 and 2013. The timing is curious. The market has posted impressive gains since bottoming out more than four years ago, and many stocks are trading near all-time highs. In the past, companies would only pursue large stock buybacks when their shares were in the doghouse. Still, it’s worth tracking any buybacks plans that promise to retire 10% or even 15% of the current share count. And in the current earnings season, we’ve seen a fresh batch of hefty plans that fulfill that mandate. Here are a dozen companies, each sporting a market value of at… Read More

As the market continues to flirt with all-time highs, a considerable amount of churn is taking place beneath the surface. Investors are increasingly flocking to companies that are seemingly big and safe, while shedding exposure to smaller and riskier names. It’s a logical move, considering the current bull market is getting along in years. Indeed, I extolled the virtues of mega-cap stocks back in August, and you can still find some great bargains among America’s largest companies. Yet if the market is going in this direction, it also means that smaller stocks are falling to levels that hold real appeal. Read More

As the market continues to flirt with all-time highs, a considerable amount of churn is taking place beneath the surface. Investors are increasingly flocking to companies that are seemingly big and safe, while shedding exposure to smaller and riskier names. It’s a logical move, considering the current bull market is getting along in years. Indeed, I extolled the virtues of mega-cap stocks back in August, and you can still find some great bargains among America’s largest companies. Yet if the market is going in this direction, it also means that smaller stocks are falling to levels that hold real appeal. And in no sector is this divergence more apparent than in biotechs. The biggest biotech stocks appear fully priced — while their smaller brethren are now far from their 52-week highs. #-ad_banner-#These large biotechs have posted very strong gains over the past few years, and no longer sport the low price-to-earnings (P/E) ratios that they did a few years back. New drug launches are expected to help some of them post solid sales growth in 2013 and 2014, but it’s hard to find a combination of impressive growth and in-check valuations in this group. Of course, smaller biotechs… Read More