From a quick glance at AutoNation’s (NYSE: AN) recent price action, you’d probably have no idea that the company has been killing it in the earnings department. With the automotive retailer scheduled to report next week, I think it could be setting up for one of the best plays of the entire earnings season.  #-ad_banner-#In October, AutoNation delivered its 16th consecutive quarter of double-digit, year-over-year earnings growth. The company reported record profits of $0.90 for the third quarter, up 20% from a year ago and beating Wall Street’s estimates.  Analysts expect new vehicle sales to reach nearly 17 million… Read More

From a quick glance at AutoNation’s (NYSE: AN) recent price action, you’d probably have no idea that the company has been killing it in the earnings department. With the automotive retailer scheduled to report next week, I think it could be setting up for one of the best plays of the entire earnings season.  #-ad_banner-#In October, AutoNation delivered its 16th consecutive quarter of double-digit, year-over-year earnings growth. The company reported record profits of $0.90 for the third quarter, up 20% from a year ago and beating Wall Street’s estimates.  Analysts expect new vehicle sales to reach nearly 17 million in 2015 for the first time since 2005, as consumers’ confidence in the economy grows and they enjoy the benefits of the nearly 40% decline in gasoline prices in the past year.   Despite this positive backdrop and the stock’s relatively inexpensive valuation — trading at 17.5 times earnings compared with an industry average of 22 — shares remain below their highs ahead of the company’s next earnings report, which is scheduled for Feb. 3.  Based on my research, there is a strong chance of another earnings beat and a subsequent rally to new all-time highs. That’s why I’m getting positioned… Read More

Mortgage lending fell to a 17-year low of $1.1 trillion in 2014 as tightening credit standards limited growth in new loans. Housing sales dropped for the first time in four years, down 3% to 4.9 million. #-ad_banner-#There has also been a shortage of homes for sale, with 2 million houses on the market in November, up from a monthly average of 1.8 million in 2012 and 2013, but well under the 2.5 million monthly average between 2001 and 2006. Part of the reason for this is that buyers were underwater or barely breaking even on their current mortgages, so they… Read More

Mortgage lending fell to a 17-year low of $1.1 trillion in 2014 as tightening credit standards limited growth in new loans. Housing sales dropped for the first time in four years, down 3% to 4.9 million. #-ad_banner-#There has also been a shortage of homes for sale, with 2 million houses on the market in November, up from a monthly average of 1.8 million in 2012 and 2013, but well under the 2.5 million monthly average between 2001 and 2006. Part of the reason for this is that buyers were underwater or barely breaking even on their current mortgages, so they lacked the equity to sell their home and buy a new one. With news like this, you might not think it’s the best time to start buying into housing-related stocks. But you may have missed one headline that could mean a stronger housing market this year, especially for one segment in particular.   Housing Boom 2.0 With 97% Loan-to-Value Option In December, Fannie Mae (OTC: FNMA) announced that it and Freddie Mac (OTC: FMCC) would begin offering a new lower-down- payment option. The 97% loan-to-value (LTV) program allows qualified first-time homebuyers to put as little as 3% down.  The news… Read More

Sometimes as analysts we’re so focused on finding the next “big thing” that we overlook a great opportunity that’s sitting right in front of us. #-ad_banner-#This happened to me recently when I was researching some of my most interesting investment ideas. I’ve researched and invested in this company plenty of times throughout my career, so I figured I’d focus on some newer companies first. But at the end of the day, I came back to it once again. You see, in my premium advisory, Income Trader, I only use my income-generating… Read More

Sometimes as analysts we’re so focused on finding the next “big thing” that we overlook a great opportunity that’s sitting right in front of us. #-ad_banner-#This happened to me recently when I was researching some of my most interesting investment ideas. I’ve researched and invested in this company plenty of times throughout my career, so I figured I’d focus on some newer companies first. But at the end of the day, I came back to it once again. You see, in my premium advisory, Income Trader, I only use my income-generating strategy on stocks that I want to own. I look for companies that I’d have no problem buying if they fell 10% or even 20% in price. Think Microsoft and Coca-Cola, for example. This approach has worked extremely well. Since I started publishing Income Trader in February 2013, I haven’t closed one trade for a loss. It may sound impossible, but over the past two years I’ve closed 81 straight winners.   So after spending the weekend researching some pretty interesting ideas, I finally got to the company I’d saved for last — The Walt Disney… Read More

Metals and mining stocks have taken a hit over the past year as global growth slowed and commodity prices plummeted. The SPDR S&P Metals and Mining ETF (NYSE: XME) lost 27% in 2014 and has retreated another 8.5% so far this year. Yet, one metal has bucked the trend, and a three-year supply deficit looks set to continue in 2015 and beyond. Russia accounts for 41% of global production of this rare metal, but reserves in the country are “pretty much exhausted,” according to one of the largest corporate users. As you can see below, palladium held up as other… Read More

Metals and mining stocks have taken a hit over the past year as global growth slowed and commodity prices plummeted. The SPDR S&P Metals and Mining ETF (NYSE: XME) lost 27% in 2014 and has retreated another 8.5% so far this year. Yet, one metal has bucked the trend, and a three-year supply deficit looks set to continue in 2015 and beyond. Russia accounts for 41% of global production of this rare metal, but reserves in the country are “pretty much exhausted,” according to one of the largest corporate users. As you can see below, palladium held up as other metals like copper and platinum plunged last year. As palladium gets more precious and prices defy market forces weighing on other metals, one company stands to benefit as a major producer and recycler. A Tight Market Could Get Tighter #-ad_banner-#Roughly three-quarters of palladium demand goes to the automobile sector. It is used in catalytic converters, which reduce emissions. With the steep drop in gasoline prices, analysts are expecting continued strength in car sales. This, combined with a growing number of vehicles in China, could increase global palladium demand. Johnson Matthey plc, a London-based company that makes a third… Read More

Wall Street wisdom tells us not to try to catch a falling knife. Stocks in strong downtrends are more likely to keep falling than suddenly turn around. However, unless a stock is heading to zero, it will eventually find its footing.  #-ad_banner-#That time seems to be at hand for international oil giant BP plc (NYSE: BP). There is no doubt that my fascination with this stock stems from everyone’s natural tendency to want to jump on an apparent bargain. After trading above $53 in the middle of last year, BP dipped below $35 in December before bouncing a bit. That’s… Read More

Wall Street wisdom tells us not to try to catch a falling knife. Stocks in strong downtrends are more likely to keep falling than suddenly turn around. However, unless a stock is heading to zero, it will eventually find its footing.  #-ad_banner-#That time seems to be at hand for international oil giant BP plc (NYSE: BP). There is no doubt that my fascination with this stock stems from everyone’s natural tendency to want to jump on an apparent bargain. After trading above $53 in the middle of last year, BP dipped below $35 in December before bouncing a bit. That’s a 35% decline in less than six months.  The next thing that piques my interest is its beefy dividend yield of 6.4%. In a market where 10 years of waiting gets you a whopping 1.8% in Treasury notes, the hunt for income is a popular pastime.  But again, just because a stock is low in price does not mean it cannot go even lower, and that would eat up the dividend rather quickly. However, in BP’s case, the technicals suggest a relatively low risk-to-reward setup is now in place.   For starters, downside momentum is waning. While the… Read More

Despite a strong rebound on Friday, all major U.S. indices closed lower for the week. The past two rebounds, in mid-December and in early January, were triggered by communication from the Federal Open Market Committee (FOMC) that pertained to the timing of an expected interest rate hike.   #-ad_banner-#Friday’s rally was not much different, as investors collectively interpreted weak December consumer price index (CPI) data as an indication that the Federal Reserve may delay increasing rates until the second half of the year.   Last week’s decline was led by the tech-heavy Nasdaq 100, which lost 1.7% and is now… Read More

Despite a strong rebound on Friday, all major U.S. indices closed lower for the week. The past two rebounds, in mid-December and in early January, were triggered by communication from the Federal Open Market Committee (FOMC) that pertained to the timing of an expected interest rate hike.   #-ad_banner-#Friday’s rally was not much different, as investors collectively interpreted weak December consumer price index (CPI) data as an indication that the Federal Reserve may delay increasing rates until the second half of the year.   Last week’s decline was led by the tech-heavy Nasdaq 100, which lost 1.7% and is now down 2.2% for the year. In the Dec. 29 Market Outlook, I said that continued weakness in technology issues could become problematic in January and February as seasonal factors began to weigh on stocks. Technology remains a key influence this week as the broader market continues to negotiate a near-term inflection point that is likely to become the springboard for the next intermediate-term trend. From a market sector standpoint, my own metric shows that the biggest inflow of investor assets last week went into energy. This followed a steady contraction in these assets between July and… Read More

Crude oil’s 58% drop from its June high is estimated to have shifted about $2.2 trillion from oil producers’ pockets into the hands of consumers. With the average American household consuming 97 gallons of gasoline a month and prices at the pump down almost $1.20 from a year ago, this translates in roughly $116 in monthly savings. #-ad_banner-#Lower oil prices are expected to persist, with Goldman Sachs (NYSE: GS) reducing its six-month prediction for West Texas Intermediate to $39 a barrel from $75. This will no doubt be one of the biggest investment themes of the year. In… Read More

Crude oil’s 58% drop from its June high is estimated to have shifted about $2.2 trillion from oil producers’ pockets into the hands of consumers. With the average American household consuming 97 gallons of gasoline a month and prices at the pump down almost $1.20 from a year ago, this translates in roughly $116 in monthly savings. #-ad_banner-#Lower oil prices are expected to persist, with Goldman Sachs (NYSE: GS) reducing its six-month prediction for West Texas Intermediate to $39 a barrel from $75. This will no doubt be one of the biggest investment themes of the year. In addition to the influx of consumer cash, which has helped boost U.S. consumer sentiment to nearly eight-year highs, the cost of travel is expected to fall. The average airline ticket price, for example, is estimated to decline by 5% in 2015.   Add to this the strengthening U.S. dollar, which makes foreign travel all the more appealing, and we have a confluence of bullish catalysts creating an amazing opportunity for the travel industry in coming quarters. Conventional wisdom might lead you to a company like Southwest Airlines (NYSE: LUV) or Hertz Global Holding (NYSE: HTZ). But rather than… Read More

The markets had investors on edge last year as they waited for the other shoe to drop in the form of a correction so many were predicting. After all, the S&P 500 had been up for five straight years including a blockbuster 2013. My own estimate for 2014 was for a gain of just 7% to 1,970 by the end of the year.  #-ad_banner-#I, along with many others, underestimated the market, and the index of large-cap stocks returned another double-digit year.  As everyone asks whether the market can do it for a sixth year, it seems pretty doubtful. Beyond the… Read More

The markets had investors on edge last year as they waited for the other shoe to drop in the form of a correction so many were predicting. After all, the S&P 500 had been up for five straight years including a blockbuster 2013. My own estimate for 2014 was for a gain of just 7% to 1,970 by the end of the year.  #-ad_banner-#I, along with many others, underestimated the market, and the index of large-cap stocks returned another double-digit year.  As everyone asks whether the market can do it for a sixth year, it seems pretty doubtful. Beyond the age of the bull market, oil has plunged with no bottom yet in sight, and we will face the effects of the end to an unprecedented quantitative easing program in the United States and rising interest rates. One ominous sign is that the typically market-leading Russell 2000 index of small-cap companies underperformed last year with a return of just 3.5% versus 11.4% for the S&P 500. But against all this, the writing is on the wall for positive returns. In fact, the catalysts are so strong that I am going to do something that I rarely do… I’m going… Read More

In a recent issue of StreetAuthority Daily, I told readers about one of the key traits that can tell you whether an investment if truly worth owning “forever”. That trait is something I like to call an “Irreplaceable Asset.” The idea behind Irreplaceable Assets is simple. Think about the types of assets companies own that competitors can’t easily duplicate… From buildings to airports to hydroelectric dams, there are dozens of Irreplaceable Assets you can invest in around the world. And many of them are market-beating profit machines. Read More

In a recent issue of StreetAuthority Daily, I told readers about one of the key traits that can tell you whether an investment if truly worth owning “forever”. That trait is something I like to call an “Irreplaceable Asset.” The idea behind Irreplaceable Assets is simple. Think about the types of assets companies own that competitors can’t easily duplicate… From buildings to airports to hydroelectric dams, there are dozens of Irreplaceable Assets you can invest in around the world. And many of them are market-beating profit machines. The best part about Irreplaceable Assets is that there are literally dozens of them around the world — and regular investors like you and me can invest in them. (Here’s a list of some of the main types of Irreplaceable Assets that my research team and I recently identified in my report “The 10 Stocks To Own For The Rest Of Your Life.”) Irreplaceable Asset Examples Buildings Empire State Building, Madison Square Garden Railroads Union Pacific Railroad, Canada’s largest railroad Airports Cancun International Airport, Mexico’s second-busiest Hydroelectric Plants 195 in the United States, Canada and Brazil,… Read More

Picking a bottom in any market is tricky, but trading is not about being right 100% of the time. It is about finding trades with good reward/risk profiles and exploiting them. As the lottery ad says, “You gotta be in it to win it.” Thankfully, technical analysis means we have immensely better odds of profiting than anyone playing the lotto. The gold market has been a widow maker for the past few years, as legions of bottom fishers have tried and failed to catch a falling knife. But now, gold mining stocks seem to be quite resilient and… Read More

Picking a bottom in any market is tricky, but trading is not about being right 100% of the time. It is about finding trades with good reward/risk profiles and exploiting them. As the lottery ad says, “You gotta be in it to win it.” Thankfully, technical analysis means we have immensely better odds of profiting than anyone playing the lotto. The gold market has been a widow maker for the past few years, as legions of bottom fishers have tried and failed to catch a falling knife. But now, gold mining stocks seem to be quite resilient and some are even bucking the trend in the U.S. dollar.  Gold and most commodities are priced in dollars, and that means a strong buck is not good for those real assets. Gold and the stocks of companies that mine it should be falling as the U.S. dollar index reaches nine-year highs in a rocket ship trajectory.  Yet, while most gold mining stocks and funds are still in declining trends, some, including the Market Vectors Junior Gold Miners ETF (NYSE: GDXJ), appear to be transitioning to a more bullish posture.  Focusing on the most recent leg down, from July to… Read More