Mutual funds and 401k investing is the primary way that most folks experience the stock market and plan for retirement. Though I love buying and selling individual stocks, it’s clar that most people don’t have the time or the brainpower to look beyond mutual funds — to say nothing of the added risk you take on when trading a diversified mutual fund investment for an individual stock.
So it’s no surprise that one of the most frequent questions I get is about picking the best mutual funds within your 401k. I’d like to tackle that topic today, but broaden the discussion to picking the best mutual funds overall – whether you have a limited menu from your employer’s 401k retirement plan or a broader IRA account with access to more options.
When evaluating your 401k and mutual fund options, you should check out the following factors:
Did the fund beat the S&P 500? This question matters on two fronts. First, did it beat in the last year? Secondly, did it outperform in the longer term, like across the last five or 10 years? (Surprisingly most managers DON’T … here’s the disturbing proof.)
What’s the expense ratio? This is the amount of your returns that the fund shaves off. 1% sounds like a reasonable expense, but what if you only get 3% in annual returns? Well, your expenses shove that down to just 2%. Giving up 1% in returns every year adds up dramatically over a decade or two. If your fund has an expense ratio higher than .75% or 1% it better deliver impressive returns to be worth it.
How long has the manager been there? If the guy moves around a lot or has only recently been put in charge of the fund, you really can’t credit him with any of its success. That would be like saying it doesn’t matter whether Steve Jobs is leading Apple Inc. (NASDAQ:AAPL) or not – it matters a great deal. That’s not to say a different manager can’t prove himself over time, but don’t be his guinea pig. Less than a year or two is a warning sign.
Another good rule of thumb is the Morningstar rating. This is a firm that specializes in ranking the best and worst funds. Anything that’s a four or five star is typically a solid fund overall. This mutual fund research firm is a great resource, though obviously you shouldn’t rely too heavily on their evaluation alone.
So what if you want to check these three metrics on your own?
My favorite one-stop shop is Fidelity … If your mutual funds aren’t in the Fidelity family, don’t worry – it offers info for ALL funds. Well, over 1,700 funds anyway.
Just type in the name of your fund under the “search” functionality at the very top of the page in the green bar, and then click on the fund you want to research to get an in-depth summary of the investment.
Showing posts with label Stocks to Invest. Show all posts
Showing posts with label Stocks to Invest. Show all posts
8 Best Consumer Stocks To Invest that Return Right Now
Consumer stocks are doing OK in 2012 as the broader market has rallied and spending has seemed strong. But the risk of rising gasoline prices, food inflation and other higher input costs could be squeezing margins for many consumer products companies. What’s more, you can bet that if gas hits $5 that many Americans will start cutting back on discretionary spending. That means some consumer stocks may be in trouble.
I watch more than 5,000 publicly traded companies with my Portfolio Grader tool, ranking companies by a number of fundamental and quantitative measures. And this week, eight consumer stocks look ready to sell.
Each one of these stocks gets a “D” or “F” according to my research, meaning it is a “sell” or “strong sell.”
8 Best Consumer Stocks To Invest that Return Right Now Walgreen (NYSE:WAG) operates a drugstore chain in the United States. In the last year, WAG stock has dropped 20%, compared to a 3% gain by the Dow Jones in the same time. Walgreen stock gets a “D” grade for sales growth and a “D” grade for earnings momentum.
8 Best Consumer Stocks To Invest that Return Right Now Archer Daniels Midland (NYSE:ADM) works with agricultural commodities and products. Since last April, Archer Daniels stock has dipped 13%. ADM stock gets a “D” grade for operating margin growth, an “F” grade for earnings momentum, an “F” grade for earnings growth, an “F” grade for its ability to exceed the consensus earnings estimates on Wall Street, and an “F” grade for the magnitude in which earnings projections have increased over the past months.
8 Best Consumer Stocks To Invest that Return Right Now Avon (NYSE:AVP) manufactures and markets beauty and related products. In the last 12 months. Avon stock is down 19%. AVP stock gets a “D” grade for sales growth, a “D” grade for operating margin growth, an “F” grade for earnings momentum, an “F” grade for earnings growth, an “F” grade for its ability to exceed the consensus earnings estimates on Wall Street, an “F” grade for the magnitude in which earnings projections have increased over the past months, and a “D” grade for cash flow.
8 Best Consumer Stocks To Invest that Return Right Now General Motors (NYSE:GM) is one of the largest American automotive company and has experienced a stock loss of 22% in the last year. GM stock gets a “D” grade for sales growth, an “F” grade for earnings momentum, and a “D” grade for its ability to exceed the consensus earnings estimates on Wall Street.
8 Best Consumer Stocks To Invest that Return Right Now Carnival (NYSE:CCL) is a major cruise company based in Miami. In the last year, CCL stock is down 17%. Carnival stock gets a “D” grade for operating margin growth, an “F” grade for earnings growth, a “D” grade for earnings momentum, an “F” grade for the magnitude in which earnings projections have increased over the past months, and a “D” grade for cash flow.
8 Best Consumer Stocks To Invest that Return Right Now Panasonic (NYSE:PC) offers diversified financial services to a variety of customers and has experienced a stock loss of 26% in the last year. C stock gets an “F” grade for sales growth, a “D” grade for earnings growth, an “F” grade for its ability to exceed the consensus earnings estimates on Wall Street, and a “D” grade for the magnitude in which earnings projections have increased over the past months.
8 Best Consumer Stocks To Invest that Return Right Now Sony (NYSE:SNE) is a major Japanese electronics company. SNE stock is down 38% since last April. Sony stock gets a “D” grade for sales growth, an “F” grade for operating margin growth, an “F” grade for earnings momentum, an “F” grade for earnings growth, an “F” grade for the magnitude in which earnings projections have increased over the past months, an “F” grade for cash flow, and an “F” grade for return on equity.
8 Best Consumer Stocks To Invest that Return Right Now Grupo Televisa (NYSE:TV) is a Mexican media company that rounds out the list. TV stock has dipped 11% since this time last year. TV stock gets an “F” grade for sales growth, a “D” grade for earnings growth, a “D” grade for earnings momentum and a “D” grade for cash flow.
I watch more than 5,000 publicly traded companies with my Portfolio Grader tool, ranking companies by a number of fundamental and quantitative measures. And this week, eight consumer stocks look ready to sell.
Each one of these stocks gets a “D” or “F” according to my research, meaning it is a “sell” or “strong sell.”
8 Best Consumer Stocks To Invest that Return Right Now Walgreen (NYSE:WAG) operates a drugstore chain in the United States. In the last year, WAG stock has dropped 20%, compared to a 3% gain by the Dow Jones in the same time. Walgreen stock gets a “D” grade for sales growth and a “D” grade for earnings momentum.
8 Best Consumer Stocks To Invest that Return Right Now Archer Daniels Midland (NYSE:ADM) works with agricultural commodities and products. Since last April, Archer Daniels stock has dipped 13%. ADM stock gets a “D” grade for operating margin growth, an “F” grade for earnings momentum, an “F” grade for earnings growth, an “F” grade for its ability to exceed the consensus earnings estimates on Wall Street, and an “F” grade for the magnitude in which earnings projections have increased over the past months.
8 Best Consumer Stocks To Invest that Return Right Now Avon (NYSE:AVP) manufactures and markets beauty and related products. In the last 12 months. Avon stock is down 19%. AVP stock gets a “D” grade for sales growth, a “D” grade for operating margin growth, an “F” grade for earnings momentum, an “F” grade for earnings growth, an “F” grade for its ability to exceed the consensus earnings estimates on Wall Street, an “F” grade for the magnitude in which earnings projections have increased over the past months, and a “D” grade for cash flow.
8 Best Consumer Stocks To Invest that Return Right Now General Motors (NYSE:GM) is one of the largest American automotive company and has experienced a stock loss of 22% in the last year. GM stock gets a “D” grade for sales growth, an “F” grade for earnings momentum, and a “D” grade for its ability to exceed the consensus earnings estimates on Wall Street.
8 Best Consumer Stocks To Invest that Return Right Now Carnival (NYSE:CCL) is a major cruise company based in Miami. In the last year, CCL stock is down 17%. Carnival stock gets a “D” grade for operating margin growth, an “F” grade for earnings growth, a “D” grade for earnings momentum, an “F” grade for the magnitude in which earnings projections have increased over the past months, and a “D” grade for cash flow.
8 Best Consumer Stocks To Invest that Return Right Now Panasonic (NYSE:PC) offers diversified financial services to a variety of customers and has experienced a stock loss of 26% in the last year. C stock gets an “F” grade for sales growth, a “D” grade for earnings growth, an “F” grade for its ability to exceed the consensus earnings estimates on Wall Street, and a “D” grade for the magnitude in which earnings projections have increased over the past months.
8 Best Consumer Stocks To Invest that Return Right Now Sony (NYSE:SNE) is a major Japanese electronics company. SNE stock is down 38% since last April. Sony stock gets a “D” grade for sales growth, an “F” grade for operating margin growth, an “F” grade for earnings momentum, an “F” grade for earnings growth, an “F” grade for the magnitude in which earnings projections have increased over the past months, an “F” grade for cash flow, and an “F” grade for return on equity.
8 Best Consumer Stocks To Invest that Return Right Now Grupo Televisa (NYSE:TV) is a Mexican media company that rounds out the list. TV stock has dipped 11% since this time last year. TV stock gets an “F” grade for sales growth, a “D” grade for earnings growth, a “D” grade for earnings momentum and a “D” grade for cash flow.
Top 7 Energy Stocks to Buy Right Now
Energy stocks are doing well right now as crude oil continues to move higher. It’s not a great thing for motorists or American consumers to see gasoline or energy costs eating in to their budgets, but if you can’t beat ‘em … join ‘em! Buying energy stocks could be your best hedge against rising fuel costs.
I watch more than 5,000 publicly traded companies with my Portfolio Grader tool, ranking companies by a number of fundamental and quantitative measures. And this week, I identify seven energy stocks to buy.
Here they are, in alphabetical order. Each one of these stocks gets an “A” or “B” according to my research, meaning it is a “strong buy” or “buy.”
Top 7 Energy Stocks to Buy Right Now China Petroleum & Chemical (NYSE:SNP) – commonly referred to as Sinopec — is an energy and chemical company that operates in China, as its name suggests. In the last year, SNP stock has gained 1%. Sinopec stock gets an “A” grade for cash flow, and a “B” grade for return on equity.
Top 7 Energy Stocks to Buy Right Now Ecopetrol (NYSE:EC) is involved with the exploration, production, refining, transportation, storage, distribution and selling of hydrocarbons. Ecopetrol stock has gained 54% in the last 12 months. EC stock gets a “B” grade for sales growth, a “B” grade for operating margin growth, an “A” grade for earnings momentum, an “A” grade for the magnitude in which earnings projections have increased over the past months, and an “A” grade for return on equity.
Top 7 Energy Stocks to Buy Right Now Enbridge (NYSEL:ENB) transports and distributes energy across North America, and has watched its stock value jump 25% since this time last year. Enbridge stock gets an “A” grade for sales growth, a “B” grade for the magnitude in which earnings projections have increased over the past months, and a “B” grade for return on equity.
Top 7 Energy Stocks to Buy Right Now Enterprise Products Partners (NYSE:EPD) works with consumers of natural gas, natural gas liquids, crude oil, refined products and certain petrochemicals. Since last April, Enterprise stock has gained 15%, compared to smaller gain by the broader markets. EPD stock gets a “B” grade for sales growth, an “A” grade for operating margin growth, a “B” grade for earnings momentum, an “A” grade for earnings growth, an “A” grade for its ability to exceed the consensus earnings estimates on Wall Street, an “A” grade for the magnitude in which earnings projections have increased over the past months, and a “B” grade for return on equity.
Top 7 Energy Stocks to Buy Right Now Kinder Morgan Energy (NYSE:KMP) is involved with approximately 29,000 miles of pipelines and 180 pipeline terminals. KMP stock is up 10% in the last year. KMP stock gets a “B” grade for earnings growth, an “A” grade for earnings momentum, and a “B” grade for the magnitude in which earnings projections have increased over the past months.
Top 7 Energy Stocks to Buy Right Now Kinder Morgan (NYSE:KMI) owns 11% of the limited partner interests of the Kinder Morgan Energy Partners but is a wholly different stock. This is also a buy. In the last 12 months, KMI stock is up 31%. KMI stock gets an “A” grade for return on equity.
Top 7 Energy Stocks to Buy Right Now TransCanada (NYSE:TRP) works with natural gas pipelines, oil pipelines and energy. TransCanada rounds out the list with a 3% gain in the past year. TRP stock gets a “B” grade for operating margin growth, and a “B” grade for earnings growth.
I watch more than 5,000 publicly traded companies with my Portfolio Grader tool, ranking companies by a number of fundamental and quantitative measures. And this week, I identify seven energy stocks to buy.
Here they are, in alphabetical order. Each one of these stocks gets an “A” or “B” according to my research, meaning it is a “strong buy” or “buy.”
Top 7 Energy Stocks to Buy Right Now China Petroleum & Chemical (NYSE:SNP) – commonly referred to as Sinopec — is an energy and chemical company that operates in China, as its name suggests. In the last year, SNP stock has gained 1%. Sinopec stock gets an “A” grade for cash flow, and a “B” grade for return on equity.
Top 7 Energy Stocks to Buy Right Now Ecopetrol (NYSE:EC) is involved with the exploration, production, refining, transportation, storage, distribution and selling of hydrocarbons. Ecopetrol stock has gained 54% in the last 12 months. EC stock gets a “B” grade for sales growth, a “B” grade for operating margin growth, an “A” grade for earnings momentum, an “A” grade for the magnitude in which earnings projections have increased over the past months, and an “A” grade for return on equity.
Top 7 Energy Stocks to Buy Right Now Enbridge (NYSEL:ENB) transports and distributes energy across North America, and has watched its stock value jump 25% since this time last year. Enbridge stock gets an “A” grade for sales growth, a “B” grade for the magnitude in which earnings projections have increased over the past months, and a “B” grade for return on equity.
Top 7 Energy Stocks to Buy Right Now Enterprise Products Partners (NYSE:EPD) works with consumers of natural gas, natural gas liquids, crude oil, refined products and certain petrochemicals. Since last April, Enterprise stock has gained 15%, compared to smaller gain by the broader markets. EPD stock gets a “B” grade for sales growth, an “A” grade for operating margin growth, a “B” grade for earnings momentum, an “A” grade for earnings growth, an “A” grade for its ability to exceed the consensus earnings estimates on Wall Street, an “A” grade for the magnitude in which earnings projections have increased over the past months, and a “B” grade for return on equity.
Top 7 Energy Stocks to Buy Right Now Kinder Morgan Energy (NYSE:KMP) is involved with approximately 29,000 miles of pipelines and 180 pipeline terminals. KMP stock is up 10% in the last year. KMP stock gets a “B” grade for earnings growth, an “A” grade for earnings momentum, and a “B” grade for the magnitude in which earnings projections have increased over the past months.
Top 7 Energy Stocks to Buy Right Now Kinder Morgan (NYSE:KMI) owns 11% of the limited partner interests of the Kinder Morgan Energy Partners but is a wholly different stock. This is also a buy. In the last 12 months, KMI stock is up 31%. KMI stock gets an “A” grade for return on equity.
Top 7 Energy Stocks to Buy Right Now TransCanada (NYSE:TRP) works with natural gas pipelines, oil pipelines and energy. TransCanada rounds out the list with a 3% gain in the past year. TRP stock gets a “B” grade for operating margin growth, and a “B” grade for earnings growth.
Top 6 Stocks to Buy for May in 2012
Stocks have been rising since the bottom made in October 2011, and this year the Dow has gained 8.14%, the S&P 500 is up 12%, the Nasdaq is up 18.67%, and the Russell 2000 has gained just under 5%. In a market where second-half gains in earnings are in question and volume and breadth suggest that a consolidation is due, where can you find reasonably valued stocks?
Stocks in the building sector, especially apartment construction, should grow, and health care companies should benefit with or without “Obama Care.” And, despite the current administration’s resistance to fossil-fuel programs, the assumption is that the Keystone XL pipeline will eventually be built.
The bull market is still in its infancy, and the public has mostly been absent, put off by a “wall of worry” that appears to be growing, and that is a positive for stocks. Plus, the Fed will continue to pump money into the market.
This month’s stock picks are generally focused on stocks that will benefit from the economic engines that drive the market.
Here are your top stocks to buy for April:
On March 30, the stock broke from a multiple top with a trading objective of $150. But longer-term investors should consider AVB as a cornerstone REIT with an objective of $175.
The stock executed a golden cross early in February, and is very close to breaking out from a complex of tops at around $40. If successful, XRAY could run to $48. Buy now with a stop-loss at $37.50.
After some weakness in the first half of the year, improved profits are expected in the second half of 2012, and 2013 revenues are expected to rise 9.7%. Earnings this year should fall to $1.46, but rise to $1.71 in 2013. The first-half decline should already be factored into the price of the stock. And these estimates may be very conservative in that the average life of cars “on the street” is currently over 10 years. Increased consumer appreciation of Ford’s product quality and confidence in its management should also raise demand for the stock.
Technically Ford broke its bear market resistance line in January, jumping from $10 in December to $13 in late January. It has been consolidating since then between $12 and $13, but just flashed a buy signal from its stochastic. A break from $13 should result in a quick run to $14 to $15. Longer-term investors should benefit from much higher prices and an increase in its dividend yield, now at 1.62%.
Earnings are estimated at 70 cents in 2012 versus 43 cents in 2011. The airline is known for the high quality of its management and enjoys an excellent reputation among customers.
Although technically still in a bear market, LUV has a solid base at $8 and recently flashed a buy signal from the stochastic and our internal indicator, the Collins-Bollinger Reversal (CBR). The trading target for LUV is $9 to $9.50, but long-term investors have an opportunity to buy this stock for a possible double or more.
In January, the U.S. State Department rejected TRP’s application to build Keystone XL, an extension that would carry heavy crude from the Alberta oil sands and Bakken Shale to Gulf of Mexico refiners. Earnings for 2012 and 2013 are expected to be $2.35 and $2.70, respectively, but could be higher if the overall Keystone XL project is approved. President Obama has already approved the southern half of the line from Cushing, Okla., to the Gulf, saving months of delays. If the entire line were to be approved, the company’s earnings would improve significantly.
Technically the stock is in a bull channel with prices hugging the 50-day moving average. TRP’s overall price objective is $50-plus, depending on the political swings in the fall. Buy under $42.
Credit Suisse analysts say, “We continue to view United as the best-positioned large-cap managed care plan for where we see the best growth prospects… especially in the shift to Bundled Payments under Medicare.”
They look for earnings of $4.85 this year compared to $4.73 in 2011, and an increase to $5.60 in 2013. UNH has a dividend yield of 1.17%.
Technically the stock consolidated in a broad nine-month cup, then broke from that cup in February at $54. From mid-February until recently, it consolidated between $54 and $55. Last week, it broke from $56 to $58.10. The trading target for UNH is $65. Longer term, Credit Suisse is predicting an annual target of $72.
Stocks in the building sector, especially apartment construction, should grow, and health care companies should benefit with or without “Obama Care.” And, despite the current administration’s resistance to fossil-fuel programs, the assumption is that the Keystone XL pipeline will eventually be built.
The bull market is still in its infancy, and the public has mostly been absent, put off by a “wall of worry” that appears to be growing, and that is a positive for stocks. Plus, the Fed will continue to pump money into the market.
This month’s stock picks are generally focused on stocks that will benefit from the economic engines that drive the market.
Here are your top stocks to buy for April:
Top Stock to Buy in 2012 #1 – AvalonBay Communities (AVB)
Real estate investment trust (REIT) AvalonBay Communities (NYSE:AVB) specializes in upscale apartment communities. An improving U.S. economy with high apartment occupancy levels should result in higher rental rates for AVB, and new development activities will be an important driver of earnings in 2012. Funds from operations (FFO) per share in 2012 is forecast at $5.30, up from $4.57 in 2011. AVB has a dividend yield of 2.83%, and it is expected to increase.On March 30, the stock broke from a multiple top with a trading objective of $150. But longer-term investors should consider AVB as a cornerstone REIT with an objective of $175.
Top Stock to Buy in 2012 #2 – DENTSPLY International (XRAY)
DENTSPLY International (NASDAQ:XRAY), the world’s largest dental products maker, should benefit from demographic trends and a rising demand for dental services in underdeveloped nations. S&P forecasts earnings of $2.30 in 2012 and $2.60 in 2013.The stock executed a golden cross early in February, and is very close to breaking out from a complex of tops at around $40. If successful, XRAY could run to $48. Buy now with a stop-loss at $37.50.
Top Stock to Buy in 2012 #3 – Ford Motor Co. (F)
Ford Motor Co. (NYSE:F), the second largest producer of cars and trucks in the United States, also has automobile financing and insurance operations. Analysts expect Ford to increase revenues this year chiefly from operations in the United States, China, and most European countries.After some weakness in the first half of the year, improved profits are expected in the second half of 2012, and 2013 revenues are expected to rise 9.7%. Earnings this year should fall to $1.46, but rise to $1.71 in 2013. The first-half decline should already be factored into the price of the stock. And these estimates may be very conservative in that the average life of cars “on the street” is currently over 10 years. Increased consumer appreciation of Ford’s product quality and confidence in its management should also raise demand for the stock.
Technically Ford broke its bear market resistance line in January, jumping from $10 in December to $13 in late January. It has been consolidating since then between $12 and $13, but just flashed a buy signal from its stochastic. A break from $13 should result in a quick run to $14 to $15. Longer-term investors should benefit from much higher prices and an increase in its dividend yield, now at 1.62%.
Top Stock to Buy in 2012 #4 – Southwest Airlines (LUV)
Southwest Airlines (NYSE:LUV) is our “bottom fisher’s choice” for this month. The stock fell from over $14 in October 2010 to almost $7 in October 2011. But a turnaround appears to be occurring with the acquisition of AirTran, which resulted in an immediate 20% growth.Earnings are estimated at 70 cents in 2012 versus 43 cents in 2011. The airline is known for the high quality of its management and enjoys an excellent reputation among customers.
Although technically still in a bear market, LUV has a solid base at $8 and recently flashed a buy signal from the stochastic and our internal indicator, the Collins-Bollinger Reversal (CBR). The trading target for LUV is $9 to $9.50, but long-term investors have an opportunity to buy this stock for a possible double or more.
Top Stock to Buy in 2012 #5 – TransCanada Corporation (TRP)
TransCanada Corporation (NYSE:TRP) is an energy infrastructure company that focuses mainly on natural gas and oil pipelines. It is the primary developer and manager of the Keystone pipeline system, and it is the company that manages non-regulated facilities in Alberta, Canada.In January, the U.S. State Department rejected TRP’s application to build Keystone XL, an extension that would carry heavy crude from the Alberta oil sands and Bakken Shale to Gulf of Mexico refiners. Earnings for 2012 and 2013 are expected to be $2.35 and $2.70, respectively, but could be higher if the overall Keystone XL project is approved. President Obama has already approved the southern half of the line from Cushing, Okla., to the Gulf, saving months of delays. If the entire line were to be approved, the company’s earnings would improve significantly.
Technically the stock is in a bull channel with prices hugging the 50-day moving average. TRP’s overall price objective is $50-plus, depending on the political swings in the fall. Buy under $42.
Top Stock to Buy in 2012 #6 – United Health Group (UNH)
UnitedHealth Group (NYSE:UNH), a diversified health and well-being company, provides health care programs, retirement plans, has a life sciences group, and provides health plans to physicians, clinical services, etc.Credit Suisse analysts say, “We continue to view United as the best-positioned large-cap managed care plan for where we see the best growth prospects… especially in the shift to Bundled Payments under Medicare.”
They look for earnings of $4.85 this year compared to $4.73 in 2011, and an increase to $5.60 in 2013. UNH has a dividend yield of 1.17%.
Technically the stock consolidated in a broad nine-month cup, then broke from that cup in February at $54. From mid-February until recently, it consolidated between $54 and $55. Last week, it broke from $56 to $58.10. The trading target for UNH is $65. Longer term, Credit Suisse is predicting an annual target of $72.
5 Best Emerging Growth Stocks to Buy Right Now
I’m very excited about the five stocks at the top of my Emerging Growth Buy List this month — these are some of the most powerful small-cap companies on Wall Street right now, and they are experiencing tremendous growth. In the past month alone, these five stocks jumped an average of nearly 11%, while the major indices posted a 2% gain.
Let’s take a look at my Top 5 Emerging Growth Stocks for April:
Right now, analysts forecast 25% sales growth and 26.7% earnings growth — compared with the 20% earnings growth forecast for the rest of the Soft Drinks industry. Analysts have also been steadily increasing their earnings estimates, to the tune of 12% in the past two months. Typically, such aggressive earnings revisions precede future earnings surprises. This stock has been appreciating in a smooth, steady manner so I recommend that you add shares.
And the way things are shaping up, Susser’s’ next earnings announcement (due in late May) should be equally stunning. Currently analysts are looking for 16% sales growth and 100% earnings growth — that’s compared with the 18.4% forecast for the rest of the Grocery Stores industry. And, in the past two months, analysts have upwardly revised their estimates by 200%. There is still plenty of time until Susser’s earnings announcement, so now is a great time to plan ahead and pick up shares.
Currently, analysts expect the drugmaker to grow sales by 136.4% and earnings by 155%, while the rest of the biotechnology industry is headed towards just 16.9% earnings growth. This company has a strong history of earnings surprises — in the past four quarters it has trumped expectations by 17.6%, 15%, 42% and 11.9% respectively. Finally, in the past two months, analysts have upwardly revised their estimates by 21%, so it looks like the company will post another double-digit surprise this quarter. With this in mind, I recommend that you purchase shares of this stock.
Looking ahead, analysts forecast 40.6% sales growth and 95.2% earnings growth for this quarter. TESS remains a strong buy.
Let’s take a look at my Top 5 Emerging Growth Stocks for April:
5 Best Emerging Growth Stocks to Buy Right Now #1 Monster Beverage Corporation
Monster Beverage Corporation (NASDAQ:MNST) is a play on the energy drink market; it is responsible for Monster, the second most popular energy drink in the nation. The company’s monster grip on the youth market makes it a fantastic takeover candidate by a larger beverage maker. Back in January, 100-year-old Hansen Natural Corp. revamped its brand by adopting the Monster Beverage name and ticker symbol. And, it looks like the company’s new look has piqued investor interest — the stock has gained 30% since then. Monster’s next earnings announcement is tentatively scheduled for early May, and it is already shaping up to have a strong showing.Right now, analysts forecast 25% sales growth and 26.7% earnings growth — compared with the 20% earnings growth forecast for the rest of the Soft Drinks industry. Analysts have also been steadily increasing their earnings estimates, to the tune of 12% in the past two months. Typically, such aggressive earnings revisions precede future earnings surprises. This stock has been appreciating in a smooth, steady manner so I recommend that you add shares.
- Also from Louis Navellier: 6 Small Cap Stocks to Sell Now
5 Best Emerging Growth Stocks to Buy Right Now #2 Susser Holdings Corporation
Susser Holdings Corporation (NASDAQ:SUSS) is a great stock to hold if you want to profit from summer road trips. This company operates a system of 540 Stripes convenience stores and also supplies motor fuels to 560 dealers across the country. So, U.S. travelers are Sussers’ bread and butter. Higher diesel and gasoline prices continue to help to boost the company’s overall sales growth, so the summer months should be very good to this company. This company also has a history of blowout earnings surprises, trouncing estimates by 100%, 135%, 86% and 61% in the past four quarters.And the way things are shaping up, Susser’s’ next earnings announcement (due in late May) should be equally stunning. Currently analysts are looking for 16% sales growth and 100% earnings growth — that’s compared with the 18.4% forecast for the rest of the Grocery Stores industry. And, in the past two months, analysts have upwardly revised their estimates by 200%. There is still plenty of time until Susser’s earnings announcement, so now is a great time to plan ahead and pick up shares.
5 Best Emerging Growth Stocks to Buy Right Now #3
Questcor Pharmaceuticals Inc.
Questcor Pharmaceuticals Inc. (NASDAQ:QCOR) has been a Top 5 veteran for some time now. It specializes in prescription drugs for central nervous system disorders, and its primary product, H.P. Acthar Gel, is used to treat multiple sclerosis. Lately, I have been getting questions on why I’ve kept Questcor on the Top 5 despite the fact that it has been sitting still recently. Well, one thing that you should know about Questcor is that it is what I like to call a “bunny” stock. This means it tends to “sit” during the quiet times and then suddenly “hop” on good earnings news. So, just because a stock has been sitting for a little while doesn’t mean that it doesn’t have explosive profit potential. In the case of Questcor, this company is headed towards a stunning earnings announcement, so I fully expect it to hop when it announces earnings in late May.Currently, analysts expect the drugmaker to grow sales by 136.4% and earnings by 155%, while the rest of the biotechnology industry is headed towards just 16.9% earnings growth. This company has a strong history of earnings surprises — in the past four quarters it has trumped expectations by 17.6%, 15%, 42% and 11.9% respectively. Finally, in the past two months, analysts have upwardly revised their estimates by 21%, so it looks like the company will post another double-digit surprise this quarter. With this in mind, I recommend that you purchase shares of this stock.
5 Best Emerging Growth Stocks to Buy Right Now #4
Plains All America Pipeline L.P.
Plains All America Pipeline L.P. (NYSE:PAA) is involved with the transportation and storage of crude oil, so it has been profiting from the latest boom in gasoline prices. Better yet, this company has been aggressively expanding its footprint through five strategic acquisitions totaling $2.3 billion dollars. Notably, the company is acquiring British Petroleum’s (BP) Canadian natural gas liquid business for $1.67 billion; this deal is expected to close by the end of the second quarter. To fund this acquisition, Plains recently completed a five million-share secondary offering at $80.03 per share in early March. Now, secondary offerings tend to depress stock share prices, but this presents the perfect opportunity to get in at a good level with this stock.5 Best Emerging Growth Stocks to Buy Right Now #5
Tessco Technologies Inc.
TESSCO Technologies Inc. (NASDAQ:TESS), provides a broad range of products that support mobility and data wireless systems to organizational clients in the U.S. And TESSCO’s business is booming. At the end of March, management announced that the company has been awarded a five-year contract by Western States Contracting Alliance (WSCA). WSCA is a state purchasing cooperative association, and it needs TESSCO to provide mobile device accessories to state agencies nationwide. TESSCO will accomplish this through its extensive network with the best manufacturers in the industry. At this time, every state in the union, including their agencies and employees, is eligible to participate. No financial details have been released yet, but this will undoubtedly boost TESSCO’s top line.Looking ahead, analysts forecast 40.6% sales growth and 95.2% earnings growth for this quarter. TESS remains a strong buy.
Top 6 Stocks to Buy for April in 2012
Stocks in 2012 have been rising since the bottom made in October 2011, and this year the Dow has gained 8.14%, the S&P 500 is up 12%, the Nasdaq is up 18.67%, and the Russell 2000 has gained just under 5%. In a market where second-half gains in earnings are in question and volume and breadth suggest that a consolidation is due, where can you find reasonably valued stocks?
Stocks in the building sector, especially apartment construction, should grow, and health care companies should benefit with or without “Obama Care.” And, despite the current administration’s resistance to fossil-fuel programs, the assumption is that the Keystone XL pipeline will eventually be built.
The bull market is still in its infancy, and the public has mostly been absent, put off by a “wall of worry” that appears to be growing, and that is a positive for stocks. Plus, the Fed will continue to pump money into the market.
This month’s stock picks are generally focused on stocks that will benefit from the economic engines that drive the market.
Here are your top stocks to buy for April:
On March 30, the stock broke from a multiple top with a trading objective of $150. But longer-term investors should consider AVB as a cornerstone REIT with an objective of $175.
The stock executed a golden cross early in February, and is very close to breaking out from a complex of tops at around $40. If successful, XRAY could run to $48. Buy now with a stop-loss at $37.50.
After some weakness in the first half of the year, improved profits are expected in the second half of 2012, and 2013 revenues are expected to rise 9.7%. Earnings this year should fall to $1.46, but rise to $1.71 in 2013. The first-half decline should already be factored into the price of the stock. And these estimates may be very conservative in that the average life of cars “on the street” is currently over 10 years. Increased consumer appreciation of Ford’s product quality and confidence in its management should also raise demand for the stock.
Technically Ford broke its bear market resistance line in January, jumping from $10 in December to $13 in late January. It has been consolidating since then between $12 and $13, but just flashed a buy signal from its stochastic. A break from $13 should result in a quick run to $14 to $15. Longer-term investors should benefit from much higher prices and an increase in its dividend yield, now at 1.62%.
Earnings are estimated at 70 cents in 2012 versus 43 cents in 2011. The airline is known for the high quality of its management and enjoys an excellent reputation among customers.
Although technically still in a bear market, LUV has a solid base at $8 and recently flashed a buy signal from the stochastic and our internal indicator, the Collins-Bollinger Reversal (CBR). The trading target for LUV is $9 to $9.50, but long-term investors have an opportunity to buy this stock for a possible double or more.
In January, the U.S. State Department rejected TRP’s application to build Keystone XL, an extension that would carry heavy crude from the Alberta oil sands and Bakken Shale to Gulf of Mexico refiners. Earnings for 2012 and 2013 are expected to be $2.35 and $2.70, respectively, but could be higher if the overall Keystone XL project is approved. President Obama has already approved the southern half of the line from Cushing, Okla., to the Gulf, saving months of delays. If the entire line were to be approved, the company’s earnings would improve significantly.
Technically the stock is in a bull channel with prices hugging the 50-day moving average. TRP’s overall price objective is $50-plus, depending on the political swings in the fall. Buy under $42.
Credit Suisse analysts say, “We continue to view United as the best-positioned large-cap managed care plan for where we see the best growth prospects… especially in the shift to Bundled Payments under Medicare.”
They look for earnings of $4.85 this year compared to $4.73 in 2011, and an increase to $5.60 in 2013. UNH has a dividend yield of 1.17%.
Technically the stock consolidated in a broad nine-month cup, then broke from that cup in February at $54. From mid-February until recently, it consolidated between $54 and $55. Last week, it broke from $56 to $58.10. The trading target for UNH is $65. Longer term, Credit Suisse is predicting an annual target of $72.
Stocks in the building sector, especially apartment construction, should grow, and health care companies should benefit with or without “Obama Care.” And, despite the current administration’s resistance to fossil-fuel programs, the assumption is that the Keystone XL pipeline will eventually be built.
The bull market is still in its infancy, and the public has mostly been absent, put off by a “wall of worry” that appears to be growing, and that is a positive for stocks. Plus, the Fed will continue to pump money into the market.
This month’s stock picks are generally focused on stocks that will benefit from the economic engines that drive the market.
Here are your top stocks to buy for April:
Top Stock to Buy in 2012 #1 – AvalonBay Communities (AVB)
Real estate investment trust (REIT) AvalonBay Communities (NYSE:AVB) specializes in upscale apartment communities. An improving U.S. economy with high apartment occupancy levels should result in higher rental rates for AVB, and new development activities will be an important driver of earnings in 2012. Funds from operations (FFO) per share in 2012 is forecast at $5.30, up from $4.57 in 2011. AVB has a dividend yield of 2.83%, and it is expected to increase.On March 30, the stock broke from a multiple top with a trading objective of $150. But longer-term investors should consider AVB as a cornerstone REIT with an objective of $175.
Top Stock to Buy in 2012 #2 – DENTSPLY International (XRAY)
DENTSPLY International (NASDAQ:XRAY), the world’s largest dental products maker, should benefit from demographic trends and a rising demand for dental services in underdeveloped nations. S&P forecasts earnings of $2.30 in 2012 and $2.60 in 2013.The stock executed a golden cross early in February, and is very close to breaking out from a complex of tops at around $40. If successful, XRAY could run to $48. Buy now with a stop-loss at $37.50.
Top Stock to Buy in 2012 #3 – Ford Motor Co. (F)
Ford Motor Co. (NYSE:F), the second largest producer of cars and trucks in the United States, also has automobile financing and insurance operations. Analysts expect Ford to increase revenues this year chiefly from operations in the United States, China, and most European countries.After some weakness in the first half of the year, improved profits are expected in the second half of 2012, and 2013 revenues are expected to rise 9.7%. Earnings this year should fall to $1.46, but rise to $1.71 in 2013. The first-half decline should already be factored into the price of the stock. And these estimates may be very conservative in that the average life of cars “on the street” is currently over 10 years. Increased consumer appreciation of Ford’s product quality and confidence in its management should also raise demand for the stock.
Technically Ford broke its bear market resistance line in January, jumping from $10 in December to $13 in late January. It has been consolidating since then between $12 and $13, but just flashed a buy signal from its stochastic. A break from $13 should result in a quick run to $14 to $15. Longer-term investors should benefit from much higher prices and an increase in its dividend yield, now at 1.62%.
Top Stock to Buy in 2012#4 – Southwest Airlines (LUV)
Southwest Airlines (NYSE:LUV) is our “bottom fisher’s choice” for this month. The stock fell from over $14 in October 2010 to almost $7 in October 2011. But a turnaround appears to be occurring with the acquisition of AirTran, which resulted in an immediate 20% growth.Earnings are estimated at 70 cents in 2012 versus 43 cents in 2011. The airline is known for the high quality of its management and enjoys an excellent reputation among customers.
Although technically still in a bear market, LUV has a solid base at $8 and recently flashed a buy signal from the stochastic and our internal indicator, the Collins-Bollinger Reversal (CBR). The trading target for LUV is $9 to $9.50, but long-term investors have an opportunity to buy this stock for a possible double or more.
Top Stock to Buy in 2012 #5 – TransCanada Corporation (TRP)
TransCanada Corporation (NYSE:TRP) is an energy infrastructure company that focuses mainly on natural gas and oil pipelines. It is the primary developer and manager of the Keystone pipeline system, and it is the company that manages non-regulated facilities in Alberta, Canada.In January, the U.S. State Department rejected TRP’s application to build Keystone XL, an extension that would carry heavy crude from the Alberta oil sands and Bakken Shale to Gulf of Mexico refiners. Earnings for 2012 and 2013 are expected to be $2.35 and $2.70, respectively, but could be higher if the overall Keystone XL project is approved. President Obama has already approved the southern half of the line from Cushing, Okla., to the Gulf, saving months of delays. If the entire line were to be approved, the company’s earnings would improve significantly.
Technically the stock is in a bull channel with prices hugging the 50-day moving average. TRP’s overall price objective is $50-plus, depending on the political swings in the fall. Buy under $42.
Top Stock to Buy in 2012#6 – United Health Group (UNH)
UnitedHealth Group (NYSE:UNH), a diversified health and well-being company, provides health care programs, retirement plans, has a life sciences group, and provides health plans to physicians, clinical services, etc.Credit Suisse analysts say, “We continue to view United as the best-positioned large-cap managed care plan for where we see the best growth prospects… especially in the shift to Bundled Payments under Medicare.”
They look for earnings of $4.85 this year compared to $4.73 in 2011, and an increase to $5.60 in 2013. UNH has a dividend yield of 1.17%.
Technically the stock consolidated in a broad nine-month cup, then broke from that cup in February at $54. From mid-February until recently, it consolidated between $54 and $55. Last week, it broke from $56 to $58.10. The trading target for UNH is $65. Longer term, Credit Suisse is predicting an annual target of $72.
Top 9 Financial Stocks to Invest In April For 2012
Mar 22, 2012, 6:30 am EDT | By Louis Navellier, Editor, Blue Chip Growth
In the wake of recent Federal Reserve stress tests, some banks are looking better than others. While there are indeed some systemic risks to the financial sector, there are also opportunities for the very best players.I watch more than 5,000 publicly traded companies with my Portfolio Grader tool, ranking companies by a number of fundamental and quantitative measures. And this week, I’ve identified nine financial stocks to buy.
Each one of these stocks gets an “A” or “B” according to my research, meaning it is a “strong buy” or “buy.” Here they are:
Top 9 Financial Stocks to Invest In April For 2012 - BlackRock (NYSE:BLK) is an independent investment management firm. In the last year, BLK stock is up 10%. BlackRock stock gets a “B” grade for the magnitude in which earnings projections have increased over the past months. For more information, view my complete analysis of BLK stock.
Top 9 Financial Stocks to Invest In April For 2012 - Mitsubishi UFJ Financial (NYSE:MTU) is a Japanese holding company mainly engaged in the banking business. Mitsubishi Financial has posted a gain of 11% since this time last year. MTU stock gets a “B” grade for operating margin growth, a “B” grade for the magnitude in which earnings projections have increased over the past months, and an “A” grade for cash flow. For more information, view my complete analysis of MTU stock.
Top 9 Financial Stocks to Invest In April For 2012 - U.S. Bancorp (NYSE:USB) provides its customers with lending and depository services, cash management, foreign exchange and trust and investment management services. Since this time last March, USB is up 19%. USB stock gets an “A” grade for operating margin growth, a “B” grade for earnings growth, a “B” grade for its ability to exceed the consensus earnings estimates on Wall Street, a “B” grade for the magnitude in which earnings projections have increased over the past months, an “A” grade for cash flow, and a “B” grade for return on equity. For more information, view my complete analysis of USB stock.
Top 9 Financial Stocks to Invest In April For 2012 - Sumitomo Mitsui Financial Group (NYSE:SMFG) is another Japanese financial services-related company to make the list. Sumitomo Financial has jumped 9% in the last 12 months. SMFG stock gets a “B” grade for earnings momentum, an “A” grade for the magnitude in which earnings projections have increased over the past months, and an “A” grade for cash flow in my Portfolio Grader tool. For more information, view my complete analysis of SMFG stock.
Top 9 Financial Stocks to Invest In April For 2012 - BB&T (NYSE:BBT) owns the commercial banking subsidiary, Branch Banking and Trust Company, and has posted a gain of 16% since last March. BB&T stock gets an “A” grade for operating margin growth, an “A” grade for earnings growth, a “B” grade for earnings momentum, an “A” grade for the magnitude in which earnings projections have increased over the past months, and a “B” grade for cash flow. For more information, view my complete analysis of BBT stock.
Top 9 Financial Stocks to Invest In April For 2012 - Banco de Chile (NYSE:BCH) provides a range of credit and non-credit products and services to its Chilean customers. Banco de Chile is up 23% in the last 12 months. BCH stock gets an “A” grade for return on equity. For more information, view my complete analysis of BCH stock.
Top 9 Financial Stocks to Invest In April For 2012 - Credicorp (NYSE:BAP) is involved with banking, pension funds, insurance and brokerage services. BAP stock has outpaced the broader markets with a gain of 21% in the last year. Credicorp stock gets a “B” grade for sales growth, a “B” grade for earnings momentum, a “B” grade for the magnitude in which earnings projections have increased over the past months, an “A” grade for cash flow, and an “A” grade for return on equity. For more information, view my complete analysis of BAP stock.
Top 9 Financial Stocks to Invest In April For 2012 - American Express (NYSE:AXP) is best known for its charge and credit payment card products. Since last March, American Express stock has gained 29%. AXP stock gets a “B” grade for operating margin growth, a “B” grade for earnings growth, a “B” grade for the magnitude in which earnings projections have increased over the past months, a “B” grade for cash flow, and an “A” grade for return on equity. For more information, view my complete analysis of AXP stock.
Top 9 Financial Stocks to Invest In April For 2012 - Discover Financial Services (NYSE:DFS) is also best known for its credit card service. Since last March, Discover stock has posted the biggest gain on this list at 45%. DFS stock gets an “A” grade for sales growth, a “B” grade for operating margin growth, an “A” grade for the magnitude in which earnings projections have increased over the past months, an “A” grade for cash flow, and an “A” grade for return on equity.
7 Best Industrial Stocks to Sell in 2012
After the banks and homebuilders that fueled the housing bubble, the industrial sector was perhaps hardest hit by the financial crisis and resulting economic downturn. As overall spending and activity slowed, manufacturers took a beating — and many haven’t recovered.
I watch more than 5,000 publicly traded companies with my Portfolio Grader tool, ranking companies by a number of fundamental and quantitative measures. And this week, I’ve identified seven industrial stocks to sell.
Each one of these stocks gets a “D” or “F” according to my research, meaning it is a “sell” or “strong sell.”
7 Best Industrial Stocks to Sell in 2012 - ABB Ltd. (NYSE:ABB) works with power and automation technologies. While the Dow Jones has posted a gain of 9% in the last year, ABB has recorded a loss of 11% in the same time. ABB stock gets an “F” grade for its ability to exceed the consensus earnings estimates on Wall Street and a “D” grade for the magnitude with which earnings projections have increased over the past months. For more information, view my complete analysis of ABB stock.
7 Best Industrial Stocks to Sell in 2012 - Emerson Electric Co. (NYSE:EMR) is a diversified global technology company that has dropped 13% in the past 12 months. Emerson stock gets a “D” grade for sales growth, a “D” grade for earnings growth and a “D” grade for its ability to exceed the consensus earnings estimates. For more information, view my complete analysis of EMR stock.
7 Best Industrial Stocks to Sell in 2012 - Koninklijke Philips Electronics (NYSE:PHG) is the parent company of Philips Group and has 118 production sites in 27 countries. PHG stock has dipped more than 36% since March 2011. Philips stock gets a “D” grade for sales growth, an “F” grade for operating margin growth, an “F” grade for earnings growth, a “D” grade for earnings momentum, an “F” grade for its ability to exceed the consensus earnings estimates on Wall Street, a “D” grade for the magnitude in which earnings projections have increased over the past months, a “D” grade for cash flow and a “D” grade for return on equity. For more information, view my complete analysis of PHG stock.
7 Best Industrial Stocks to Sell in 2012 - General Electric Co. (NYSE:GE) is the most well-known stock on this list. It’s involved in aircraft engines, power generation, water processing, household appliances, medical imaging, consumer financing and other endeavors. Despite its big name, GE has posted a loss of 4% in the last year. GE stock gets an “F” grade for sales growth. For more information, view my complete analysis of GE stock.
7 Best Industrial Stocks to Sell in 2012 - Siemens (NYSE:SI) is an electronics and electrical-engineering company. Despite gains by the broader markets, SI stock is down 21% in the last year. Siemens stock gets a “D” grade for sales growth, a “D” grade for earnings growth, an “F” grade for earnings momentum, a “D” grade for its ability to exceed the consensus earnings estimates on Wall Street and a “D” grade for the magnitude with which earnings projections have increased over the past months. For more information, view my complete analysis of SI stock.
7 Best Industrial Stocks to Sell in 2012 - Ingersoll-Rand (NYSE:IR) is involved in enhancing the comfort of air in homes and buildings, in the transport of food and perishables and in secure homes and commercial properties. Ingersoll-Rand stock has lost 13% in the last 12 months. IR stock gets an “F” grade for sales growth, an “F” grade for operating margin growth and a “D” grade for cash flow. For more information, view my complete analysis of IR stock.
CSX Corp. (NYSE: CSX) is a transportation supplier that rounds out the list with a 17% drop in the past year. CSX stock gets a “D” grade for its ability to exceed the consensus earnings estimates on Wall Street. For more information, view my complete analysis of CSX stock.
I watch more than 5,000 publicly traded companies with my Portfolio Grader tool, ranking companies by a number of fundamental and quantitative measures. And this week, I’ve identified seven industrial stocks to sell.
Each one of these stocks gets a “D” or “F” according to my research, meaning it is a “sell” or “strong sell.”
7 Best Industrial Stocks to Sell in 2012 - ABB Ltd. (NYSE:ABB) works with power and automation technologies. While the Dow Jones has posted a gain of 9% in the last year, ABB has recorded a loss of 11% in the same time. ABB stock gets an “F” grade for its ability to exceed the consensus earnings estimates on Wall Street and a “D” grade for the magnitude with which earnings projections have increased over the past months. For more information, view my complete analysis of ABB stock.
7 Best Industrial Stocks to Sell in 2012 - Emerson Electric Co. (NYSE:EMR) is a diversified global technology company that has dropped 13% in the past 12 months. Emerson stock gets a “D” grade for sales growth, a “D” grade for earnings growth and a “D” grade for its ability to exceed the consensus earnings estimates. For more information, view my complete analysis of EMR stock.
7 Best Industrial Stocks to Sell in 2012 - Koninklijke Philips Electronics (NYSE:PHG) is the parent company of Philips Group and has 118 production sites in 27 countries. PHG stock has dipped more than 36% since March 2011. Philips stock gets a “D” grade for sales growth, an “F” grade for operating margin growth, an “F” grade for earnings growth, a “D” grade for earnings momentum, an “F” grade for its ability to exceed the consensus earnings estimates on Wall Street, a “D” grade for the magnitude in which earnings projections have increased over the past months, a “D” grade for cash flow and a “D” grade for return on equity. For more information, view my complete analysis of PHG stock.
7 Best Industrial Stocks to Sell in 2012 - General Electric Co. (NYSE:GE) is the most well-known stock on this list. It’s involved in aircraft engines, power generation, water processing, household appliances, medical imaging, consumer financing and other endeavors. Despite its big name, GE has posted a loss of 4% in the last year. GE stock gets an “F” grade for sales growth. For more information, view my complete analysis of GE stock.
7 Best Industrial Stocks to Sell in 2012 - Siemens (NYSE:SI) is an electronics and electrical-engineering company. Despite gains by the broader markets, SI stock is down 21% in the last year. Siemens stock gets a “D” grade for sales growth, a “D” grade for earnings growth, an “F” grade for earnings momentum, a “D” grade for its ability to exceed the consensus earnings estimates on Wall Street and a “D” grade for the magnitude with which earnings projections have increased over the past months. For more information, view my complete analysis of SI stock.
7 Best Industrial Stocks to Sell in 2012 - Ingersoll-Rand (NYSE:IR) is involved in enhancing the comfort of air in homes and buildings, in the transport of food and perishables and in secure homes and commercial properties. Ingersoll-Rand stock has lost 13% in the last 12 months. IR stock gets an “F” grade for sales growth, an “F” grade for operating margin growth and a “D” grade for cash flow. For more information, view my complete analysis of IR stock.
CSX Corp. (NYSE: CSX) is a transportation supplier that rounds out the list with a 17% drop in the past year. CSX stock gets a “D” grade for its ability to exceed the consensus earnings estimates on Wall Street. For more information, view my complete analysis of CSX stock.
5 Health Care Penny Stocks to Buy in 2012
One of the residual benefits of the cantankerous debate regarding the debt ceiling in Washington is the health care sector. The debate on raising the debt limit has demonstrated the remarkable gains in political clout of the tea party and fiscally conservative elements of the GOP. With that clout, expect current health care legislation to be repealed or changed entirely at some point in the near future.
Already, the health care sector has been humming along in 2011. Stocks in the group have been rallying as politicians’ attention shifted to other priorities. Free to operate without the fear of onerous regulations, investors have been bidding up health care stocks like UnitedHealth (NYSE:UNH) and WellPoint (NYSE:WLP).
The biggest gains are yet to come, especially if the current health care law is repealed. I expect outsized gains in the sector, and I am particularly enamored with health care penny stocks. The SEC defines a penny stock as being less than $5 per share. The penny stocks mentioned here are all real companies with promising futures despite low prices.
Catalyst Pharmaceutical is a biopharmaceutical company in search of drugs to treat neural system disorders. As one would expect, the company is losing money. The play here is to buy future success today. There really are only two outcomes: huge success or failure. Thus, this a higher-risk/high-reward health care penny stock.
The medical device-maker has signed impressive purchasing agreements that bode well for its future. The company, now trading for more than $1 per share, is listed on NASDAQ. That listing is likely to attract the attention of more buyers that otherwise would shun the company. A focus on chiropractic and alternative solutions to physical ailments holds much promise for this health care penny stock.
The company generated a profit in excess of $1 million on sales of $7.6 million. The sales number represented an improvement of 24% from the year prior. As quickly as the market bid up shares, the rug was pulled out as sellers emerged. Shares now trade below $2. Investors might have been spooked by the company’s admission that future buying might not be similar to the impressive quarter announced.
That said, Pro-Dex is working hard to diversify its customer base. To the extent they are successful, this stock will rally back to more than $3 per share – and then some.
Shares soared on the news of the bid to more than $2 per share, but the eventual rejection of the offer has resulted in shares drifting lower. You can buy the stock today for $1.70 per share. As acceptance of its prostate treatment gains momentum, look for TGX to soar higher.
The company is in the business of providing contract-based research and development in the biotechnology industry. The tiny $9 million market cap company stands to benefit from the increasing research activity in this critical area of health care. As more barriers to research are removed, this stock should climb higher. It certainly is worthy of a speculation at this low price.
Already, the health care sector has been humming along in 2011. Stocks in the group have been rallying as politicians’ attention shifted to other priorities. Free to operate without the fear of onerous regulations, investors have been bidding up health care stocks like UnitedHealth (NYSE:UNH) and WellPoint (NYSE:WLP).
The biggest gains are yet to come, especially if the current health care law is repealed. I expect outsized gains in the sector, and I am particularly enamored with health care penny stocks. The SEC defines a penny stock as being less than $5 per share. The penny stocks mentioned here are all real companies with promising futures despite low prices.
5 Health Care Penny Stocks to Buy in 2012 - Catalyst Pharmaceutical Partners
Catalyst Pharmaceutical Partners (NASDAQ:CPRX) is a tiny health care penny stock with a $35 million market cap. Despite the low price, the average volume of shares traded is at 129,000 per day. There is plenty of action in this stock, including a recent analyst recommendation of “outperform” from Wall Street firm Cowen.Catalyst Pharmaceutical is a biopharmaceutical company in search of drugs to treat neural system disorders. As one would expect, the company is losing money. The play here is to buy future success today. There really are only two outcomes: huge success or failure. Thus, this a higher-risk/high-reward health care penny stock.
5 Health Care Penny Stocks to Buy in 2012 -
Dynatronics
Low-priced health care penny stocks can generate significant returns. Dynatronics (NASDAQ:DYNT) is one of the best-performing under-$5 stocks in the market, with a gain of more than 100% this year.The medical device-maker has signed impressive purchasing agreements that bode well for its future. The company, now trading for more than $1 per share, is listed on NASDAQ. That listing is likely to attract the attention of more buyers that otherwise would shun the company. A focus on chiropractic and alternative solutions to physical ailments holds much promise for this health care penny stock.
5 Health Care Penny Stocks to Buy in 2012 -
Pro-Dex
Pro-Dex (NASDAQ:PDEX) is a medical device company specializing in rotary drives and motors for physician and dental practitioners. This tiny health care penny stock has a valuation of only $6 million, and as a result, shares are volatile. In May, shares soared to more than $3, thanks in part to an impressive earnings report.The company generated a profit in excess of $1 million on sales of $7.6 million. The sales number represented an improvement of 24% from the year prior. As quickly as the market bid up shares, the rug was pulled out as sellers emerged. Shares now trade below $2. Investors might have been spooked by the company’s admission that future buying might not be similar to the impressive quarter announced.
That said, Pro-Dex is working hard to diversify its customer base. To the extent they are successful, this stock will rally back to more than $3 per share – and then some.
5 Health Care Penny Stocks to Buy in 2012 -
Theragenics
If the name Theragenics (NYSE:TGX) sounds familiar, you likely heard of this stock via its heavily advertised prostate cancer treatment program. TheraSeed is an FDA-approved medical device helping to diversify this 30-year-old medical device company. Earlier this year, the $58 million market cap company received a takeover bid that would have valued Theragenics at $74 million.Shares soared on the news of the bid to more than $2 per share, but the eventual rejection of the offer has resulted in shares drifting lower. You can buy the stock today for $1.70 per share. As acceptance of its prostate treatment gains momentum, look for TGX to soar higher.
5 Health Care Penny Stocks to Buy in 2012 -
Bioanalytical Systems
It doesn’t take much to move a health care penny stock significantly higher. On Wednesday, shares of Bioanalytical Systems (NASDAQ:BASI) gained 5% on a 9 cent-per-share move in stock price. At the end of last year, BASI spiked to $3.98 per share, hitting a 52-week high. Shares have been sliding lower since and now trade for $1.88.The company is in the business of providing contract-based research and development in the biotechnology industry. The tiny $9 million market cap company stands to benefit from the increasing research activity in this critical area of health care. As more barriers to research are removed, this stock should climb higher. It certainly is worthy of a speculation at this low price.
6 Software Penny Stocks to Buy in 2012
There is no better place to find explosive growth than with low-priced penny stocks. I’m not talking about pink sheet stocks that are potentially nonexistent, or fraudulent names set to crash. I’m talking about real companies with real earnings — companies listed for more than one year on a major exchange like the AMEX, NYSE or Nasdaq, and that have a market cap in the ballpark of $100 million.
The returns can be even more powerful when you combine the power of technology stocks and penny stocks. Specifically, the software space is seeing lots of action thanks to the mass acceptance of smart phones and personal computing devices.
These devices are quite powerful, but they still need programs to make them run. The best software companies are those that make users more productive. In this tough economy, those companies that help workers do more with less are poised to be the penny stocks that really move higher.
Because these companies have the wind at their sails from an earnings perspective, these penny stock prices will not last long. Now is the time to pounce before the rest of the market catches on.
Here are six software penny stocks to buy now:
NetSol
6 Software Penny Stocks to Buy in 2012 - NetSol Technologies (NASDAQ:NTWK) is a penny stock with a near $100 million market cap. This is a real company with real products and real revenues. The company makes application software for the automobile finance and leasing industry as well as the banking, financial services and healthcare industries globally.
Shares have drifted lower since peaking near $2.40 per share earlier this year. You can buy this penny stock today for just $1.60 per share. That is a bargain that you should exploit.
NetSol beat estimates in the last quarter by 4 cents per share. Look for a similar result when it announces quarterly results. For the full year, the expectation is for a profit of 18 cents per share. If the company does better than expected, this stock could really take off.
Cover-All
The penny stock Cover-All Technologies (AMEX:COVR) has a market cap of $63 million and is part of the Russell micro cap index. In May, the stock was listed on the AMEX exchange taking shares off bulletin board status. The stock has gained about 50cents per share since that time.
Cover-All Technologies is in the business of providing software products and services for the property and casualty insurance space. That sector has been getting headlines this year with the uptick in natural disasters and inclement weather. Any chance to save money with technology will be more likely to be advanced under more difficult financial times.
Cover-All is profitable and expected to make seventeen cents per share in the current fiscal year. That number jumps 3 cents to 20 cents per share in 2012. The company has beaten estimates in the last two quarters. You can buy that 17% growth for less than 15 times estimated earnings.
Top Image
One of the problems owning penny stocks is trading volume is thin and liquidity makes it tough to sell shares for a profit. In the case of Top Image Systems (NASDAQ:TISA), we have a stock that sees an average of 300,000 shares trading hands each day. Clearly this stock will be followed by a fairly large group of investors.
Top Image system is in the business of making software with respect to data capture and manipulation. This Israeli-based company was founded in 1991. Shares of the company blasted higher in early May after the company reported positive results for its first quarter of 2011.
In the period, the company saw a 36% increase in revenue and posted a profit of seven cents per share as opposed to a loss in the year prior. That was enough to move the stock from $1.34 per share to $2.20 per share. Those are the types of moves you can expect from a penny stock when it delivers solid operating performance. I expect a repeat performance in future quarters.
Authentidate
6 Software Penny Stocks to Buy in 2012 -Authentidate Holding Corp. (NASDAQ:ADAT) is in the business of making the health care industry less paper-intensive. Offering web-based solutions for health systems and physician groups, this penny stock has nearly doubled in value since early April.
I don’t think the gains are done there. This sort of momentum is what I like to see. Historically riding these waves of momentum has been very lucrative to me and my investors.
Authentidate is growing and continually adding to its impressive roster of customers. Most recently the company signed a deal with the Department of Veteran Affairs to provide telehealth solutions. The company is expected to lose money in 2011, but to be profitable in 2012. If so, the stock will double again from here.
Cinedigm Digital Cinema
Penny stocks can be quite volatile. 6 Software Penny Stocks to Buy in 2012 -Shares of Cinedigm Digital Cinema (NASDAQ:CIDM) have been on a roller coaster this year. In mid-March the stock caught fire and jumped a dollar per share over the course of a couple of months. Since that time, shares have given up half that gain to the ballpark of $1.90 per share.
Use the selling to get in on this penny stock ride. Cinedigm provides technology solutions and digital content to theater exhibitors. The company just completed a year of operating losses that it expects to sharply narrow in the 2012 fiscal year. Sales are growing rapidly and that is what investors should focus on today.
To the extent they beat expectations, profitability may arrive sooner than later.
Mind CTI
6 Software Penny Stocks to Buy in 2012 -Mind CTI (NASDAQ:MNDO) is an Israeli-based technology company that provides convergent end-to-end billing and customer-care product-based solutions for service providers as well as telecom expense management solutions. After peaking at nearly $3.60 per share, the stock has slipped to current levels at $2.80 per share.
The move lower comes on the heels of a less-than-stellar quarterly earnings report for its first quarter ending March 31, 2011. Year over year revenue in the period was lower, but the company did post a profit of six cents per share. In addition to reporting a backlog to be recognized this year of $10.2 million Mind CTI had previously declared a cash dividend of 32 cents per share.
With telecom and wireless being all the rage around the globe, I expect Mind CTI to perform quite well for the remainder of the year.
The returns can be even more powerful when you combine the power of technology stocks and penny stocks. Specifically, the software space is seeing lots of action thanks to the mass acceptance of smart phones and personal computing devices.
These devices are quite powerful, but they still need programs to make them run. The best software companies are those that make users more productive. In this tough economy, those companies that help workers do more with less are poised to be the penny stocks that really move higher.
Because these companies have the wind at their sails from an earnings perspective, these penny stock prices will not last long. Now is the time to pounce before the rest of the market catches on.
Here are six software penny stocks to buy now:
NetSol
6 Software Penny Stocks to Buy in 2012 - NetSol Technologies (NASDAQ:NTWK) is a penny stock with a near $100 million market cap. This is a real company with real products and real revenues. The company makes application software for the automobile finance and leasing industry as well as the banking, financial services and healthcare industries globally.
Shares have drifted lower since peaking near $2.40 per share earlier this year. You can buy this penny stock today for just $1.60 per share. That is a bargain that you should exploit.
NetSol beat estimates in the last quarter by 4 cents per share. Look for a similar result when it announces quarterly results. For the full year, the expectation is for a profit of 18 cents per share. If the company does better than expected, this stock could really take off.
Cover-All
The penny stock Cover-All Technologies (AMEX:COVR) has a market cap of $63 million and is part of the Russell micro cap index. In May, the stock was listed on the AMEX exchange taking shares off bulletin board status. The stock has gained about 50cents per share since that time.
Cover-All Technologies is in the business of providing software products and services for the property and casualty insurance space. That sector has been getting headlines this year with the uptick in natural disasters and inclement weather. Any chance to save money with technology will be more likely to be advanced under more difficult financial times.
Cover-All is profitable and expected to make seventeen cents per share in the current fiscal year. That number jumps 3 cents to 20 cents per share in 2012. The company has beaten estimates in the last two quarters. You can buy that 17% growth for less than 15 times estimated earnings.
Top Image
One of the problems owning penny stocks is trading volume is thin and liquidity makes it tough to sell shares for a profit. In the case of Top Image Systems (NASDAQ:TISA), we have a stock that sees an average of 300,000 shares trading hands each day. Clearly this stock will be followed by a fairly large group of investors.
Top Image system is in the business of making software with respect to data capture and manipulation. This Israeli-based company was founded in 1991. Shares of the company blasted higher in early May after the company reported positive results for its first quarter of 2011.
In the period, the company saw a 36% increase in revenue and posted a profit of seven cents per share as opposed to a loss in the year prior. That was enough to move the stock from $1.34 per share to $2.20 per share. Those are the types of moves you can expect from a penny stock when it delivers solid operating performance. I expect a repeat performance in future quarters.
Authentidate
6 Software Penny Stocks to Buy in 2012 -Authentidate Holding Corp. (NASDAQ:ADAT) is in the business of making the health care industry less paper-intensive. Offering web-based solutions for health systems and physician groups, this penny stock has nearly doubled in value since early April.
I don’t think the gains are done there. This sort of momentum is what I like to see. Historically riding these waves of momentum has been very lucrative to me and my investors.
Authentidate is growing and continually adding to its impressive roster of customers. Most recently the company signed a deal with the Department of Veteran Affairs to provide telehealth solutions. The company is expected to lose money in 2011, but to be profitable in 2012. If so, the stock will double again from here.
Cinedigm Digital Cinema
Penny stocks can be quite volatile. 6 Software Penny Stocks to Buy in 2012 -Shares of Cinedigm Digital Cinema (NASDAQ:CIDM) have been on a roller coaster this year. In mid-March the stock caught fire and jumped a dollar per share over the course of a couple of months. Since that time, shares have given up half that gain to the ballpark of $1.90 per share.
Use the selling to get in on this penny stock ride. Cinedigm provides technology solutions and digital content to theater exhibitors. The company just completed a year of operating losses that it expects to sharply narrow in the 2012 fiscal year. Sales are growing rapidly and that is what investors should focus on today.
To the extent they beat expectations, profitability may arrive sooner than later.
Mind CTI
6 Software Penny Stocks to Buy in 2012 -Mind CTI (NASDAQ:MNDO) is an Israeli-based technology company that provides convergent end-to-end billing and customer-care product-based solutions for service providers as well as telecom expense management solutions. After peaking at nearly $3.60 per share, the stock has slipped to current levels at $2.80 per share.
The move lower comes on the heels of a less-than-stellar quarterly earnings report for its first quarter ending March 31, 2011. Year over year revenue in the period was lower, but the company did post a profit of six cents per share. In addition to reporting a backlog to be recognized this year of $10.2 million Mind CTI had previously declared a cash dividend of 32 cents per share.
With telecom and wireless being all the rage around the globe, I expect Mind CTI to perform quite well for the remainder of the year.
Best Investments in 2012 - 5 Popular Mutual Funds to Avoid
While competitive returns are key for attracting assets, some funds mostly rely on their former glory. They have become somewhat like a trusted brand, leading some investors to do not perform their due diligence. And even if they’re down, won’t an iconic fund return to its winning ways?
Not necessarily. There are many examples where portfolio managers have lost their touch. Sometimes it’s because prior success came on just a few good investments or a surge in a particular market. Or, even more ominously, it could have been the result of some risky bets that just happened to pay off — at one time.
Here’s a look at a few big-time mutual funds that investors shouldn’t just trust on name alone:
However, in September, Fidelity brought on board a new manager, Jeff Feingold. Before this, he managed the Best Investments in 2012 -Fidelity Trend (MUTF:FTRNX) fund and posted a strong track record. And at least early on, Feingold is showing promise, with FMAGX up 11.07% year-to-date.
But Best Investments in 2012 -Janus Overseas A (MUTF:JDIAX), which has more than $9 billion in assets, has truly struggled. JDIAX posted a 32.88% loss in 2011, and its average return for the past five years is barely positive, at 0.28%.
The portfolio manager, Brent Lynn, likes to focus on emerging markets and smaller companies. Some years, that strategy can result in big returns. But in others, it means big losses. Either way, it’s a wild ride mutual fund investors could do without.
Yet RGAAX still has a whopping $127 billion under management.
A key issue has been the fund’s focus on foreign markets. Also, because of its enormous size, the Growth Fund is heavily concentrated with large-cap stocks, which can be a bit of a drag, too.
Current VWNDX manager Jim Mordy (who oversees 70% of the portfolio) is trying to stay true to Neff’s contrarian style. But making money as a contrarian is no easy feat, considering that in today’s markets, value stocks can stay depressed for prolonged periods of time.
As the name implies, the fund sticks to large-cap stocks, with top holdings including Pfizer (NYSE:PFE), Best Investments in 2012 -Johnson & Johnson (NYSE:JNJ) and Apple (NASDAQ:AAPL). But EILVX has had missteps with its industry allocation — last year, it was bullish on financials, and we all know how that sector played out.
Not necessarily. There are many examples where portfolio managers have lost their touch. Sometimes it’s because prior success came on just a few good investments or a surge in a particular market. Or, even more ominously, it could have been the result of some risky bets that just happened to pay off — at one time.
Here’s a look at a few big-time mutual funds that investors shouldn’t just trust on name alone:
Fidelity Magellan
Back in the 1980s, legendary investor Peter Lynch posted a standout performance at the helm of the Best Investments in 2012 -Fidelity Magellan (MUTF:FMAGX) fund. Now that success is a distant memory. Over the past decade, the average annual return was a meager 1.58%. Of course, with $15.9 billion in assets, it is not easy to find investment opportunities that can significantly move the needle.However, in September, Fidelity brought on board a new manager, Jeff Feingold. Before this, he managed the Best Investments in 2012 -Fidelity Trend (MUTF:FTRNX) fund and posted a strong track record. And at least early on, Feingold is showing promise, with FMAGX up 11.07% year-to-date.
Janus Overseas A
Foreign investing is never easy. A portfolio manager must not only figure out where to find growth opportunities across hundreds of countries, but also deal with political situations and currency swings.But Best Investments in 2012 -Janus Overseas A (MUTF:JDIAX), which has more than $9 billion in assets, has truly struggled. JDIAX posted a 32.88% loss in 2011, and its average return for the past five years is barely positive, at 0.28%.
The portfolio manager, Brent Lynn, likes to focus on emerging markets and smaller companies. Some years, that strategy can result in big returns. But in others, it means big losses. Either way, it’s a wild ride mutual fund investors could do without.
American Funds Growth Fund
Investors have been losing patience with the American Funds Growth Fund (MUTF:RGAAX). The fund lost 5.58% last year, and it suffered outflows of almost $26 billion.Yet RGAAX still has a whopping $127 billion under management.
A key issue has been the fund’s focus on foreign markets. Also, because of its enormous size, the Growth Fund is heavily concentrated with large-cap stocks, which can be a bit of a drag, too.
Vanguard Windsor Investor
For 31 years, John Neff posted an average return of 13.7% at the Best Investments in 2012 -Vanguard Windsor Investor (MUTF:VWNDX) fund. However, it has not had the same kind of magic since he left in the mid-90s. The fund has generated an average loss of about 2% int he past five years and fell 4% in 2011.Current VWNDX manager Jim Mordy (who oversees 70% of the portfolio) is trying to stay true to Neff’s contrarian style. But making money as a contrarian is no easy feat, considering that in today’s markets, value stocks can stay depressed for prolonged periods of time.
Eaton Vance Large-Cap Value
It’s tough to get excited about the Eaton Vance Large-Cap Value (MUTF:EILVX) fund, which has almost $12 billion in assets. During the past five years, EILVX is averaging a loss of 1.6%, and it shed more than 4% last year.As the name implies, the fund sticks to large-cap stocks, with top holdings including Pfizer (NYSE:PFE), Best Investments in 2012 -Johnson & Johnson (NYSE:JNJ) and Apple (NASDAQ:AAPL). But EILVX has had missteps with its industry allocation — last year, it was bullish on financials, and we all know how that sector played out.
Hot Stocks to buy - Sears Holdings Stock: 3 Prosm 3 Cons
Last year, shareholders of Hot Stocks to buy - Sears Holdings (NASDAQ:SHLD) lost 57%, and they even had to deal with talks of bankruptcy.
But 2012 has been a whole new year. Rather than become the next American icon to bite the dust, Sears has watched its stock soar a stunning 124% so far this year.
So does SHLD still have room to make investors money, or would it be better to hold off? Let’s take a look at Sears’ pros and cons:
In the case of Sears, it actually has an assortment of strong proprietary brands. Examples include Kenmore, Craftsman, DieHard and Lands’ End. With more attention and investment, the company has an opportunity to leverage these assets to find growth.
Convenience: Between Sears and Kmart locations, SHLD’s extensive footprint is a competitive advantage. It not only has thousands of stores but also service centers (for example, there are nearly 800 Sears auto centers).
But Sears wants to integrate this infrastructure with its e-commerce platform and mobile technologies. This is all part of the company’s “Shop Your Way Rewards” strategy, which has the goal of creating a continuous relationship with customers. It could be an effective way to increase loyalty and sales.
Skin in the Game: Members of the Sears board control roughly 65% of the outstanding stock. Of this, ESL Investments has a 61% stake. In other words, there is strong motivation to find ways to enhance shareholder value. Eddie Lampert, who operates ESL, has a strong investment track record, with investments in great companies like Hot Stocks to buy - AutoNation (NYSE:AN) and Hot Stocks to buy - AutoZone (NYSE:AZO).
Competition: It’s brutal. While Sears restructures, it also must fend off brick-and-mortar competitors like Hot Stocks to buy - Wal-Mart (NYSE:WMT), Kohl’s (NYSE:KSS) and Best Buy (NYSE:BBY), as well as e-commerce operators like Amazon (NASDAQ:AMZN).
Macroeconomic Trends. The U.S. economy has shown renewed strength during the past few months, but it might be temporary. Consumers might once again start to pull back thanks to a recent surge in gas prices.
Sears also has shown a lack of ability to deal with changes in the economy. For example, it was not able to move quickly enough to change its inventory to adapt to the hotter winter. While companies like Hot Stocks to buy - Home Depot (NYSE:HD) and Hot Stocks to buy - Lowe’s (NYSE:LOW) were able to capitalize on warmer weather, Sears could not.
All in all, these actions certainly will help to deal with the company’s liquidity concerns. Yet they do little about the core problem of Sears — that is, getting more people to come into its stores. This will take more than financial engineering. Unfortunately, Sears still has not provided much detail on how to get back on track.
So for now, Sears’ cons outweigh the pros.
But 2012 has been a whole new year. Rather than become the next American icon to bite the dust, Sears has watched its stock soar a stunning 124% so far this year.
So does SHLD still have room to make investors money, or would it be better to hold off? Let’s take a look at Sears’ pros and cons:
Hot Stocks to buy - Pros
Proprietary Brands: These are products that retailers own, and they have become increasingly popular over the years. Reasons include better differentiation and higher margins.In the case of Sears, it actually has an assortment of strong proprietary brands. Examples include Kenmore, Craftsman, DieHard and Lands’ End. With more attention and investment, the company has an opportunity to leverage these assets to find growth.
Convenience: Between Sears and Kmart locations, SHLD’s extensive footprint is a competitive advantage. It not only has thousands of stores but also service centers (for example, there are nearly 800 Sears auto centers).
But Sears wants to integrate this infrastructure with its e-commerce platform and mobile technologies. This is all part of the company’s “Shop Your Way Rewards” strategy, which has the goal of creating a continuous relationship with customers. It could be an effective way to increase loyalty and sales.
Skin in the Game: Members of the Sears board control roughly 65% of the outstanding stock. Of this, ESL Investments has a 61% stake. In other words, there is strong motivation to find ways to enhance shareholder value. Eddie Lampert, who operates ESL, has a strong investment track record, with investments in great companies like Hot Stocks to buy - AutoNation (NYSE:AN) and Hot Stocks to buy - AutoZone (NYSE:AZO).
Cons
Losses: In 2011, Sears posted a loss of $3.14 billion, and the company has seen revenues decline for the past six years. And it’s far from clear when and if the company can reverse these adverse trends.Competition: It’s brutal. While Sears restructures, it also must fend off brick-and-mortar competitors like Hot Stocks to buy - Wal-Mart (NYSE:WMT), Kohl’s (NYSE:KSS) and Best Buy (NYSE:BBY), as well as e-commerce operators like Amazon (NASDAQ:AMZN).
Macroeconomic Trends. The U.S. economy has shown renewed strength during the past few months, but it might be temporary. Consumers might once again start to pull back thanks to a recent surge in gas prices.
Sears also has shown a lack of ability to deal with changes in the economy. For example, it was not able to move quickly enough to change its inventory to adapt to the hotter winter. While companies like Hot Stocks to buy - Home Depot (NYSE:HD) and Hot Stocks to buy - Lowe’s (NYSE:LOW) were able to capitalize on warmer weather, Sears could not.
Verdict
Last week, Sears announced a major restructuring. The company plans to raise as much as $500 million through a spinoff of its specialty Hometown and Outlet stores. There also will be a $270 million infusion from the sale of real estate assets.All in all, these actions certainly will help to deal with the company’s liquidity concerns. Yet they do little about the core problem of Sears — that is, getting more people to come into its stores. This will take more than financial engineering. Unfortunately, Sears still has not provided much detail on how to get back on track.
So for now, Sears’ cons outweigh the pros.
Top Stocks to Invest in 2012 - 4 Stocks That Love Stalled Home Sales
The current environment is bad news if you’re trying to sell your home — prices haven’t been this low since the first season of American Idol. (That’s 2002 for you non-Ryan Seacrest fans.)
The Case-Shiller national home price index reported a 4% drop in 4Q 2011, marking the biggest decline since 2008. Since the market peaked in 2Q 2006, home prices have dropped 33.8%.
This disappointing trend comes despite pockets of recovery in other parts of the economic world. Industrial production has been gaining ground, for example, and consumer confidence is at an annual high. Even the unemployment rate is moving lower, finally, though perhaps not for long.
Every cloud has a silver lining, however, and most negative market trends have some beneficiaries. The group of companies that may be enjoying a little schadenfreude at the expense of homeowners are home-improvement retailers such as Top Stocks to Invest in 2012 - Home Depot (NYSE:HD), Top Stocks to Invest in 2012 -Lowe’s (NYSE:LOW), Top Stocks to Invest in 2012 -Fastenal (NASDAQ:FAST) and Sherwin-Williams (NYSE:SHW). Respectively, this quartet of stocks has returned 38%, 35%, 63%, and 38% over the past six months.
The rationale behind this relationship is twofold: First, consumers desperate to sell their homes may pour additional funds into improvements to make the property more attractive to buyers. Second, homeowners who realize they may not have be able to sell might opt to spend on upgrades rather than shop around for a new place.
Technically speaking, HD is looking quite strong. The stock has rallied to a new 52-week high along support from its 10-day and 20-day moving averages. What’s more, the shares recently overtook the $44-to-$45 region, which acted as price-level resistance throughout 2004-2006.
HD is now trading at levels not seen since — what a coincidence — 2002. Meanwhile, earnings have continued to grow at a 16% annual rate, and the stock’s price-to-earnings ratio, at 19.1, is on par with HD’s competitors.
Home Depot’s top rival, Lowe’s, is trying to overtake some technical resistance of its own. The stock has been muscling higher since last fall and is currently trying to break out above the $28 level. While this proved insurmountable for LOW in April 2010 and March 2011, the stock’s current momentum may be enough to power it through this resistance.
Traders looking for a possible entry point should watch for a breakout above $30. Earnings growth at LOW is lower than HD’s, at 8% year-over-year, but the stock’s P-E ratio is lower as well, at 16.5.
FAST has been in a steady uptrend since late 2009, gaining roughly 150% since the beginning of 2010. Currently, the stock is exploring new all-time-high territory. Quarterly earnings have met or exceeded analysts’ estimates in each of the past eight quarters, and year-over-year earnings have grown at a rate of over 20%. One caveat: FAST’s P-E ratio stands at 42.6, well above the average in the industrials sector (19.0) or the S&P 500 (18.5).
Finally, the principal of paint — SHW. Nothing spruces up a room more quickly and inexpensively than a new color, and SHW is happy to help. Year-over-year, earnings have grown by more than 18% and are predicted to keep edging higher in the next half-decade. Like FAST, SHW is currently trading near an all-time high and recently entered triple-digit territory.
Finally, if you like this overall theory, another name to consider that is adjacent to the home-improvement sector is Top Stocks to Invest in 2012 - Sears Holdings (NASDAQ:SHLD), which has been rallying lately in the wake of some strategic changes. Valspar Corp. (NYSE:VAL), another paint and coatings manufacturer, could also participate in any upside.
The Case-Shiller national home price index reported a 4% drop in 4Q 2011, marking the biggest decline since 2008. Since the market peaked in 2Q 2006, home prices have dropped 33.8%.
This disappointing trend comes despite pockets of recovery in other parts of the economic world. Industrial production has been gaining ground, for example, and consumer confidence is at an annual high. Even the unemployment rate is moving lower, finally, though perhaps not for long.
Every cloud has a silver lining, however, and most negative market trends have some beneficiaries. The group of companies that may be enjoying a little schadenfreude at the expense of homeowners are home-improvement retailers such as Top Stocks to Invest in 2012 - Home Depot (NYSE:HD), Top Stocks to Invest in 2012 -Lowe’s (NYSE:LOW), Top Stocks to Invest in 2012 -Fastenal (NASDAQ:FAST) and Sherwin-Williams (NYSE:SHW). Respectively, this quartet of stocks has returned 38%, 35%, 63%, and 38% over the past six months.
The rationale behind this relationship is twofold: First, consumers desperate to sell their homes may pour additional funds into improvements to make the property more attractive to buyers. Second, homeowners who realize they may not have be able to sell might opt to spend on upgrades rather than shop around for a new place.
Technically speaking, HD is looking quite strong. The stock has rallied to a new 52-week high along support from its 10-day and 20-day moving averages. What’s more, the shares recently overtook the $44-to-$45 region, which acted as price-level resistance throughout 2004-2006.
HD is now trading at levels not seen since — what a coincidence — 2002. Meanwhile, earnings have continued to grow at a 16% annual rate, and the stock’s price-to-earnings ratio, at 19.1, is on par with HD’s competitors.
Home Depot’s top rival, Lowe’s, is trying to overtake some technical resistance of its own. The stock has been muscling higher since last fall and is currently trying to break out above the $28 level. While this proved insurmountable for LOW in April 2010 and March 2011, the stock’s current momentum may be enough to power it through this resistance.
Traders looking for a possible entry point should watch for a breakout above $30. Earnings growth at LOW is lower than HD’s, at 8% year-over-year, but the stock’s P-E ratio is lower as well, at 16.5.
FAST has been in a steady uptrend since late 2009, gaining roughly 150% since the beginning of 2010. Currently, the stock is exploring new all-time-high territory. Quarterly earnings have met or exceeded analysts’ estimates in each of the past eight quarters, and year-over-year earnings have grown at a rate of over 20%. One caveat: FAST’s P-E ratio stands at 42.6, well above the average in the industrials sector (19.0) or the S&P 500 (18.5).
Finally, the principal of paint — SHW. Nothing spruces up a room more quickly and inexpensively than a new color, and SHW is happy to help. Year-over-year, earnings have grown by more than 18% and are predicted to keep edging higher in the next half-decade. Like FAST, SHW is currently trading near an all-time high and recently entered triple-digit territory.
Finally, if you like this overall theory, another name to consider that is adjacent to the home-improvement sector is Top Stocks to Invest in 2012 - Sears Holdings (NASDAQ:SHLD), which has been rallying lately in the wake of some strategic changes. Valspar Corp. (NYSE:VAL), another paint and coatings manufacturer, could also participate in any upside.
Apple: How to Play the Best Stock in 2012
If you’re a long-term investor, there’s a lot to look forward to. the Best Stock in 2012 Apple (NASDAQ:AAPL) is much more than a brand; it’s a lifestyle. People tattoo the company’s iconic symbol on their rear ends, for crying out loud!
Always the innovator, Apple has barely scratched the surface with regard to new devices and has hardly tapped into every way in which to use them. People line up thousands-deep to buy newer versions of the company’s most basic products every year, whether they need them or not. That’s something no other tech company has been out able to do. Plus, Apple’s market share is growing overseas, with a particular emphasis on the Pacific Rim.
In China alone, for instance, there’s the potential for an additional 30 million to 50 million iPhone sales in the next 12 months that could add an additional $4 to $6 in EPS to Apple’s bottom line. I remain convinced that Apple could be the world’s first trillion-dollar company, and I’m not alone in my thinking. Since I first voiced that highly controversial opinion a few years ago, many other firms and analysts have joined me.
The chart tells the story:
Like all charts, though, interpreting this is a matter of perspective. Stocks that have run a long way in a short time often require some “digestion,” or to use a market term, “give back.” And Apple is no exception, particularly when you consider the stock has moved up 44.76% in only three months, from $363.57 to $526.29.
If we contrast the prior chart with a longer-term view, we see Apple is simply accelerating ahead of a major trendline (seen below in red). Not only does this speak to a pullback for the company, which traders have simply pushed ahead of itself on nothing more than euphoria, but it also highlights the next logical value buying point, at $463 for aggressive traders — or roughly 6.96% lower than Wednesday’s blow-off-induced close of $497.67.
Of course, if you are more conservative, you could consider buying Apple at roughly $420 to $430, which is where Apple was trading prior to the most recent earnings announcement that fueled this latest run.
Blow-offs like this one typically set intermediate-term highs that last, on average, 90 to 145 days. Not always, but often, even if the stock wants to run higher in the days ahead, a period of lower price digestion is likely ahead. So there’s a little time to play.
Aggressive traders wanting to play the downside could consider put options or shorting the stock until it gets down to the $460-ish ranges, where there is likely to be aggressive buying support. More conservative investors who want to add to existing Apple positions or establish new ones may find that waiting until the price drops to the $420 area makes more sense.
Either way, be prepared for some volatility. Stocks like Apple that become media darlings tend to take on a life of their own before they settle down and then head higher.
Always the innovator, Apple has barely scratched the surface with regard to new devices and has hardly tapped into every way in which to use them. People line up thousands-deep to buy newer versions of the company’s most basic products every year, whether they need them or not. That’s something no other tech company has been out able to do. Plus, Apple’s market share is growing overseas, with a particular emphasis on the Pacific Rim.
In China alone, for instance, there’s the potential for an additional 30 million to 50 million iPhone sales in the next 12 months that could add an additional $4 to $6 in EPS to Apple’s bottom line. I remain convinced that Apple could be the world’s first trillion-dollar company, and I’m not alone in my thinking. Since I first voiced that highly controversial opinion a few years ago, many other firms and analysts have joined me.
How to Play the Short-Term Apple(the Best Stock in 2012) Top
However, in the short term, Apple’s chart looks like a classic blow-off top — and technically speaking, it is. Last Wednesday, we saw the stock close near the lows of the day after a quick runup and a high volume, high-speed failure midday.The chart tells the story:
Like all charts, though, interpreting this is a matter of perspective. Stocks that have run a long way in a short time often require some “digestion,” or to use a market term, “give back.” And Apple is no exception, particularly when you consider the stock has moved up 44.76% in only three months, from $363.57 to $526.29.
If we contrast the prior chart with a longer-term view, we see Apple is simply accelerating ahead of a major trendline (seen below in red). Not only does this speak to a pullback for the company, which traders have simply pushed ahead of itself on nothing more than euphoria, but it also highlights the next logical value buying point, at $463 for aggressive traders — or roughly 6.96% lower than Wednesday’s blow-off-induced close of $497.67.Of course, if you are more conservative, you could consider buying Apple at roughly $420 to $430, which is where Apple was trading prior to the most recent earnings announcement that fueled this latest run.
Positioning Your Portfolio in Apple(the Best Stock in 2012) Stock
When might we get there?Blow-offs like this one typically set intermediate-term highs that last, on average, 90 to 145 days. Not always, but often, even if the stock wants to run higher in the days ahead, a period of lower price digestion is likely ahead. So there’s a little time to play.
Aggressive traders wanting to play the downside could consider put options or shorting the stock until it gets down to the $460-ish ranges, where there is likely to be aggressive buying support. More conservative investors who want to add to existing Apple positions or establish new ones may find that waiting until the price drops to the $420 area makes more sense.
Either way, be prepared for some volatility. Stocks like Apple that become media darlings tend to take on a life of their own before they settle down and then head higher.
2012 Best stocks to buy-5 Stocks Saddled With Debt
Using debt to fund a business’ growth is just fine. But taking on too much debt — and not being able to pay interest on that debt — is a recipe for bankruptcy. A lot of companies got caught with their pants down in the financial crisis by being overleveraged. Some of them still are standing today, but they are the equivalent of a two-legged chair.
Here are some companies so loaded with debt that you should consider shorting them, as bankruptcy is a very real possibility.
2012 Best stocks to buy - MGM Resorts International (NYSE:MGM) is the victim of really bad timing. It took down a ton of debt and built the massive City Center in Las Vegas just as the financial crisis hit — thus, MGM had all these units to sell, and nobody with any money to buy them. The company sits on $13 billion of debt and is losing money every year. So far, MGM has kept creditors at bay, but I wonder how long that can last. This is a long-term short, and I’d set a stop-loss in case some white knight comes to MGM’s rescue.
2012 Best stocks to buy - Thomson Reuters (NYSE:TRI) has a dual problem. First, it carries $6.8 billion in debt. Second, it operates in a slowly dying sector. Fewer and fewer people get their news from wire services and newspapers anymore. It’s all Internet now. Thomson is in danger of becoming the horse and buggy to the Internet’s airplane.
2012 Best stocks to buy - Avis Budget Group (NASDAQ:CAR) might be in for a serious crash. Yes, the company has more than $1 billion in cash, but it’s offset by $2.4 billion in debt. That might not be so bad, except Avis is running free cash flow negative to the tune of $6.5 billion in the trailing 12 months. One thing to be careful of — the rental car companies have been bought and sold a zillion times each, so careful with that short.
I’d also take a good, long look at solar energy stocks. After the Solyndra debacle, it’s pretty clear that alternative energy companies have a tough road. The dirty little secret about solar is that it only pays for itself because of government subsidies. Those won’t last forever. One of them, Evergreen Solar, already is operating under bankruptcy. 2012 Best stocks to buy - LDK Solar (NYSE:LDK) has more than $650 million in debt, and the head of its audit committee resigned last summer – the perfect setup for a short.
And no discussion of shortable stocks with loads of debt is complete without mentioning the airlines. I’ll pick 2012 Best stocks to buy - United Continental (NYSE:UAL) as the next airline to go bankrupt — again — with its $11.8 billion in debt. With oil prices headed higher again, it’s only a matter of time.
Here are some companies so loaded with debt that you should consider shorting them, as bankruptcy is a very real possibility.
2012 Best stocks to buy - MGM Resorts International (NYSE:MGM) is the victim of really bad timing. It took down a ton of debt and built the massive City Center in Las Vegas just as the financial crisis hit — thus, MGM had all these units to sell, and nobody with any money to buy them. The company sits on $13 billion of debt and is losing money every year. So far, MGM has kept creditors at bay, but I wonder how long that can last. This is a long-term short, and I’d set a stop-loss in case some white knight comes to MGM’s rescue.
2012 Best stocks to buy - Thomson Reuters (NYSE:TRI) has a dual problem. First, it carries $6.8 billion in debt. Second, it operates in a slowly dying sector. Fewer and fewer people get their news from wire services and newspapers anymore. It’s all Internet now. Thomson is in danger of becoming the horse and buggy to the Internet’s airplane.
2012 Best stocks to buy - Avis Budget Group (NASDAQ:CAR) might be in for a serious crash. Yes, the company has more than $1 billion in cash, but it’s offset by $2.4 billion in debt. That might not be so bad, except Avis is running free cash flow negative to the tune of $6.5 billion in the trailing 12 months. One thing to be careful of — the rental car companies have been bought and sold a zillion times each, so careful with that short.
I’d also take a good, long look at solar energy stocks. After the Solyndra debacle, it’s pretty clear that alternative energy companies have a tough road. The dirty little secret about solar is that it only pays for itself because of government subsidies. Those won’t last forever. One of them, Evergreen Solar, already is operating under bankruptcy. 2012 Best stocks to buy - LDK Solar (NYSE:LDK) has more than $650 million in debt, and the head of its audit committee resigned last summer – the perfect setup for a short.
And no discussion of shortable stocks with loads of debt is complete without mentioning the airlines. I’ll pick 2012 Best stocks to buy - United Continental (NYSE:UAL) as the next airline to go bankrupt — again — with its $11.8 billion in debt. With oil prices headed higher again, it’s only a matter of time.
The Best Stocks to Invest in 2012 - 9 Insurance Stocks That Aren’t'Sure Things'
For the time being I’ve willed myself away from the financial industry as its problems still outweigh any benefit for any investor’s portfolio. And, once again, I have for you a group of struggling insurance companies who I’ve put on my sell list for a number of fundamental reasons.
I watch more than 5,000 publicly traded companies with my Portfolio Grader tool, ranking companies by a number of fundamental and quantitative measures.
Here they are, in alphabetical order. Each one of these stocks gets a “D” or “F” according to my research.
The Best Stocks to Invest in 2012 -The Best Stocks to Invest in 2012 -American International Group (NYSE:AIG) is an international insurance company that works with customers in more than 130 countries. In the last year, AIG stock has dropped nearly 34%. AIG stock gets an “F” for sales growth, an “F” for earnings momentum, an “F” for the magnitude in which earnings projections have increased over the past month, a “D” for cash flow and an “F” for return on equity in my Portfolio Grader tool. For more information, view my complete analysis of AIG stock.
The Best Stocks to Invest in 2012 -Genworth Financial (NYSE:GNW) provides insurance, wealth management, investment and financial solutions. GNW is nearly 31% since last February. GNW stock gets an “F” for sales growth, an “F” for operating margin growth, an “F” for earnings growth, an “F” for its ability to exceed the consensus earnings estimates on Wall Street, a “D” for the magnitude in which earnings projections have increased over the past month, a “D” for cash flow and a “D” for return on equity in my Portfolio Grader tool. For more information, view my complete analysis of GNW stock.
Hartford Financial Services Group (NYSE:HIG) is an insurance and financial services company consisting of 52 mutual funds. In the last 12 months, HIG stock has dipped 30%. HIG stock gets an “F” for sales growth, a “D” for operating margin growth, an “F” for earnings growth, an “F” for earnings momentum, an “F” for its ability to exceed the consensus earnings estimates on Wall Street, an “F” for the magnitude in which earnings projections have increased over the past month and a “D” for return on equity in my Portfolio Grader tool. For more information, view my complete analysis of HIG stock.
The Best Stocks to Invest in 2012 -Lincoln National (NYSE:LNC) owns multiple insurance and retirement businesses. Despite gains by the broader markets, LNC stock is down almost 22% in the last year. LNC stock gets a “D” for sales growth, a “D” for earnings growth and a “D” for earnings momentum in my Portfolio Grader tool. For more information, view my complete analysis of LNC stock.
The Best Stocks to Invest in 2012 -Manulife Financial (NYSE:MFC) is a Canada-based financial services group operating in 21 countries. Since last February, MFC stock has declined 37%. MFC stock gets an “F” for the magnitude in which earnings projections have increased over the past month in my Portfolio Grader tool. For more information, view my complete analysis of MFC stock.
The Best Stocks to Invest in 2012 -Old Republic International (NYSE:ORI) is involved entirely with insurance underwriting. ORI stock has dipped 14% in the last year. ORI stock gets an “F” for operating margin growth, an “F” for cash flow and an “F” for return on equity in my Portfolio Grader tool. For more information, view my complete analysis of ORI stock.
The Best Stocks to Invest in 2012 -Principal Financial Group (NYSE:PFG) provides its customers with retirement savings, investment and insurance products and services. While the broader markets have posted gains, PFG is down 20% in the last year. PFG stock gets an “F” for sales growth, a “D” for earnings growth, a “D” for earnings momentum and a “D” for its ability to exceed the consensus earnings estimates on Wall Street in my Portfolio Grader tool. For more information, view my complete analysis of PFG stock.
The Best Stocks to Invest in 2012 -Unum Group (NYSE:UNM) owns numerous insurance companies in the U.S. and U.K., and has posted a loss of 13% in the last 12 months. UNM stock gets a “D” for sales growth, and a “D” for the magnitude in which earnings projections have increased over the past month in my Portfolio Grader tool. For more information, view my complete analysis of UNM stock.
The Best Stocks to Invest in 2012 -XL Group (NYSE:XL) works with industrial, commercial and, professional firms, as well as insurance companies and other enterprises. XL rounds out the list with a loss of 11% in the last year. XL stock gets a “D” for sales growth, a “D” for operating margin growth, a “D” for earnings growth, an “F” for its ability to exceed the consensus earnings estimates on Wall Street, an “F” for the magnitude in which earnings projections have increased over the past month and a “D” for return on equity in my Portfolio Grader tool. For more information, view my complete analysis of XL stock.
I watch more than 5,000 publicly traded companies with my Portfolio Grader tool, ranking companies by a number of fundamental and quantitative measures.
Here they are, in alphabetical order. Each one of these stocks gets a “D” or “F” according to my research.
The Best Stocks to Invest in 2012 -The Best Stocks to Invest in 2012 -American International Group (NYSE:AIG) is an international insurance company that works with customers in more than 130 countries. In the last year, AIG stock has dropped nearly 34%. AIG stock gets an “F” for sales growth, an “F” for earnings momentum, an “F” for the magnitude in which earnings projections have increased over the past month, a “D” for cash flow and an “F” for return on equity in my Portfolio Grader tool. For more information, view my complete analysis of AIG stock.
The Best Stocks to Invest in 2012 -Genworth Financial (NYSE:GNW) provides insurance, wealth management, investment and financial solutions. GNW is nearly 31% since last February. GNW stock gets an “F” for sales growth, an “F” for operating margin growth, an “F” for earnings growth, an “F” for its ability to exceed the consensus earnings estimates on Wall Street, a “D” for the magnitude in which earnings projections have increased over the past month, a “D” for cash flow and a “D” for return on equity in my Portfolio Grader tool. For more information, view my complete analysis of GNW stock.
Hartford Financial Services Group (NYSE:HIG) is an insurance and financial services company consisting of 52 mutual funds. In the last 12 months, HIG stock has dipped 30%. HIG stock gets an “F” for sales growth, a “D” for operating margin growth, an “F” for earnings growth, an “F” for earnings momentum, an “F” for its ability to exceed the consensus earnings estimates on Wall Street, an “F” for the magnitude in which earnings projections have increased over the past month and a “D” for return on equity in my Portfolio Grader tool. For more information, view my complete analysis of HIG stock.
The Best Stocks to Invest in 2012 -Lincoln National (NYSE:LNC) owns multiple insurance and retirement businesses. Despite gains by the broader markets, LNC stock is down almost 22% in the last year. LNC stock gets a “D” for sales growth, a “D” for earnings growth and a “D” for earnings momentum in my Portfolio Grader tool. For more information, view my complete analysis of LNC stock.
The Best Stocks to Invest in 2012 -Manulife Financial (NYSE:MFC) is a Canada-based financial services group operating in 21 countries. Since last February, MFC stock has declined 37%. MFC stock gets an “F” for the magnitude in which earnings projections have increased over the past month in my Portfolio Grader tool. For more information, view my complete analysis of MFC stock.
The Best Stocks to Invest in 2012 -Old Republic International (NYSE:ORI) is involved entirely with insurance underwriting. ORI stock has dipped 14% in the last year. ORI stock gets an “F” for operating margin growth, an “F” for cash flow and an “F” for return on equity in my Portfolio Grader tool. For more information, view my complete analysis of ORI stock.
The Best Stocks to Invest in 2012 -Principal Financial Group (NYSE:PFG) provides its customers with retirement savings, investment and insurance products and services. While the broader markets have posted gains, PFG is down 20% in the last year. PFG stock gets an “F” for sales growth, a “D” for earnings growth, a “D” for earnings momentum and a “D” for its ability to exceed the consensus earnings estimates on Wall Street in my Portfolio Grader tool. For more information, view my complete analysis of PFG stock.
The Best Stocks to Invest in 2012 -Unum Group (NYSE:UNM) owns numerous insurance companies in the U.S. and U.K., and has posted a loss of 13% in the last 12 months. UNM stock gets a “D” for sales growth, and a “D” for the magnitude in which earnings projections have increased over the past month in my Portfolio Grader tool. For more information, view my complete analysis of UNM stock.
The Best Stocks to Invest in 2012 -XL Group (NYSE:XL) works with industrial, commercial and, professional firms, as well as insurance companies and other enterprises. XL rounds out the list with a loss of 11% in the last year. XL stock gets a “D” for sales growth, a “D” for operating margin growth, a “D” for earnings growth, an “F” for its ability to exceed the consensus earnings estimates on Wall Street, an “F” for the magnitude in which earnings projections have increased over the past month and a “D” for return on equity in my Portfolio Grader tool. For more information, view my complete analysis of XL stock.
7 Warren Buffett Stocks Dishing Up Double-Digit Gains in 2012
Well, January sure set a pleasant tone for 2012. The market recorded its best first month of the year since 1997, with the S&P 500 up 5%, the Dow up over 4% and Nasdaq up a stunning 9% from Jan. 1 to Feb. 1.
Warren Buffett didn’t seem to fare as well, though, with his iconic 7 Warren Buffett Stocks Dishing Up Double-Digit Gains in 2012 - Berkshire Hathaway (NYSE:BRK.B) underperforming with a less than 3% return in January. But investors should know by now that Buffett stocks aren’t meant to be in your portfolio for a matter of weeks but for many months. The Oracle of Omaha has famously said that even if the market was open for just one day a year, he would still buy shares.
So don’t take this as a sign that Buffett has lost his edge just yet.
Which stocks is Buffett banking on in 2012? Here are the leaders so far. Share totals are as of the November filing for Berkshire Hathaway disclosure of equity stakes:
USG (NYSE:USG), 17.1 million shares. USG stock is up over 45% year-to-date in 2012.
Bank of America (NYSE:BAC), $5 billion in preferred shares bought with warrants at $7.14 per share. Common stock of BofA is up about 40% YTD, approaching $8 a share.
Ingersoll-Rand (NYSE:IR), 636,600 shares. Ingersoll-Rand is up 22% so far this year.
Moody’s (NYSE:MCO), 28.4 million shares. The ratings agency is up 14% in 2012.
7 Warren Buffett Stocks Dishing Up Double-Digit Gains in 2012 - Intel (NASDAQ:INTC), 9.3 million shares. Intel is up 11% so far this year.
Wells Fargo (NYSE:WFC), 361 million shares. Wells is also up 11% YTD.
7 Warren Buffett Stocks Dishing Up Double-Digit Gains in 2012 - American Express (NYSE:AXP), 151.6 million shares. AmEx is up 10% so far in 2012.
It’s no surprise that financials are the leaders here. Buffett’s value investing style has caused him to plow lots of cash into the financial sector in the wake of the crisis, and other Berkshire Hathaway holdings not making this list of double-digit gainers include U.S. Bancorp (NYSE:USB), Bank of New York Mellon (NYSE:BK) and 7 Warren Buffett Stocks Dishing Up Double-Digit Gains in 2012 - M&T Bank (NYSE:MTB), all up roughly 8% so far in 2011.
It’s strange, then, that Berkshire would underperform with so many high fliers in there. But remember, the stakes are far from equally distributed. Berkshire’s portfolio has are some 200 million shares of Coca-Cola (NYSE:KO) — with a total value of $13.6 billion, give or take a few hundred million. Coke stock is in the red year to date, and that has held back Buffett & Co.
But you can be sure that if financials keep rallying and Coke turns around, Buffett will do just fine in 2012.
In the meantime, take a good look at what Buffett has been buying, and ask yourself if any of these picks are right for your own portfolio.
Warren Buffett didn’t seem to fare as well, though, with his iconic 7 Warren Buffett Stocks Dishing Up Double-Digit Gains in 2012 - Berkshire Hathaway (NYSE:BRK.B) underperforming with a less than 3% return in January. But investors should know by now that Buffett stocks aren’t meant to be in your portfolio for a matter of weeks but for many months. The Oracle of Omaha has famously said that even if the market was open for just one day a year, he would still buy shares.
So don’t take this as a sign that Buffett has lost his edge just yet.
Which stocks is Buffett banking on in 2012? Here are the leaders so far. Share totals are as of the November filing for Berkshire Hathaway disclosure of equity stakes:
USG (NYSE:USG), 17.1 million shares. USG stock is up over 45% year-to-date in 2012.
Bank of America (NYSE:BAC), $5 billion in preferred shares bought with warrants at $7.14 per share. Common stock of BofA is up about 40% YTD, approaching $8 a share.
Ingersoll-Rand (NYSE:IR), 636,600 shares. Ingersoll-Rand is up 22% so far this year.
Moody’s (NYSE:MCO), 28.4 million shares. The ratings agency is up 14% in 2012.
7 Warren Buffett Stocks Dishing Up Double-Digit Gains in 2012 - Intel (NASDAQ:INTC), 9.3 million shares. Intel is up 11% so far this year.
Wells Fargo (NYSE:WFC), 361 million shares. Wells is also up 11% YTD.
7 Warren Buffett Stocks Dishing Up Double-Digit Gains in 2012 - American Express (NYSE:AXP), 151.6 million shares. AmEx is up 10% so far in 2012.
It’s no surprise that financials are the leaders here. Buffett’s value investing style has caused him to plow lots of cash into the financial sector in the wake of the crisis, and other Berkshire Hathaway holdings not making this list of double-digit gainers include U.S. Bancorp (NYSE:USB), Bank of New York Mellon (NYSE:BK) and 7 Warren Buffett Stocks Dishing Up Double-Digit Gains in 2012 - M&T Bank (NYSE:MTB), all up roughly 8% so far in 2011.
It’s strange, then, that Berkshire would underperform with so many high fliers in there. But remember, the stakes are far from equally distributed. Berkshire’s portfolio has are some 200 million shares of Coca-Cola (NYSE:KO) — with a total value of $13.6 billion, give or take a few hundred million. Coke stock is in the red year to date, and that has held back Buffett & Co.
But you can be sure that if financials keep rallying and Coke turns around, Buffett will do just fine in 2012.
In the meantime, take a good look at what Buffett has been buying, and ask yourself if any of these picks are right for your own portfolio.
10 Best Stocks to invest Under Barack Obama in 2012
There’s a lot of bluster this election year about the economy and President Barack Obama’s effect on jobs and the stock market. But what you may not realize is that many comparisons aren’t exactly fair.
Yes, in November 2008 when Obama won the election, unemployment was just shy of 7%, and when he took office in January it was under 8%. But comparing our current unemployment rate of 8.3% to what things were like when the president took office isn’t so simple. After all, the financial crisis was really only beginning in late 2008, and the Great Recession didn’t peak until mid-2009.
In many ways it’s an accident of timing that Obama has presided over a rise in unemployment more than anything else. It doesn’t take a rocket scientist to understand that a previous administration’s policies were in action for those first readings and Obama’s plans hadn’t yet had time to take shape.
The same can apply, however, to the stock market. The bottom of the bear market in equities came in early March 2009. So, in many respects, President Obama “bought the bottom” of the stock market and has simply presided over the rebound. The stock market is up about 55% since January 20, 2009, and a handful of equities are up by dramatically more than that.
Of course, the five-year return for the S&P 500 as of this writing is a loss of 8%, so we haven’t even gotten back to pre-crash levels yet. Let’s not pretend Obama ignited a stock market boom.
Still, investors are addicted to crunching numbers and tracking time frames. So I’ve decided to offer up some of the biggest winners since Obama took the oath of office in January 2009.
I could have included the losers too, but there would be too many tied for losses of 100% via bankruptcy — ranking from the recent failure of Borders to victims like (10 Best Stocks to invest Under Barack Obama in 2012)-General Motors (NYSE:GM), which went to zero but then got a second life with its 2010 IPO after Chapter 11 reorganization.
Instead, here are the 10 biggest “winners” under Obama, even though the president personally deserves little credit for these success stories:
I’m not sure whether there are any lessons to learn from this list, either. But at least I hope you find it interesting.
Yes, in November 2008 when Obama won the election, unemployment was just shy of 7%, and when he took office in January it was under 8%. But comparing our current unemployment rate of 8.3% to what things were like when the president took office isn’t so simple. After all, the financial crisis was really only beginning in late 2008, and the Great Recession didn’t peak until mid-2009.
In many ways it’s an accident of timing that Obama has presided over a rise in unemployment more than anything else. It doesn’t take a rocket scientist to understand that a previous administration’s policies were in action for those first readings and Obama’s plans hadn’t yet had time to take shape.
The same can apply, however, to the stock market. The bottom of the bear market in equities came in early March 2009. So, in many respects, President Obama “bought the bottom” of the stock market and has simply presided over the rebound. The stock market is up about 55% since January 20, 2009, and a handful of equities are up by dramatically more than that.
Of course, the five-year return for the S&P 500 as of this writing is a loss of 8%, so we haven’t even gotten back to pre-crash levels yet. Let’s not pretend Obama ignited a stock market boom.
Still, investors are addicted to crunching numbers and tracking time frames. So I’ve decided to offer up some of the biggest winners since Obama took the oath of office in January 2009.
I could have included the losers too, but there would be too many tied for losses of 100% via bankruptcy — ranking from the recent failure of Borders to victims like (10 Best Stocks to invest Under Barack Obama in 2012)-General Motors (NYSE:GM), which went to zero but then got a second life with its 2010 IPO after Chapter 11 reorganization.
Instead, here are the 10 biggest “winners” under Obama, even though the president personally deserves little credit for these success stories:
- Dollar Thrifty Automotive Group (NYSE:DTG), up 5,740%
- Jazz Pharmaceuticals (NASDAQ:JAZZ), up 3,570%
- (10 Best Stocks to invest Under Barack Obama in 2012)Pier 1 Imports (NYSE:PIR), up 2,750%
- Cardtronics (NASDAQ:CATM), up 2,090%
- Pharmasset (NASDAQ:VRUS), up 2,471% based on its buyout by Gilead (NASDAQ:GILD) that was completed Jan. 16 at $137 a share.
- Boise (NYSE:BZ), up 1,560%
- Dana Holding (NYSE:DAN), up 1,460%
- Crocs (NASDAQ:CROX), up 1,390%.
- (10 Best Stocks to invest Under Barack Obama in 2012)Valassis Communications (NYSE:VCI), up 1,230%
- Ulta Salon (NASDAQ:ULTA), up 1,160%
I’m not sure whether there are any lessons to learn from this list, either. But at least I hope you find it interesting.
6 Software Penny Stocks to Buy in 2012
There is no better place to find explosive growth than with low-priced penny stocks. I’m not talking about pink sheet stocks that are potentially nonexistent, or fraudulent names set to crash. I’m talking about real companies with real earnings — companies listed for more than one year on a major exchange like the AMEX, NYSE or Nasdaq, and that have a market cap in the ballpark of $100 million.
The returns can be even more powerful when you combine the power of technology stocks and penny stocks. Specifically, the software space is seeing lots of action thanks to the mass acceptance of smart phones and personal computing devices.
These devices are quite powerful, but they still need programs to make them run. The best software companies are those that make users more productive. In this tough economy, those companies that help workers do more with less are poised to be the penny stocks that really move higher.
Because these companies have the wind at their sails from an earnings perspective, these penny stock prices will not last long. Now is the time to pounce before the rest of the market catches on.
Here are six software penny stocks to buy now:
Shares have drifted lower since peaking near $2.40 per share earlier this year. You can buy this penny stock today for just $1.60 per share. That is a bargain that you should exploit.
NetSol beat estimates in the last quarter by 4 cents per share. Look for a similar result when it announces quarterly results. For the full year, the expectation is for a profit of 18 cents per share. If the company does better than expected, this stock could really take off.
Cover-All Technologies is in the business of providing software products and services for the property and casualty insurance space. That sector has been getting headlines this year with the uptick in natural disasters and inclement weather. Any chance to save money with technology will be more likely to be advanced under more difficult financial times.
Cover-All is profitable and expected to make seventeen cents per share in the current fiscal year. That number jumps 3 cents to 20 cents per share in 2012. The company has beaten estimates in the last two quarters. You can buy that 17% growth for less than 15 times estimated earnings.
Top Image system is in the business of making software with respect to data capture and manipulation. This Israeli-based company was founded in 1991. Shares of the company blasted higher in early May after the company reported positive results for its first quarter of 2011.
In the period, the company saw a 36% increase in revenue and posted a profit of seven cents per share as opposed to a loss in the year prior. That was enough to move the stock from $1.34 per share to $2.20 per share. Those are the types of moves you can expect from a penny stock when it delivers solid operating performance. I expect a repeat performance in future quarters.
I don’t think the gains are done there. This sort of momentum is what I like to see. Historically riding these waves of momentum has been very lucrative to me and my investors.
Authentidate is growing and continually adding to its impressive roster of customers. Most recently the company signed a deal with the Department of Veteran Affairs to provide telehealth solutions. The company is expected to lose money in 2011, but to be profitable in 2012. If so, the stock will double again from here.
Use the selling to get in on this penny stock ride. Cinedigm provides technology solutions and digital content to theater exhibitors. The company just completed a year of operating losses that it expects to sharply narrow in the 2012 fiscal year. Sales are growing rapidly and that is what investors should focus on today.
To the extent they beat expectations, profitability may arrive sooner than later.
The move lower comes on the heels of a less-than-stellar quarterly earnings report for its first quarter ending March 31, 2011. Year over year revenue in the period was lower, but the company did post a profit of six cents per share. In addition to reporting a backlog to be recognized this year of $10.2 million Mind CTI had previously declared a cash dividend of 32 cents per share.
With telecom and wireless being all the rage around the globe, I expect Mind CTI to perform quite well for the remainder of the year.
The returns can be even more powerful when you combine the power of technology stocks and penny stocks. Specifically, the software space is seeing lots of action thanks to the mass acceptance of smart phones and personal computing devices.
These devices are quite powerful, but they still need programs to make them run. The best software companies are those that make users more productive. In this tough economy, those companies that help workers do more with less are poised to be the penny stocks that really move higher.
Because these companies have the wind at their sails from an earnings perspective, these penny stock prices will not last long. Now is the time to pounce before the rest of the market catches on.
Here are six software penny stocks to buy now:
6 Software Penny Stocks to Buy in 2012 - NetSol
NetSol Technologies (NASDAQ:NTWK) is a penny stock with a near $100 million market cap. This is a real company with real products and real revenues. The company makes application software for the automobile finance and leasing industry as well as the banking, financial services and healthcare industries globally.Shares have drifted lower since peaking near $2.40 per share earlier this year. You can buy this penny stock today for just $1.60 per share. That is a bargain that you should exploit.
NetSol beat estimates in the last quarter by 4 cents per share. Look for a similar result when it announces quarterly results. For the full year, the expectation is for a profit of 18 cents per share. If the company does better than expected, this stock could really take off.
6 Software Penny Stocks to Buy in 2012 -
Cover-All
The penny stock Cover-All Technologies (AMEX:COVR) has a market cap of $63 million and is part of the Russell micro cap index. In May, the stock was listed on the AMEX exchange taking shares off bulletin board status. The stock has gained about 50cents per share since that time.Cover-All Technologies is in the business of providing software products and services for the property and casualty insurance space. That sector has been getting headlines this year with the uptick in natural disasters and inclement weather. Any chance to save money with technology will be more likely to be advanced under more difficult financial times.
Cover-All is profitable and expected to make seventeen cents per share in the current fiscal year. That number jumps 3 cents to 20 cents per share in 2012. The company has beaten estimates in the last two quarters. You can buy that 17% growth for less than 15 times estimated earnings.
Top Image
One of the problems owning penny stocks is trading volume is thin and liquidity makes it tough to sell shares for a profit. In the case of Top Image Systems (NASDAQ:TISA), we have a stock that sees an average of 300,000 shares trading hands each day. Clearly this stock will be followed by a fairly large group of investors.Top Image system is in the business of making software with respect to data capture and manipulation. This Israeli-based company was founded in 1991. Shares of the company blasted higher in early May after the company reported positive results for its first quarter of 2011.
In the period, the company saw a 36% increase in revenue and posted a profit of seven cents per share as opposed to a loss in the year prior. That was enough to move the stock from $1.34 per share to $2.20 per share. Those are the types of moves you can expect from a penny stock when it delivers solid operating performance. I expect a repeat performance in future quarters.
Authentidate
Authentidate Holding Corp. (NASDAQ:ADAT) is in the business of making the health care industry less paper-intensive. Offering web-based solutions for health systems and physician groups, this penny stock has nearly doubled in value since early April.I don’t think the gains are done there. This sort of momentum is what I like to see. Historically riding these waves of momentum has been very lucrative to me and my investors.
Authentidate is growing and continually adding to its impressive roster of customers. Most recently the company signed a deal with the Department of Veteran Affairs to provide telehealth solutions. The company is expected to lose money in 2011, but to be profitable in 2012. If so, the stock will double again from here.
Cinedigm Digital Cinema
Penny stocks can be quite volatile. Shares of Cinedigm Digital Cinema (NASDAQ:CIDM) have been on a roller coaster this year. In mid-March the stock caught fire and jumped a dollar per share over the course of a couple of months. Since that time, shares have given up half that gain to the ballpark of $1.90 per share.Use the selling to get in on this penny stock ride. Cinedigm provides technology solutions and digital content to theater exhibitors. The company just completed a year of operating losses that it expects to sharply narrow in the 2012 fiscal year. Sales are growing rapidly and that is what investors should focus on today.
To the extent they beat expectations, profitability may arrive sooner than later.
Mind CTI
Mind CTI (NASDAQ:MNDO) is an Israeli-based technology company that provides convergent end-to-end billing and customer-care product-based solutions for service providers as well as telecom expense management solutions. After peaking at nearly $3.60 per share, the stock has slipped to current levels at $2.80 per share.The move lower comes on the heels of a less-than-stellar quarterly earnings report for its first quarter ending March 31, 2011. Year over year revenue in the period was lower, but the company did post a profit of six cents per share. In addition to reporting a backlog to be recognized this year of $10.2 million Mind CTI had previously declared a cash dividend of 32 cents per share.
With telecom and wireless being all the rage around the globe, I expect Mind CTI to perform quite well for the remainder of the year.
How to invest in stocks 101 | learn stock market basics for beginners
Whether you are an active investor or just looking for a place to park your retirement money, your best bet is with the stock market. You can reasonably expect a 8-12% annual return over time. That could end up being a lot of money if you compound those returns over a long time horizon. You really can’t expect those types of returns from other types of investments.
That being said, you really have to know how to invest in stocks in a variety of markets and economic conditions if you want these types of returns. You generally won’t get this type of ROI by sitting on your hands the whole time.
It’s not difficult to learn how to invest in the stock market. Even beginners can get started almost right away with the right investment strategy. If you want to get started right away as you learn the basics, consider investing in a broad market index fund like the SPDR ETF, which is a vehicle that tracks the S&P 500 composite index.
You can also look at the Vanguard Total Stock Market Fund which tracks 3,000 stocks in an effort to match the broader US stock market. Both of these index funds have historically produced the returns of 8-12% a year that I was talking about.
But again, if you want to get exceptional returns, you will need to do some learning.
This doesn’t mean you should give up ownership of your own finances. No one will care more about your personal finances than you. You cannot hand this responsibility off to someone else.
At the same time, you don’t want to reinvent the wheel. You can also benefit from another perspective as well as any research and investing ideas they might be able to offer.
You could go with a standard stock broker, but there are a lot of downsides to doing that if you are a beginner investor. I would look for a fee based investment advisor that you can trust and feel comfortable with. Some of the larger fee based advisory firms are Edward Jones and Ameriprise Financial Advisors.
If you are going to stock pick yourself, be warned. Most people cannot average market returns. If you don’t beat the market, there is no point in actively picking your own stocks. You might as well invest in a S&P 500 index fund ETF. You would get better returns, cheaper transaction costs and with the fraction of the time investment.
If you are older and closer to retirement age, you should be more conservative. That means investing in large cap stocks that offer dividends with low risk of capital depreciation. You should also start reallocating your assets into bonds and other fixed income investments as well.
For example, let’s say you want 80% in stocks and 20% in bonds. In 3 months from now, your stocks may appreciate to 90% of your portfolio and bonds 10%. To rebalance to get you back to your optimal ratio, you should sell your stocks and buy bonds. Either that, you can leave the stocks the same and allocate more capital from elsewhere to your bonds.
In stock market investing and trading, those owners can freely sell their share of the company to a buyer for the market price. Or they can buy additional shares in that company or in another company. The stock market gives investors and traders an avenue to do this freely, efficiently and it streamlines this whole process. These are basic things you need to know whether you are doing stock market trading or day trading for a living.
Here are some stock market investing basics terms and definitions you will need to know to understand what’s going on in the market. You can find these terms and learn more about them in stock market for dummies 101 books that I will eventually do a post on. In the mean time, here are some of the more important ones that you would learn in most stock market courses and tutorials.
The Dow – When a CNBC reporter refers to the Dow, she is referring to the Dow Jones Industrial Average. This is the average of the share price of 30 of the largest and most influential stocks on the New York Stock Exchange. The Dow typically is looked at as an indicator of the state of the US economy.
S&P 500 Index - This is another composite of companies compiled by a credit rating agency called Standard & Poor’s, hence the S&P. The 500 part refers to how many companies are included in this index. S&P has a set of criteria to pick the 500 most important companies in the US. This again is used to indicate the health of the US economy and stock market.
Share Price – Refers to the price of a single share of a company.
Market Cap – Also known as market capitalization, this is a measurement of the company’s size. It’s calculated by taking the share price and multiplying it by the number of outstanding shares. The 3 main categories of market caps are large-cap, mid-cap and small-cap.
P/E Ratio – This is the price per earnings ratio. It gives an indication of how much real money a company is earning relative to it’s share price. If their P/E is high, that means the price is way higher than what they are earnings, which means there is a market expectation that this particular stock will go up at some point in the future, the earnings will rise significantly, or both.
Stock Broker – Everyone needs one of these in one form or another to buy and sell stocks. A broker trades shares on your behalf and you pay them a commission each time you do it. Back in the old days, you’d have to call them on their landline to place an order. You can still do that, but most people have an online brokerage account that they trade from these days.
Mutual Fund – This is when a money manager puts together an investment portfolio and let’s other people get in on it. It’s like if you were picking stocks to invest in and other people started to ask you to do it for them. You are basically paying a professional to invest your money for you and you pay them a management fee.
Investment Portfolio – This is your overall basket of stocks, bonds and other assets that you have invested in. If I own shares in GE, Microsoft and Coca-cola, I would say that those stocks are in my investment portfolio.
Diversification – This is an important concept to understand when you are developing your investment strategy. Diversification is the idea that you don’t put all of your eggs in one basket. By buying a variety of stocks, bonds and other kinds of assets, you are diversifying your risk. If one goes down the tube, you have other assets to make up for it. It is unlikely that all of your assets will tank. And if one does extraordinarily well, it will make up for the losses. But you have no way of knowing which ones will do well and which ones won’t, so you buy all different kinds.
That being said, you really have to know how to invest in stocks in a variety of markets and economic conditions if you want these types of returns. You generally won’t get this type of ROI by sitting on your hands the whole time.
It’s not difficult to learn how to invest in the stock market. Even beginners can get started almost right away with the right investment strategy. If you want to get started right away as you learn the basics, consider investing in a broad market index fund like the SPDR ETF, which is a vehicle that tracks the S&P 500 composite index.
You can also look at the Vanguard Total Stock Market Fund which tracks 3,000 stocks in an effort to match the broader US stock market. Both of these index funds have historically produced the returns of 8-12% a year that I was talking about.
But again, if you want to get exceptional returns, you will need to do some learning.
Finding a Financial Advisor
Before you do anything, you should find a financial advisor. A good one will do far more than just give you investment advice about individual stocks. They will help you create a comprehensive investing strategy that is based on your risk profile, time horizon and financial objectives.This doesn’t mean you should give up ownership of your own finances. No one will care more about your personal finances than you. You cannot hand this responsibility off to someone else.
At the same time, you don’t want to reinvent the wheel. You can also benefit from another perspective as well as any research and investing ideas they might be able to offer.
You could go with a standard stock broker, but there are a lot of downsides to doing that if you are a beginner investor. I would look for a fee based investment advisor that you can trust and feel comfortable with. Some of the larger fee based advisory firms are Edward Jones and Ameriprise Financial Advisors.
Online Stock Market Trading Account
The next thing you will probably need to do is set up a trading account with a stock broker. Most people these days go with an online stock broker. The big ones that most investors use are Etrade, TD Ameritrade, and Scottrade. Just put a “.com” after their name and you are there.Stocks or Mutual Funds?
Again, it really depends on how active you want to be. If you want someone else to manage your money for you, you should invest in a mutual fund. If you are very interested in the stock market and would like to pick your own stocks, you can do that as well.If you are going to stock pick yourself, be warned. Most people cannot average market returns. If you don’t beat the market, there is no point in actively picking your own stocks. You might as well invest in a S&P 500 index fund ETF. You would get better returns, cheaper transaction costs and with the fraction of the time investment.
Time Horizon
It is important that you consider your time horizon when investing. If you are young and have 20-30 years before retirement, you should be a little more aggressive. You should look at investing in small cap growth stocks or a mutual fund that does the same.If you are older and closer to retirement age, you should be more conservative. That means investing in large cap stocks that offer dividends with low risk of capital depreciation. You should also start reallocating your assets into bonds and other fixed income investments as well.
Rebalancing Your Investment Portfolio
There is a spectrum to follow. As you get older, you should get progressively more conservative in your investment strategy. You do this with something called re-balancing. This is where you check in with your portfolio regularly to reallocate your assets based on your time horizon.For example, let’s say you want 80% in stocks and 20% in bonds. In 3 months from now, your stocks may appreciate to 90% of your portfolio and bonds 10%. To rebalance to get you back to your optimal ratio, you should sell your stocks and buy bonds. Either that, you can leave the stocks the same and allocate more capital from elsewhere to your bonds.
Introduction
First of all, the stock market is a financial exchange where buyers and sellers get together to trade shares or stock in public companies. Public companies issue shares of ownership in their company. Some may have 1,000 owners, some may have 1 million owners. In either case the owners are said to own stocks in that company.In stock market investing and trading, those owners can freely sell their share of the company to a buyer for the market price. Or they can buy additional shares in that company or in another company. The stock market gives investors and traders an avenue to do this freely, efficiently and it streamlines this whole process. These are basic things you need to know whether you are doing stock market trading or day trading for a living.
Terms and Definitions
Here are some stock market investing basics terms and definitions you will need to know to understand what’s going on in the market. You can find these terms and learn more about them in stock market for dummies 101 books that I will eventually do a post on. In the mean time, here are some of the more important ones that you would learn in most stock market courses and tutorials.
The Dow – When a CNBC reporter refers to the Dow, she is referring to the Dow Jones Industrial Average. This is the average of the share price of 30 of the largest and most influential stocks on the New York Stock Exchange. The Dow typically is looked at as an indicator of the state of the US economy.
S&P 500 Index - This is another composite of companies compiled by a credit rating agency called Standard & Poor’s, hence the S&P. The 500 part refers to how many companies are included in this index. S&P has a set of criteria to pick the 500 most important companies in the US. This again is used to indicate the health of the US economy and stock market.
Share Price – Refers to the price of a single share of a company.
Market Cap – Also known as market capitalization, this is a measurement of the company’s size. It’s calculated by taking the share price and multiplying it by the number of outstanding shares. The 3 main categories of market caps are large-cap, mid-cap and small-cap.
P/E Ratio – This is the price per earnings ratio. It gives an indication of how much real money a company is earning relative to it’s share price. If their P/E is high, that means the price is way higher than what they are earnings, which means there is a market expectation that this particular stock will go up at some point in the future, the earnings will rise significantly, or both.
Stock Broker – Everyone needs one of these in one form or another to buy and sell stocks. A broker trades shares on your behalf and you pay them a commission each time you do it. Back in the old days, you’d have to call them on their landline to place an order. You can still do that, but most people have an online brokerage account that they trade from these days.
Mutual Fund – This is when a money manager puts together an investment portfolio and let’s other people get in on it. It’s like if you were picking stocks to invest in and other people started to ask you to do it for them. You are basically paying a professional to invest your money for you and you pay them a management fee.
Investment Portfolio – This is your overall basket of stocks, bonds and other assets that you have invested in. If I own shares in GE, Microsoft and Coca-cola, I would say that those stocks are in my investment portfolio.
Diversification – This is an important concept to understand when you are developing your investment strategy. Diversification is the idea that you don’t put all of your eggs in one basket. By buying a variety of stocks, bonds and other kinds of assets, you are diversifying your risk. If one goes down the tube, you have other assets to make up for it. It is unlikely that all of your assets will tank. And if one does extraordinarily well, it will make up for the losses. But you have no way of knowing which ones will do well and which ones won’t, so you buy all different kinds.
Subscribe to:
Posts (Atom)