The February stock market rout created a tremendous opportunity for long-term investors. Everyone is asking which stocks make sense for the rest of 2018 and beyond. The following five stocks are my favorite large-cap names for a buy-and-hold portfolio. 1. United Parcel Service (NYSE: UPS) Shares of this package delivery service have plunged around 30% from their January 2018 highs. The February market plunge resulted in a steep gap, exasperating an already dire situation. #-ad_banner-#Currently, shares are building a base in the $105.00 zone, setting up an ideal technical buy opportunity. Let’s take a closer look. Fundamentals supporting the… Read More

The February stock market rout created a tremendous opportunity for long-term investors. Everyone is asking which stocks make sense for the rest of 2018 and beyond. The following five stocks are my favorite large-cap names for a buy-and-hold portfolio. 1. United Parcel Service (NYSE: UPS) Shares of this package delivery service have plunged around 30% from their January 2018 highs. The February market plunge resulted in a steep gap, exasperating an already dire situation. #-ad_banner-#Currently, shares are building a base in the $105.00 zone, setting up an ideal technical buy opportunity. Let’s take a closer look. Fundamentals supporting the bullish call include the dividend increase of 10% in February. The company has increased dividends every year since 1969, and they have quadrupled since 1999. UPS boasts a healthy cash flow to support the ever-growing payout to investors. CEO David Abney stated, “Dividends remain a high priority at UPS. Our strong cash flow from operations has enabled us to pay a stable or growing dividend for nearly 50 years.” Next, the company has been knocked lower due to a perceived Amazon threat; however, it still boasts the top margins in the industry. Also, it has posted a compound annual growth… Read More

The historic bull market is entering its ninth year and signs of stretched stock prices are everywhere. A slightly higher inflation number and bond rates sent the markets into a tailspin early February even as fourth-quarter earnings showed some of the strongest profits in a decade. #-ad_banner-#The market has been rewarding good news less and punishing companies that can’t live up to investors’ expectations, a clear sign of sentiment turning sour. Companies that beat expectations for fourth-quarter earnings saw their share price decrease an average of 0.4% from the two days before through the… Read More

The historic bull market is entering its ninth year and signs of stretched stock prices are everywhere. A slightly higher inflation number and bond rates sent the markets into a tailspin early February even as fourth-quarter earnings showed some of the strongest profits in a decade. #-ad_banner-#The market has been rewarding good news less and punishing companies that can’t live up to investors’ expectations, a clear sign of sentiment turning sour. Companies that beat expectations for fourth-quarter earnings saw their share price decrease an average of 0.4% from the two days before through the two days after their release. That’s well under then five-year average where companies have seen their stock price increase 1.2% over the four-day period after an earnings beat. Companies that have missed earnings expectations have seen their shares drop an average of 1.8% over the same period. In this environment, value investing might just come back in vogue after nearly a decade of lagging behind the growth investing theme. A return to investing in companies with solid fundamentals and stock prices based on valuation rather than the promise of growth could… Read More

My parents took me to Walt Disney World for the first time when I was five years old. One of the rides I most vividly remember, now long since gone, was Mr. Toad’s Wild Ride. Based on Disney’s film adaptation of the classic book The Wind in the Willows, you recklessly “drove” an old fashioned (pre-Model T) car through a darkened, decrepit Victorian mansion. Sounds a little cheesy, I know. But for a small tyke in 1973, it was big adventure. The market has felt a little like Mr. Toad’s Wild Ride recently, with the Dow Jones Industrial Average posting… Read More

My parents took me to Walt Disney World for the first time when I was five years old. One of the rides I most vividly remember, now long since gone, was Mr. Toad’s Wild Ride. Based on Disney’s film adaptation of the classic book The Wind in the Willows, you recklessly “drove” an old fashioned (pre-Model T) car through a darkened, decrepit Victorian mansion. Sounds a little cheesy, I know. But for a small tyke in 1973, it was big adventure. The market has felt a little like Mr. Toad’s Wild Ride recently, with the Dow Jones Industrial Average posting its biggest one-day point drop ever at 1,175 points. While that is indeed significant, this chart of the S&P 500 is even more unnerving. Since equities decided to roll over like my 13 year-old yellow lab does when she wants her tummy scratched, investors have experienced a 9.56% drawdown from what appears to be a market top. A wild ride indeed. #-ad_banner-#I’m not going to dive into the nuances of why volatility has suddenly decided to return to the market, but it has — big time. And with any market pullback, opportunities are created to buy great, timely… Read More

A weak fourth-quarter earnings release sent shares of Procter & Gamble (NYSE: PG) tumbling 3% in the last week of January, and the stock has gone nowhere since the end of 2016. A competitive environment, eroding market share, and little pricing power have had investors questioning the safety of their money in the consumer staples giant. The $226 billion consumer goods behemoth reported just 2% growth in sales from the same quarter last year, and that was entirely driven by volume with no pricing upside. Despite a cost-reduction plan that trimmed off 1.9%, the operating margin still lost 0.1% on… Read More

A weak fourth-quarter earnings release sent shares of Procter & Gamble (NYSE: PG) tumbling 3% in the last week of January, and the stock has gone nowhere since the end of 2016. A competitive environment, eroding market share, and little pricing power have had investors questioning the safety of their money in the consumer staples giant. The $226 billion consumer goods behemoth reported just 2% growth in sales from the same quarter last year, and that was entirely driven by volume with no pricing upside. Despite a cost-reduction plan that trimmed off 1.9%, the operating margin still lost 0.1% on a year-over-year basis. Against this abysmal report by a bellwether of the sector, companies in the consumer products group still trade for a lofty 25.6 times trailing earnings.  But not all was half-empty in the company’s earnings call. Looking deeper to the segment-level presented a different picture.  #-ad_banner-#Using P&G as a guide for the larger sector may reveal opportunities for investors in consumer staples. P&G Earnings As A Preview For The 2018 Consumer Staples Procter & Gamble is so massive and so diversified across consumer-packaged products that it can be used as a guide to the sector. Even after… Read More

A strange thing happens during roaring bull markets. When the economy and stock market are booming, investors seem to forget the fundamentals of stock picking. With nearly every stock being carried higher as the major indexes break record after record, investors think that value no longer matters.  But nothing could be further from the truth. Using fundamentals to locate value stocks works in any type of market. While it is more difficult to locate value during times of extreme bullishness, the extra effort can pay off in spades.  Even in the most overstretched market, value cases still exist. Sometimes a… Read More

A strange thing happens during roaring bull markets. When the economy and stock market are booming, investors seem to forget the fundamentals of stock picking. With nearly every stock being carried higher as the major indexes break record after record, investors think that value no longer matters.  But nothing could be further from the truth. Using fundamentals to locate value stocks works in any type of market. While it is more difficult to locate value during times of extreme bullishness, the extra effort can pay off in spades.  Even in the most overstretched market, value cases still exist. Sometimes a company or industry falls out of favor for no apparent reason. A weak quarterly earnings report or an external event can depress a company’s stock price for a short time, creating an opportunity for sharp investors.  Here are seven signs a stock could be undervalued. #-ad_banner-#​1. The Current Ratio The current ratio is simply a company’s current assets divided by its current liabilities. Value investors should look for a current ratio over 1.50. This assures that the company has enough assets to survive even when bear markets rear their ugly heads.  2. Watch The Debt When searching for… Read More

It’s no secret that starting a business is a daunting task. After all, about 50% of new businesses fail within five years. And as you can see from the Bureau of Labor Statistics chart below, that number is expected to grow to more than 80% over the next two decades. Now, let’s be clear. The chart actually shows how many companies were still in business from one year to the next. But that doesn’t mean that all of them failed.  You see, some businesses merged with other companies, while others saw their owners retire… Read More

It’s no secret that starting a business is a daunting task. After all, about 50% of new businesses fail within five years. And as you can see from the Bureau of Labor Statistics chart below, that number is expected to grow to more than 80% over the next two decades. Now, let’s be clear. The chart actually shows how many companies were still in business from one year to the next. But that doesn’t mean that all of them failed.  You see, some businesses merged with other companies, while others saw their owners retire and close the doors. So the numbers are a bit skewed. Still, the odds of starting a successful business for the long term are stacked against entrepreneurs.  What may not be apparent in this BLS chart is that these stats apply equally to all companies — not just mom and pop businesses. In other words, government bureaucrats were following companies with billion dollar capitalizations as well — including the once formidable tech company, Yahoo!  #-ad_banner-#Yahoo started as a list of websites called “Jerry and David’s Guide to the World Wide Web” created by a couple of engineering students at Stanford… Read More

It’s no secret that businesses want your e-mail. It’s the holy grail of marketing today — especially for every fly-by-night outfit advertising on social media. You see, if a business can get your e-mail, they can begin an almost scientific process of turning you into a paying customer.  They do this by offering some free report or trial offer. And once you take the bait and provide your e-mail, they enter your e-mail address into a sales funnel. Here, they automatically send you an e-mail every few days trying to get you to read or listen to a long sales… Read More

It’s no secret that businesses want your e-mail. It’s the holy grail of marketing today — especially for every fly-by-night outfit advertising on social media. You see, if a business can get your e-mail, they can begin an almost scientific process of turning you into a paying customer.  They do this by offering some free report or trial offer. And once you take the bait and provide your e-mail, they enter your e-mail address into a sales funnel. Here, they automatically send you an e-mail every few days trying to get you to read or listen to a long sales letter. This sales letter is an attempt to sell you a high-priced product or service. And the process couldn’t be easier. The business offers their product or service, and then at the end of the pitch, they offer a bunch of freebies to sweeten the deal.  You know the process. “Buy my $100 book and you’ll get five BONUS reports giving you secrets that only my customers know.” And believe it or not, this funnel system works. #-ad_banner-#In fact, research shows that once an e-mail address is entered into a sales funnel, it takes roughly 45 days to make that… Read More

Finding cheap stocks is all but impossible. Of course, that’s not uncommon when markets continue notching all-time highs. Unfortunately, overpriced markets pose significant risks for investors looking to deploy additional capital. But that doesn’t mean there aren’t any stocks trading at relatively attractive valuations. And that’s an important concept to keep in mind in this long-in-the-tooth bull market where most stocks are overvalued based on traditional metrics. That’s why the search for value is the single most important principle to employ right now. Simply put, should the market fall off the cliff, as many pundits expect, stocks bought at a… Read More

Finding cheap stocks is all but impossible. Of course, that’s not uncommon when markets continue notching all-time highs. Unfortunately, overpriced markets pose significant risks for investors looking to deploy additional capital. But that doesn’t mean there aren’t any stocks trading at relatively attractive valuations. And that’s an important concept to keep in mind in this long-in-the-tooth bull market where most stocks are overvalued based on traditional metrics. That’s why the search for value is the single most important principle to employ right now. Simply put, should the market fall off the cliff, as many pundits expect, stocks bought at a discount to their intrinsic value fare much better than other stocks trading at higher valuations. These so-called value stocks are often stocks that have fallen out of favor with the market — for any number of reasons. But oftentimes, the reasons a stock is trading below intrinsic value are transitory in nature, such as a bad quarter or two.  #-ad_banner-#But value investors are investors with long time horizons. It’s expected that a company will occasionally have a bad quarter every now and again — even Apple (Nasdaq: AAPL) does from time to time. But no sane long-term investor would ditch… Read More

“When the going gets weird, the weird turn pro.” – Hunter S. Thompson I know I’ve used this quote before, but it so applicable to so many situations, especially now considering the lofty state of equity markets. Markets do seem to be in weird place. Pundits are almost split down the middle as to whether the current bull run has any more steam left. Some argue that valuations are stretched thin while others continue to pound the table, goading investors to pile in. I’m splitting the difference. The S&P 500 trades at 19.4 times expected earnings. We’ve seen it much richer… Read More

“When the going gets weird, the weird turn pro.” – Hunter S. Thompson I know I’ve used this quote before, but it so applicable to so many situations, especially now considering the lofty state of equity markets. Markets do seem to be in weird place. Pundits are almost split down the middle as to whether the current bull run has any more steam left. Some argue that valuations are stretched thin while others continue to pound the table, goading investors to pile in. I’m splitting the difference. The S&P 500 trades at 19.4 times expected earnings. We’ve seen it much richer in the past. However, there are some visible cracks showing. #-ad_banner-#Some sectors, such as energy and telecom services, are negative for the year. But despite news to the contrary, there are bargains in the market. Previously, I highlighted a consumer staples stock that stood out in another lackluster sector.  One of the most consistently successful value investing strategies is the venerable Dogs of the Dow. Created in 1972, the year I started kindergarten, the remarkable beauty of the Dogs as an investment strategy is its simplicity: Buy the ten highest dividend yielders in the Dow Jones Industrial Average (DJIA).  Here is… Read More

The S&P 500 is up 2.7% in the month since the close of the third quarter, and has boomed 15% so far this year. That upside strength, especially as companies report their third-quarter results, is hiding a growing deviation in the market.  Behind the optimism for tax cuts and economic growth, this trend has grown from investor fears of stock valuations. And while the overall market trend to higher prices makes for shaky investments in what could ultimately end badly, this new trend is actually creating an opportunity to invest in solid companies with catalysts for upside growth. I’ve been… Read More

The S&P 500 is up 2.7% in the month since the close of the third quarter, and has boomed 15% so far this year. That upside strength, especially as companies report their third-quarter results, is hiding a growing deviation in the market.  Behind the optimism for tax cuts and economic growth, this trend has grown from investor fears of stock valuations. And while the overall market trend to higher prices makes for shaky investments in what could ultimately end badly, this new trend is actually creating an opportunity to invest in solid companies with catalysts for upside growth. I’ve been mining the market to pick winners out of the third quarter’s losers — and they could be some of the best investments I make all year. #-ad_banner-#​Complacent Investors Are Too Quick To Punish As of November 3, 81% of companies in the S&P 500 have reported third quarter earnings. Two-thirds (66%) have reported positive sales surprises and three-quarters (74%) have reported positive earnings surprises on a blended growth rate of 5.9% over the same quarter last year. That market strength fades quickly if you strip away some of the best-performing sectors. Exclude the energy sector and year-over-year earnings growth… Read More