<![CDATA[Wyatt Investment Research Analysis]]> en-us <![CDATA[Why You Should Invest Like Robert Kinder]]> robert-kinderKinder Morgan (NYSE: KMI) CEO Robert Kinder bought $27 million of his company’s stock on Dec. 18 when shares traded at $33.

Less than one month later, the company announced a healthy 11% increase of its quarterly dividend payment.

The combination of insider buying and a growing dividend is great news for Kinder Morgan investors.

Despite being No. 39 on Forbes’ list of the richest Americans, Robert Kinder isn’t well known outside of Texas. He was buddies with Enron founder Ken Lay and served as Enron President from 1990 to1996. But unlike Lay, Kinder was able to avoid prison and built a real and profitable oil and gas company. Along the way, he’s grown his net worth to $10.2 billion.

Kinder Morgan owns and operates oil and gas pipelines through its subsidiaries. It is a managing partner that controls Kinder Morgan Energy Partners (NYSE: KMP), El Paso Pipeline Partners (NYSE: EPB) and Kinder Morgan Management (NYSE: KMR) – three companies that are involved in the distribution and processing of oil and natural gas.

Kinder Morgan’s services are essential to companies drilling and fracking for oil and natural gas. These companies may be able to locate and extract oil from the ground but without Kinder Morgan they wouldn’t be able to efficiently transport the oil to refineries and other processing facilities.

One of Kinder Morgan’s largest holdings is a 111-mile pipeline running through the heart of the Eagle Ford Shale region. The pipeline carries natural gas from the region’s extraction sites to processing facilities, which are also owned by Kinder Morgan.

Such full-service pipeline operations are what make Kinder Morgan the logical choice for large natural gas producers operating in the area, including Chesapeake Energy (NYSE: CHK) and Anadarko (NYSE: APC).

And thanks to the significant cash flow generated by its subsidiaries, Kinder Morgan pays a healthy, reliable and growing dividend. Over the last three years, the dividend has surged 192%.

With a current yield of 4.9%, Kinder Morgan is a high-yield energy company. Exxon Mobil (NYSE: XOM), for example, only offers its shareholders a 2.8% yield.

All of this may sound like great news. But the stock took a hit in early December after disappointing guidance from one of its subsidiaries. It was at those depressed levels that the company’s CEO, Robert Kinder, invested $27 million in Kinder Morgan stock. While shares enjoyed a 10% bump on the news, the price has since fallen back to pre-announcement levels.

Kinder Morgan’s profitability has little to do with gas prices. The company offers “midstream” services, which means that Kinder Morgan isn’t involved in extracting the resource and isn’t selling it to the end consumer. Therefore, Kinder Morgan’s network of pipelines and processing facilities is profitable anytime that oil and gas are flowing through them.

Based on steady demand and the long-term commitments Kinder Morgan has secured from large oil and natural gas producers, the company’s business model is rock solid.

Despite being a dividend champion, Exxon Mobil’s 2.8% dividend seems paltry next to Kinder Morgan’s 4.9% yield. And with a proven track record for dividend growth, Kinder Morgan is poised to make investors a lot of money.

The median of analyst predictions suggests that Kinder Morgan shares will rise by over 15% this year. Between that share appreciation and the 5% dividend, your annual return could be 20%. In an environment where major markets are expected to be flat, that is tremendous performance. Still, the stock is 22% below its 52-week high and has the potential to return to those levels.

Investors search for opportunities to own dividend growth and undervalued stocks. With Kinder Morgan, you can own both at a price that was attractive to the person who should know best, its CEO.

There’s a New Highway Being Built Across America

For investors, this is an incredible opportunity. You see, the one company at the center of this new highway is on pace to DOUBLE in value very soon. I’ve put my money where my mouth is… and invested my personal savings in this stock! And I’d like you to get in before shares take off – which is why I prepared a brand new report on this highway and the company behind it. Click here for all the details on this company – before its shares DOUBLE!

]]>
<![CDATA[How Coca-Cola’s GMCR Deal Changes the Beverage Industry]]> beverage-industryWhat happens when the largest entity in the beverage industry buys a 10% stake in your company?

In the case of Green Mountain Coffee Roasters (Nasdaq: GMCR), shares of the specialty coffee company jumped 47% in just four trading days, landing on an all-time above $119. Coca-Cola (NYSE: KO) bought a minority stake in GMCR for $1.2 billion last week. The deal has major benefits for both sides, and could have long-lasting implications for shareholders of the two companies.

The benefits for Green Mountain Coffee – the Vermont-based single-serve brewer headquartered a mere 15 miles from our offices here at Wyatt Investment Research – are obvious. The 10-year agreement with Coca-Cola gives GMCR a decade’s worth of increased branding and distribution potential. Everybody knows what Coke is. Not everybody knows the name Green Mountain Coffee Roasters. Being in business with Coca-Cola for the next 10 years will probably change that.

For Coca-Cola, buying a stake in Green Mountain Coffee has the potential to create an entirely new revenue stream. It allows Coca-Cola to tap into the burgeoning at-home soda-making sector that SodaStream (Nasdaq: SODA) currently dominates.

Green Mountain Coffee made its name through its signature Keurig brewing machines and K-Cups, which allow users to brew coffee with ease from a disposable, single-serve plastic container. Now Coke and GMCR are collaborating on the “Keurig Cold,” a similar system to the K-Cups except using cold Coke beverages.

The Deal’s Impact on the Beverage Industry 

The deal with Green Mountain comes at a time when sales in the soda industry are flat-lining. Coca-Cola’s revenue slipped in the first three quarters of 2013, and earnings have actually fallen on a per-share basis since 2010. PepsiCo (NYSE: PEP), Coca-Cola’s main rival, has experienced similar declines.

Meanwhile, sales at SodaStream have quintupled in the last three years, while net income has more than tripled. The maker of do-it-yourself soft drink systems has become mainstream enough to warrant its own Super Bowl commercial – starring Scarlett Johansson, no less – a couple weeks ago. SodaStream’s sales grew by 51% last year, though the pace is expected to slow to 29% this year.

Now Coca-Cola wants a piece of the make-it-yourself market in the beverage industry. And it doesn’t have to risk much to tap into that market. The $1.2 billion spent in the Green Mountain Coffee deal is a lot to GMCR, a $17 billion company. But it’s little more than a drop in the bucket for Coca-Cola, which despite its recent sales plateau reported $6.8 billion in profits in the first three quarter of 2013 alone.

Coca-Cola will always make boatloads of money. But the number of Coke drinkers around the world remains fairly steady. By teaming with Green Mountain Coffee, Coca-Cola can now sell “Keurig Cold” home brewers to those same people. The average retail price for a regular Keurig brewer is $120, and Green Mountain sold a record 5.1 million Keurig machines over the holidays. That’s $612 million in basically one month.

It’s doubtful Keurig Cold sales will ever reach that level. After all, the Keurig brewer is designed to simplify the coffee-making process for people. You can just buy a can or bottle of Coke. You don’t have to change a filter or pour grounds or wait a few minutes for it to brew. You simply crack open a can or twist a bottle cap and drink.

People don’t buy do-it-yourself soda brewing systems for the simplicity, however. They do it for the novelty. Now that the most recognizable soda brand in the world has entered the do-it-yourself space, Coca-Cola should be able to steal some of that novelty away from SodaStream, which only offers generic brands.

Opening up a new avenue of business could help move Coca-Cola sales  out of their current rut. If so, that should give a nice boost to a stock that has risen less than 3% in the last year.

As for Green Mountain Coffee Roasters, the Coca-Cola deal could completely change the way we think of the company. Heretofore, GMCR has been almost strictly a brewer of hot beverages. Breaking into the cold-beverage industry opens up countless possibilities.

And that means its recent 47% bump may be just the beginning of a much larger run.

Triple your dividends with one stock – starting this month!

With so many investors grabbing up shares of blue chips, yield is getting hard to come by. In fact, the average yield of the Dow has sunk to 2.1%. But our group of investors isn’t worried. We’re collecting big monthly dividends… up to $550 every 30 days…  from a little-known investment that yields a whopping 12%! If you’d like to tap into this income stream, and earn up to triple the dividends of even the best blue chip, click here for our full report on this opportunity. 

]]>
<![CDATA[Rare Downgrade Sinks Amazon Stock]]> amazon-stockThe Wall Street firm UBS downgraded shares of Amazon (NASDAQ: AMZN) to Neutral.

The move had an immediate effect on Amazon stock and shares are trading lower on Wednesday by as much as 4%.

The concern for UBS has to do with Amazon Prime subscribers. The recent quarterly results at the online retailer combined with customer surveys suggest that fewer subscribers will renew if Amazon raises the price for the Amazon Prime above the current $79 per annum.

UBS set a new price target for Amazon shares  at $375 to $450.

With Amazon trading at $350 per share, that target is fairly meaningless. The bigger news is that Amazon received a downgrade.

It simply doesn’t happen very often for what has become the beacon of the market. The can-do-no-wrong company has earned a ton of respect from the Street . . . so much so a downgrade has become out of the question.

After the UBS  downgrade, will others follow?

Valuation with respect to Amazon has long taken a back seat to reality. What matters for the stock is psychology. To the extent one Wall Street firm loses faith, others will do the same simply for not wanting to be the last man standing.

It’s been a dangerous game to be short Amazon. The stock has done nothing but appreciate in value in a major way.

Perhaps now might be the time.

As has been the case for some time, fundamental value at Amazon simply does not exist.

Analysts expect the company to make $1.95 per share in 2014. At current prices, the stock trades for 179 times that number. Amazon trades for just over 2 times sales and 17 times book value.

It’s an expensive stock, plain and simple, and perhaps now under attack.

The big thing I would worry about is competition. Forget about the current known players like traditional brick-and-mortar retailers trying to infringe on Amazon’s chokehold on the Internet.

Best Buy (NYSE: BBY), Target (NYSE: TGT) and Wal-Mart (NYSE: WMT) are all legitimate threats to Amazon, but the real threat might come from overseas.

Earlier this week Chinese online retail giant Alibaba announced that it was taking the first steps to set up an online marketplace in the U.S. The 11 Main site will offer products in the fashion and jewelry space.

That move, in addition to small investments made in the U.S., suggests the company has bigger plans for competing in the U.S.

That should scare Amazon investors holding a stock that is very, very richly priced.

I wouldn’t want to be holding this one when the music stops.

]]>
<![CDATA[What is Bitcoin?]]> what-is-bitcoinIt is the latest innovation to sweep the financial world and it wasn’t created by some investment bank. In fact, it’s not entirely clear who created it.

I’m talking about Bitcoin. And you would be completely forgiven if you aren’t exactly sure what it is.

So, What is Bitcoin?

Bitcoin is a peer-to-peer virtual currency exchanged digitally and directly between users. Some merchants have even begun to accept Bitcoins as payment. Since there is no institution or person that controls Bitcoin, it is considered a “decentralized” currency.

Instead of a central bank, Bitcoin relies on mutually agreed upon rules embedded in the software responsible for facilitating Bitcoin transactions.

The same way that a Town Clerk’s office would maintain records, each Bitcoin has a public ownership ledger – or “block chain” – that is accessible to all users. Because the ownership record involves a complex electronic address, it is possible to maintain anonymity while exchanging Bitcoins.

The transparency of a publicly viewable block chain ensures that a Bitcoin is only sold by its owner and that the buyer becomes the new owner of record.

Because the currency is decentralized, global and can be exchanged anonymously, it has already emerged as a favorite for e-criminals and money laundering.

And because it rose from $15 to $1,200 between January and November 2013, it has been a favorite for speculators as well.

How do you get Bitcoins?

First, you could accept Bitcoins as payment for goods or services that you are offering for sale.

Second, you could simply purchase Bitcoins through an online Bitcoin exchange. There are even Bitcoin exchanges offering to connect Bitcoin owners to Bitcoin buyers nearby. These services act as a neutral third-party and keep the Bitcoins in escrow while the two parties meet in person to exchange cash or services.

The fourth, and by far the most interesting way to acquire Bitcoins, is also the way in which Bitcoins enter circulation. You could “mine” for Bitcoins.

Yes, I said “mine for Bitcoins.”

How does the virtual currency work?

When the first Bitcoin block chain started in January 2009, there were only 50 virtual coins in circulation. Today there are 12,336,200.

Mining involves applying significant computational power to the Bitcoin network, which serves to verify past transactions and strengthen the Bitcoin network. Eventually, this processes releases new blocks of Bitcoins to the miner and new Bitcoins have entered circulation.

The process is meant to simulate real mining in the sense that it is labor intensive, takes a long time, and gets harder and harder over time because the easiest Bitcoin blocks are mined first.

The final blocks of Bitcoins will be mined in or around the year 2140. At that time there will be 20,999,999.9769 Bitcoins in circulation and no new blocks can be mined.

There are specific terms for Bitcoins in various denominations.

1 BTC = 1 Bitcoin

0.01 BTC = 1 cBTC or 1 Centibitcoin or Bitcent.

0.001 BTC = 1mBTC or 1 Millibitcoin or Millibit.

0.000 001 BTC = 1 ?BTC = 1 Microbitcoin or Microbit.

Bitcoin Advantages

The U.S. Dollar was backed by silver, gold and Treasury Notes at various points in history. But today the U.S. dollar is no longer backed by any hard asset.

Like the U.S. dollar, Bitcoin isn’t backed by any hard assets. But unlike the U.S. dollar and other world currencies, it isn’t controlled by a central bank that can expand the money supply for political or arbitrary reasons. The expansion of the Bitcoin supply is predictable and generally understood by the Bitcoin community.

Bitcoin advocates will say it has value because it can be used in exchange for goods and services, is somewhat scarce, and is accepted by individuals and merchants for payment. In reality, Bitcoin has value because speculators have piled into Bitcoin in hopes that it would rise…and its price has surged higher.

Regardless, the advantages of a digital, global and low-fee or fee-free currency are unmistakable.

What are some of Bitcoin’s risks?

For starters, it is subject to the laws of supply and demand. If Bitcoin users lose faith in the virtual currency and demand for Bitcoin suddenly drops, the value of Bitcoins will drop along with it.

I wrote more about Bitcoin’s risks yesterday in an article offering three compelling reasons to not invest in Bitcoin.

Additionally, there are competing virtual currencies. A shift from Bitcoin to other virtual currencies could result in the demise of Bitcoin the same way that Myspace and Friendster fell victim to Facebook (NYSE: FB).

And you can’t ignore the fact that many view Bitcoin as nothing more than a hi-tech money laundering scheme. Two executives of a popular Bitcoin exchange tied to the criminal marketplace Silk Road were arrested on charges related to money laundering only two weeks ago.

Just a few days ago prosecutors in Florida filed charges against heavy Bitcoin traders for use of an unapproved money transfer service in what will surely be a landmark court case.

The fact is, Bitcoin’s legal status is in question.

The Bottom Line

This technology is so new and unproven that long-term investors would be best served by avoiding Bitcoin altogether.

If you want to invest in the future of payments, take a look at this list of alternative Bitcoin investments that we published last week.

Whether Bitcoin is here to stay remains to be seen. Surely, its journey to the final mined block of Bitcoins in the year 2140 will have its ups and downs.

But hopefully the next time you hear someone ask, “What is Bitcoin?” you will have no trouble offering an intelligent answer.

The One Stock to Own in 2014 — The Year Mobile Takes Over

On Dec. 31, something incredible happened. For the first time in history, the majority of Internet traffic originated from NOT from PCs or desktops — but from mobile devices including smartphones and tablets. We’re never going back. Mobile is taking over. And even though the biggest player in mobile, Apple, is selling over 200 million iPhones this year alone… here at Wyatt Research, we’re recommending the one company no one is taking about. The one reaping massive profits each time a new Apple or Samsung smartphone is activated. In fact, as mobile data usage explodes in the year ahead, its stock is set to soar! Shares are already on the move. So, before this stock moves any higher, read our latest report for all the details: Click here for the full story.

]]>
<![CDATA[The Genuine Reason to Own CVS Stock]]> cvs-stockCVS Caremark (NYSE: CVS) made major headlines last week by stating that it would no longer sell cigarettes at its stores.

Though important as that story was, the real issue that will determine the future value of the company is operating results.

On Tuesday before the market opened, CVS reported results that exceeded expectations. CVS stock made $1.12 per share in the fourth quarter, beating estimates by a penny per share. Revenues of $32.83 billion slightly beat estimates of $32.67 billion.

CVS also increased earnings guidance for the first quarter to a range of $1.03 to $1.06 per share. Analysts were looking for 98 cents per share.

It turns out discontinuing cigarette sales won’t have a negative impact CVS stock after all.

The socially conscientious move was a savvy PR move.

While the company is said to be forgoing $2 billion in sales, the decision will not necessarily be a negative on the top or bottom line of the company.

CVS will replace those lost sales by increasing sales of smoking-cessation drugs and perhaps increased sales of e-cigarettes.

For certain, selling all drugs helped boost profits in the most recently reported quarter. It is the future growth of those sales that will likely make the decision to stop selling cigarettes a non-event.

In the fourth quarter, the 3.8% increase in prescription sales helped offset lower customer traffic and lower network claims.

With an aging demographic in the U.S., drug sales are likely to continue to grow for the foreseeable future and because of that, CVS stock is a really good investment opportunity.

Shares are up 2.5% on Tuesday, thanks to strong earnings.

Analysts expect CVS to grow profits by 13% in 2013. At current prices, shares trade for 15 times 2014 estimated earnings.

That price is a small premium to pay for a company that continuously exceeds expectations.

In addition, CVS pays a near-2% dividend — thus you have a tightly constructed stock that holds the promise to deliver in a good or weak market environment.

The expectation for investors going forward is slow and steady gains for CVS stock. Double-digit profit growth and a solid dividend should result in gains for the stock that will beat or exceed the major market averages

The end of cigarette sales may be a sensational headline but overall drug sales put CVS in the no-brainer category.

Mega-dividends

Ian Wyatt has found 3 stocks that pay dividends so big — you can retire on them. The Wall Street Journal calls them, “mega-dividends.” These stocks have a history of consistently RAISING their dividends… quarter after quarter. In fact, one of these cash-cranking companies hiked its dividend 10-fold! So, if these ever-increasing payouts sound good to you… Click here for all the details.

 

 

]]>
<![CDATA[Why Income Investors Should Prefer “New” Coke to “Old” Coke]]> cce-stockThe Coca-Cola Company (NYSE: KO) just might be the premier dividend grower. The company has paid a quarterly dividend since 1920 and has increased the dividend each year for the past 50 years.

You’ll find Coca-Cola on every list of “dividend aristocrats.” It’s the safe and obvious bet. No money manager jeopardizes his job recommending Coca-Cola for an income-investment portfolio.

I, too, am on board with Coca-Cola. But that doesn’t mean I’m necessarily on board with The Coca-Cola Company (KO).

I see a more intriguing income and dividend-growth opportunity in “New Coke” –  Coca-Cola Enterprises (NYSE: CCE), the Western European bottler and distributor of Coca-Cola products.  CCE is the product of KO reorganizing its bottling operations in 2010.  (Hat tip to Top Stock Insights editor Tyler Laundon for introducing me to CCE.)

CCE’s and KO’s fortunes are, not surprisingly, intertwined.  Over 90% of CCE’s sales volume consists of KO products.  So an investment in CCE stock is an investment in the Coca-Cola brand, except on a more concentrated scale. KO is worldwide, CCE is regional, with Western Europe being the region.

Admittedly, Western Europe is hardly renowned for growth opportunities, and CCE isn’t much of a top-line growth story. From 2010 through 2013, annual revenue grew to $8.2 billion from $6.7 billion.  Year-over-year for 2013, revenue is up only 2%.

Then again, KO isn’t much of a top-line growth company. Its year-over-year revenue growth for 2013 is expected to be on par with a day-old open bottle of Coke – flat.

KO is a storied dividend-growth company, but CCE is writing its own dividend-growth story.

If we go back to the beginning of 2009 (a time that includes legacy CCE, which included U.S. bottling operations), CCE has increased its annual dividend at a 23.3% average annual rate.  Over the same period, KO increased its annual dividend at an 8.1% average annual rate.

KO will likely announce another dividend increase in the near future, with the release of four-quarter and fiscal-year 2013 financial results. If the increase exceeds 10%, I’ll be surprised.

CCE, on the other hand, already announced its financial results for the quarter and the year. The announcement included a 25% dividend increase to $1.00 a share for 2014.

As the dividend goes, so frequently goes the share price.  Look no further than the relative share-price performance of CCE and KO.  As the chart below reveals, CCE has far outdistanced KO on share-price appreciation over the past five years.  I suspect the relative rate of dividend growth influenced the relative rate of share-price appreciation.

ko-stockDespite raising the dividend in leaps and bounds over the past five years, CCE’s payout ratio is still a reasonable 41% based on 2013 EPS of $2.44.  Preliminary estimates are for CCE’s EPS to grow 17% to $2.86, which drops the payout ratio to 35%.  In contrast, KO’s payout ratio is 54% based on the $1.12 annual dividend and expected 2013 EPS of $2.08.

Since 2009,  KO’s EPS has grown roughly 9% year after year. CCE’s EPS has grown roughly 13% each year.  A higher rate of earnings growth enables a higher rate of dividend growth.

I’m insufficiently familiar with KO’s recent purchase of Green Mountain Coffee  (NASDAQ: GMCR) to comment on specifics.  I’m sure Green Mountain will help KO’s top and bottom  lines. I would be surprised, though, if it helps enough to enable KO to grow its dividend at the same rate as CCE.

Triple your dividends with one stock – starting this month!

With so many investors grabbing up shares of blue chips, yield is getting hard to come by. In fact, the average yield of the Dow has sunk to 2.1%. But our group of investors isn’t worried. We’re collecting big monthly dividends… up to $550 every 30 days…  from a little-known investment that yields a whopping 12%! If you’d like to tap into this income stream, and earn up to triple the dividends of even the best blue chip, click here for our full report on this opportunity. 

]]>
<![CDATA[Are American Consumers Pulling Back?]]> american consumers

There’s been a lot of talk about American consumers early in 2014. And for good reason … it’s not entirely clear how well consumers are doing.

At first blush the macro-economic picture looks pretty good. After all, unemployment has been steadily falling and household wealth is back to where it was before the recession. Consumer confidence is back near post-recession highs too.

But unemployment is still around 6.7%. And while that’s lower than it’s been since the recession started, it’s also higher than it was prior to 2008. You have to go back to 1993 to get a similarly high unemployment rate.

Retail sales in 2013 were also a bit weak. I know sales came in lower than expected at many of the retail stocks I follow, including Best Buy (NYSE:BBY). And preliminary data from the National Retail Federation shows total retail sales growth of just 3.7% in 2013 (excludes autos, gas and restaurants), which is the weakest growth in four years.

The list of downward estimates since July for retail same-store sales (SSS) paints a picture of a conservative consumer. I checked in with Fact Set’s latest data and pulled the following negative revisions:

  • Downward SSS revision for Vera Bradley (NASDAQ:VRA) from 0.1% to -14.3%
  • Downward SSS revision for Radio Shack (NYSE:RSH) from 1.0% to -5.3%
  • Downward SSS revision for Wal-Mart (NYSE:WMT) from 2.0% to -0.4%
  • Downward SSS revision for Target (NYSE:TGT) from 2.2% to -1.7%
  • Downward SSS revision for Big Lots (NYSE:BIG) from 1.5% to -3.9%

There are pockets of expected strength. A few struck me as somewhat odd, given that the likes of WMT and TGT are expected to contract. For instance, Fact Set’s estimates show expected SSS growth for The Pantry (NASDAQ:PTRY), SUPERVALU (NYSE:SVU) and Safeway (NYSE:SWY). These grocery chains are expected to do better than the more diversified discount retailers.

Home improvement is expected to be strong, too. The Home Depot (NYSE:HD), Lowe’s (NYSE:LOW) and Tile Shop Holdings (NASDAQ:TTS) have all seen increases in their Q4 SSS estimates since the end of July.

Reading between the lines, I see a picture of an American consumer that isn’t quick to part with dollars that they don’t need to spend . . . unless they see those dollars going towards fixing up and/or maintaining assets like homes.

Perhaps this is an oversimplified perspective given the relatively narrow set of data provided above, but nevertheless the pattern seems to hold true even when I look a wider set of SSS data (I don’t have room to include all of it in this article).

Despite this relative weakness in 2013, consensus estimates are for 4.1% retail store growth in 2014. If we can avoid more government shutdowns and get used to the Fed tapering without a major pullback in the market, I do think 4.1% could prove to be conservative. This year’s holiday season was a definite letdown, and I think a repeat performance next year is less likely.

But I’m not overly bullish on retail stocks. Unless there are very specific reasons to own a particular company, like the turnaround effort at BBY, I’m putting the bulk of my money to work elsewhere.

Is this happening in your neighborhood?

It feels like robbery. Local governments are broke. But instead of cutting spending, they’re forcing homeowners to pay up – raising property taxes when most of us are feeling the pinch. There used to be nothing you can do about it – until now! There’s a a special Federal program that allows you to completely pay off your real estate taxes through exclusive rebates. And they are available to any American. In fact, you can collect a Real Estate Tax Rebate this month! And every 30 DAYS after that! Click here to find out how to enroll.

]]>
<![CDATA[Janet Yellen Takes the Stage]]> janet-yellenThere’s a new Fed chief in town.

Janet Yellen made her brand spanking debut on Capitol Hill today.

Yellen testified before the House Financial Services Committee about her intentions as Federal Reserve chair now that she’s supplanted former chair Ben Bernanke. As with Bernanke’s frequent Capitol Hill testimonies and press conferences, Wall Street hung on Yellen’s every word.

Here are some highlights of what she said this morning:

Janet Yellen on the state of the U.S. economy:

  • At 6.6%, “the unemployment rate is still well above levels … consistent with maximum employment.”
  • The recent decline of emerging markets poses no significant threats to the U.S. economy.

Yellen on QE3, the Fed’s ongoing bond-buying program:

  • While 6.5% unemployment remains a threshold for considering raising short-term interest rates from near zero, but hitting that level “will not automatically prompt” the Fed to raise rates.
  • In the meantime, the Fed is likely to continue reducing its bond purchases. What had been an $85 billion-per-month bond-buying stimulus measure has been reduced to $65 billion in the last two months. Yellen expects the Fed to continue reducing – i.e. “tapering,” as Bernanke once infamously called it – its bond-buying program as the economy improves.
  • “If the economy continues to improve, we’re likely to continue reducing asset purchases in measured steps,” Yellen said.

On how Fed policy may change with her replacing Bernanke:

  • Yellen promised a “great deal of continuity” between her regime and Bernanke’s, and she supports the current policy that Bernanke implemented.
  • “The purpose (of the current policy) is to spur spending in the economy, and to achieve more economic growth. We certainly saw a pickup in housing activity, and a very meaningful increase in house prices, which has improved the security of people in their mortgages … Housing is a good example of where the Fed policy has been successful.”
  • “Since the beginning of this program, we have seen unemployment decline 1.5%.”

On whether last month’s weak jobs report will convince the committee to slow its tapering:

It’s important not to jump to conclusions. What would cause the committee to consider the cause is a notable change in the outlook. We do need to see growth at an above-trend pace to see continued improvement in the labor market.”

Stocks were up very slightly while Yellen spoke this morning. Because she is essentially vowing to maintain the status quo, there wasn’t a whole lot for investors to sink their teeth into.

The next Federal Open Market Committee (FOMC) meeting isn’t until March 18-19. Stay tuned.

]]>
<![CDATA[Selling Puts for Steady, Reliable Income]]> Before I get started, I want to remind everyone that later this week I will reveal all the details of a reliable and defensive options strategy for profiting even when the market slumps. While the market dropped over 5% in January, I was able to make over 11% in my portfolio. Click here if you wish to secure a spot to this free, live event:  “My Gameplan: Earn 5% a Month Even When the Market Drops.” I hope all of you are able to attend. If not, sign up to ensure you receive the video in your email shortly after the presentation. It’s important to me that everyone learns about this important alternative strategy.

Today, I’d like to tell you about my favorite income strategy.

It’s a strategy that has allowed subscribers in my High Yield Trader service to reap 41% in Gold Miners ETF (NYSE:GDX), 28.99% in Microsoft (NYSE: MSFT) and 16.92% in Wells Fargo (NYSE: WFC) all within the last six to nine months. And the overall track record has been an astounding 27 out of 28 trades for a win ratio of 96.4%.

The strategy has the highest probability of any strategy in the investment universe, and for that reason it is one of the most popular strategies among professional investors.

The strategy is called put selling and it is the synthetic equivalent of a covered call, but with far better benefits. Both strategies have the same risk/reward profile, meaning they have the same net investment and profit potential.

Selling puts allow you to generate a steady, reliable stream of income without actually owning any stock. And if you want to own a certain stock, you can purchase it at the price you want. The best part, while you’re waiting for the stock to hit a specified price you are able to continuously collect income…essentially getting paid to be an investor. So, why would you ever set a limit price when you could sell puts and collect income while waiting for your price to hit? That  wouldn’t make sense.

Let me use an example from our High Yield Trader portfolio.

Microsoft is a stock I like to sell puts on (and covered calls for that matter). It’s a company that I feel comfortable owning for the long haul mostly due to its unwavering quest to please shareholders. The company continually buys stock and pays a healthy 3.1% dividend.

The stock is currently trading for $36.50.

Remember when I said we want to get paid to be investors? Well, given our desire to own Microsoft at, say, $34 – we can get paid. Think about that: we can get PAID to agree to buy a stock at a lower price that we prefer.

I don’t want to get into the details in this short column, but we can sell one put contract that gives us the ability to buy 100 shares of Microsoft at $34 a share – and collect an immediate $60.

And no matter what happens, we get to keep that $60. If Microsoft stays above $34 – the $60 we collected is ours.

But for the sake of understanding, we should examine the alternative – Microsoft closing below $34 by option expiration.

In that case, we’d keep the $60 and be forced to buy Microsoft stock at $34 per share.

In our case, we’d actually own the stock for $33.40 per share – that’s the $34 strike price minus the $0.60 premium. That is 8.5% less than Microsoft’s current market price.

Here’s that math:

Initial income from sold put premium – $60

Purchase 100 shares of Microsoft at $34 – $3,400

Initial outlay – $3,340

The important thing to remember is that if the stock trades below $34 by option expiration, you become a shareholder just like everyone else … but at a discount.

Plus, you’d get the dividend going forward of at least $112 per 100 shares, as each share pays a $1.12 annual dividend.

One way to think about it is that you’d receive $172 on a $3,340 investment. This works out to 5.1% on your money.

To me, this safe 5.1% return is superb given the current yields on bonds and other safe investments  . . . and the likelihood of Microsoft raising dividends going forward.

Simply, selling puts is not inherently dangerous. If used correctly, it’s no more dangerous than any other type of investment. In fact, it’s often safer.

And if you’re truly interested in income, it’s something you owe to yourself to look into.

Click here if you wish to secure a spot to my free, live event:  “My Gameplan: Earn 5% a Month Even When the Market Drops.”

]]>
<![CDATA[Should You Invest in Bitcoin?]]> invest in bitcoin When an investment grows by 7,900% in less than one year, what do you do?

That’s exactly what happened with Bitcoin in 2013, as the value of the virtual currency soared from $15 in January to more than $1,200 in November. In fact, the best performing hedge fund last year invested exclusively in Bitcoins. So, should you invest in Bitcoin?

After such an astronomical surge in prices, investors should NOT buy Bitcoin. In fact, there are three simple reasons for concern.

Bitcoin is not a proven alternative asset.

As part of my diversified portfolio, I like to own gold and silver. One easy way to do this is through the popular ETFs that track their value, including the SPDR Gold Trust (NYSE: GLD) and iShares Silver Trust (NYSE: SLV).

Most long-term investors who hold gold ETFs or silver ETFs are seeking the diversification offered by alternative assets. After all, these assets are thought to be a good hedge against the U.S Treasury printing money.

But over the last year, the SPDR Gold Trust is down 23%. And the iShares Silver Trust has plunged 36%. After such a poor showing, investors are looking for an alternative. And increasingly they’re buying Bitcoins.

While Bitcoin is certainly an “alternative” to owning stocks and bonds or holding U.S. dollars, it is not necessarily a reliable one.

Gold and silver have been around for a very long time. You can pick them up in your hands and both have industrial uses. The same cannot be said for Bitcoin.

Bitcoin is merely a promising digital currency experiment. It was dreamed up out of thin air and the first Bitcoins entered circulation in January 2009, just five years ago. As a matter of fact, the person or group that created Bitcoin did so under a pseudonym so we don’t even know who created it.

I don’t know about you, but when I go looking for alternative assets to put in my portfolio I prefer something with more than 5 years of history and at least some physical existence or value.

Bitcoin isn’t a share of a company or a bond to be repaid by a borrower. Bitcoin is new, completely different and its future isn’t certain. While it could have a place in a speculative portion of your portfolio, Bitcoin is not a proven and reliable alternative asset.

Second, Bitcoin’s legal status is uncertain.

Bitcoin is a five-year-old digital money experiment. As skillfully as the technology and software behind Bitcoin have been designed and implemented, the concept of a virtual currency is unlike any other technology we use.

While no laws have been passed in direct response to Bitcoin, its prominent use in criminal enterprise makes it a high profile target for law enforcement and legislative efforts. Even for those using and investing in Bitcoin legitimately, tax implications and the legal status of Bitcoin exchanges remain uncertain.

Just last week Florida prosecutors charged three high-profile Bitcoin traders on various charges stemming from the use of an unlicensed money transfer service.

Is this just the tip of the iceberg when it comes to various local and national governments taking action against Bitcoin users and traders?

And my third concern is this: how do you value a virtual currency?

The argument that Bitcoins have no real value is a tough pill for Bitcoin advocates to swallow. They will argue that, relatively speaking, the U.S. dollar and the Euro have to real value as they are not backed by any hard assets either. And, while true, this argument misses the point.

Sure, the U.S. dollar is no longer backed by gold, silver or Treasury Notes. However, U.S. debt and currency is backed by the full faith and credit of the U.S. government. The government can tax to pay off its debts while Bitcoin is pure speculation.

Speculation isn’t necessarily bad, but it’s very important to recognize it as such.

Bitcoin has no assets or central bank behind it whatsoever. For some people, this is exactly the appeal of Bitcoin. Its only value comes from the value given to it by users and the speculators who have purchased Bitcoins on the assumption that the value will go up over time.

The reality is that we don’t have good answers to any of the risks I just outlined. I have heard intelligent responses to each of these issues but they miss the bigger picture.

This is a “virtual currency.” It is five years old. It was created by an anonymous person or group. It has questionable legal status. It is not tied to any asset of any kind.

Bitcoin is pure speculation. But, because there is no theoretical value, there are no fundamentals to slow its rise.

Despite the fact that Bitcoin could rise indefinitely there are so many other great alternative assets, investments with sound legal standing and with proven fundamental value.

I can’t stop you from investing in Bitcoin if that’s what you want to do. But you should know that it could be today’s riskiest investment.

Can you think of more reasons not to buy Bitcoin?

Buy Gold for $400 an Ounce

Most gold miners are lucky to get their gold out of the ground for less than $1000 an ounce – which is great if gold is $1400 or more…But we found a specialized gold company that can buy gold for $400 an ounce. It’s a unique story – a safe way to benefit from high gold prices, with lots of downside protection. Click here for the full write-up. 

]]>
<![CDATA[LinkedIn Earnings Fail to Impress]]> linkedin-earningsShares of online resume and job networking site LinkedIn (NASDAQ: LNKD) fell on Friday after the company released earnings that failed to impress.

Not helping matters was a job market report that for the second month in a row also failed to impress.

The U.S. economy produced 113,000 jobs in January. The expectations were for 190,000 jobs to be produced.

The unemployment rate did dip to 6.6% and the participation rate – an important given the number of unemployed dropping out entirely – increased. December job numbers were revised slightly higher to 75,000.

That’s two months in a row now of weaker-than-expected numbers. Even though the unemployment rate is falling, the strength of this economic recovery is clearly in question.

To be fair, much of the disappointment can be blamed on the weather. Many regions of the country are stuck frozen in a New Millennium Ice Age of sorts. In such conditions, things tend to grind to a halt.

The hope is that when spring comes, the thaw will produce greater activity to make up for lost time. Or, at least that’s what the bulls are hoping for.

As for LinkedIn, the weak economy does not help its prospects for growth. With the Federal Reserve removing stimulus in the form of reduced bond buying, a decline in economic growth is a very real possibility.

For a stock that has a premium valuation, such an environment is not conducive to appreciation. It’s the forward guidance that is hurt LinkedIn on Friday.

LinkedIn actually beat expectations on the top and bottom line, but guidance was light. Adjusted earnings for the fourth quarter came in at 39 cents per share, beating analyst estimates by a penny per share.

Revenues were $447 million in the period versus an estimate of $438 million. Revenue guidance for the first quarter missed expectations. The company sees revenue for the first three months of 2014 at $455 million to $460 million. Analysts were expecting $471 million.

This result comes on the heels of Twitter (NASDAQ: TWTR) disappointing investors and dropping hard.

Such is the life of a momentum stock. The hype can lift shares to levels that really make no sense from a fundamental value perspective.

Eventually the house of cards collapses when reality comes far from the dream. Usually the trigger is earnings. Missing estimates in one quarter does not a trend make, but it does make for a good excuse to sell, and that’s what is happening with LinkedIn dropping nearly 10%.

Analysts expect LinkedIn to grow profits by 35% in 2014. At current prices, including Friday’s drop, shares trade for 94 times 2014 estimated earnings.

That’s a steep price. This one could fall further. I’d avoid this stock for now.

There’s a New Highway Being Built Across America

For investors, this is an incredible opportunity. You see, the one company at the center of this new highway is on pace to DOUBLE in value very soon. I’ve put my money where my mouth is… and invested my personal savings in this stock! And I’d like you to get in before shares take off – which is why I prepared a brand new report on this highway and the company behind it. Click here for all the details on this company – before its shares DOUBLE!

]]>
<![CDATA[Is the Obama myRA a Bad Idea?]]> myra-obamaPresident Obama announced a major change to the way some Americans plan for retirement when he introduced the myRA retirement plan during his recent State of the Union address.

We didn’t find out much about the details of myRA during the State of the Union speech itself but the White House later released a fact sheet providing some of the important specifics.

In the State of the Union address, President Obama referred to myRA as a plan similar to workplace 401k plans and Individual Retirement Accounts (or IRAs) and offering a “new way for working Americans to start their own retirement savings.”

How Does myRA Work?

The plan bears some similarity to the workplace 401k in the sense that is a payroll-deduction retirement vehicle.

The plan is voluntary and capped at $15,000. After a worker has accumulated $15,000 in their myRA or has been contributing for 30 years, they will be forced to roll it over to a private IRA account.

The most significant difference between existing IRA/401k plans and myRA is that myRA funds can only be invested in a mix of U.S. Treasury Bonds.

The minimum to open the account is only $25 and regular payroll deductions can be in increments as small as $5.

myIRA is clearly targeted towards lower income workers who don’t have access to a workplace 401k plan and lack the financial know-how to start and manage an IRA. But the plan is also available to workers earning as much as $191,000 per year.

The plan will be available to all employers as an option for their employees, but doesn’t appear to be mandatory at this time. Employers aren’t being asked to administer or contribute to the plans themselves, they only need to forward employee contributions to the Treasury Department.

Workers contribute funds on a Roth basis, meaning that their withdrawals in retirement will be tax-free but the worker will contribute after-tax dollars.

So, Is the Obama myRA a Bad Idea?

There are several key ways in which myRA is different than the retirement plans currently available.

For starters, participants can only invest their contributions in a mix of U.S. Treasury Bonds. This is actually identical to the Thrift Savings Plan available to government employees but this is the first time a similar savings vehicle will be available to the general population.

myIRA is also unique in the sense that after a worker has contributed for 30 years or has saved $15,000, they are forced to leave myRA and roll the funds over to a private Roth IRA. As such, this really is more of a starter-IRA than anything else. As a matter of fact, the White House refers to the plan as a “simple, safe and affordable starter savings account.”

Anything that gets millions of people to start saving for retirement has to be a good thing. Still, the plan isn’t perfect.

The major drawbacks are the limit of $15,000 and the fact that participants can only invest in Treasury Bonds, which offer little or no yield after inflation.

But the point of the program is to provide a means for millions of American workers to start saving for retirement. And in that respect, the plan could be wildly successful.

The myRA Treasury Bond investments offer safety and the low-minimum payroll deductions offer convenience and accessibility across a broad socioeconomic spectrum.

I’m curious what you think, is the Obama myRA a bad idea?

8 dividend checks from 1 stock 

It’s one of the best-kept secrets in the market today… an oil company paying out bigger dividends than Exxon and BP. This highly-profitable company rewards shareholders with unannounced “bonus” dividend checks. And it pays them out every quarter. And that’s on top of its regular, scheduled dividends — meaning shareholders are collecting 8 dividend checks a year, all from this one investment. If you’d like to earn some extra income simply by sitting back and collecting these extra dividend checks, then click here to find out everything you need to know.

]]>
<![CDATA[Your Magic Number for a Comfortable Retirement]]> comfortable retirement

We all want to make sure we save enough for a comfortable retirement. But in today’s world, how much is “enough”?

It all depends on who you ask, I suppose. Jason Zweig thinks he has the answer.

Zweig is a highly respected and intelligent financial columnist for The Wall Street Journal. In fact, the name of his column is “The Intelligent Investor.” Zweig recently wrote an interesting article titled, “Retiring on Your Own Terms.”

In it, Zweig suggests there’s a concrete magic number for how much money you need to save to retire comfortably. He says:

“To be assured of having enough money to fund a comfortable retirement, you should save a total of 22 times the annual income you want to earn when you retire.”

In real terms, if you want to take home $100,000 in annual income after you retire, that would mean you’d need to save a whopping $2.2 million between now and then! That’s not chump change.

Of course, not everyone needs $100,000 a year to be comfortable when they retire. More importantly, Zweig didn’t factor Social Security into the equation. But the average retiree only receives $1,300 per month in Social Security checks, or $15,000 a year.

Furthermore, there’s a lot of uncertainty swirling around Social Security these days. The social security trust fund is currently only fully funded through 2033. That could always change. But Social Security is no longer something you can just automatically count on.

Add in the fact that human beings are living longer than we ever have before. Many people working today are likely to live to 100, or even 105. For those who want to retire at 65, that’s as much as 40 years you’ll need to live on your retirement savings.

It’s a scary thought. But it’s one that you can combat through not only diligent saving but also sound, conservative investing. You don’t want risk to enter the equation when you’re saving for a comfortable retirement. Zweig recommended Treasury inflation-protection securities, a.k.a. TIPS, as one low-risk option. But with interest rates still near zero, government bonds aren’t particularly appealing at the moment.

Blue-chip dividend stocks are another alternative. “Dividend Aristocrats” are a good, low-risk place to start. It’s a list of 54 companies that have increased their dividend payouts for at least 25 straight years. Coca-Cola (NYSE: KO), Exxon Mobil (NYSE: XOM) and Wal-Mart (NYSE: WMT) are among the companies on the list.

Few Dividend Aristocrats offer huge yields. Only three of them yield more than 4%, in fact. None of them will make you rich overnight. But if you’re looking to see your money grow steadily for the next 25 years, these dividend stocks are fairly safe bets.

If you’re still in the working world, saving 22 times your annual income for retirement seems like a daunting task. By putting your money to work now, however, you can be better prepared for when you decide to hang it up.

Eureka! Huge, new oil reserve discovered under the Atlantic

Geologists estimate it’s the biggest reserve in the Western Hemisphere. We call it, the “Saudi Arabia of Offshore Drilling.” And only one company has the high-tech rigs to reach these billions of barrels of crude. It’s there right now… reaping massive profits with an entire fleet of drilling rigs. The best part is, the bulk of these profits are paid out to shareholders in the form of dividends. And this driller is making so much money… it regularly pays out special dividends (it’s paid out 20 consecutive special dividends in a row). That means investors earn up to 8 dividends a year — all from this one company. Click here for all the details – before the next ex-dividend date!

]]>
<![CDATA[GILD Stock: 36% Growth Per Year Is Hard To Argue With]]> gild-stockA couple of weeks ago I presented a simple question: After rising by 48% in 2013 is the biotech sector too hot for its own good?

I concluded then that it was not – that there is still a lot of upside in select biotech stocks based on growth prospects and relative valuation. After reviewing full year and Q4 results from biotech heavyweight Gilead Sciences (NASDAQ:GILD) last week, I’m still convinced this is the right perspective.

Gilead’s 2013 revenue was up 15% to $11.2 billion, and net income was up 19% to $3.075 billion. That is very respectable growth, but it is just the tip of the iceberg.

Gilead’s new hepatitis drug, Sovaldi, just launched in December 2013 and it already hit $139.4 million in sales. Some of this is due to stocking up, but regardless, the drug is off to a great start. By 2017, I expect Gilead’s hepatitis treatments to generate more than $10 billion in annual sales.

That is a massive number. Remember, GILD’s 2013 revenues totaled $11.2 billion. In just 4 years Sovaldi has the potential to add 90% revenue growth for GILD. This is a $117 billion company, not some small cap, so this kind of growth is not normal.

Sovaldi is just one product though. GILD’s HIV treatments are also growing. If we put everything together, we’re looking at 2017 revenues in the neighborhood of $24 billion. That should translate into net income of roughly $10.7 billion. In other words, GILD could grow net income at a 36% annual rate over the next four years.

By comparison, analysts expect the S&P 500 is to grow at a CAGR of just 5.5% to 7% over the same timeframe.

This is what historical and estimated revenues and net income look like for GILD.

gilead-stock

Biotech is moving into its 4th year as the best performing sector in the market. The sector’s rise is fueled by rampant earnings growth as new blockbuster products, like GILD’s Sovaldi, hit the market. While this growth will not last forever, I also don’t think the end is nigh. In some cases, like with GILD stock, growth is just about to accelerate.

Until there is some major stumbling block, it’s difficult to advise against owning leading biotech companies like GILD.

For those of you interested in a little more detail into GILD’s sales, here are the results by product in 2013. Just take a few seconds to look these over and you’ll see that GILD is growing product sales almost across the board (Sovaldi had no 2012 sales so there is no growth rate noted).

 

12 Months Ended December 31 (in thousands, except percentages)

 

2013

2012

% Change

Antiviral product sales

$9,339,879

$8,141,790

15%

Atripla

$3,648,496

$3,574,483

2%

Truvada

$3,135,771

$3,181,110

(1)%

Viread

$958,969

$848,697

13%

Complera/Eviplera

$809,452

$342,200

137%

Stribild

$539,256

$57,536

837%

Sovaldi

$139,435

—–

—–

Cardiovascular Product sales

$968,590

$783,003

24%

Letairis

$519,996

$410,054

27%

Ranexa

$448,624

$372,949

20%

GILD stock slumped a bit after reporting Q4, but we shouldn’t make too much of that. This stock is one I own for the long haul, and you should too.

The Secret to Our 399% ‘Boomerang Payday’

Have you watched a stock crash to a new low only to boomerang and rocket up to a ‘lifetime high’ just days later? If you know when to get in, the results can be astounding. Recent boomerang stocks include: Pier 1 Imports up 21,700%, Select Comfort up 10,816%, and Sirius XM Radio up 6,100%. Now, I’ve found a similar boomerang opportunity – a stock with a “secret catalyst” that could send its shares soaring! It could be the biggest Boomerang Payday of 2014. Click here to take 2 minutes to read the amazing story of this stock.

]]>
<![CDATA[Is a Tobacco Ban Bad for CVS?]]> tobacco-banDrugstore chain CVS Caremark (NYSE: CVS) announced earlier this week that it would cease sales of tobacco products in all of its 7,600 retail stores. It’s a bold move. But is the CVS tobacco ban bad for business?

In the press release announcing the decision, CVS said it hoped it was setting an example and that other drugstores would follow.

Why would CVS decide such a thing?

“The CVS announcement sends a powerful message that if you’re in the business of health care you shouldn’t be in the business of selling tobacco products,” says a spokesperson for the Campaign for Tobacco-Free Kids.

This seems like a simple and reasonable rationale for the tobacco ban. The numbers behind the decision aren’t quite so simple.

CVS Tobacco Ban: Good or Bad for Business?

The CVS tobacco ban will result in the loss of $2 billion in revenue, according to CVS estimates. Approximately $1.5 billion would be from tobacco products themselves, while an additional $500 million would be from other items that customers buy alongside their tobacco purchases.

CVS is expected to report $126 billion in revenue for 2013, so arguably $2 billion in lost revenue isn’t the end of the world for CVS.

But it’s not as simple as lost revenue.

Cigarettes and other tobacco products are notoriously low-margin products.

By clearing out the low-margin tobacco products, CVS is also making room for new or expanded product offerings. For example, tobacco products – with an average margin of 15% – could easily be replaced by health and beauty products, which carry margins of 30-50%.

It remains to be seen whether competitors like Walgreens (NYSE: WAG), which operates over 8,600 stores, will follow the CVS tobacco ban and decide to ban tobacco sales in its own stores.

Target (NYSE: TGT) actually ceased its sales of tobacco in 1996 after determining that it was too expensive to manage the process of selling tobacco in its stores.

Interestingly, both Family Dollar (NYSE: FDO) and Dollar General (NYSE: DG) recently started selling tobacco products. Dollar General said in December that sales of tobacco products seemed to be driving increased traffic to its stores.

While casually referred to as “CVS,” the official name for the company is “CVS Caremark Corporation.”

Though it isn’t the most publicly visible part of the corporation, Caremark is responsible for almost two-thirds of the company’s revenue. Caremark is a pharmacy benefit manager handling prescription drug coverage for large employers and institutions.

With that in mind, Caremark is in the business of keeping people healthy. And with its identity as a drugstore, so is CVS. This is truer today than in previous years now that CVS has quietly added in-store clinics to many of its locations.

Indeed, CVS Caremark is in the business of promoting health and preventing disease. And selling tobacco products seems to be in direct conflict with that message.

The Bottom Line

After the CVS tobacco ban announcement, shares of CVS fell by 1% while the broader market remained flat. Still, there hasn’t been much of a reaction from investors.

While the company expects to pass up $2 billion in revenue as a result of the tobacco ban, it also said that it expects to “offset the profitability impact” of the ban. In plain English, that means CVS thinks it has identified ways to replace the lost revenue of tobacco sales with new sources of revenue.

Of course, it remains to be seen whether the CVS tobacco ban will have an impact on its profitability. Regardless, this appears to be the right moral and business decision for CVS.

How Hilda Trebert Collects $4,374 in Monthly Income…

Ian Wyatt has found a way to earn steady, monthly income through rental properties WITHOUT being a landlord. You can collect a monthly “rent check” for up to $4,374 (like Hilda Trebert of Gorham, NH)… without wasting your time as a busy, overworked landlord… and never having to worry about mortgage payments, security deposits or property maintenance. If this sounds good to you, click here to find out how to collect your first “rent check” later this month and after 30 days after that!

]]>
<![CDATA[Boost Yield on This Tech Stock]]> tech-stock

Back in late April, Ian Wyatt and I introduced High Yield Trader to the masses.

The service was based on doubling the dividends in some of the most shareholder-friendly, blue-chip companies the market has to offer. One of the first picks we chose for the portfolio was tech stock Microsoft (Nasdaq: MSFT).

For over ten years, Microsoft has hiked its dividend at an impressive rate of 18.7% year over year. That alone makes it worth owning over the long term. But Ian and I knew we could do significantly better over the long term using a few simple steps.

The idea was to buy shares of Microsoft . . .and then sell someone the right to buy our shares from us at a higher price. The practice is better known as “covered calls” and it is a favorite strategy among professional income investors.

Again, our original goal was to double the dividends of each and every stock that we added to the High Yield Trader portfolio. At the time we added Microsoft, the company was paying out a dividend of 2.3% . . . now it’s 3.1%.

Now nine months and 16.9% later we’ve more than fulfilled our initial goal. If you had purchased MSFT stock at the same time, you would only be up 13.6%. The difference in returns doesn’t sound like much, but you must remember that we have consistently locked in returns on a monthly basis using our covered-call strategy . . .unlike just holding the stock, which leaves you with complete exposure to market risk.

tech-stock

One thing is certain, if you are willing to learn the basics of our strategy, you can easily use MSFT to safely and consistently collect 6% to 8%  annually.

Let me show you how it works…

In our original trade in late April 2013, we noted how you could buy shares of Microsoft for around $31.50 and simultaneously sell the June $33 calls for about $0.40.

In other words, we were buying shares for $31.50, then selling someone the right to buy them from us for $33 per share.

We earned a “premium” – also known as income – of $0.40. And that provided us with an immediate 1.3% yield on the original stock position. And the options had a lifespan of less than two months.

So the 1.3% return was an “annualized” gain of about 8%.

But by the time our June $33 calls were to expire, Microsoft was trading for over $33. So we were forced to sell our shares for $33. As a result, we pocketed a capital gain of 4.7%, plus our 1.3% in call premium for a total return of 6% in just two months.

To drive the point home, let me cover the trade in “real money” terms…

We bought 100 shares of Microsoft for $3,150. We collected $40 in super-low-risk premium for selling covered calls on Microsoft. And once those calls expired or called away, we do it all over again.

An 8% annual income stream on the $3,150 stake is $252. That’s an extraordinary amount of extra income coming from a great blue-chip tech stock like Microsoft. And remember that’s only based on the bare minimum of 100 shares.

Now… you might be thinking, “You’re not telling us the full story. You can’t repeat that trade all the time.”

But… two months later… in late June, I essentially made the same trade with the same tech stock. We were able to bring in another 1.5%. Not only that, but we did it once again in August for a 1.3% gain…and again in October, December and February.

So far we’ve managed to produce a total income of 16.9% over the past nine months.

Keep in mind, Microsoft shares didn’t have to “soar” for us to earn this extra income. We made money as the tech stock climbed, moved sideways, or even declined a little.

The best news is that you can do this again right now. Today, you can buy Microsoft for around $36.18 per share.

All you have to do is learn the basics of this approach and put them to work for you. If you are interested in learning all the details, please click here now.

]]>
<![CDATA[How to Profit from the Organic Food Movement]]> organic-food-movementThe organic food movement gets larger every day, with more American’s buying locally raised and organic vegetables, meats, beers, and snacks.

This notion has created a significant demand for high quality foods, specifically organic and “all-natural” products. Today, consumers are better educated than ever before about the health benefits of avoiding processed foods. And that knowledge is creating more demand for locally grown and organic foods.

Some investors have been profiting from the health food craze by investing in Whole Foods Market (NYSE: WFM).

As the largest and best-known organic grocery store chain with 367 stores, Whole Foods has been growing rapidly. Over the last three years, sales of grown by 40% to reach $14 billion in 2014. Meanwhile, Whole Foods stock is up an impressive 860% over the last five years.

You may have missed out on the biggest profits with Whole Foods stock. But there is a little known company that’s at the epicenter of the organic food movement.

That company is Where Food Comes From (NASDAQ: WFCF). The company is well positioned to profit from the eating healthy and local food movement. And that could mean big gains for the stock.

Where Food Comes From is in the business of third party food auditing. In simple terms, the company goes to different plants and production factories to inspect the cleanliness and make sure food companies are producing their food as it is advertised.

This company is tiny, with a market capitalization of just $45 million. Yet Where Food Comes from has a lot of clients you’ve already heard about. Among these are Costco Wholesale (Nasdaq: COST) and Chipotle Mexican Grill (NYSE: CMG), two growing food companies.

With 18 years in the business, the company has a head start on industry relationships, expertise and general knowledge of food auditing. That puts the company in a dominant position in the food auditing business. With more than 10,000 customers, Where Food Comes From is the #1 independent agricultural auditor in the country.

Revenue and profits have been modest thus far.  In the first 9-months of 2013, the company’s revenues were $3.7 million. With a net loss of one penny per share, Where Food Comes From is essentially operating at breakeven.

But those results don’t represent the potential for this company to become much bigger. Where Food Comes From wants to become a one-stop solution for all standards in the food industry. Demand for this type of solution exists today and is growing rapidly.

The key piece of this story rests on the company becoming the industry standard for the retail and consumer market. By acting as a third party auditor, the firm provides transparency between consumers and suppliers.

I believe there is potential for Where Food Comes From to become a nationally or even globally recognized stamp of approval for quality food. If the company were able to achieve that ambitious goal, its value would be far more than the current $45 million market cap.

Just to put things in perspective, the total current market for food auditing in the U.S. is estimated at $100 million. That’s pretty small.  But if you consider the labeling business at $2.7 billion, it’s easy to see why the company has its sights on this much bigger market.

Recently, Where Food Comes From began trials of a labeling program in several prominent high-end retailers. Some of the first stores to participate were Heinens Supermarket and Delmonico’s in New York. Any positive feedback should result in a wider rollout of these services at other retailers.

If this initiative to expand to the labeling market is successful, Where Food Comes From stock has a lot of room to run. This micro-cap has been building a reputation second to none in its niche, and now its time to take things to the next level.

Mega-dividends

Ian Wyatt has found 3 stocks that pay dividends so big — you can retire on them. The Wall Street Journal calls them, “mega-dividends.” These stocks have a history of consistently RAISING their dividends… quarter after quarter. In fact, one of these cash-cranking companies hiked its dividend 10-fold! So, if these ever-increasing payouts sound good to you… Click here for all the details.

]]>
<![CDATA[Green Mountain Stock Surges on Coca-Cola Deal]]> green-mountain-stockSome incredible things are happening with shares of Green Mountain Coffee Roasters (NASDAQ: GMCR).

The stock is up an amazing 30% on Thursday after the company reported earnings after the market closed, but that’s not what moved the stock.

In parallel with the earnings report came news that Coca-Cola (NYSE: KO) was turning to Green Mountain to develop individual servings of Coke that could be made at home.

The single-cup coffee maker scored big time. In the 10-year deal, Coca-Cola is making a big investment in Green Mountain. In return, Green Mountain hits front and center at the current home soda pop delivery system, SodaStream (NASDAQ: SODA).

It’s a brilliant deal. Green Mountain was being attacked by short sellers concerned about the maturation of the home coffee system makers market. If growth is stalling,  that could derail the premium valuation in shares, or so went the short thesis.

This Coca-Cola deal blows that out of the water. It also created the epic short squeeze just like a Mento being dropped in a bottle of Diet Coke.

The transaction was one that put the earnings report in the back seat. Who cares about the numbers in the short term when you are about to do business with one of the most well-known brands in the world?

Wall Street firm KeyBanc raised their price target on Green Mountain from $100 per share to $150.

Unlike social media and Internet nonsensical valuations, this deal is a bit easier to price. The global beverage market is huge and in the home-delivery space there are few players. Coke sales are likely to be through the roof and now Green Mountain will capture a share of that market.

KeyBanc thinks the deal could add nearly $3.50 per share earnings power over the next three to tive years from this deal alone. That’s almost double what the company is making today.

I suspect the impact will be even greater.

The impact on Coca-Cola is less clear. Home sales could grow the overall market or it might cannibalize existing markets. Its shares are up slightly on the Green Mountain deal news.

The trickle-down here is enormous.

What does PepsiCo (NYSE: PEP) do in response?

The obvious target is SodaStream. Its shares are up 10% on speculation that PepsiCo will have no choice  but to partner with the company in response to Coca-Cola partnering with Green Mountain.

I think the fireworks are just starting. Despite the big jump in Green Mountain shares on Thursday, they are likely to be the big winner when the dust settles.

Triple your dividends with one stock – starting this month!

With so many investors grabbing up shares of blue chips, yield is getting hard to come by. In fact, the average yield of the Dow has sunk to 2.1%. But our group of investors isn’t worried. We’re collecting big monthly dividends… up to $550 every 30 days…  from a little-known investment that yields a whopping 12%! If you’d like to tap into this income stream, and earn up to triple the dividends of even the best blue chip, click here for our full report on this opportunity. 

]]>
<![CDATA[Twitter Shares Plunge After Earnings]]> twitter-sharesYesterday was a rough day to be a shareholder of Twitter (NYSE: TWTR). Despite surpassing analyst expectations for revenue growth, a slowdown in user activity saw Twitter shares plunge after earnings.

The Wednesday afternoon earnings report was the company’s first since its Initial Public Offering (IPO). As such, it was the first time that Twitter and the company’s CEO – Dick Costolo – have gone through Wall Street’s earnings gauntlet.

Safe to say, Twitter and Costolo did not emerge unscathed. For starters, the exchange between Costolo and Wall Street analysts on Twitter’s earnings call was, at best, tense.

Analysts had plenty of questions about why user growth and timeline views seem to be plateauing. But Costolo and the Twitter team seemed to be short on answers.

After-hours trading yesterday shaved $6.5 billion from Twitter’s market capitalization.

The Twitter IPO

We first wrote about the Twitter IPO when the company filed the papers required to initiate the IPO process. The company went public in November 2013.

Twitter priced its shares at $26 on the eve of its IPO. When shares finally began trading the next morning, they quickly shot up to $50.09, a gain of 93% over the IPO price of $26. By the end of the day, shares had given back some of the days gains.

But on its first day of trading, shares of Twitter still closed 73% higher than its IPO price, a closing price of $44.90.

Reaction to the Twitter Earnings Report

The market’s reaction to Twitter’s earnings report was swift and vicious.

The company’s balance sheet and revenue surpassed analyst expectations. The real issue with Twitter’s earnings report was growth, and it could be a major issue.

Twitter disclosed yesterday that the number of regular users grew 30%. This seems like a healthy number until you consider that growth in the same quarter of last year was 39%. Even worse, growth should be accelerating rather than slowing in order for Twitter to live up to the market’s hype.

Besides “regular users,” “timeline views” is another important metric used by investors to understand the strength of Twitter’s user base and growth.

The chart below from Business Insider illustrates exactly why investors are – and should be – spooked about Twitter’s growth story, as evidenced by declining “timeline views.”

twitter-chart

The news saw Twitter shares plunge in after-hours trading by 15% after the earnings report was released. The stock fell an additional 2.5% after the earnings conference call.

Twitter Shares: The Bottom Line

If Twitter is unable to continue both adding users and getting users to spend more time on Twitter then the company is in serious trouble.

Until yesterday, the biggest concern has been, “Can Twitter generate enough revenue and start turning a profit?”

After yesterday’s earnings report, many Twitter investors will be faced with the tough reality that the question of revenue growth matters very little if Twitter is unable to maintain its user base.

Without users there is no revenue. And, frankly, without users there is no Twitter.

Until Twitter can document a clear reversal in that trend, I doubt investors will pile into the stock with the same fervor as they have since the November IPO.

Sure, Twitter impressed the market with revenue growth. But with its user base stagnating, it is no wonder we saw Twitter shares plunge after earnings.

The One Stock to Own in 2014 — The Year Mobile Takes Over

On Dec. 31, something incredible happened. For the first time in history, the majority of Internet traffic originated from NOT from PCs or desktops — but from mobile devices including smartphones and tablets. We’re never going back. Mobile is taking over. And even though the biggest player in mobile, Apple, is selling over 200 million iPhones this year alone… here at Wyatt Research, we’re recommending the one company no one is taking about. The one reaping massive profits each time a new Apple or Samsung smartphone is activated. In fact, as mobile data usage explodes in the year ahead, its stock is set to soar! Shares are already on the move. So, before this stock moves any higher, read our latest report for all the details: Click here for the full story.

]]>
<![CDATA[Three Tips for Avoiding Risky Stocks]]> risky-stocksStocks have pulled back since the calendar flipped to 2014. But fresh off a banner 2013, many stocks remain overvalued.

Wall Street pundits have been calling for a pullback for months. Still, U.S. stocks kept rising to new all-time highs on almost a weekly basis. By the end of 2013, the S&P 500 had risen 30% – the index’s largest one-year return since 1997. Now the tide has turned.

The S&P has fallen 5% so far this year, only the second such pullback in the last three years. The pundits were right – ultimately, a correction was inevitable. It was just a matter of when. Stocks never rise continuously without an occasional pullback.

The recent pullback notwithstanding, some stocks are still overbought. As a whole, the S&P is trading at a very reasonable level of 15x 2014 earnings. But not all stocks are created equal.

The rising tide of last year’s bull run lifted many boats – including some stocks that didn’t necessarily deserve it. Some stocks were simply along for the ride. In many cases, that ride took them further than their earnings (or lack thereof) would warrant. Now that volatility has returned on Wall Street, many of these risky stocks are likely to come crashing back to earth.

We at Wyatt Investment Research refer to these risky stocks as “landmines” – ticking time bombs that could have a devastating effect on any investment portfolio.

In order to avoid such risky stocks, you must first identify them.

How to Avoid Risky Stocks

Here are three common characteristics of potential “landmine” stocks:

  1.  Unsustainable P/E Ratios. There is no real cutoff point for when a P/E ratio becomes too high. Tech stocks, for example, often trade at much higher P/E ratios than low-risk utility stocks. But I think we can all agree that a P/E of 50 is too high. Any stock that trades at more than 50 times forward earnings is in dangerous territory. Some risky stocks trade at high valuations for years. More often than not, however, high price-to-earnings ratios are difficult to sustain if profits aren’t growing at lightning speed. If you see a forward P/E above 50, that’s a red flag.
  2. Tiny Profit Margins. Profitability is the key to any company’s growth, and thus the key to any stock’s long-term performance. Sure, some upstart social media or biotech stocks can achieve major short-term returns on the promise of big things to come. But eventually, all companies have to prove to investors that they can make money. A risky stock that looks like a strong speculative play one day can quickly become stale if it’s struggling to turn a profit. And a low profit margin is a sure sign of a company that’s just scraping by. Be wary of any company with a profit margin of 10% or less.
  3. Huge Recent Returns. Huge returns are every investor’s goal. Finding a stock that will double in a year is essentially why investment newsletters like this one exist. But you don’t want to be late to the party. If you see a stock that has risen more than 100% in a year, it’s best to leave it alone. After all, “buy low, sell high” is the first rule of investing – not the opposite. Some stocks that have posted major gains in a short amount of time will continue rising. Those, however, are rarities on Wall Street. And they’re not worth the risk.

Any one of the three aforementioned characteristics should at least give you pause before deciding to buy a stock. If you see a stock with all three of these red flags, run very quickly in the opposite direction to avoid stepping on the landmine.

Entering the New Year, there were exactly 20 mid- to large-cap stocks that fit this so-called landmine criteria. And we have identified them all in a report we’re calling, 20 Stock Landmines that Could Destroy Your Wealth in 2014.” 

To read more about these risky stocks, click here. Until then…

]]>
<![CDATA[Top Residential REIT Boosts Dividend by 8.4%]]> residential-reitJust last week, one of the premier residential REITs raised its dividend.  And income investors who buy the stock before March 31 can claim the next dividend check.

That company is AvalonBay Communities (NYSE: AVB), a Real Estate Investment Trust (REIT) with a market capitalization of $16 billion. With an 8.4% increase in its dividend, AvalonBay now offers investors a 3.8% yield.

As you know, REITs are companies that own and lease properties.  While most REITs are in the commercial office space or real estate business, there are also residential REITs.

AvalonBay owns and manages almost 200 “multifamily communities in the United States.” Basically, the company owns and operates apartment buildings and townhouse complexes in 10 states and the District of Columbia.

The business model is simple: AvalonBay buys an apartment building. The company is a landlord, and rents apartments.  The nice thing about this business is the regular cash flow from its 52,000 apartments. AvalonBay operates in some of the country’s most robust housing markets including Washington, D.C., New York and Boston, and boasts an occupancy rate of 96%.

Business has been good for AvalonBay thanks to a slow housing market. With home ownership rates falling since the financial crisis, demand for rental units remains high. Over the last three years, the company’s sales have grown by 73%, and they’re expected to top $1.6 billion in 2014.

Thanks to a loophole in the IRS tax code, AvalonBay is able to avoid paying federal income taxes because of its residential REIT status. As you may know, REITs are not subject to corporate taxes if they distribute at least 90% of income to shareholders as dividends. As such, almost every dollar of profit that AvalonBay earns is distributed right back to shareholders.

In the most recent earnings report covering the final three months of 2013, AvalonBay reported an increase in quarterly profit of 64%.

AvalonBay has been expanding and making big investments. In early 2013, AvalonBay partnered with its chief rival to purchase the Archstone real estate portfolio from the trustee overseeing the Lehman Brothers’ bankruptcy.

As part of the deal, AvalonBay acquired 40% of the massive portfolio, roughly 22,000 housing units. AvalonBay rival Equity Residential (NYSE: EQR) also acquired around 23,000 housing units. Both companies took on their share of Archstone’s debt and incurred significant one-time expenses as part of the deal.

While the acquisition has left a blemish on AvalonBay’s short-term financial results, the long-term benefit of this investment will be realized for years to come. AvalonBay shareholders are already beginning to benefit from the company’s recent investments.

Investors were clearly impressed by the performance of AvalonBay’s housing portfolio, the company’s high-occupancy rate and the strength of the rental markets in which this residential REIT owns property. But just as impressive as these metrics was the company’s 8.4% dividend hike. Shares of AvalonBay stock rose 6% following the earnings report.

The stock hasn’t done well over the last year. While the S&P 500 index rose 30%, AvalonBay shares were flat.  But it looks like that underperformance could turn around in 2014.

Analysts expect the company’s sales to grow by 12%. And EPS are estimated to soar 33%.  Shares are trading around $125, or about 18-times this year’s earnings estimate.

AvalonBay is beginning to reap the benefits of its massive Archstone acquisition, and it looks like profits will grow considerably this year.

If you’re looking for a healthy stream of investment income and the potential for capital gains, this residential REIT looks like a long-term winner.

Avoid $6,000 in taxes with this form

There’s one tax that’s inescapable… Real Estate Tax. If you own a home, you have to pay – no matter what. Except the thing is, one group of homeowners doesn’t. They haven’t paid taxes in years. They’re enrolled in a special program that allows them to completely pay off their real estate taxes through exclusive rebates. These rebates arrive in the form of U.S. government-backed checks. And they are available to any American, regardless of income or employment status… In fact, you can start collecting a Real Estate Tax Rebate check of up to $6,175 – Click here for all the details of this unique program.

 

]]>
<![CDATA[Buffalo Wild Wings Stock Clipped on Revenue Miss]]> buffalo wild wings stockWhat a difference a night makes.

Buffalo Wild Wings (NASDAQ: BWLD) reported earnings results for the fourth quarter ending Dec. 31, 2013 after the market closed on Tuesday, and the initial headline was a positive report.

The company reported adjusted earnings of $1.10 per share, beating estimates by a few pennies per share. Revenues, though, were less than expected with $341.5 million in sales versus estimates of $345 million.

Even with the revenue miss, the initial reaction was for investors to bid up shares in Tuesday evening after-hours trading. Perhaps the thinking was the Buffalo Wild Wings stock would explode higher in regular trading on Wednesday on the earnings beat.

Chipotle Mexican Grill (NYSE: CMG) shares jumped more than 10% after it reported profits that beat estimates by a penny per share.

So why then did shares of Buffalo Wild Wings tank more than 10% when shares opened for trading on Wednesday? Part of the problem is market conditions, which continue to be weak, but the real reason is the revenue miss.

Investors can be a fickle bunch and the earnings report opens the door to so many reactions, many of them neurotic. It’s always best for companies to not open that door by offering a pristine report.

A pristine report can be defined as one that beats earnings, beats revenues and raises guidance or at a minimum, maintains guidance. Absent one of those things,  the shorts can attack.

That is especially true when the valuation of the stock is at a premium.

Analysts expect Buffalo Wild Wings to grow profits by 25% in 2014. At current prices, including the 10% discount on Wednesday, shares trade for 19 times 2014 estimated earnings.

19 times earnings is a big price to pay for the stock, but it is not a huge premium. Relative to expected profit growth, one could argue that the stock is in fact cheap. It is most certainly cheaper than it was before earnings came out. The fact that the company beat earnings should have trumped the sales miss, but alas that was not the case.

I would use the discount in shares to acquire the stock. It is far more likely that profit growth will be greater than 25% in 2014. The company has exceeded analyst estimates in the last three quarters reported.

That is a solid track record, and buying 25% growth as it is currently expected for a price less than 20 times earnings is a good price to pay.

I would look to take advantage of the selling by owning Buffalo Wild Wings at these levels.

]]>
<![CDATA[A Better Virtual Currency Than Bitcoin]]> virtual-currency

It’s no secret that cash as a method of payment is dying. Credit, debit and online payments are accepted almost everywhere. And in some cases, like on an airplane, cash is no longer even an option.

But I’m not into the whole Bitcoin thing. I just don’t believe that it’s a viable currency. Call me old fashioned, but I’ll stick with dollars, silver and gold.

Electronic payment processors – like PayPal, which is owned by eBay (NASDAQ:EBAY) – represent a much better investment opportunity than Bitcoin. That’s because one of the real opportunities for Bitcoin is to replace cash in economies where a lot of people don’t have bank accounts. These people have a need for a virtual currency, and something like Bitcoin could fill that need.

But so can PayPal. And for that matter, so could virtual currency products from other electronic payment processors like Visa (NYSE:V) and MasterCard (NYSE:MA), if they introduced them. The fact that payments through these providers are backed by a regulated and understood currency makes their adoption much more feasible.

A lot of the value in Bitcoin comes from the expectation that a unit of the virtual currency will be worth more in the future. That’s not a good thing for a currency that should be used as a medium of exchange. It opens the door for consumers and vendors who use it to get badly burned.

In sharp contrast, the shift toward electronic payments has made payment providers MasterCard and Visa insanely good investments for investors that bought and held as cash-based transactions evaporated.

The pennies-per-transaction that they charge for their services add up to billions of dollars in profits each year. For example, an investor that bought shares of MA in May of 2006 has earned a gain of 1,700%.

Electronic transaction processors are in a lucrative business. They generate a ton of cash. That’s why companies with large user bases, like Apple (NYSE:AAPL), are thinking about getting into the business.

Apple has access to millions of users through iTunes. And when it looks at privately held companies like Square and Stripe, which are seeing their market values surge, the temptation to introduce its own version of PayPal grows harder to ignore. The Financial Times reports that, based on the latest rounds of funding, Square is valued at $5 billion while Stripe is valued at $1.75 billion.

EBay’s PayPal is growing briskly. In 2013 sales of the unit grew by 19% to $6.6 billion. And mobile payments outside of parent company eBay grew by 128%.

Activist investor Carl Icahn has a position in eBay (and Apple for that matter) and, because of PayPal’s potential, calls a spin out of the unit a “no brainer”. I think it’s fair to say that a similar payment unit within Apple and Google could make sense (to be clear, both companies have worked on this).

I won’t ever invest in Bitcoin instead of EBAY, AAPL, GOOG, V or MA. All of these companies have very real potential to make a lot of money (i.e. dollars) in the virtual currency market. Some of them already do.

Why did Google just invest $60 million in this alternative bank?

We just found out that some of the savviest investors in the tech world are bankrolling a new, alternative, web-based banking platform. Most investors have never heard of it, but we believe it could revolutionize banking the same way the internet revolutionized music, communication and business. The best part? You can invest alongside Google and collect 9.6% yields starting immediately. Click here for the full details.

]]>
<![CDATA[Apple iWatch: Everything You Need to Know]]> apple-iwatchRumors have flown for years but it seems that in 2014, it is time for the Apple iWatch.

The detail of the iWatch rumors has intensified recently. These rumors offer considerable insight into what Apple (NASDAQ: AAPL) might have up its sleeve.

Almost a year ago I wrote an article predicting that the iWatch could contribute as much as $237 million in just profit in its first quarter after launch. Just days later Apple patent filings were released suggesting that the company is pursuing a curved and continuous display around the wrist.

Here is the latest in the quickly evolving Apple iWatch story.

Morgan Stanley’s Big Prediction About the Apple iWatch

News broke yesterday that Morgan Stanley analyst Katy Huberty is predicting $17.5 billion in iWatch sales after just the first 12 months after launch.

She bases these predictions both on the launch and subsequent performance of Apple’s existing products but also on the number of Apple customers at the time of each launch.

The chart below from Business Insider illustrates her prediction for the launch of the Apple iWatch:

apple-iwatch

The Morgan Stanley analyst predicted $17.5 billion in sales during the first year after launch. If true, the Apple iWatch could contribute as much as $3.97 billion in profit.

When you consider that Apple reported $64.3 billion in profit over the past year, an additional $3.97 billion in profit from the Apple iWatch would be an additional 6% in annual profit.

That could have a huge positive impact on Apple stock.

Will the Apple iWatch Replace my iPhone?

Smartphone users take their phone out an average of 150 times per day. The Business Insider chart below shows the breakdown of why, on average, smartphone users are reaching for their phones.

apple-iwatch

The important takeaway from this chart is most smartphone uses could be replaced by a “wearable.” Wearables, such as Google Glass or Google Contacts, clearly wouldn’t replace a smartphone entirely, but would be a perfect complement to a smartphone.

An Apple iWatch could easily replace the smartphone for initiating messages, voice calls, checking the time, accessing music, using the camera, using the alarm, viewing news & alerts and initiating web searches.

The Apple iWatch isn’t going to replace your iPhone, but it will sync perfectly with your iDevices.

What Will the Apple iWatch Do?

We still don’t know what the iWatch will look like, although a Google (NASDAQ: GOOG) image search for “iWatch concept” yields some pretty cool results.

But we are starting to get insight into what the iWatch will be capable of. Some of the most interesting of the recent iWatch rumors pertain to the people Apple is hiring and new technology the company is patenting.

9to5mac and the New York Times have published stories suggesting that Apple is making a push into health-monitoring and medical devices.

First, the New York Times reported that high-level Apple executives met with officials from the Food and Drug Administration, which is responsible for regulating – among other things – medical devices. The meeting was reportedly to talk about Apple bringing medical devices and apps to market.

The 9to5mac report suggests that the next version of Apple’s operating system, iOS, will include an app called “Healthbook.” The app is reported to be capable of monitoring calories, steps taken and weight lost.

Of course, in order for Healthbook to monitor these things, Apple will need a way to measure them.

Enter the Apple iWatch.

Apple has hired key people from around the medical device industry. Most recently, Apple hired the Chief Medical Officer of the Massimo Corporation. Massimo produces a heart-rate monitor that connects to the iPhone and uses an accompanying app to track and record heart rate data.

Apple is also rumored to be hiring experts in vascular visualization (finding veins, presumably to assist in heart rate and blood pressure monitoring) and non-invasive blood glucose monitoring. The company is also rumored to be hiring fitness experts.

Everything mentioned above suggests that health will play a central role in the Apple iWatch.

Apple iWatch: The Bottom Line

Imagine a device that monitors your heart rate, your blood pressure and your steps, then uses your heart rate data to calculate actual calories burned. This device will also track blood glucose in real time so individuals with diabetes can maintain control of their disease painlessly and conveniently.

Now imagine that this device can take a picture, wake you up, tell you when your next meeting is, display your recent texts or e-mails, and more.

That device is the Apple iWatch.

And after all of the rumors it seems that in 2014 it is finally time for the Apple iWatch.

Why did Google just invest $60 million in this alternative bank?

We just found out that some of the savviest investors in the tech world are bankrolling a new, alternative, web-based banking platform. Most investors have never heard of it, but we believe it could revolutionize banking the same way the internet revolutionized music, communication and business. The best part? You can invest alongside Google and collect 9.6% yields starting immediately. Click here for the full details.

]]>
<![CDATA[3 Dividend Paying Stocks Poised to Maintain Momentum]]> dividend-paying-stocksI’m sure you’ve noticed 2014 has gotten off to a rough and rocky start.  Stocks across the board have traded mostly down. The Wilshire 5000 Total Market Index has sagged 4.5% year to date – a palpable reversal from the 30% upward thrust in 2013.

Now I did say “mostly” down, not all down.  A few stocks have bucked the trend to keep the good times rolling through the turbulent nascent days of 2014.  Within the minority, three dividend paying stocks – dividend growers to be specific – look poised to build on gains achieved in 2013 and early 2014.

Audio and electronics manufacturer Harman International Industries (NYSE: HAR) is one of those dividend growers.

In 2013, Harman’s share price rose 80%. Over the past month, shares have tacked on another 24%.

Harman’s share price is being fueled by strong earnings and revenue trends, which are likely to continue through 2014. A few days ago, management raised fiscal-year 2014 EPS guidance to $4.16 from the original projection of $3.85. Revenue is expected to post at $5.1 billion compared to an earlier forecast of $4.7 billion.

The good news for income investors is Harman has the financial wherewithal to grow the dividend at the same pace as share-price appreciation. The company can boast of $7.55 in cash per share.

Harman is willing to return more cash to shareholders. The quarterly dividend payment has increased tenfold – to $0.30 per share from $0.03 – since early 2011. Over the past three years, the dividend, on average, has doubled.  I can’t say another doubling is in the cards, but an increase is forthcoming, and anything less than a 25%-increase would be a disappointment.

Anyone who bet Wynn Resorts (NASDAQ: WYNN) would outpace the market in 2013 is holding a winning ticket. The large Las Vegas and Macau casino operator saw its share price rise 60% in 2013.  Wynn investors were further rewarded with a 100% increase in the annual dividend payment – to $4 per share from $2 – as well as a special $3 per share dividend.

So far this year, shares of this dividend paying stock are up 10%.

Impressive growth is powering Wynn’s share price and dividend growth. For the fourth quarter, Wynn posted a 17.9% year-over-year increase in quarterly revenue to $1.52 billion.  Over the same quarter, net income nearly doubled to $213.9 million, or to $2.10 per share.

Sales at its Macau properties, Wynn’s largest market, have been particularly robust, rising 25% to $1.12 billion in the quarter. Management said in a recent conference call that growth in Macau will be just as good, if not better, in 2014.

Like its share price, Wynn’s dividend has gotten off to a good start in 2014. The company recently hiked the quarterly payout to $1.25 – a 25% increase.

Don’t be put off by negative news. I’m not, which is why I like Royal Caribbean Cruises (NYSE: RCL). A week ago, an illness outbreak on one of its ships affected 600 of the 3,500 passengers. The crew handled the outbreak professionally and courteously. The impact to future growth is negligible.

Growth in Royal Caribbean’s share price is anything but negligible.  In 2013, Royal Caribbean’s shares were up over 40%. In 2014, Royal Caribbean shares are up an additional 2%.

An increase in both cruise traffic and casino activity is driving earnings growth. In the latest quarter, Royal Caribbean reported EPS of $0.23, beating the consensus estimate by $0.05. Divining the future, management updated guidance, with EPS ranging between $0.20 and S0.30 for the first quarter. For the year, management expects EPS to range between $3.20 and $3.40, which is meaningfully higher than the $2.14 posted for all of 2013.

Since 2011, Royal Caribbean has increased its quarterly dividend 150%, to $0.25 a share from $0.10.  Given robust earnings expectations for 2014, Royal Caribbean is capable of funding a 20% dividend increase for 2014.

If share price follows dividend growth, as it frequently does, Harman, Wynn, and Royal Caribbean investors could see an encore performance of 2013 returns.

8 dividend checks from 1 stock 

It’s one of the best-kept secrets in the market today… an oil company paying out bigger dividends than Exxon and BP. This highly-profitable company rewards shareholders with unannounced “bonus” dividend checks. And it pays them out every quarter. And that’s on top of its regular, scheduled dividends — meaning shareholders are collecting 8 dividend checks a year, all from this one investment. If you’d like to earn some extra income simply by sitting back and collecting these extra dividend checks, then Click Here to find out everything you need to know.

]]>
<![CDATA[Michael Kors Stock Rockets Higher on Strong Earnings]]> michael kors stockThe stock market might be down some 5% this year but that doesn’t mean money can’t be made on the long side.

Momentum stocks are usually a good bet especially when earnings momentum exceeds expectations.

That’s the case with Michael Kors (NASDAQ: KORS) as shares jumped 17% on Tuesday after a very strong earnings report.

The high-end fashion and accessory company blasted expectations, reporting a profit of $1.11 per share in the fourth quarter. Analysts expected a  profit of 86 cents per share.

Revenues also topped estimates. Michael Kors had sales of $1 billion versus an expectation of $860 million.

Same-store sales in North America were up an impressive 24%. There were no signs of the supposedly weak consumer here.

An interesting competition is developing between Kors and Coach (NYSE: COH). For some time, Coach enjoyed a dominating position in the luxury accessory market.

Not anymore! Kors is gaining a foothold in the U.S. and enjoyed a very successful holiday season. The same cannot be said of Coach.

While shares of Michael Kors stock are flying, shares of Coach are slipping.

For 2014, Kors raised guidance. The company expects to make $3.08 per share this year on sales of $3.185 billion. Those numbers are well above consensus estimates of $2.77 to $2.81 and sales of $2.95 billion.

It was as perfect a report as a company can receive. With today’s gain, Michael Kors stock is up 11% on the year. That compares quite favorably to a market that is off 5% in 2014.

Coach shares, by comparison, are down nearly 20% this year.

Occasionally investors need to stick with things that are working, especially in a challenging market environment. Kors is working and it’s supported by earnings.

The company consistently exceeds expectations and shares are only priced with a slight premium to expected profit growth.

Analysts expect Kors to grow profits by 23% from the current fiscal year ending March 30, 2014 to the next. At current prices, Kors shares trade for 31 times current fiscal year estimated earnings.

In a market of disappointment, it’s more than OK to pay a premium valuation. Nothing hurts a stock more than missing earnings estimates. With Michael Kors stock you don’t really need to worry about that.

At some point the music will stop, but now is not that time. I’d be a buyer of Michael Kors stock as there are simply too few companies that are crushing it on both the top and bottom line, as is happening here.

Mega-dividends

Ian Wyatt has found 3 stocks that pay dividends so big — you can retire on them. The Wall Street Journal calls them, “mega-dividends.” These stocks have a history of consistently RAISING their dividends… quarter after quarter. In fact, one of these cash-cranking companies hiked its dividend 10-fold! So, if these ever-increasing payouts sound good to you… Click here for all the details.

]]>
<![CDATA[How to Protect Your Portfolio as the Market Slumps]]> I was going to write about Chinese gambling stocks today, but given the recent 5% decline in the market I thought all of you would appreciate an article that truly works to keep hard-earned money in your pocket.

The S&P 500 closed the year up 29.6 %…the best year for stocks since 1997. Since the calendar has flipped to 2014, however, stocks have struggled. Is it the sign of a long-expected correction? Or is it the latest in a string of false alarms – mini pullbacks that last little more than a month?

As we near the five-year anniversary of the latest bull market run, I can’t help but  remind everyone that the market is over 135% higher since the low established in early 2009. So, a pullback should not be unexpected…and I want to show you how to keep your profits without having to sell your stocks.

Stocks like Netflix (Nasdaq:NFLX), LinkedIn (Nasdaq: LNKD), Chipotle (NYSE: CMG) and many other have benefitted from the relentless surge.

Is it time to sell a few of these high-flyers or just stocks in general?

Well, let’s take a look at one of the biggest bull benefactors and a personal position of mine, Elon Musk’s Tesla (Nasdaq:TSLA).

Back in late December 2012, on a recommendation from a friend, I purchased 100 shares of Tesla for my seven year-old daughter. I NEVER, and I must emphasize NEVER, buy stocks based on the recommendations of others. But my friend is the ultimate perma-bear. He would much rather short a stock than buy one. But, for the first time, at least since I’ve known him, he highly recommended buying a stock. The stock…Tesla.

The timing happened to be just right because I had some capital set aside for my daughter and was searching for a few stocks to invest in. So, I bought a few hundred shares thinking I would hold on to the stock for a few years.

But then the stock started to rise, well, exponentially.

protect-your-portoflio

Surprisingly, I was able to hold on to the stock as it continued to gain more and more momentum. As an options trader, the typical holding period is days, sometimes hours, but in this case the stock was purchased as a long-term holding.

But the struggle to not sell the Tesla continued as the stock became more and more overextended. And then a video surfaced back in early October of a Tesla Model S sedan that had burst into flames. Finally, too concerned to ignore the situation, I did what any sound options strategist and savvy investor would do; I added some downside protection.

As a quick aside…I realize that as soon as I mention options most of you immediately tune out, but not learning how to appropriately protect your investments can cost you thousands upon thousands of hard-earned dollars.

Why would you not want to learn a simple strategy that allows you to protect gains in your portfolio without jeopardizing too much of the upside potential left in the stock?.

I used a simple options strategy known as a collar.

The Collar = (long stock + short call + long put [with different strikes])

To build a collar, the owner of 100 stock shares buys one put option, which grants the right to sell those shares at the put’s strike price.  At the same time, the stock holder sells a call option, which grants the buyer the right to buy those same shares at the call’s strike price.

Because the investor is paying and receiving premium, the collar can often be established for zero out-of-pocket cash, depending on the call and put strike prices. That means the investor is accepting a limit on potential profits in exchange for a floor on the value of their holdings. This is an ideal tradeoff for a truly conservative investor.

So, on Oct. 2, I  decided to use a collar on Tesla with the stock trading around $180. I wanted to protect a loss in the stock of no more than 20%…a typical bear market move.

I bought $145 puts for $15.25 and sold $220 calls for $15.50, which actually gave me a credit of $0.25 or $25. Basically my loss was limited to move down to $145. Any move more than that and I was covered by my position.

Due to the unrelenting rally, I had $18,000 in TSLA shares when I opened the collar.

But roughly a month later TSLA closed at roughly $151, down roughly 16% from the price at which I added the collar.

Here is where my collar stood. The puts were worth $19.45 and the calls were worth $4.20. So, if I wanted to close the short call leg of the collar it would cost me $420. By doing this I am left with my put position worth $1,945.

So what’s my loss?

If you take the $15,100 the shares were worth last Wednesday plus the $1,945 the puts were worth, you have a total of $17,045. But remember, we bought back the calls for $420 so we have to subtract that from the $17,045 which gives us a total of $16,625.

The $16,625 represents a loss of 7.6% loss from the $18,000 our TSLA position was worth when we added the collar. That’s far superior to the 16% loss we would have taken if we had no hedge on the position.

Being hedged gave me the breathing room to decide the best course of action. My TSLA position hedged with a collar could allow me to exit my position with an 8% loss now, or I could wait to see what happens, or if I was still bullish on TSLA, I could buy-to-close the call leg of this collar, to eliminate my upside cap. If I was even more bullish after the decline, I could sell my appreciated puts, and use those proceeds to buy more TSLA.

Given the recent advance in many of the high-flyer stocks like LinkedIn, Netflix and many others, now might be the ideal time to start looking towards a collar to keep your hard-earned gains in your pocket.

My Gameplan for the Year Ahead — Earn $1,200 a Month

If you missed Andy Crowder’s latest options webinar… don’t worry. We’ve uploaded a full, on-demand recording of the event on our site. During this video, you’ll discover exactly how he’s planning to make consistent profits in 2014, no matter which direction the market moves. Including, free action-specific trades you can execute immediately — gains you can earn in as little as 15 to 28 days! You’ll also get his entire presentation, including the lively Q&A session. Options videos and courses can run as high as $999, but this 60-minute presentation is completely FREE. Click here to watch this video now.

]]>
<![CDATA[4 Dividend ETFs for High Yield and Safety]]> dividend-etfsI’m an income investor who prefers to construct investment portfolios with individual securities.  Fortunately, I have the time and ability to analyze and cobble together individual securities to create high-yield, diversified income portfolios.  After all, it is  my occupation.

Other investors are more time constrained, or they lack the wherewithal, or perhaps even the confidence, to undertake individual security analysis.  For these investors, exchange-traded funds (ETFs) are useful alternatives.  Well-diversified income portfolios are possible with just a few ETFs, if you know which to choose.

The following four dividend ETFs are solid choices for any income investor. They’re low-volatility, low cost, and high yield. With these four ETFs, an investor can produce a well-diversified income portfolio.

A fund of large-cap dividend growers is a solid anchor. I like the iShares High Dividend ETF (NYSE: HDV). This ETF gives investors immediate exposure to the largest dividend-growth companies: Chevron (NYSE: CHV), AT&T (NYSE: T), Johnson & Johnson (NYSE: JNJ), and many more. The HDV is a true dividend-growth investment. Over the past two-and-a-half years, the quarterly dividend has more than doubled to $0.58 a share from $0.24. The rising payout has helped lift the fund’s yield to a respectable 3.2%.

Incorporating international exposure is generally a good idea. Foreign stocks tend to be imperfectly correlated with U.S. stocks, so they provide a diversification benefit.  I prefer to keep it safe and invest in large international income stocks in developed markets.

The SPDR S&P International Dividend ETF (NYSE: DWX) fits the bill. This international  fund owns over 100 of the highest-yield stocks in Western Europe, Australia, the United Kingdom, and Canada.  The companies are large- or mid-cap and weighted by yield, which produces an overall fund yield of 6.9%.  With the DWX, investors get high-yield and international exposure. What’s more, they get it at a reasonable price: the DWX trades at only 13 times current earnings.

I’m also a fan of real estate exposure.  In the REIT ETF space, I like the Vanguard REIT ETF (NYSE: VNQ). The fund invests in a wide swath of REIT securities – storage, healthcare, residential, and commercial properties.  The VNQ offers instant REIT diversification, and a high yield. At 4.2%, the yield on the VNQ fund is higher than many individual REIT stocks.

Bonds have historically been a key component of income portfolios. Unfortunately, bonds of any quality have been lousy income investments in recent years. Short-term investment-grade bonds yield 2% to 3%.  A few longer-term investment-grade bonds push the yield up to 4%.

Income investors can do better with a preferred-stock ETF.  Preferred stocks have characteristics of both stocks and bonds. They are like common stocks because they pay dividends. They are like bonds because they are issued with a coupon payment based on par value and a contractual obligation.

Income is the real attraction, though, which is why I like the iShares U.S. Preferred Stock ETF (NYSE: PFF). The fund generates a 6.5% yield by investing in over 300 preferred stocks issued by large- and mid-cap companies. The PFF gives income investors the best of both worlds: the high-yield of a dividend stock and the safety of a bond’s contractual obligation to pay.

With these four dividend ETFs, an income investor can construct his or her own high-yield dividend-income portfolio.

Organize Your Dividends With One Step

Do you know when your next dividend stock pays out? Do you know when the dividend stock you want to buy more of pays out – and how much? We’ve put together a simple calendar that highlights many of the market’s best dividends into one easy to scan document. Read it once, and you’ll see how to set up a 12 month dividend stream to ensure income all year long. Click here to see the full details of the Dividend Calendar!

]]>
<![CDATA[Did Google Lose $9.4 Billion?!]]> google-sells-motorola

News broke last week that Google plans to sell Motorola to Lenovo. After doing some quick math I wondered, “Did Google lose $9.4 billion here?!”

In 2011, Motorola split its business-oriented and consumer-oriented divisions into two companies. Motorola Solutions contained the enterprise services used by other businesses. The services that produced smartphones and other consumer-oriented products became Motorola Mobility.

Later that same year, Google (NASDAQ: GOOG) purchased Motorola Mobility for $12.4 billion. In explaining the deal, Google noted the following:

Google is great at software; Motorola is great at devices. The combination of the two makes sense and will enable faster innovation.”

When you consider Google’s competitors in the smartphone market, Apple (NASDAQ: AAPL) and Samsung come to mind. Samsung relies on Google’s Android operating system and the two tech titans are partners more often than not.

But Google and Apple? Pure rivalry.

Apple produces all of its own hardware and produces its own operating system as well.

In the case of Google, integration between hardware and software seemed like a logical way to compete with Apple. So Google bought Motorola.

Patents

Google bought Motorola for another key reason: patents.

In this brave new world of huge courtroom battles between technology companies, protecting the patent portfolio could mean the difference between domination and bankruptcy.

In its press release about the acquisition, Google noted the following:

Motorola Mobility’s patent portfolio will help protect the Android ecosystem. Android, which is open-source software, is vital to competition in the mobile device space, ensuring hardware manufacturers, mobile phone carriers, applications developers and consumers all have choice.”

Google has faced patent infringement battles with Apple, Microsoft (NASDAQ: MSFT) and Oracle (NYSE: ORCL).

In a nutshell, using Motorola’s patents to protect Android from Google’s competitors appears to have been just as much a priority as the union between hardware and software.

A Look at the Numbers

Google bought Motorola Mobility for $12.4 billion in 2011 and announced last week that plans to sell its Motorola unit to Lenovo for around $3 billion in 2014, what appears to be a loss of $9.4 billion.

Hmm.

When I first saw that I couldn’t believe Google would be so foolish. So I dug around a bit and discovered that, in fact, Google wasn’t foolish at all.

1. Google’s original purchase price for Motorola Mobility was $12.4 billion.

2. At the time of purchase, Motorola Mobility had around $3 billion in cash on its balance sheet. Purchase price drops to $9.4 billion.

3. Motorola Mobility also had around $1 billion in tax credits that became Google’s after the acquisition. Purchase price drops to $8.4 billion.

4. During the two-and-a-half years that Google owned Motorola Mobility, Google sold a division of the company that produced set top boxes for high speed internet and cable providers. The purchasing company, Arris (NASDAQ: ARRS) paid $2.35 billion to Google. Purchase price drops to $6.05 billion.

5. Now Google is selling Motorola Mobility to Lenovo for $2.9 billion. This drops Google’s purchase price to $3.15 billion.

It would be all to easy to look at this and say, “Ok, Google didn’t lose $9.4 billion. But $3.15 billion is still a lot of money to lose!”

The kicker is that Google is retaining almost all of the patents it acquired from Motorola Mobility, a patent portfolio that it valued at $5.5 billion in a 2012 quarterly filing.

The Bottom Line

With the assets that Google either sold or has retained, Google will come out ahead in the Motorola Mobility deal. Google paid $3.15 billion for a portfolio of patents worth over $5 billion. And more importantly, Google significantly boosted its ability to defend Android in court.

Google will emerge from the Motorola Mobility deal a winner. Its prize? Preserving Android for years to come. Did Google lose $9.4 billion on Motorola Mobility? I think not.

Why did Google just invest $60 million in this alternative bank?

We just found out that some of the savviest investors in the tech world are bankrolling a new, alternative, web-based banking platform. Most investors have never heard of it, but we believe it could revolutionize banking the same way the internet revolutionized music, communication and business. The best part? You can invest alongside Google and collect 9.6% yields starting immediately. Click here for the full details.

]]>
<![CDATA[Whirlpool Stock Goes Down the Drain]]> whirlpool-stockThe mood of the market remains negative as stocks are falling hard on the first trading day of February. A weaker-than-expected ISM number can be blamed for the 250-point drop in stocks on Monday morning.

That selling puts the S&P 500 down 5% so far in 2014. We’re almost at the 10% correction mark that so many seemed to be focused on.

As bad as that may seem, it has been far worse for certain stocks. Today’s whipping boy is Whirlpool Corp. (NYSE: WHR). Whirlpool stock tumbled 5% on this first trading day of February alone.

That puts Whirlpool’s  total decline at nearly 20% since the stock hit $153.33 at the close on Jan. 23.

In the middle of that sell-off, the company reported earnings. Whirlpool missed earnings estimates for the quarter by a nickel per share, but beat the number on the top line. In addition, guidance for the current year was in line with expectations.

From my vantage point I would look at these results and think that shares would go up, not down as they did.

It seems that all you hear about in the financial media are stories about companies missing estimates on the top line. Earnings are growing, but sales are falling.

Here you have a very explainable earnings miss, but you have top-line results that were better than expected. Why the market did not reward that performance is beyond my comprehension.

Put it in the category of an irrational market once again inefficiently pricing a stock.

All told, the damage to Whirlpool stock has been excessive, not to mention extraordinary. Although the company missed the quarterly earnings number, they did maintain guidance.

If Whirlpool hits the marks in its guidance,  it will grow profits in 2014 by 17%. You can now buy that growth for the puny price of less than nine times 2014 estimated earnings.

As for the nickel-per-share earnings miss, who cares? We are talking about a company that made $10 per share last year. Does a nickel miss really matter?

It doesn’t, and yet it did, according to the nut cases that control prices in the market.

You can and should exploit the mispricing in Whirlpool stock by jumping all over shares at these prices. Investors simply do not get opportunities like this very often.

]]>
<![CDATA[Don’t Miss The Next Smartphone Market Trend]]> smartphone-market

There’s been a lot of chatter about slowing smartphone sales ever since Apple (NASDAQ:AAPL) missed expectations in its last quarter. To be fair, the chatter started well before that event. But given the market’s love of all things AAPL, the talk has gotten louder this week. Perhaps “dull roar” would be a more apt description.

Let’s take a step back for a second and think about this rationally. How many iPhones does one person need? Well, just one. How often do you need a new one? Maybe every couple of years … tops. Do you need more than one tablet? Not unless you can swipe with your nose.  And if you have an iPhone, iPad and a laptop, do you really need any more mobile devices? I don’t think so.

The data is simply showing that market saturation in certain areas, like the U.S., is starting to happen. No surprise there, given the rampant growth in mobile devices over the past few years. In other, less developed economies (China), there is still room to grow. Not just for Apple, but for Samsung and other competitors too.

But getting back to the “next smartphone market trend,” let’s be clear that market saturation in certain geographies doesn’t mean the smartphone market is dead. In some respects, it’s just getting going – investors just need to understand that the play isn’t all about unit sales.

Now that mobile devices have reached a critical mass, the options for how we use them will expand exponentially. And that means ever-increasing amounts of data are streaming around the world.

According to Cisco’s (NASDAQ:CSCO) VNI Mobile Forecast, in 2012 a smartphone generated 35 times more traffic than a traditional feature phone. That was in 2012. In its 2013 VNI Mobile Forecast, Cisco estimates smartphones now generate 50 times more data traffic than a traditional cell phone.

Other devices, like tablets, are not so gentle. They generate 120 times more traffic than a standard feature phone.

Much of this data, around 45% to 50%, is video. Credit Hulu, Netflix (NASDAQ:NFLX) and YouTube for this. And information sources, like Google Maps (NASDAQ:GOOG) and digital media, make up another 15% to 20%.

Fitting into a category of its own is the device-to-device data stream. This is the whole “connectivity” trend that’s become a 2014 buzz word. Expect it to become less fad and more fact as the year moves on.

This category is called by various names; “interconnectivity”, the “mobile internet of things” and “machine to machine” connections, depending on the source. One thing is clear though, and that is that a heck of a lot more mobile devices are going to be talking to each other five years from now than today.

CSCO tries to quantify the growth of this data category in its 2013 VNI forecast. The company’s projections call for a 24-fold increase in machine-to-machine traffic between 2012 and 2017. That’s a growth market, even if their forecasts prove to be wildly optimistic.

smartphone-market

This looks like a market trend investors want to have exposure to. That might not ease the pain if you bought Apple last week at $550, but it sure should get you thinking that there’s more to the smartphone market than just unit sales – there are the data-related investment angles too.

There’s a whole world of these devices that are just starting to talk to each other. That’s the next smartphone market trend. And it’s time to become part of the conversation.

The One Stock to Own in 2014 — The Year Mobile Takes Over

On Dec. 31, something incredible happened. For the first time in history, the majority of Internet traffic originated from NOT from PCs or desktops — but from mobile devices including smartphones and tablets. We’re never going back. Mobile is taking over. And even though the biggest player in mobile, Apple, is selling over 200 million iPhones this year alone… here at Wyatt Research, we’re recommending the one company no one is taking about. The one reaping massive profits each time a new Apple or Samsung smartphone is activated. In fact, as mobile data usage explodes in the year ahead, its stock is set to soar! Shares are already on the move. So, before this stock moves any higher, read our latest report for all the details: Click here for the full story.

]]>
<![CDATA[9 Best Ex-Dividend Dates for February]]> ex-dividend dates We at Wyatt Investment Research talk quite a bit about where to find yield. We rarely mention when to find it.

For income investors like us, it’s important to know which companies are increasing their dividends and which companies offer attractive yields. It’s equally important to know the ex-dividend dates for each company.

Money-market accounts and CDs are virtually useless these days with the Fed keeping short-term interest rates near zero. And at 2.65%, 10-year U.S. Treasury bonds are near historic lows. As a result, dividend stocks have rarely been more appealing as an income alternative.

Top February Ex-Dividend Dates

If you’re looking to add a high-yielding dividend stock or two to your portfolio, you’d be wise to do it before the next dividend payout. In chronological order, here are nine stocks that yield more than the U.S. Treasury that will go ex-dividend in February:

Feb. 5

Intel (Nasdaq: INTC): One of the more generous dividend payers in the tech sector, Intel offers an attractive 3.6% yield. The company has been steadily increasing its dividend since 2004.

Pfizer (NYSE: PFE): This healthcare giant is increasing its quarterly dividend by two cents a share, to 26 cents from 24 cents. It’s the fifth straight year Pfizer has upped its dividend. At just over $30 a share, the increase will push Pfizer’s yield up to 3.5%.

Unilever (NYSE: UL): The London-based consumer goods giant just increased its dividend by 4% in November – its fifth such increase since late 2012. Unilever’s current yield is 3.6%.

Feb. 12

Duke Energy (NYSE: DUKE): Based in North Carolina, Duke is the largest electric power company in the U.S. And it’s very generous with its shareholders. Duke offers a 4.6% yield, the highest of any stock on this list. The company’s also a surprisingly reliable dividend grower, having upped its quarterly payment at least once a year since 2007.

Eli Lilly (NYSE: LLY): This multinational pharmaceutical giant isn’t exactly a dividend grower. In fact, its $0.49 dividend hasn’t budged since February 2009. But the 3.6% yield is attractive. And the fact that the company hasn’t reduced its dividend payment since before the turn of the century is at least a sign of stability, if not growth.

Feb. 14

Target (NYSE: TGT): The credit-card hacking debacle at Target has turned some investors off. The stock has fallen 12.5% in the last three months. But the retailer remains a huge dividend grower, having increased its quarterly payouts by more than six-fold in the last 10 years. What was a 7-cent dividend in 2004 is now a 43-cent dividend. That amounts to a 3% yield – better than the U.S. Treasury.

Feb. 18

Microsoft (Nasdaq: MSFT): Another example of the rise of dividends in the tech sector, Microsoft just upped its payout by 22% in November. Its current yield is 3%, making February 18 a great ex-dividend date to be aware of.

Feb. 21

Johnson & Johnson (NYSE: JNJ): If you’re an income investor, you probably know about Johnson & Johnson. JNJ is a so-called “Dividend Aristocrat” for having increased its dividend every year for at least 25 years. The company’s increases typically come in May. In other words, you have three months to get in as a shareholder before Johnson & Johnson upgrades its dividend – which offers a 2.9% yield – yet again.

Feb. 27

Lockheed Martin (NYSE: LMT): This defense contractor offers the largest payout of the bunch at $1.33 per quarter. The yield isn’t bad either at 3.6%.

Those are the key ex-dividend dates in February. But that’s just one month. For access to a more comprehensive ex-dividend calendar – and to grab $5,760 in dividends over the next 12 months – click here. The deadline to get in before the next dividend payment is this Wednesday, Feb. 5.

]]>
<![CDATA[Is China the New Frontier for Tesla Motors Stock?]]> tesla-motors-stockElectric carmaker Tesla Motors (NASDAQ: TSLA) has big plans for China. And those plans have the potential to send the high-flying Tesla Motors stock even higher.

After resolving a legal dispute with a Chinese businessman who registered “Tesla Motors” back in 2006, the stage has been set for Tesla’s new frontier.

China is increasingly an important market for makers of luxury goods. The country boasts a population of 1.4 billion people, and has a rapidly growing population of wealthy people.

China is already one of the world’s best markets for luxury cars. By 2015, it could become the #1 market.

For most luxury car buyers in China, “luxury” seems to be synonymous with “European.” Audi, BMW and Mercedes-Benz currently make up more than 70% of the Chinese market for high-end cars.

And these brands are scared.

Yes, the Chinese market for high-end cars is larger than $40 billion annually. But competitors from all over the world are desperately trying to capture the Chinese market.

General Motors (NYSE: GM) announced big plans to expand its Cadillac unit. The company hopes to build a dedicated facility in China to keep production costs and shipping costs down.

The Chinese luxury car market is certainly competitive, but the market is ripe for disruption. And Tesla has proven to be very effective at disrupting the markets it enters.

Tesla opened its Chinese flagship store in Beijing at the end of 2013. In 2014, the company plans to open at least 10 more stores.

Thus far, Tesla is rolling out a similar strategy that was successfully executed in the U.S. and Europe.  That includes manufacturer-owned dealers and a network of Supercharge stations that allow drivers to charge up for free.

Tesla also wants to open a production facility in China, increasing the company’s ability to win customers in the region. The company’s plans are rapidly advancing, with founder Elon Musk expected to visit China in March to review production facility options.

One reason that luxury carmakers are coming to China is because there is considerable demand for high priced cars.

Most luxury car brands sell vehicles in China for twice or even three times as much as they would sell for in the U.S., a strategy that reeks of price-gouging. But with the explosive success of the luxury car market in China, it seems high-end Chinese customers are willing to pay it.

In China, Tesla sells its Model S for 734,000 yuan, approximately $124,780. This is essentially the U.S. price of $81,070, plus the cost of shipping and Chinese taxes.

That means that Tesla’s Model S is a far more affordable option compared with cars from Audi or BMW.  The potential downside to Tesla pricing well below its peers is that some experts worry Tesla’s lower price will make Chinese consumers feel it is inferior to other cars in the category.

But in a market where other $80,000 cars sell for the yuan equivalent of $160,000 or more, Tesla’s pricing strategy could prove wildly successful. Chinese consumers will likely appreciate Tesla’s straightforward pricing — not to mention the cool, environmentally friendly cars.

China offers the next big opportunity for Tesla’s expansion.  With the company’s expansion already underway, this could be the next opportunity that continues to fuel Tesla Motors’ stock growth. Shares are already up more than 850% since its IPO in 2010.

My colleague – Ian Wyatt – recommended Tesla shares to his $100k Portfolio subscribers just 11 months ago when shares were trading at $38.  And readers who have followed his advice are sitting on gains of 356%.

Even after those gains, Ian’s telling his subscribers “it’s best we hold onto at least a portion of our Tesla position to see just how far this run can carry us.”

Perhaps expansion in China is just what Tesla Motors stock needs to keep rising in 2014.

The Secret to Our 399% ‘Boomerang Payday’

Have you watched a stock crash to a new low only to boomerang and rocket up to a ‘lifetime high’ just days later? If you know when to get in, the results can be astounding. Recent boomerang stocks include: Pier 1 Imports up 21,700%, Select Comfort up 10,816%, and Sirius XM Radio up 6,100%. Now, I’ve found a similar boomerang opportunity – a stock with a “secret catalyst” that could send its shares soaring! It could be the biggest Boomerang Payday of 2014. Click here to take 2 minutes to read the amazing story of this stock.

 

]]>
<![CDATA[How to Outperform the Market Over the Long-Term]]> outperform-the-marketAs January winds down, investors are reminded of the harsh reality that markets do move lower on occasion. I realize short-term memory dominates investors’ minds, so I think we all need to be reminded just how far this market has gone over the past five years.

After 13 years of the S&P 500 basically going nowhere, the major market index finally pushed through the decade-plus trading range. And it was a valiant effort as the market pushed roughly 30% higher — the best return for the S&P since 1997.

But let’s not forget the collapse in 2008 and the five years the market has spent climbing out of that enormous hole. As we near the five-year anniversary of the latest bull market run, I can’t help but  remind everyone that the market is over 135% higher since the low established in early 2009.

And just think if you were lucky enough to start investing during those first few years of our latest bull market. Which leads me to a New York Times article I discussed several months ago by investment manager Ed Easterling of Crestmount Research.

 “Market returns are much more volatile than most people realize, even over periods as long as 20 years.”

That’s what Easterling’s profound research revealed. His research may alarm you, because it directly contradicts what we hear from most Wall Street “experts.”

It also echoes what I’ve been saying for years: buying and holding a basket of stocks isn’t enough by itself. You must use alternative investments to outperform the market over the long term.

To prove this fact, Easterling produced one of the most interesting infographics I’ve seen about the benefits, or lack thereof, of long-term investing… a detailed chart of an investor’s average annual return dependent solely on when an investor first entered and exited the market. His calculation accounts for taxes and inflation – something you almost never hear about.

The illustration is based on the Standard and Poor’s 500-stock index for the U.S. and goes back to before the Great Depression.

Easterling was incited to create the chart after furiously debating with a client about whether investors should expect to achieve long-term average returns in the future.

Polls by three major research organizations  –  the University of Michigan’s Survey Research Center, as well as UBS and Gallup – all found that investors are strikingly bullish. Most individual investor predicted that the stock market would return about 10%  a year over the next 10 to 20 years — or about 7%  after inflation.

But research tells us historical averages can vary greatly depending upon when an investor is in the market.

For instance, the New York Times article notes that, “After accounting for dividends, inflation, taxes and fees, $10,000 invested at the end of 1961 would have shrunk to $6,600 by 1981. From the end of 1979 to 1999, $10,000 would have grown to $48,000.”

Easterling felt that choosing a single date was arbitrary, which is why he created a compelling infographic to visually present the data. His detailed chart shows annualized returns in the S&P 500 based on thousands of possible combinations of market entry and exit.

After looking at his chart, it’s clear that stocks have underperformed for long periods of time. In fact, wealth creation is directly tied to the time in which you were invested.

So, is Easterling’s chart the beginning of the end for the financial industry? Not by a long shot.

Yes, investors are at mercy of the market gods when it comes to long-term investing, but that doesn’t mean that we should avoid investing all together.

There are many ways to combat the unpredictable fate of investment returns. My favorite way is through a conservative options investing strategy known as covered calls.

You can boost the yields of the market’s safest, shareholder-friendly, blue-chip, dividend-paying stocks like Intel  (NASDAQ: INTC), Microsoft (NASDAQ: MSFT) and McDonald’s (NYSE: MCD).

In fact, we’ve been doing just that in the High Yield Trader portfolio. So far, in just nine months we’ve managed to more than double the dividend in over a 70% of our positions. Moreover, since its inception, the portfolio has outperformed the S&P 500 through the use of two basic strategies: selling puts and covered calls. If you would like to learn more, click here.

So, let’s not fall prey to Easterling’s findings on long-term investing. Yes, Mr. Market will ultimately control the fate of the returns of our holdings, but he left out the power of selling options to increase the returns of your overall portfolio.

I hope you won’t allow yourself the same fate.

If you would like to take a closer look at Easterling’s chart, click here.

]]>
<![CDATA[Under Armour Stock Explodes on Earnings]]> under-armour-stockWho says momentum investing is dead?

The market may be in pull-back mode, but that doesn’t mean the fast money has quit working.

Today the momentum investors are flocking to Under Armour (NYSE: UA). Shares are up an impressive 22% today after the company released earnings that beat expectations.

The sport apparel company reported a profit of 59 cents per share in the fourth quarter. Analysts were looking for a profit of 53 cents per share. Revenues also exceeded expectations, coming in at $683 million versus an average estimate of $620 million.

The company blew out expectations, sidestepping a difficult retail environment that was heavy on discounts and promotion. Under Armour instead saw a 36% year-over-year increase in direct to consumer sales.

The outlook for 2014 was just as impressive. Under Armour sees revenue for the current year in a range of $2.84 billion to $2.87 billion. The current estimate is for sales to come in at $2.77 billion for 2014.

What’s there for a momentum investor not to like?

Like most stocks, January had not been kind to Under Armour stock. Shares fell from a peak of near $89 to a low of $82. Interestingly that sell-off happened in the middle of the month, not during the recent pull-back in the overall market.

Perhaps that should have been a clue to what was about to transpire.

By comparison, rival Nike (NYSE: NKE) shares began falling at the start of January and continued right up until Thursday’s recovery rally. Its shares have dropped from $79 per share to below $72 per share.

Analysts expect profits to grow at Under Armour by 24% in 2014. Even before releasing  fourth-quarter results, that growth was attracting investors as shares traded for 48 times 2014 estimated earnings.

With that valuation and a negative stock market environment, one might have expected Under Armour stock to have a tough time appreciating no matter what the results.

Just when the market has you worried, a stock like Under Armour crushes earnings and shares go through the roof.

Are you kidding me? A 22% gain in one day of trading?

I thought this was supposed to be the start of a correction or worse in the market.

Would you buy the stock now?

Despite the impressive run, I would have a hard time paying the now 58 times 2014 estimated earnings you would have to fork over to own shares.

As impressive as the operating results were, a stock at these levels can fall hard and fall fast. I’d stay away from this one, especially now.

Mega-dividends

Ian Wyatt has found 3 stocks that pay dividends so big — you can retire on them. The Wall Street Journal calls them, “mega-dividends.” These stocks have a history of consistently RAISING their dividends… quarter after quarter. In fact, one of these cash-cranking companies hiked its dividend 10-fold! So, if these ever-increasing payouts sound good to you… Click here for all the details.

]]>
<![CDATA[Facebook Stock: Then and Now]]> facebook-stockFacebook (Nasdaq: FB) has come a long way in a year.

This time a year ago, Facebook stock was trading for $31, still well below its May 18, 2012 IPO price of $38. It seemed as if the social network’s stock might be spinning its tires for years to come.

Fast forward to this morning, and Facebook stock has exactly doubled. Shares are up a whopping 14% to $62 today after the company trounced earnings estimates after hours yesterday. Profits and revenue exceeded Wall Street expectations. EPS was 15% higher than analyst estimates. Revenues were 11% higher.

Mobile was a major reason for the revenue spike. Mobile ads accounted for 53% of Facebook’s fourth-quarter advertising revenue, up from 49% in the third quarter. It’s the first time mobile has accounted for the majority of Facebook’s ad revenue.

The growth in mobile – one of the hottest sectors on the market these days – has been the main driver behind Facebook’s turnaround. Mobile comprised just 23% of Facebook’s ad revenue a year ago. The rise of Facebook’s mobile business is a major development for the company. It now owns an 18% share of the $16.7 billion global mobile-advertising market, second only to Google’s 53% share.

Perhaps not coincidentally, Facebook’s earnings have grown. Facebook reported EPS of $0.31 per share excluding items yesterday, up from $0.17 a year ago.

Not long after Facebook’s disastrous IPO, some wondered if the stock would ever fully recover. Mark Zuckerberg’s company was struggling to break into the mobile realm, and many thought Facebook’s greatest growth period was behind it.

Now that its mobile revenues are expanding exponentially, it opens up a whole new avenue of growth for the social media giant. As it has done over the past six months, that should translate to a rising share price.

Why did Google just invest $60 million in this alternative bank?

We just found out that some of the savviest investors in the tech world are bankrolling a new, alternative, web-based banking platform. Most investors have never heard of it, but we believe it could revolutionize banking the same way the internet revolutionized music, communication and business. The best part? You can invest alongside Google and collect 9.6% yields starting immediately. Click here for the full details.

]]>
<![CDATA[Now is the Time to Buy Apple Stock]]> After falling over 9% since earnings, it is finally time to buy Apple stock again.

As I wrote earlier this week, Apple’s (NASDAQ: AAPL) earnings report on Monday disappointed investors enough that they sent shares lower by 8% and another 1% yesterday.

Apple stock soared to $700 per share in 2012. But within just 6 months had already fallen by over 30%.

The chart below shows December 2012 to December 2013.

apple-stock-chart

After bottoming around $385 per share in May 2013, Apple shares jumped to over $460 before crashing back below $400 in June. But since then, Apple stock has been on a tear.

That is, until Monday’s earnings report. Since I covered the details of Apple’s disappointing earnings report earlier this week I won’t get into them here. I encourage you to take a look at what it was about the earnings report that disappointed investors.

Here’s the part that matters for us:

Before the earnings report Apple stock traded at $550 per share. Yesterday, shares closed at $500.

This decline of 9% has pushed Apple’s dividend yield to 2.4% and, in my opinion, didn’t change the investment thesis.

Sure, iPhone sales numbers disappointed investors and that isn’t good. iPhone accounts for more than 60% of Apple’s profit, so it is important that iPhone sales are strong.

But the company reported that it sold 51 million iPhones in three months, an increase of 6.8% over the previous year. While I recognize that analysts were expecting a higher number, I highly doubt these numbers mean the company is worth 9% less.

But now the stock is 9% cheaper.

The P/E Ratio for Apple Stock

buy-apple-stock

If you have followed Apple stock for long you probably hear analysts repeatedly bring up the P/E ratio, or the Price-to-Earnings ratio. This simple ratio of the price of the stock divided by its earnings-per-share is one of the easiest ways to compare stocks to each other.

If a stock has a high P/E ratio it is said to be “expensive.” If a stock has a low P/E ratio then it is said to be “cheap.”

Today, Apple is cheap, which means it’s a great time to buy Apple stock.

With a P/E ratio of 12.39, Apple stock is well below the average of the S&P 500 index of 18.86.

By comparison, Google (NASDAQ: GOOG) trades at a P/E ratio of 32.74.

Apple stock is cheaper than the rest of the market and is cheaper than its peers. Just another reason to buy Apple right now.

Carl Icahn Buys More Apple Stock

Just recently, billionaire investor Carl Icahn announced a large stake in Apple. He took to Twitter to announce his investment. After Apple fell this week Icahn purchased another $500 million worth of shares. This brings his total investment to almost $4 billion.

High-profile investors aren’t always a good thing, and often they can provide more noise than usefulness.

But in the case of Icahn, known as an activist investor, his efforts to get Apple to do something with its huge cash hoard should be a good thing for investors. Whether it is increased share buy-backs – as Icahn is asking for – or increased dividends, I look forward to seeing Apple use its money constructively and applaud Icahn’s efforts.

China Mobile

Apple finally sealed the deal with China Mobile (NYSE: CHL), China’s largest mobile carrier. With 700 million subscribers, a deal between Apple and China Mobile could prove to be huge for Apple.

Apple traded for around $520 per share in late November 2013 when Goldman Sachs released a report saying a China Mobile deal was “imminent.” Just a few weeks later shares had risen by about 10%.

Today, you can buy Apple stock for right around $500. That is $20 less than when the market didn’t even know the deal to reach 700 million potential customers was close.

To me, that looks like a tremendous opportunity.

The Bottom Line: Buy Apple Stock

An overreaction to disappointing earnings, a low P/E ratio, bullish sentiment and a large investment from an activist investor…not to mention the fact that the China Mobile deal seems to have been ignored by the market. Apple stock represents a tremendous opportunity right now.

And that doesn’t even consider the possibility of new products. We’ve been hearing of new products for years but top analysts are finally expecting both an Apple TV and a wearable tech device to be released in 2014.

With the share price depressed, now is the time to buy Apple stock again.

The One Stock to Own in 2014 — The Year Mobile Takes Over

On Dec. 31, something incredible happened. For the first time in history, the majority of Internet traffic originated from NOT from PCs or desktops — but from mobile devices including smartphones and tablets. We’re never going back. Mobile is taking over. And even though the biggest player in mobile, Apple, is selling over 200 million iPhones this year alone… here at Wyatt Research, we’re recommending the one company no one is taking about. The one reaping massive profits each time a new Apple or Samsung smartphone is activated. In fact, as mobile data usage explodes in the year ahead, its stock is set to soar! Shares are already on the move. So, before this stock moves any higher, read our latest report for all the details: Click here for the full story.

]]>
<![CDATA[A Surprise Trend in Oil Demand]]> oil-demandIt’s no secret that U.S. oil production is on the rise . . . so much so that North America could reach energy independence before 2020. But a lesser-known fact is that U.S. oil consumption is also picking back up, reversing a downward trend that persisted until last year.

U.S. oil demand rose by 390,000 barrels per day in 2013, according to recently released data from the International Energy Agency (IEA).  That 2% increase might not seem like a lot, but it reversed a long-term trend of declining demand. And it came as quite a surprise to many analysts following the energy markets.

What’s more, demand in the fourth quarter appears to have been accelerating. And this has led the EIA to reverse its prior forecast of lower demand in 2014 with one calling for yet another year of higher consumption.

The implications of this emerging trend are far-reaching. It’s not just that Americans are buying more SUVs and cranking their thermostats to combat a cold winter – although both are contributing to some oil demand in recent months.

It’s much more about the global shift in energy production and consumption, and what it means for the economies of those countries.

Growth in many emerging markets has been slowing. The “BRICs” — Brazil, Russia, India and China — were responsible for much of the world’s growth in oil consumption over the last decade. But that is changing. According to the Financial Times, oil demand in China in 2013 was the weakest it’s been in six years — just 295,000 barrels a day.

Meanwhile, the U.S. recovery has been helped along in no small part because of its energy boom. Exploration, production and distribution means, in part, job growth. And it also means easy access to energy for the recovering industries that need it.

Perhaps I’m simplifying this a bit too much. But the big picture certainly shows that the U.S. economy is picking up steam, albeit slowly, while many emerging markets are cooling off.

Is there a connection to oil production growth? I think it’s a fairly safe bet to say “yes.”  Domestic oil production gives the U.S. a competitive advantage that it has lacked for decades. And consumers and industries alike are taking advantage.

The next logical part of the discussion is what the U.S. should do with excess crude oil production when it comes. There are a lot of people who think the country would benefit from exporting excess production, and production of lighter oil that may best be refined overseas.

Exporting crude would require that the U.S. government reverse its ban on crude oil exports. The ban has been in place since the 1970s, but clearly a lot has changed since then.

There is going to be a lot of talk about this in 2014. For energy investors, the takeaway message is that we need to consider more than just the U.S. production growth angle. There is the consumption angle,   too. And that angle is one we haven’t had to consider, given that demand was in decline.

Now, we need to broaden our perspective. I’ll have more to say about this in the coming months.

Income From Pipelines: the Safest Energy Investment

Most investors hope to “catch a flier” on small, risky exploration companies who usually don’t have a drop of oil in their wells. But in our experience, people don’t build pipelines until they know when and how much oil they’ll pump. Which makes pipeline stocks the least risky investments in the entire energy sector. No pipes – no oil. Click here to read my full write-up on two American pipeline stocks paying big (and growing) dividends.

]]>
<![CDATA[Why Tomorrow May Decide the Fate of Stocks in 2014]]> It hasn’t been a good first month for stocks. As of this morning’s market open, the S&P 500 is down more than 3.5% in January. Ordinarily a 3.5% pullback would be no cause for concern – especially considering that stocks entered the month near all-time highs. But history tells us that January is different. Yale Hirsch of the “Stock Trader’s Almanac” devised a theory more than 40 years ago that how January goes, so goes the stock market that year. Dubbed the “January Barometer,” Hirsch’s theory is remarkably accurate. Since 1950, the January Barometer (not to be confused with the “January Effect,” which my colleague Andy Crowder wrote about earlier this month) has predicted the direction of the S&P 500 in a given year with 89% accuracy. Only seven times in 64 years has the January Barometer significantly missed the mark. It has been dead on each of the last two years. That brings us back to this morning. With only two trading days left in January, it would take a major rally today and tomorrow for this not to be a down month for the S&P. Chances are that won’t happen. So, with the market headed for a down January, does that mean stocks in 2014 are doomed? Not necessarily. For starters, the January Barometer has only registered seven major errors since 1950. It’s been wrong other times, too. Hirsch assigned the theory a margin of error of +/-5%. That’s why 2011 doesn’t count against the January Barometer’s misses, even though stocks finished flat in a year in which the S&P was up 2.3% in January. When you factor in the “minor” misses, the January Barometer’s accuracy dips to 76.2%. That’s still high – but not the virtual sure thing that an 89% accuracy rate for major errors represents. Also, two of the seven “major” errors have occurred in the last five years. In 2009, stocks fell 8.6% in January. But the post-recession recovery got underway shortly thereafter and the S&P 500 finished the year up 23.5%. 2010 got off to a similarly inauspicious start. Stocks fell 3.7% in January, only to bounce back and finish the year up 12.8% thanks in large part to the Federal Reserve’s enactment of QE2 – a second round of quantitative easing. In light of those recent misses, a down January isn’t an automatic death sentence for stocks in 2014. Things can change through the course of a year. Just look at how much the tone on Wall Street has changed from December to January. 2013 was the best year for stocks since 1997. Since the calendar has flipped to 2014, however, stocks have struggled. Is it the sign of a long-expected correction? Or is it the latest in a string of false alarms – mini pullbacks that last little more than a month? If you believe the January Barometer, it’s the former. Let’s hope the Barometer is wrong this year.

Where is Buffett Retiring To?

It’s widely believed that Warren Buffett will work until he keels over, but we’ve found a place we believe Buffett is ALREADY using to increase his income. It's an island paradise just off the coast of North Carolina and it offers the best retirement benefits -- even if you don't live there. You can pay less taxes... and collect more income... by investing on this island right through your brokerage account. Best of all, this is completely sanctioned by the IRS and the U.S. Government. In fact, Warren Buffett has over $600 million of his personal wealth invested here. To find out how to protect your life savings and collect big 5% payouts, read our just-published report that tells you everything you need to know. Click here for our full report.

]]>
<![CDATA[Boeing Shares Crash on Weak Guidance]]> boeing-stockBoeing shares (NYSE: BA) are falling today after the company reported earnings before the market opened.

Boeing made an adjusted profit of $1.88 per share in the fourthquarter. The average analyst estimate for the period was $1.58 per share.

Revenues also exceeded expectations. Boeing's sales totaled $23.79 billion in the period. That beat the $22.64 billion expected by analysts.

The fly in the ointment was guidance. Boeing said that it expected to make $7 to $7.20 per share in 2014. That’s lower than the $7.57 per share estimate currently expected by Wall Street.

There was no indication from the company as to the reasons for the guidance miss. CEO Jim McNerny appeared confident in his statements accompanying the release.

Shares of Boeing opened weaker on a down day for stocks. Boeing stock was down nearly 6% by midday.

Given current market worries about emerging markets, it should be no surprise that guidance from Boeing would come up short. The airplane maker is fairly dependent on foreign markets. Any potential weakness overseas would negatively impact earnings.

Why not mention that fact in the earnings report?

I think the answer is the company knew that an even bigger sell-off would have occurred had they been more cautious.

Boeing shares were huge winners in 2013 and as such the stock has a lofty valuation.

While that lofty valuation may be deserved, I’m not so sure that is the case, given today’s news.

Emerging market weakness should not be ignored with respect to the impact on Boeing. In fact you could argue earnings will be even lower in 2014 than currently expected, given developments in January.

With the reduced guidance, Boeing is on pace to grow profits at a paltry 3% clip in 2014. The stock trades for 18 times the 2014 guided number.

That’s a huge premium for a pittance of growth.

Today’s selling is likely just the start of bad things to come for Boeing this year. I would expect shares to drift lower throughout the year.

I suspect McNerny didn’t mention the potential impact of emerging market crisis because he would prefer a slow bleed of the stock.

Traders can profit on that approach by riding this one lower with put options or outright short selling of the stock.

Boeing is too expensive given the uncertain future.

Why did Google just invest $60 million in this alternative bank?

We just found out that some of the savviest investors in the tech world are bankrolling a new, alternative, web-based banking platform. Most investors have never heard of it, but we believe it could revolutionize banking the same way the internet revolutionized music, communication and business. The best part? You can invest alongside Google and collect 9.6% yields starting immediately. Click here for the full details.

]]>
<![CDATA[Will News Corp. (NWS) Get a Super Bowl Bump?]]> The Super Bowl is big business. And especially for the network that airs the game. Fox has the honor this year. Rupert Murdoch’s network – owned by News Corp. (Nasdaq: NWS) – will air this Sunday’s Super Bowl XLVII between the Denver Broncos and the Seattle Seahawks. Over 100 million viewers will tune in to watch for four hours, which is why companies pay an average of $4 million per 30-second spot -- $133,000 per second. That’s all money in the pocket of the network. And that’s why networks like Fox, CBS and NBC pay a pretty penny to air the game. The Super Bowl is, without fail, always the most-watched television event of the year. But do the companies that air the game see a significant short-term bump in their stock price? Recent results say “yes.” Consider the impact in three of the last four years (2011 data was not available): -          2013: CBS (NYSE: CBS) aired the game between the Baltimore Ravens and San Francisco 49ers. Over 108 million viewers tuned in. The result? CBS shares rose 5% in the ensuing month. Meanwhile, the S&P 500 was essentially flat. -          2012: NBC aired the game, and Comcast (Nasdaq: CMCSA) – which owns the network – was the beneficiary. A record 111.4 million viewers tuned in to watch the New York Giants upset the New England Patriots. Perhaps not coincidentally, Comcast shares shot up nearly 8% in the following month. The S&P rose just 2% during that time. -          2010: The then-record 106 million viewers that tuned in to see the game between the New Orleans Saints and the Indianapolis Colts benefitted CBS. Shares of “America’s Most Watched Network” popped 11% over the ensuing month. The S&P was up less than 7% during that time. It’s a small sample size. But recent Super Bowls have clearly been a boon for the networks’ share prices. The network that aired the Super Bowl has seen its stock pop an average of 7.8% in the month following the big game. That’s more than double the average 3% gains in the S&P 500 during that time. If you want to take it a step further, the average return among the network stocks in the year they aired the Super Bowl was 53.5% in the three years of our study period. The average return in the S&P 500 during those three years? 18.6%. So perhaps this is more than just a one-month phenomenon. It could be a coincidence. But you could probably do worse than investing in News Corp. before this Sunday’s Super Bowl airs on Fox. If we’re to believe the recent trend, it could result in a nice pay day by year’s – or even month’s – end.

Why did Google just invest $60 million in this alternative bank?

We just found out that some of the savviest investors in the tech world are bankrolling a new, alternative, web-based banking platform. Most investors have never heard of it, but we believe it could revolutionize banking the same way the internet revolutionized music, communication and business. The best part? You can invest alongside Google and collect 9.6% yields starting immediately. Click here for the full details.

]]>
<![CDATA[Stock Market Today: The Buyers Return]]> Dow Jones Industrial Average gained 91 points to finish just below 16,000. The S&P 500 added 11 points. Particularly impressive was the 14-point gain on the Nasdaq. Holding back the technology-heavy index was Apple (NASDAQ: AAPL).The 44-point loss in Apple shares threatened to put the Nasdaq in negative territory all day, but buying elsewhere lifted the index to the positive. Icahn can’t save Apple today Perhaps most interesting trade of the day was the sideways action in Apple after a lower open. After a disappointing earnings report the stock opened down 8% and stayed there for most of the day. Despite lots of commentary on the subject of Apple’s future or lack thereof, the stock did not move much throughout the day. Not even Carl Icahn could change the tone in Apple shares. The financial activist said he bought more shares after the disappointing results. There were no followers apparently – at least not on Tuesday. Seagate fares worse than Apple Also in tech land, shares of Seagate Technology (NASDAQ: STX) fell by 11% on Tuesday. The disk drive company reported results on Monday that missed expectations by 7 cents per share. Future guidance also disappointed. Slow growth in the cloud computing world was to be blamed. With the stock down all day and drifting lower at the close, it would appear buyers remained on the sidelines. Look for this one to get cheaper. Too cold to snowmobile at Polaris Shares of Polaris (NYSE:PII) lost 3% on Tuesday after reporting earnings that beat estimates by a penny per share, but included a forecast that was weaker than expected on both the top and bottom line. Apparently the bitter cold in much of the country is depressing buying. The good news is the stock rallied throughout the day to trim its losses. Perhaps the guidance was simply a case of being conservative. Investors cautious with Ford The market is in a sour mood. Not even a solid report by Ford (NYSE: F) could lift shares. The stock opened higher, but sold off in the afternoon. It took a late rally to simply break even. Ford reported earnings that beat estimates by 3 cents per share. Revenues and future guidance was in-line. Statements from the company suggest that 2014 will be a far different year than 2013. That caution despite maintaining guidance is what spooked investors. On Deck Blame the President. Stocks were poised for a rally today after Turkey’s impressive move on interest rates there. Instead, more government confusion and potential haggling set a depressing tone for the stock market today. We have much to watch today including Yahoo (NASDAQ: YHOO). The turn-around there might not be going so well. The stock is down in pre-market trading after disappointing results on Tuesday after the bell. The Federal Reserve will be in focus as well. It’s the last policy meeting for outgoing Chairman, Ben Bernanke. Expectations are for the central bank to continue tapering its bond buying program.

A crushing blow to Honda and Toyota 

Ian Wyatt recently discovered Japanese automakers have a hidden weakness. And it's something so devastating, it could bankrupt the likes of Toyota and Honda. It all has to do with one rapidly growing company based right here in the U.S. Each month, its revolutionary product steals away more market share, taking millions in profits away from foreign competition. It's opening up new operations along the East Coast and in California, Texas, Washington, and Illinois. Soon it will be everywhere. Before this stock moves any higher, click here for the details of the wealth-building opportunity I call, "The New Highway Being Built Across America."

]]>
<![CDATA[A Retail Turnaround? Don’t Bet on These Two Fallen Angels]]> I'm a contrarian value investor at heart.  My curiosity is more aroused by the stock that plunges 50% than the one that surges 50%.  I love trolling the bargain bins. That said, I troll carefully. Some sectors tend to produce damaged goods that are even too dinged and dented for my liking.  Through experience, I've learned to avoid betting on a turnaround in an airline (most of the major airlines have been bankrupt at least once), a sit-down casual restaurant, a niche software developer. Once dinged and dented, no amount of putty and burnishing restores the luster. I also generally avoid retail turnarounds. I've been asked a few times for my opinion on J.C. Penney (NYSE: JCP) and Sears Holdings (NASDAQ: SHLD).  I understand a contrarian's interest. J.C. Penney's share price is down 85% in the past two years; Sears' share price is down 55%. Both are iconic retail names whose history can be measured in centuries. Contrarian interest is further piqued because of celebrity-investor interest. George Soros owns a 6.6% stake in Penney. Sears is run by investor Edward Lampert, who owns 25 million shares, nearly 25% of the retailer's outstanding shares. I'm still not on board.  In 2007, Penney recorded $19.9 billion in revenue. That same year, Sears recorded $53 billion.  Over the trailing 12 months, Penney recorded $11.9 billion in revenue; Sears recorded $37.6 billion.  Each successive year brings in fewer dollars. But what about the iconic names? Everyone is familiar with J.C. Penney and Sears. Fair enough, but at one time everyone was familiar with W.T. Grant, Caldor, Woolworth, Foley's, Service Merchandise, and Montgomery Ward.  A recognizable retailing brand simply doesn't ensure a high level of customer loyalty. Should a retailer fail to anticipate consumer trends or to price competitively, consumers have no qualms about patronizing the competition. A turnaround is further hindered by plentiful, fierce competition. The retail sector is easy to enter, and many do. Within a five-mile radius of most suburban homes, a consumer will find a plethora of retail outlet to satisfy nearly all his needs. Plentiful, fierce competition means retailers must continually evolve.  Older retailers like Penney and Sears are rarely thought leaders, and hence always behind the evolutionary curve. Retailing also allows any investor to easily kick the tires. When I walk into Sears, I see an antiquated retailing concept. When I walk into Sears' subsidiary K-Mart, I see dilapidation.  J.C. Penney, to me, is a poor imitation of Kohl's (NYSE: KSS). Time is another obstacle. Even if energetic, progressive managers take the reins, time works against them. Customers are quick to leave, but slow to return. And when customers are quick to leave, vendors are usually quick to demand more immediate payment terms. Fewer dollars flowing in and more dollars flowing out is a forbidding combination. Returning to 2007, Sears generated $1.4 billion in cash flow from operations. Over the trailing 12 months, Sears' operations generated a negative $694 million. Penney offers a similar cash-burning tale: Operating cash flows were a positive $1.3 billion in 2007 and a negative $1.6 billion over the trailing 12 months. When a retailer hemorrhages cash, the ensuing bloodbath frequently leads to irreparably damaged goods. In my opinion, J.C. Penney and Sears are irreparably damaged.

Triple your dividends with one stock – starting this month!

With so many investors grabbing up shares of blue chips, yield is getting hard to come by. In fact, the average yield of the Dow has sunk to 2.1%. But our group of investors isn’t worried. We’re collecting big monthly dividends… up to $550 every 30 days...  from a little-known investment that yields a whopping 12%! If you’d like to tap into this income stream, and earn up to triple the dividends of even the best blue chip, click here for our full report on this opportunity. 

 
]]>
<![CDATA[3 Reasons Apple Stock Fell After Earnings]]> Apple earnings disappointed investors, with shares of the technology giant falling over 8% in after-hours trading. While the stock recovered some of those losses in today's trading session, shares of Apple stock remain well below yesterday's closing price of around $550 per share. After opening today around $508 per share, the stock has spent much of today’s trading session trading around or below $510 per share. As the world’s largest technology company, Apple commands a total market value of over $450 billion. So to see moves in the stock as large as 8%, we know that significant amounts of money are flowing between buyers and sellers. Apple stock remains one of the most actively traded and followed in the market today. So what was it about the earnings announcement that led investors to push Apple stock lower by over 8%? Here are the three main reasons that Apple earnings disappointed investors.

1) iPhone sales failed to impress

If I had to point to one main reason it would be the iPhone sales results. This was supposed to be a big quarter for the iPhone, with both the iPhone 5s and 5c launching in late September 2013. Earlier reports that Apple had slowed or even stopped production of the iPhone 5c suggested that the phone wasn’t selling as well as expected. Sure enough, the 5c appears to have been a bit of a dud. Considering that iPhone represents about 58% of Apple’s revenues and more than 60% of profits, iPhone sales results are one of the most important metrics for Apple investors to follow. With median analyst estimates for iPhone sales averaging around 55 million, the market was clearly disappointed by Apple’s results of 51 million iPhones sold in the quarter. The major disappointment for Apple stock is that analysts were looking for 4 million additional iPhone sales, not unreasonable considering the hype around the launch of Apple’s iPhone 5s. Still, the actual results of 51 million iPhones sold represents a 6.8% growth in sales during the same quarter in the previous year. Not terrible. Moving forward, expect Apple to revise its iPhone lineup. The current product lineup features the iPhone 5s in the premium position, iPhone 5c as the mid-priced option, and the iPhone 4s as the “low-cost” option.

2) Revenue results and revenue guidance

Also disappointing investors was the revenue guidance offered by Apple. When a company declares its quarterly earnings it also typically offers an estimate of how much money it will make in the coming quarter. This estimate is typically offered as a range. Apple has been notorious in the past for “sandbagging,” or giving estimates so low that its actual results come as a very positive surprise for investors, called an "upside surprise." In the last few quarters Apple has remained pretty true to its estimates, which is why analysts were disappointed by Apple’s estimates for the next quarter. While analysts expect approximately $46 billion in revenue, Apple stated that it expects between $42 and $44 billion in revenue next quarter. This disappointment further added to the effects of the disappointing iPhone numbers, sending shares lower. Perhaps the main reason the low guidance is so concerning is that Apple recently signed a deal with China’s largest mobile phone carrier, China Mobile (NYSE: CHL). With more customers than there are people in the United States of America, the China Mobile deal has been years in the making and exposes Apple to hundreds of millions of new potential customers. This deal was believed by analysts to be a very big deal and Apple CEO Tim Cook called it a "watershed moment" for Apple. But with somewhat modest estimates, it remains unclear how big of an impact the China Mobile deal will really have on Apple's profits.

3) New products? Same promises

For several consecutive quarters Apple CEO Tim Cook has spoken enthusiastically about the “new products” and “new product categories” the company is working on. And for several consecutive quarters we have seen no new products. Since the passing of Apple CEO and co-founder Steve Jobs back in October of 2011, Apple hasn’t released any new products. Sure, the iPhone has been updated, made more powerful and given new features. And yes, the iPad now comes with a retina display, is offered in the iPad Mini form and is now joined by the iPad Air. In fact everything in Apple's product lineup has been drastically improved. But when it comes to entering product categories that are brand new for Apple, nothing has happened since the iPad. For a long time we’ve heard of an Apple TV. These days we’re hearing rumors of an Apple Watch and potential other applications for wearable technology. Meanwhile, connected TVs seem almost like commodity items today and other companies are entering the category of wearable technology. (Read Ian Wyatt's review of Google Glass!) On top of the weak revenue guidance and iPhone sales disappointments, Tim Cook used pretty much the same language on yesterday’s conference call that I’ve been hearing quarter after quarter for almost two years now. If you’re an investor hoping for a bright future of new Apple products, this is disappointing indeed.

Apple Stock: The Bottom Line

Was the Apple earnings report disappointing? In a few key areas, yes. But does it warrant an 8% drop in shares? I think not. If you like the financial metrics of the company and believe the company can produce new products, there is no reason to change your investment thesis. I personally own shares of Apple and see no reason, based on yesterday’s earnings release, to change my investment thesis. The company has a great dividend, generates huge amounts of cash flow, is sitting on significant cash and investment reserves, and is rumored to be working on some groundbreaking products. After such a dramatic fall, this may be a great time to pick up shares of Apple stock. “Buy the dip,” as they say.

The One Stock to Own in 2014 -- The Year Mobile Takes Over

On Dec. 31, something incredible happened. For the first time in history, the majority of Internet traffic originated from NOT from PCs or desktops -- but from mobile devices including smartphones and tablets. We're never going back. Mobile is taking over. And even though the biggest player in mobile, Apple, is selling over 200 million iPhones this year alone... here at Wyatt Research, we’re recommending the one company no one is taking about. The one reaping massive profits each time a new Apple or Samsung smartphone is activated. In fact, as mobile data usage explodes in the year ahead, its stock is set to soar! Shares are already on the move. So, before this stock moves any higher, read our latest report for all the details: Click here for the full story.

]]>
<![CDATA[DuPont Earnings Met with Deafening Silence]]> More than occasionally the market acts in peculiar ways. For the most part, the game is simple. When a company reports earnings that beat Wall Street expectations, the stock will generally go up thereafter. That’s not the case today with DuPont earnings. The giant chemical company reported earnings before the market opened that were for the most part better than expectations. DuPont (NYSE: DD) made an adjusted profit of 59 cents per share in the  fourth quarter of 2013 compared to an estimate of 55 cents per share. DuPont's revenues were  $7.7 billion versus an expectation of $7.8 billion. Full-year guidance was in line with expectations. DuPont earnings were boosted by the company's fast-growing agricultural division. Rising seed prices and demand for crop protection is expected to continue in 2014. Already the company is reporting a strong start in advance of spring planting in North America. In addition to the positive DuPont earnings, the company announced a new $5 billion share buy-back program. Given the news, one would think shares of DuPont would rally, but that was not the case. The stock traded higher in pre-market trading. After a very short-lived higher open, the stock quickly turned negative and has traded below the flat line for much of the early morning trade on Tuesday. Considering the overall market was higher, such action is disappointing. Instead I would view the trade as an opportunity. The chemical space is one of the few places I can get really excited about in 2014. With global growth expected despite the early rumblings and grumblings in January, profit growth should be strong. In addition, falling oil prices this year should translate to higher margins. With oil set to drop to $80 per barrel according to some, profits in the chemical space are likely to be higher than expected. At the moment, DuPont is expected to grow profits by 12% in 2014. At current prices, shares trade for 14 times 2014 estimated earnings. That’s not cheap nor is it expensive. Interestingly, activist investor Dan Loeb has a big stake in rival chemical company, Dow Chemical (NYSE: DOW). His goal is to increase shareholder value by spinning off Dow’s petrochemical business. That may or may not be a play for DuPont, but you can bet other hedge fund managers are sniffing around the chemical industry with DuPont being front and center. The main point is that chemical stocks may be viewed as cheap in their current form.

Income From Pipelines: the Safest Energy Investment

Most investors hope to “catch a flier” on small, risky exploration companies who usually don’t have a drop of oil in their wells. But in our experience, people don’t build pipelines until they know when and how much oil they’ll pump. Which makes pipeline stocks the least risky investments in the entire energy sector. No pipes – no oil. Click here to read my full write-up on two American pipeline stocks paying big (and growing) dividends.

]]>
<![CDATA[Apple (AAPL) Extends Underwhelming Earnings Start]]> Apple’s (Nasdaq: AAPL) disappointing earnings yesterday were the latest in what has become a disturbing trend this earnings season. While the world’s largest company didn’t technically fall short of earnings estimates, its iPhone sales underwhelmed. The 51 million iPhones Apple sold over the holidays, while a record, were still 4 million shy of consensus analyst expectations. That was enough to send Apple shares plummeting after hours. The stock opened Tuesday trading down more than 8%, and is threatening to dip below $500 a share for the first time since October. AAPL isn’t the only stock that has suffered after reporting Q4 earnings over the last month. According to FactSet, only 68% of S&P 500 companies have beaten earnings expectations so far this earnings season. That’s below the one-year average of 71% and even further below the four-year average of 73%. Only about a quarter of the S&P companies have reported earnings thus far, so it’s still too early to make any sweeping judgments. But holiday earnings aren’t exactly off to a booming start. And right now, it’s hurting the stock market. Since Alcoa (NYSE: AA) reported lackluster earnings on Jan. 9, stocks have fallen more than 3%. That’s the biggest drop-off on Wall Street since late September. Of course, there have been a number of mini pullbacks over the past year, and each time stocks have bounced back and risen higher than ever before. Whether that happens this time may depend on if earnings can improve over the next few weeks. This week alone could be rather revealing. AAPL was merely the first of several blue-chip stocks set to report Q4 results. Four of the 10 richest U.S. companies by market cap report earnings this week, including the three largest companies. Here’s what’s on tap the rest of the week: Tuesday (after hours)
  • AT&T (NYSE: T)
  • Yahoo! (Nasdaq: YHOO)
Wednesday Thursday
  • Amazon (Nasdaq: AMZN)
  • Chipotle (NYSE: CMG)
  • Conoco Phillips (NYSE: COP)
  • Exxon (NYSE: XOM)
  • Google (Nasdaq: GOOG)
  • United Parcel Service (NYSE: UPS)
  • Visa (NYSE: V)
Friday
  • Chevron (NYSE: CVX)
  • MasterCard (NYSE: MA)
  The One Stock to Own in 2014 -- The Year Mobile Takes Over On Dec. 31, something incredible happened. For the first time in history, the majority of Internet traffic originated from NOT from PCs or desktops -- but from mobile devices including smartphones and tablets. We're never going back. Mobile is taking over. And even though the biggest player in mobile, Apple, is selling over 200 million iPhones this year alone... here at Wyatt Research, we’re recommending the one company no one is taking about. The one reaping massive profits each time a new Apple or Samsung smartphone is activated. In fact, as mobile data usage explodes in the year ahead, its stock is set to soar! Shares are already on the move. So, before this stock moves any higher, read our latest report for all the details: Click here for the full story.]]>
<![CDATA[S]]> Stocks rode a roller coaster on Monday. After the two-day sell-off last week, skittishness by investors was to be expected. Many reports earlier in the day focused on a key technical level: S&P 500 1775. Mid-morning we breached that level with the major index going below 1773. That breach triggered a rally as investors used the discounts to buy shares. By the end of the day, selling returned. All three major indexes closed the day in the red. The Dow Industrial Index finished at 15,838, down 41 points. The S&P was down 8 points. The technology-heavy Nasdaq was the big loser shedding 1% to 4084. Caterpillar jumps after strong report Ironically, the big winner today was Caterpillar (NYSE: CAT). The giant international company --  heavily dependent on the very emerging market currently giving investors fits -- released earnings before the bell. Caterpillar posted a profit that exceeded expectations by 26 cents per share. Revenues were also better than expected. The company raised guidance and authorized a $10 billion stock buy-back. The company expects sales to stabilize thanks to a growing global economy. Shares gained more than 5% on the news. Twitter sinks David Faber is out recommending investors short a basket of stocks including the much publicized and heavily traded Twitter (NASDAQ: TWTR). Good idea or not, the stock is selling off today, perhaps in anticipation of Facebook (NYSE: FB) reporting results later this week. Shares are well off their highs, but still above their initial offering price. Current selling pressure can be attributed to worries about valuations in social networking stocks. Sprint and Vodafone big movers in mobile Shares of Sprint (NYSE: S) gained 6% thanks to the rollout of 4G LTE. The addition of 40 new markets brings the total 4G LTE rollout to 340 cities nationwide. AT&T (NYSE: T) announced it would not be acquiring Vodafone Group (NASDAQ: VOD). That disappointment sent shares of Vodafone down 3%. Shares of AT&T were up fractionally on the day. Geron shares collapse on study update Not all is rosy in the biotech space. Shares of Geron (NASDAQ: GERN) lost 15% on Monday on seemingly innocuous news. Enrollment in a Mayo Clinic study has been stopped at 79 patients with 20 of those patients discontinuing treatment since the studies inception. That was enough to spook investors, who sold the stock on heavy volume.

The Stock Market Today: On Deck

Stocks were looking to open strongly higher before a weak durable goods report put investors in a foul mood. Futures had been higher throughout the morning, but are now flat. The big headline for the day is Apple (NASDAQ: AAPL). The technology bellwether reported results after the market closed. Weak iPhone sales had the stock down more than 7% in after-hours trading. Other stocks to keep an eye on today include Pfizer (NYSE: PFE)Ford (NYSE: F) and Dupont (NYSE: DD). All three released earnings that were positive lifting shares in pre-market trading. Will it hold in a negative environment for the stock market today? We shall see.

Why did Google just invest $60 million in this alternative bank?

We just found out that some of the savviest investors in the tech world are bankrolling a new, alternative, web-based banking platform. Most investors have never heard of it, but we believe it could revolutionize banking the same way the internet revolutionized music, communication and business. The best part? You can invest alongside Google and collect 9.6% yields starting immediately. Click here for the full details.

]]>
<![CDATA[Use Vertical Call Spreads to Profit from Apple]]> I want you to think about the last stock you purchased. Now think about why you chose to buy stock in that company. Certainly, you did your due diligence. You know the revenues, profits and expenses, and of course its five major competitors and main suppliers. You wouldn’t dare buy a stock just by looking at the chart. Unfortunately, most individual investors can’t answer any of those questions. Yet, investors will invest their life savings in a company they know very little about. But who really knows the answers to those questions? Experts, of course. There are facets of a company that analysts will spew out that you never knew existed. But frankly, who cares. Knowing everything you can about a company and making money are two different things. And confusing the two is where most investors, individual and professional alike, are led astray. It’s all fugazi. Those of you who have seen “The Wolf of Wall Street” know what I’m talking about. Sadly enough, the majority of investors are sold a story and nothing more. In many ways it’s what Wall Street was built on. Believe me, I worked on the floor, I’ve heard the fine-tuned pitches based on nothing but an attention-grabbing story. And that is exactly why I use options. I’m not going to allow a story to define how I invest my hard-earned money. I make investment choices based on a “no nonsense” approach of evaluating hard statistics: maximum risk and reward, probability of profit, and expected return.. Before I make any investment decision I know the exact percentage of each statistic mentioned above. Again, no stories or the soft data we are accustomed to seeing from the financial community…just hard statistics. Let me take you through an example of how I evaluate each and every investment I make using one of my recent trades in Apple (Nasdaq: AAPL). The first question I always ask myself when looking at a potential option trade is, “What is the most I can make or lose on this trade?” Fortunately, in the world of options the numbers can easily be calculated so that you can make a logical decision based on your risk/reward tolerance. On Dec. 27 with Apple trading for roughly $560 and in an overbought state I decided to sell a few vertical call spreads in Apple. A vertical call spread is an options strategy for those who are bearish or neutral on a stock. In fact, the stock can actually move slightly higher and you will still make a max profit. I sold the 600/605 vertical call spread for $0.42, or $42 per spread. The max risk on the trade was $458. At first glance the risk/reward seems off to those new to options. I always get the same question, “Why would you risk $458 to make $42?” This is where the second question comes into play, “What are the chances that this will be a profitable trade?” The answer is simple: the trade has a very high probability of profit of over 90%. In fact, I can cater each of my trades to fit a certain probability of profit so I always have an overwhelming edge. Basically, by selling options rather than buying options like most investors I can create an enormous margin of error. In this case, as long as Apple doesn’t push past the short strike of my spread or $600 I will make a max profit on the trade. That’s a margin of error of 6.6%. I challenge investors to find a stock trade that allows you to be directionally wrong 6.6% and still make a profit. Again, this is why I use options. I compare selling options to being the house in a casino, but with significantly better odds. And as we all know the house always wins over the long term. Finally, I would ask, “What is the expected return for this trade, taking into consideration the max risk/reward and probability?” The expected return would be 9.1% ($42/$458*100). I’ve been doing trades like this in my Apple portfolio for my Options Advantage service. So far, so good. Since May 19, 2012 I’ve made over 40% in the Apple portfolio using this same strategy while the stock has moved lower. A buy-and-hold strategy would have failed miserably in comparison. I hope a few of you will decide to take the plunge and at least investigate the true power of options. Yes, they can be risky, but if used properly they are one of the most conservative and lucrative investment tools available. That is a combination that is impossible to come by in today’s investment arena.

My Gameplan for the Year Ahead -- Earn $1,200 a Month

If you missed Andy Crowder's latest options webinar... don't worry. We've uploaded a full, on-demand recording of the event on our site. During this video, you'll discover exactly how he's planning to make consistent profits in 2014, no matter which direction the market moves. Including, free action-specific trades you can execute immediately -- gains you can earn in as little as 15 to 28 days! You'll also get his entire presentation, including the lively Q&A session. Options videos and courses can run as high as $999, but this 60-minute presentation is completely FREE. Click here to watch this video now.

]]>
<![CDATA[How Twitter's IPO Avoided Facebook’s Fate]]> twitter's ipo“There is no doubt that Twitter is a huge force on the Internet. After Facebook, it’s the largest U.S. social network site, with 200 million active monthly users.  Not surprisingly, the Twitter IPO is already attracting considerable attention from the media, as bankers and company insiders hype the Silicon Valley success story. “But that isn’t enough reason to justify buying this upcoming IPO. . .” My colleague Ian Wyatt wrote those words in late October, two weeks before Twitter’s (NYSE: TWTR) highly anticipated market debut. He wasn’t alone. Just about everyone was cautioning against buying the Twitter IPO. Many worried that it would suffer the same fate as its social media predecessor, Facebook (Nasdaq: FB). Facebook’s May 18, 2012 IPO was an outright disaster. Technical glitches on the Nasdaq exchange delayed public trading of the stock and it never recovered. After going public at $38 a share, the stock tumbled all the way to $17 in less than four months. It took more than a year for FB shares to return to their IPO price. Twitter had no such problems. The stock set its IPO price at $26, closed its first day of trading at around $45, and is all the way up to $57 now. If you bought Twitter shares the first minute they went public (at $45 a share, way up from the original IPO price of $26), you would have earned a return of 27% in less than three months. By contrast, Facebook shares declined 45% in their first three months of trading. So it’s safe to say Twitter has successfully avoided becoming the next Facebook. The question is how. Facebook, after all, was profitable at the time of its IPO. Twitter wasn’t. Facebook was generating 60% more revenue per user than Twitter at the time it went public. On the surface, Twitter had the makings of another social media IPO disaster. Ian had very good reasons to warn readers against investing in Twitter’s IPO. But Twitter’s executives made a few smart moves to ensure that the company avoided Facebook’s fate. For starters, Twitter listed on the New York Stock Exchange instead of the Nasdaq, which was responsible for Facebook’s disastrous debut. Next, Twitter didn’t allow all the hype leading up to its debut to cause its IPO to be too overpriced. Twitter's IPO priced at $26, but by the time it actually began trading on the NYSE it was already up to $45. Clearly, Twitter's IPO price didn’t scare early investors off. But the main difference between Twitter’s IPO versus Facebook’s was market condition. Facebook went public in a year in which stocks were up 13%. Twitter went public at the tail end of a year in which stocks were up nearly 30%, riding the momentum of the best year on Wall Street since 1997. Furthermore, Facebook went public at the beginning of the traditional “Sell in May” period. Twitter went public just before the holidays – the best time to invest on Wall Street. True, Twitter had the benefit of going after Facebook and other failed social media IPOs such as Pandora (NYSE: P) and Zynga (Nasdaq: ZNGA). It was able to learn from those companies’ mistakes. But timing is everything on Wall Street. And that may have been the biggest factor driving Twitter in its first couple months. Now comes the hard part. Few companies see their share prices rise in perpetuity without turning a profit. Until Twitter becomes profitable, its stock will be on borrowed time. Despite its early struggles, Facebook today looks like the better investment of the two social media giants. Facebook turned its fortunes around by growing profits and expanding its mobile advertising business. To have staying power on Wall Street, Twitter will need to demonstrate that same kind of growth.

The One Stock to Own in 2014 -- The Year Mobile Takes Over

On Dec. 31, something incredible happened. For the first time in history, the majority of Internet traffic originated from NOT from PCs or desktops -- but from mobile devices including smartphones and tablets. We're never going back. Mobile is taking over. And even though the biggest player in mobile, Apple, is selling over 200 million iPhones this year alone... here at Wyatt Research, we’re recommending the one company no one is taking about. The one reaping massive profits each time a new Apple or Samsung smartphone is activated. In fact, as mobile data usage explodes in the year ahead, its stock is set to soar! Shares are already on the move. So, before this stock moves any higher, read our latest report for all the details: Click here for the full story.

]]>
<![CDATA[Caterpillar Stock Surges]]> The stock market is truly insane. Last week’s sell-off was supposedly due to troubles in emerging markets. What company is correlated to goings-on overseas? Why Caterpillar (NYSE: CAT), of course, and yet its shares are up more than 4% today thanks to a better-than-expected profit report. Before the market opened, the company reported a profit of $1.54 per share, beating estimates by 26 cents per share. Revenues also beat expectations, coming in at $14.4 billion versus an estimate of $13.61 billion. Caterpillar sees fiscal year earnings per share of $5.85 per share excluding items in 2014. That exceeds the $5.80 average estimate currently expected. The company also authorized an additional $10 billion stock buy-back. It’s a full-frontal assault on those who are speculating on Caterpillar’s demise. A close look at the numbers and current valuation should still give investors pause. The real risk to the global economy is deflation. Chinese economic data last week was poor. These are not positive conditions for Caterpillar stock. Before the report was released, analysts expected Caterpillar to grow profits by 6% in 2014. The new estimate does little to increase that percentage  growth rate. With shares trading for 16 times 2014 estimated earnings, the stock is expensive relative to potential growth. In other words, I would use the buying in the stock today as a selling opportunity. Concerns about emerging markets are quite real. The story does not jive with management’s expectations that sales are stabilizing. The risk here is to the downside. Over the last four quarters, Caterpillar missed earnings expectations. Does one quarter beating the number justify the move higher today? Not really in my opinion. It is a knee-jerk reaction. I suppose the company is to be commended on a strong quarter, but on another down day in the market bidding up Caterpillar stock does not make sense. So who are we to believe? The market is predicting chaos for emerging markets. Caterpillar is saying something entirely different. It sees the world economy improving, hence the confidence to raise guidance. Somebody is going to be wrong here. Interestingly, Wall Street appears to be just as perplexed by the results. Usually when a company beats expectations, raises guidance and offers a stock buy-back, analysts increase price targets or ratings very quickly after the news is reported. That is not happening with Caterpillar stock. There is still a healthy dose of skepticism. My guess is that Wall Street will take the news in stride with most firms covering Caterpillar maintaining ratings at best. A brave analyst here or there might even suggest that buying is an opportunity to sell the stock. That’s how I would play it for sure. There is much more downside risk than for upside surprise with Caterpillar.

Income From Pipelines: the Safest Energy Investment

Most investors hope to “catch a flier” on small, risky exploration companies who usually don’t have a drop of oil in their wells. But in our experience, people don’t build pipelines until they know when and how much oil they’ll pump. Which makes pipeline stocks the least risky investments in the entire energy sector. No pipes – no oil. Click here to read my full write-up on two American pipeline stocks paying big (and growing) dividends.

]]>