Could This Forgotten Tech Stock Be On The Road To Recovery?

The tech sector can be very unforgiving. A tech product is generally only good until the crowd finds more interesting technology to buy or obsess over. Think of how often Apple (NASDAQ: AAPL) releases new iPhones.

Sometimes, there isn’t a substantial difference between iPhone models, but the company is constantly pushing its latest tech. That’s because management knows buyers will get bored and move elsewhere unless there are new features added on a frequent basis.

This conundrum is even more apparent in the video game industry. You do have the occasional video game that seems to have everlasting longevity. Although, even those games (like Minecraft) get pretty consistent updates. For the most part, video game developers need to regularly release new games in order to stay relevant. And who knows if the new games will be popular…

Related: 3 Stocks for Profits from People Playing Video Games All Day

There’s no better example of this situation than with Zynga(NASDAQ: ZNGA). The company became incredibly popular with its FarmVille game on Facebook. Games like Words With Friends also have done quite well on mobile platforms.

However, by the time the company had its IPO, it was already starting to lose momentum. The new games could not attract customers like they used to. There were a lot more competitors in the mobile space, and that’s where all the casual gaming was taking place (as opposed to social media platforms).

ZNGA’s stock soon dropped below its $10 IPO price and hasn’t been back there since. Today, the stock is trading under $4 a share.

However, this last quarter, ZNGA surprised investors with increases in both mobile users and mobile revenues. The company also announced a new $200 million share buyback. And, it appears the company’s aggressive acquisition strategy has been paying off. As you can see from the chart, the stock jumped over 3% on the news.

For longer-term investors, the real action in ZNGA happened in the options market. That’s where you can find a couple very large bullish trades. In September options, a buyer grabbed 8,600 of the 4 calls for $0.25 (for a breakeven point of $4.25, stock at $3.80). Going farther out, someone also bought over 1,200 of the January 2019 calls, also at the 4 strike, for $0.41 (breaking even at $4.41, stock at $3.60).

Straight call purchases like these are about as bullish as you can be on a stock, especially when you are buying that much time. Of course, since the stock is so cheap, longer-term calls don’t cost all that much. The other benefit is since the stock is at such a low price, there isn’t a whole lot of downside left for short sellers. As long as the company stays in business, it essentially has only one direction it can go.

The mobile video gaming space is enormous, and there’s still plenty of room for ZNGA to make a splash – particularly if it continues to make shrewd acquisitions. As such, I think either one of these trades I mentioned above is a reasonable, cheap way to get long the stock. While the stock isn’t like to go back to $10 anytime soon, it won’t take a big move for these calls to pay off.

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Source: Investors Alley 

3 Stocks to Own When the Next Recession Strikes

The current U.S. corporate earnings season is the best seen since the third quarter of 2010. With just over half of the S&P 500 companies having reported, the largest U.S. companies are on course to post earnings per share growth of 23.2% from a year ago, according to FactSet.

But apparently, the best growth in seven years isn’t good enough for Wall Street, which so far in 2018, has been ‘selling the rip’ instead of ‘buying the dip’.

Despite spectacular gains in revenues and earnings, some companies’ stocks have barely budged or even dropped. The worry is that rising borrowing costs (interest rates going to 4% or 5% and beyond) and inflation mean that a turn in the business cycle is close. These worries were intensified when Caterpillar (NYSE: CAT), which reported record quarterly profits, said rising input costs may mean that the first quarter would be the “high watermark for the year.”

Other worriers point to the threat from cash investments. Putting your money into a three-month Treasury bill with a return of around 1.85% isn’t bad considering the trailing 12-month dividend on the S&P 500 is 1.97%.

The most serious of all these worries is that we’ve seen the peak in corporate earnings and that a recession is coming soon. But as it usually does, I believe Wall Street is over-reacting. Yes, a recession is coming… eventually. But I believe it will not arrive until late 2020 or even 2021 and it will be caused, as usual, by the Federal Reserve raising interest rates too steeply.

But what if the doom-and-gloom crowd are finally right and a recession is just around the corner? Here are three stocks that will do well even if the U.S. economy goes into a recession.

Just Netflix and… 

If the economy slides into recession, many Americans will cut out certain expenses. A vacation may be canceled or a major new purchase will be delayed. They may spend more time hanging around the house or apartment.

But these Americans will need something to keep them entertained… and what is better than Netflix (Nasdaq: NFLX)?

The company is growing gangbusters, both here in the U.S. and overseas. In the first quarter, Netflix posted net additional subscribers of 7.4 million, compared with about 5 million that most analysts were expecting, to reach a total of 125 million members. In the U.S., the company added more than two million subscribers – the largest sequential add in two years – to reach 55 million subscribers.

Revenues were up 40% to $3.7 billion, the fastest quarterly year-on-year increase it recorded since introducing its online streaming service in 2007. And its revenue outlook for the second quarter was above Wall Street’s previous estimates at $3.9 billion. Netflix said international streaming revenues will hit $1.94 billion in the second quarter, compared with $1.9 billion for the U.S.

Netflix’s CEO Reed Hastings points to the further opportunity to grow for the company, with the 700 million households that pay for television and fixed-line broadband around the world (excluding China) and the 2 billion people that use YouTube.

Despite the negative cash flow – largely due to spending on content – the Netflix business model is working. So it will keep growing and rewarding shareholders.

Pizza Anyone?

And what else goes better with binge watching than eating pizza? The pizza business is one of the most recession-resistant businesses I can think of and the best company in this niche sector is Domino’s Pizza (NYSE: DPZ).

The reason that it is the leading player in the sector is because Domino’s is, as outgoing CEO Patrick Doyle calls it, a tech company that happens to sell pizzas.

One example of its tech savvy is its implementation of automated phone orders via the artificial intelligence assistant DOM. The use of AI will likely grow its digital ordering business beyond the current 65% of total orders. That is good news since more digital sales translates often into bigger orders and better operational efficiency. According to research from analysts at BTIG, traditional orders over the phone or at the counter cost at least a dollar’s worth of an employee’s time, while each digital order costs only about 25 cents.

Domino’s mobile app has been a huge success over the past few years. It has totaled over 10 million installs from the Google Play store and the iOS App Store. In addition to traditional addresses, the app now offers the ability to deliver pizza to 200,000 outdoor hotspots — like beaches and parks. As incoming CEO Richard Allison says, “It’s our path to being a 100 percent digital company.”

The technology infrastructure supporting Domino’s has led to 20 consecutive quarters of positive comparable sales, with the latest quarter blowing away Wall Street estimates by $100 million. And comparable U.S. store sales rose 8.3%, far surpassing Wall Street estimates of 4.7%.

I expect this trend to continue, despite the change in CEOs, thanks to Domino’s technology edge over the competition. That’s the story Wall Street missed when it sold off the stock earlier this year on the announcement of the change in leadership.

And if a recession hits, a pizza will be one of the small pleasures people will be able to afford.

Dollar Shopping

The final beneficiary of bad economic times is a retailer that thrives in a poor economic environment.

While retailers around the country are closing stores in droves, Dollar General (NYSE: DG) is doing exactly the opposite. The discount store has opened more stores than ever before, with over 5,000 new locations across the U.S. since 2010. Dollar General now has more than 14,000 stores in the country — or just about as many as McDonald’s. And it plans to add another 900 stores in 2018.

For their expansion, Dollar General targeted parts of the country that have been slow to rebound from the prior recession — low-income, rural communities that larger retailers won’t touch. And it is making a boatload of money doing it. So even if a new recession is far into the future, Dollar General is thriving because poorer Americans can’t afford to shop anywhere but the dollar stores.

Morgan Stanley analysts talked about a ‘Goldilocks’ scenario where low-end consumer health does improve, but not enough to trade-up to other stores. As Dollar General CEO Todd Vasos told the Wall Street Journal, “The economy continues to create more of our core customer.” The company’s target shopper household earns less than $40,000 a year.

If you look at the company’s financials, it is impressive, with fiscal 2017 being the 28th consecutive year of comparable-store sales growth. Dollar General management is not standing still either. In order to increase store traffic, Dollar General is focusing on both the consumables and discretionary categories, and on items ranging between $1 and $5. The company is expanding its cooler facilities to enhance the sale of perishable items and is rolling out a DG digital coupon program too.

These initiatives led the company to provide a robust outlook for 2018. Management anticipates net sales for fiscal 2018 to increase by 9% year on year, with same store sales continuing their long-term uptrend. Earnings for the fiscal year are forecast to be in the range of $5.95-$6.15, which was well above Wall Street estimates.

And if the economy does worsen, business will pick-up even more for Dollar General.

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Source: Investors Alley

3 ‘Strong Buy’ Takeover Targets in Tech

 

Source: Shutterstock

Wall Street is seeing a flurry of mergers right now. Tax cuts have freed up cash for deals, and the money is flowing. So which tech companies are likely to be snapped up next? Share prices can soar when a takeover deal is announced — meaning that there is big value in identifying takeover targets correctly.

Luckily Morgan Stanley put out a report identifying tech companies most likely to get acquired in the next 12 months. The bank noticed that acquisition intensity increased to 3.2% in Q1 from 2.5% in the previous quarter. “Our model, ALERT (Acquisition Likelihood Estimate Ranking Tool), combines stock characteristics, cohort membership, and data regarding offers to forecast probabilities that stocks receive tender offers in the coming 12 months,” revealed Brian Hayes, the firm’s global head of quantitative research.

I used TipRanks’ data to identify the most compelling stocks featured in Morgan Stanley’s report. These are the stocks with a notably bullish Street outlook and a ‘Strong Buy’ analyst consensus rating. The advantage of these three tech stocks is that they represent compelling investing opportunities- even if a takeover doesn’t materialize.

So with this in mind, let’s take a closer look now:

‘Strong Buy’ Takeover Target: Ciena Corp (CIEN)

Source: Shutterstock

Ciena Corporation (NYSE:CIEN), is a tech stock focusing on telecommunications equipment. William Blair analyst Dmitry Netis likes the way the company is diversifying. He says new customers in new territories — such as Japan and South Korea — clearly show that Ciena has a leading product portfolio and market share gains.

He explains:

“We argue for a better multiple for Ciena shares due to higher quality earnings, above-market growth over the next three years, a leadership position in all segments of the optical market, improving operating margins and balance sheet, and strong free cash flows ($150 million-$200 million over each of the past two years).”

And don’t let a recent report that Ciena is seeing softness from AT&T Inc. (NYSE:T) faze you. The report alleges that the carrier is re-allocating capital dollars away from packet networking. However, after speaking with CIEN management, top Jefferies analyst George Notter says he sees “nothing wrong” with AT&T’s fiber-to-cell tower plans. He advises investors to focus on the big picture and reiterated his Buy rating and $31 price target.

Overall, CIEN has 9 recent buy ratings from the Street and 1 hold rating. These analysts see the stock spiking an average of 20% to $31.

Click to Enlarge

 

 

Shares in optical networking giant Lumentum Holdings Inc (NASDAQ:LITE) are popping right now. Sparked by a robust earnings report, shares have risen 19% in the last week. Now LITE has received another bullish call from Rosenblatt Securities’ Jun Zhang. He sees prices spiking a further 37% to $80 and sets out his analysis here:

“With the best yield rate and quality consistency, we think Lumentum will maintain its leading position in the Android market. This will give Lumentum the first mover advantage to secure design wins in tier 1 android OEMs.” And as far as Apple Inc. (NASDAQ:AAPL) is concerned, Zhang writes: “We think Lumentum has 100% of the initial market share in the new iPhone dot projector.” This is the infrared technology Apple uses for facial recognition.

Plus, he is optimistic about the outcome of LITE’s Oclaro Inc (NASDAQ:OCLR) takeover — and the cost synergies that should materialize. The deal has run into some hiccups due to the loss of a key OCLR customer (Chinese hardware firm ZTE Corp.), but ultimately “Lumentum’s acquisition of Oclaro could allow LITE to become more competitive in both the 100G and 400G long haul transmission market.”

For the quarter, Lumentum reported revenues of $298.8 million (up 16.8% year-over-year), easily beating consensus estimates of $292.3 million. Meanwhile, EPS came in at $0.78 (+59.2% YoY) — again flying past consensus estimates of $0.71.

As you can see from this screenshot, eight top analysts have published buy ratings on LITE in the last three months. They see big upside potential of 43% from current levels.

‘Strong Buy’ Takeover Target: Twilio (TWLO)

Cloud communications pioneer Twilio Inc (NYSE:TWLO) wants to ‘fuel the future of communications’. After going public in June 2016 at $15/share, prices surged to $71. But a 7-million secondary share offering saw the stock plummet just as fast. And on the shock loss of major customer Uber, shares sunk to just $23.

Now TWLO is on a roll again. In the last three months, prices climbed almost 85% to $44. So what does all this mean? Well word on the Street is decidedly bullish. Ahead of Twilio’s Q1 earning results on May 8, Oppenheimer analyst Timothy Horan ramps up his price target from $38 to $45.

“Strong stock performance YTD suggests that investor sentiment is shifting as investors better appreciate Twilio’s growth opportunity and strong competitive position” writes Horan. Looking forward: “We remain bullish and expect another quarter of strong customer additions and robust expansion of existing customers (ex. Uber). And while gross margin could fall QoQ in 1Q18, we see potential improv

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Source: Investor Place

7 Cheap Stocks to Invest In NOW

Source: Shutterstock

Investors typically overlook cheap stocks. It’s easy to conflate the word “cheap” with the lack of value or even with underperformance. These are only investments that suckers would buy, right?

Wrong.

There are plenty of “cheap” stocks that have solid charts. The ones listed below, in particular, look especially close to a breakout.

That’s not to say cheap stocks can’t blow up in your face. They sure can. But if you find the right ones like we believe we have, then you can reap the high reward for taking the high risk.

Read on to find out what cheap stocks to invest in today:

Cheap Stocks to Invest in Today: Northern Oil and Gas (NOG)

Shares of Northern Oil & Gas, Inc. (NYSEAMERICAN:NOG) are breaking up and out of a year-to-date downtrend range with a move above its 50-day moving average for a gain of 8%. Watch for a move back to its January high, which would be worth a move of nearly 60% from current levels.

Shares are well off of the highs above $17 set back in 2014. But with crude oil pushing over the $70-a-barrel threshold once more, shares look ready for a sustained uptrend.

The company reported results this morning, with earnings of 17 cents per share beating estimates by five cents on a 61.8% rise in revenues. Daily production exceeded guidance by 35% on an annual basis.

Management raised their full-year production guidance as well, barging an increase of upwards of 30% from last year.

Cheap Stocks to Invest in Today: Yamana Gold (AUY)

With the job market continuing to tighten and inflationary pressures building, precious metals look ready for a leg higher. And that should benefit the beaten down gold mining sector, which has been in a sideways doldrum since late 2016.

Yamaha Gold Inc (NYSE:AUY) should catch a tailwind, setting up a run at the January high for a gain of nearly 30% from current levels.

The company will next report results on July 26 after the close. Analysts are looking for earnings of three cents per share on revenues of $488.8 million.

When the company last reported on May 2, a loss of 17 cents per share missed estimates by 18 cents on an 11.4% rise in revenues.

Cheap Stocks to Invest in Today: Nokia (NOK)

Nokia (NYSE:NOK) shares have pushed up and out of double-top resistance going back to February, returning to the trading range seen last summer. This caps a 35% rally off of the lows seen back in December.

The stock has been rangebound since late 2013 as it tries to engineer a comeback after badly bungling the smartphone revolution. Analyst sentiment is turning around, however, as it focuses on providing infrastructure products and services to the wireless industry.

The company will nexts report results on July 26 before the bell. Analysts are looking for earnings of four cents per share on revenues of $5.2 billion.

When the company last reported on April 26, results missed estimates on an 8.5% decline in revenues amid an ongoing focus on cost cutting ahead of hopes for revenue growth via the rollout of the 5G wireless standard.

Cheap Stocks to Invest in Today: BlackBerry (BB)

BlackBerry (NYSE:BB) shares look set to rise up and out of a three-month consolidation range — which in turn, marked. Return to the trading range seen last fall — potentially setting up a return to its January high.

That would be worth a gain of more than 30% from current levels. Shares are only now beginning to recover from a negative response to the reporting of quarterly results back in late March.

The company will next report results on June 21 before the bell. Analysts are looking for a breakeven result on revenues of $210 million.

When it last reported on March 28, earnings of five cents per share beat estimates despite a 16.4% decline in revenues. Gross margins hit a record of 76%.

Cheap Stocks to Invest in Today: Mattel (MAT)

Mattel (NYSE:MAT) shares look ready to bounce off of multi-month support with an upward cross of its 50-day moving average.

Sentiment has been a drag in the wake of the Toys R Us bankruptcy and widespread trouble in the toys industry. But with the retailer’s liquidation over, the stage is set for a turnaround.

The company will next report results on July 26 after the close. Analysts are looking for a loss of 29 cents per share on revenues of $885.7 million.

When the company last reported on April 26, a loss of 60 cents per share missed estimates by 21 cents on a 3.7% decline in revenues. Gross margins fell by 3.8%.

Cheap Stocks to Invest in Today: Supervalu (SVU)

SuperValu (NYSE:SVU) shares are peaking up and out of a long, bottom-forming trading range going back to October setting up what looks like a possible run at the 200-day moving average.

That level hasn’t been crossed since late 2016 as worries about retailing and the threat to the traditional grocery business from Amazon has weighed. But now, the industry is fighting back and M&A rumors are swirling.

The company will next report results on July 24 after the close. Analysts are looking for earnings of 63 cents per share on revenues of $4.8 billion. When the company last reported on April 24, earnings of 86 cents per share beat estimates by seven cents on a 42% rise in revenues.

Cheap Stocks to Invest in Today: Uranium Energy Corp. (UEC)

Uranium Energy (NYSE:UEC) shares are emerging out of a February-April trading range to move in on its January high. A rally back to the $2-a-share level would be worth a 20% gain from here.

The stock has been trendless and rangebound for years as nuclear energy has lost favor with politicians, who battle back and forth between renewables and “clean” fossil fuel alternatives like clean coal (a favorite of the Trump Administration).

But a turnaround could be underway if Trump adopts more of an “all of the above” approach, and reconsiders nuclear.

When the company last reported back on December 11, a loss of three cents per share just missed the single analyst estimate by a penny.

Anthony Mirhaydari is the founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.

 

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Source: Investor Place

Money-Making Stock to Buy

Money-Making Stocks to Buy: Baidu (BIDU)
baidu stockI highly recommend checking out Baidu Inc (ADR) (NASDAQ:BIDU), China’s No. 1 search engine. With a Q1 beat and very strong Q2 guidance, this is a top stock to track right now. “The beat was attributed to a series of AI-driven efforts including dynamic ads, which has been described as increasing click-through rates by double digits” explains top Wells Fargo analyst Ken Sena.

He is feeling so encouraged by the company’s outlook that he ramped up his already-bullish price target by $10 to $310. This suggests 22% upside potential. According to Sena, “Baidu’s share currently trades at 24x Adj. 2018E EPS of ¥67.20/$10.59, making it attractive among our Outperform-rated names, particularly when considering the industry leadership it is showing within AI, both as it applies to core (Search, Feed), video, and new initiatives (Apollo, DuerOS).”

Top Oppenheimer analyst Jason Helfstein agrees. He believes Baidu is still undervalued compared to Google, especially when you consider that BIDU is in prime position for the rapid growth of China’s online ad market. “We think key drivers include increasing number of paid clicks, higher conversion rates and higher cost-per-click (CPC). The penetration of smartphones in China, especially in lower tier cities, provides another strong revenue stream for BIDU as it starts to monetize mobile search separately” comments the analyst.

He has a $295 price target on BIDU. Bear in mind that Helfstein’s strong track record on BIDU stock specifically (87% success rate and 21.1% average return per rating) further reinforces the credibility of his latest recommendation.

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Money-Making Stocks to Buy: Merck (MRK) Our second money-making stock, Merck & Co., Inc. (NYSE:MRK), is one of the world’s largest pharma companies. MRK delivered revenue in 2017 of over $40 billion. The pharma giant is seeing the dollars roll in from its best-selling cancer drug Keytruda. This isn’t surprising given that the drug currently costs a whopping $150,000 per patient per year.

The company has just announced positive Q1 earning results, revealing an unexpectedly robust performance of key franchises outside the U.S.

“Keytruda’s beat reflects Merck’s strong commercial execution. Januvia and Gardasil’s strong demand in ex-US (e.g., China) should also drive growth in the near term” comments top BMO Capital analyst Alex Arfaei. He calls the execution and R&D on Keytruda ‘excellent.’

Investors should keep a close eye on data presented at the upcoming ASCO annual meeting in June advises Arfaei. This will be ‘the next catalyst’ which “should further strengthen the drug’s lead in lung cancer, raise expectations in other tumors, and provide insights on the next set of Keytruda combo data (e.g., with Lenvima).” He has a $70 price target on “Strong Buy” rated MRK (22% upside potential). Indeed, in the last three months, MRK has received four consecutive buy ratings from top-ranked analysts.

Note that Merck is also a top dividend stock. The company pays an impressively high dividend yield of 3.36%. With six straight years of dividend growth under its belt, Merck’s latest quarterly payout came to $0.48 in April.

 

Money-Making Stocks to Buy: Alexion Pharma (ALXN)

Source: Alexion Pharmaceuticals
US pharma stock Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) is best known for rare blood disorder drug Soliris. So far this drug has proved extremely successful. Now the company is looking to expand Soliris into new treatment opportunities, including for Generalized Myasthenia Gravis (gMG). This is a chronic autoimmune neuromuscular disease that causes weakness in skeletal muscles.

Five-star Cowen & Co analyst Eric Schmidt calls Alexion a ‘top pick’. He is looking forward to the new possibilities for Soliris in gMG. “We think a favorable financial outlook, strong launch for Soliris in gMG, and increased confidence in ALXN1210’s profile could position ALXN shares for a potential re-rating as investors gain confidence in the growth and durability of the company’s complement franchise,” Schmidt told investors on April 26.

Indeed, the gMG launch is now on track to be the drug’s best-ever launch says Schmidt. He estimates that gMG sales might have reached between $20-25 million. Bearing in mind solid Q1 financials and strong underlying demand trends, Schmidt predicts upside potential of 40%. This would take shares all the way from $118 to $163.

Overall, ALXN demonstrates an overwhelmingly positive outlook from the Street. In the last three months, 14 out of 15 analysts have published ‘Buy’ ratings on ALXN. Their average price target of $157 is 33% above the current share price.

Money-Making Stocks to Buy: Nvidia (NVDA)
NVIDIA Corporation (NVDA) Stock Is at a Serious Tipping Point
Source: via Nvidia
Nvidia Corporation (NASDAQ:NVDA) has received a slew of bullish calls from the Street in the last month. All eyes are on the chip giant right now ahead of its first quarter earnings results on May 10. “Expect beat/raise … We remain positive on NVDA ahead of Q1 results,” five-star Bank of America analyst Vivek Arya told clients on May 7.

“In our view, FQ2 sales outlook can be at-least inline or better than consensus from continued data center strength, start of Nintendo Switch sales, workstation demand, and shift of GPU sales to gamers from miners” this five-star analyst added. He is predicting that prices can soar to $300 from $248 currently.

And the longer-term outlook for NVDA is even more impressive given its ‘unparalleled strength’ in both auto and AI. Top Goldman Sachs analyst Toshiya Hari advises investors not to be alarmed by any short-term choppiness: “Despite the potential near-term volatility, our long-term thesis on the stock is intact — we continue to see Nvidia as one of the best-positioned companies in the Semiconductor space with exposure/leadership in AI, PC gaming, and further down the road in L4/5 autonomous cars.”

SunTrust Robinson’s William Stein agrees. He believes shares have 23% upside right now (which would take shares to $305) and sees huge potential for NVDA in the self-driving space. Meaningful revenue from autonomous driving should hit in the next 2-3 years advises Stein. As a result, he urges investors to buy any weakness.

Money-Making Stocks to Buy: McDonalds (MCD) I recommend taking a closer look at “Strong Buy” stock McDonald’s Corporation (NYSE:MCD) . The fast food chain has a top rating from the Street in general, with a $187 average price target (13.6% upside potential). Following a Q1 earnings beat, the Street swooped in with bullish moves: Goldman Sachs added the stock to its Conviction Buy list; BMO Capital ramped up its price target $5 to $195; as did RBC Capital (from $170 to $175).

RBC Capital’s David Palmer explains that “a better business is worth a consumer staple multiple.” Looking around the corner, Palmer anticipates rapid free cash flow (FCF) growth with FCF conversion of 105%+ by 2020. He explains: “Over the next few quarters, we believe digital and delivery initiatives, more effective value marketing, product renovation, improving operational focus, and asset improvements can re-accelerate sales growth.”

Right now McDonald’s is in the process of bringing fresh cooked-to-order beef patties to all of its U.S. restaurants. “They wanted a hotter and juicier Quarter Pounder, and we wanted to deliver it to them,” says MCD’s manager for Michigan and Oregon. Just switching to fresh beef and delivery alone could each bolster same-store-sales growth by as much as 3-4% when fully rolled out.

And what could be juicier than a fresh Quarter Pounder? A top-rated Dividend Aristocrat. MCD boasts a lucrative quarterly dividend payout of $1.01 on a 2.45% yield. Back in September, the board of directors approved a sizable payout increase of 7% — it’s 41st straight dividend increase.

Money-Making Stocks to Buy: AutoZone (AZO)

Auto parts retailer AutoZone, Inc. (NYSE:AZO) is known as one of the ‘steadiest performers’ in the auto parts retail space. And now the stock has received a big thumbs up from Goldman Sachs’ Matthew Fassler. On May 7 Fassler added AZO to its ‘Conviction Buy’ list. This is a group of elite stocks that the firm expects will outperform the market.

Following a ‘more normative’ winter of 2017-2018, Fassler expects a ‘solid’ summer season as auto parts de-thaw. This can create parts failure — boosting AZO sales. At the same time, sales of auto parts correlate with cars over 10 years old. In 2019 this segment will become more evident as the “last stages of the hangover” from the 2009 financial crisis hit predicts Fassler.

The best part is that AutoZone boasts a “rich” free cash flow yield of 8.5% on 2018 estimates and 8.3% on 2019 estimates. Plus AZO is trading near the low end of its recent historical relative P/E range right now. Note that AutoZone is also a top pick at Fenimore Capital Asset Management.

Interestingly, our data shows AZO as a ‘Moderate Buy’ stock. However, if we limit recent ratings to only those from the best-performing analysts, this consensus shifts to ‘Strong Buy’. Meanwhile, the average price target from these analysts of $819 indicates big upside potential 26% from current levels.

 

Money-Making Stocks to Buy: MasterCard (MA)
Mastercard Stock

Last, but by no means least, we have online payments giant MasterCard Inc (NYSE:MA). Can this company do no wrong?! Our data shows that MasterCard has 100% support from the Street right now. In the last three months, this breaks down into 11 back-to-back buy ratings. These analysts have an average MasterCard price target of $204 (8% upside potential). Mastercard is the “most innovative and competitively advantaged payments ecosystem participant” with an “impressive” core business trend, writes SunTrust’s Andrew Jeffrey.

Right now analysts are digesting the latest set of positive earnings results. “We like Mastercard’s ability to grow faster than peers and its potential to expand margins. Results for 1Q18 were above expectations, with solid growth across all segments,” cheers Cantor Fitzgerald’s Joseph Foresi. MA reported solid growth across all segments with gross dollar volume growth of 19% year-over-year. For comparison, rival Visa reported 15% y-o-y dollar growth. On the back of these results, MA increased its 2018 revenue guidance range to high-teens from the mid-teens.

This isn’t some kind flash-in-the-pan success either. Foresi states that: “We remain attracted to Mastercard’s card network and strong products and solutions, which should continue to drive solid performance.” Accordingly he boosts his price target from $198 to $213 (13% upside potential).

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Source: Investor Place

7 Hot IPOs Yet to Come in 2018 and Beyond

Source: Shutterstock

You can’t buy them … at least not yet. Possibly soon, however.

What’s that? Initial public offerings that are in the works, but not quite yet ready for the market. There’s an interesting list of names investors have been eyeing for a while now, waiting for the day they’d complete their respective IPOs and become publicly traded entities.

Yes, this list includes outfits like the oft-ballyhooed ride-sharing service Uber, though it also includes organizations like the more obscure Acquia, which provides cloud-based business software. Just like their already-trading brethren, there’s a little bit of everything in the next round of public offerings.

That being said, seven of these potential publicly traded stocks are more interesting than the rest. Here’s a preview of those companies, should they actually go through with their suggested IPO plans.

In no particular order…

Should You Buy Uber Shares? It Depends on This...

Source: Shutterstock

Hot IPOs to Come: Uber

Truth be told, a bunch of investors are surprised ride-hailing organization Uber hasn’t gone public yet; the idea has been floating around for a couple of years now.

On the other hand, in light of the company’s public stumbles of late, perhaps Uber knows it would be a “tough sell” to prospective investors. Namely, now-former CEO Travis Kalanick was indirectly implicated in sexual harassment allegations, but was also at the helm at a time when the company hired drivers with criminal records.

For an organization that is not yet profitable (and which may never actually become profitable), asking investors for more funding now might not work very well this soon. Later this year or early next year, however, investors will likely have forgiven and forgotten.

Source: Shutterstock

Hot IPOs to Come: Ancestry.com

You know the company. Ancestry.com not only sells access to a platform that lets people track down their ancestors, but now also offers DNA testing that will help identify where an individual’s ancestors came from, in terms of geography. It has been a hot business for a while now, and the market only continues to grow.

That’s why the company almost went public in the latter half of last year, starting to talk with investment banks that would take care of the underwriting. At the proverbial eleventh hour, though, then-CEO Tim Sullivan stepped down, prompting the postponement of the initial public offering.

There’s some speculation he resigned and the company delayed the IPO because growth was slowing; a corporation generally wants to seek funding while it’s firing on all cylinders. Its former growth pace may well re-materialize before the end of the year.

Hot IPOs to Come: Pinterest

Conceptually speaking, the idea of a website that simply lets you collect digital images of things you’re interested in and pin them to a virtual bulletin board seems silly. There are 175 million regular users of the Pinterest platform, however, that seem to have become addicted. More are added all the time.

What has not quite happened yet is the degree of monetization the organization was hoping for. It set a target of $500 million in revenue for last year, but when it came up short it reportedly prompted the company to postpone the public offering it had planned for 2018.

Those plans may be accelerated, however, if the hiring of the company’s first-ever COO is any indication. Former Square Inc (NYSE:SQ) and Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL) executive Francoise Brougher may inject just the discipline Pinterest needs to get over its fiscal hurdles.

Source: Shutterstock

Hot IPOs to Come: BuzzFeed

BuzzFeed, the news (and sometimes not-so-newsy) website is near the top 200 visited sites in the world, and in the top 100 in the United States. That’s enough to generate roughly $300 million in revenue last year, most of it coming from ad sales. In fact, the company was prepping an IPO last year for this year.

That work was halted, however, when BuzzFeed fell short of its 2017 revenue goal that would have made it an easier sell to investors. The idea didn’t go away though. In fact, the Wall Street Journalreported in November “One person close to BuzzFeed said the performance reflects a more general malaise this year in ad-supported media businesses and isn’t particular to the company.”

In the meantime, note that revenue is actually still growing for the company, even if not as much as hoped.  If the web’s traffic undertow perks up again, BuzzFeed is apt to strike while the proverbial iron is hot.

Xiaomi Mi6

Hot IPOs to Come: Xiaomi

Ironically, though Xiaomi is probably the least familiar name of potential public offerings for U.S. investors to keep on their radar, it’s arguably the most compelling growth prospect of the bunch.

Xiaomi is, among other things, a smartphone maker. Its wares are still a little bit tough to buy in the U.S., though that’s slowly changing.

In the meantime, its phones, cameras, televisions and fitness bands are all become popular in China thanks to their high-quality at a low price. During the fourth quarter of last year, its share of the worldwide smartphone market nearly doubled from 3.6% to 6.9%.

That’s still relatively small compared to the likes of the iPhone from Apple Inc. (NASDAQ:AAPL) and comparable smartphones from Samsung Electronics (OTCMKTS:SSNLF). Growth opportunities are relative though, and this young-ish Chinese company is starting to make waves that could bode well for an IPO many people say is coming this year.

Source: ©iStock.com/bestdesigns

Hot IPOs to Come: 23andMe

Even if you only watch a little bit of television, you know this company as well as you know Ancestry. 23andMe offers genetic testing that lets you identify you’re cultural and geographic heritage.

It’s not just a matter of satisfying curiosity though — 23andMe also offers an analysis of your DNA that will help determine your genetic predisposition to certain health problems. There’s not always something that can be done to completely prevent those diseases and illnesses, but knowing is half the battle.

More important to investors, the whispers that the company is coming to a public-trading exchange near you are circulating again.

That hasn’t always been the case. In September of last year the company raised $200 million in private funding, implying a company value of $1.5 billion. The usual next step, however, is a public offering that ultimately allows initial investors a chance to ‘cash out’ of their stake by creating a market of retail investors.

Hot IPOs to Come: Acquia

Last but not least, add Acquia to your IPO watchlist.

The average consumer/investor won’t be familiar with it. Acquia offers a cloud-based platform that lets companies offload the headache of content management, app hosting and e-commerce.

It’s not a bad business to be in, though it’s a hyper-competitive one. That may be why it has not initiated a public offering yet — the company knows it has to decidedly differentiate itself, and its core website-building platform called Drupal is simply unpopular relative to the web’s use of rival platform WordPress.

A relatively new CEO may be just the shake-up Acquia needs though. Michael Sullivan, who took the helm in November, has the right experience, and looks poised to turn the company into an outfit that’s ready for the IPO that’s been discussed as far back as 2015.

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It's not gold, crypto or any mainstream investment. But these mega-billionaires have bet the farm it's about to be the most valuable asset on Earth. Wall Street and the financial media have no clue what's about to happen...And if you act fast, you could earn as much as 2,524% before the year is up.
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Source: Investor Place

Ethereum Scrutiny Might Actually Be Good News

Founder’s Note: I’d like to introduce you to Vin Narayanan. He’s our new senior managing editor and analyst. Vin knows his stuff when it comes to crypto, and today he’s giving us an update on the latest crypto regulation news.

– Adam Sharp, Co-Founder, First Stage Investor


Dear First Stage Investor,

Ethereum hit the mainstream press this week when The Wall Street Journal reported regulators are investigating it and other cryptocurrencies not named bitcoin.

The main question is whether cryptocurrencies, especially ones that have had initial coin offerings, are securities that require SEC regulation or commodities that don’t. The Commodity Futures Trading Commission has already ruled bitcoin a commodity.

To no one’s surprise, both regulators and the Journal are late to this party – really late.

Ethereum has been trading since 2014. Ripple, another cryptocurrency that’s caught the eye of regulators, has been trading since 2012. These issues aren’t exactly new.

They should have been addressed by now. Then again, this is the government we’re talking about!

The good news is when it comes to resolving these types of issues, regulators hate picking winners and losers (they prefer the markets and lobbyists take care of that).

So whatever action regulators take, the long-term effect on these currencies shouldn’t be significant. But that doesn’t change the fact that regulation is coming.

We’ve been saying that for quite some time at First Stage Investor, so it shouldn’t be a surprise to you. And frankly, that’s not a bad thing. A good regulatory infrastructure will provide a sense of order and certainty that will allow cryptocurrencies to thrive.

The key word in that last sentence is good.

The reason the internet – especially e-commerce – took off in the late 1990s is the Clinton administration made a conscious decision to take a hands-off regulatory approach. That meant online purchases weren’t taxed at the federal or state level. And companies operating on the internet were given wide legal protections in copyright and free speech lawsuits.

That friendly approach to regulation paved the way for the internet boom. Without that friendly and open regulatory framework, the internet as you know it today wouldn’t exist.

No Facebook. No Twitter. No Amazon. No Netflix. (Some people would argue this is a good thing, but that’s a separate discussion…)

The cryptocurrency world is at the same crossroads that the internet was in 1998. The government has a choice. It could create a burdensome regulatory infrastructure that stifles innovation and growth. But I believe it will adopt common-sense regulations that will allow the crypto markets and industry to thrive.

Typically, governments err on the side of encouraging innovation and growth – especially when existing stakeholders are already on board. And in this case, the list of existing stakeholders is impressive.

Goldman Sachs is a few weeks away from opening its bitcoin trading desk. (Just count all the former Goldman officials who’ve worked either in this White House or the previous one.)

Peter Thiel’s venture capital firm, Founders Fund, participated in a $15.5 million funding round for Tagomi Systems, a company focused on bringing Wall Street-type trading to the cryptocurrency market.

Thiel is the one Silicon Valley executive President Trump likes – and that means a lot right now.

We expect the government to take a pro-growth regulatory approach to cryptocurrencies for these reasons. But we’ll have a better idea on what the government is thinking about on May 8.

That’s when the House Science, Space, and Technology Committee holds its blockchain hearing. In theory, this hearing is about improving supply chain management and battling counterfeit goods.

But rare is the government blockchain hearing that doesn’t address cryptocurrencies. So stay tuned. We’ll cover the hearing for you and keep you posted.

Good investing,

Vin Narayanan

Senior Managing Editor

Source: Early Investing

Big Tech Is Still King of Earnings

The current U.S. corporate earnings season is the best seen since the third quarter of 2010. With just over half of the S&P 500 companies having reported, the largest U.S. companies are on course to post earnings per share growth of 23.2% from a year ago, according to FactSet

But apparently, the best growth in seven years isn’t good enough for Wall Street which is feeling a bit ‘biblical’ these days. Right out of the story of Joseph in Genesis, Wall Street is worried that these seven years of ‘plenty’ will be followed by seven years of relative ‘famine’.

Despite spectacular gains in revenues and earnings, some companies’ stocks have barely budged or even dropped. The worry is that rising borrowing costs (interest rates going to 4% or 5% and beyond) and inflation mean that a turn in the business cycle is close. These worries were intensified when Caterpillar (NYSE: CAT) said rising input costs may mean that the first quarter would be the “high watermark for the year.”

As it usually does, I believe Wall Street is over-reacting. Yes, a recession is coming… eventually. But I believe it will not arrive until late 2020 or even 2021 and it will be caused, as usual, by a misstep by the Federal Reserve.

But it’s just too soon to get out of stocks now. If you do, you will miss a lot of upside that still remains, especially in the large cap technology stocks, such as ‘old tech’ stalwarts Intel (Nasdaq: INTC) and Microsoft (Nasdaq: MSFT) as well as the new tech titan Amazon.com (Nasdaq: AMZN).

Intel Moves Beyond PCs

Its first quarter showed all the doubters that Intel’s long-running efforts to carve out a future in the post-PC era is moving along nicely. Revenues from its newer endeavors in markets including autonomous vehicles and artificial intelligence (AI) were about even with revenues from its PC chips for the first time ever!

Thanks to the surprising boost from these markets, Intel reported revenues were about $1 billion ahead of Wall Street estimates. This outperformance was largely due to a 24% jump in revenues from the data center division, which has quickly grown to become the second pillar of Intel’s business behind its PC-related business. Demand from customers in this sector had driven growth, with “a significant bias for high-performance compute” leading to a shift in chip sales towards more powerful chips and therefore higher average selling prices.

Further expected expansion in these newer markets for Intel allowed its management to raise its revenue forecast for the rest of the year by 4%. And it confirmed that CEO Brian Krzanich made the right moves when he acquired Altera (its products are used in AI) for $16.7 billion and Mobileye (driverless vehicle technology) for $15.3 billion.

I expect Intel to continue “to step on the gas” with even further investments into faster growing markets away from PCs. Its stock, already at a 17-year high, will also continue to accelerate.

Microsoft’s Best Growth in a Decade

Another company that has broken away from its PC past with a bang is Microsoft. The company looks to be on track to record its best annual growth for more than a decade. This follows a revenue boost from its cloud business in the latest quarter and a bullish forecast for the final quarter of its fiscal year.

Microsoft reported revenues of $26.8 billion, boosted by growth of 17% in both its intelligent cloud division and its productivity and business processes group. That was $1 billion ahead of Wall Street’s expectations. Earnings per share rose by 36% to 95 cents, compared with expectations of 85 cents.

Microsoft’s management forecast revenues of as much as $29.5 billion in its current quarter, which is roughly $1.5 billion above most analysts’ estimates. Hitting that target, which is likely, would represent growth of more than 20% for the year to June.

Underpinning Microsoft’s move into becoming a growth company is its move into the cloud. In the latest quarter, the company showed a 58% jump in revenues from its commercial cloud operations — its Office 365 productivity service, Azure cloud platform and Dynamics 365 cloud applications. They a accounted for 22% of overall sales in the quarter at $6 billion. Azure continued its explosive growth, with revenues growing by 93% from a year earlier. This firmly cements Microsoft’s place as the second-largest public cloud computing platform after Amazon Web Services (AWS).

Revenue from the company’s overall commercial cloud business soared by 58% in the quarter. That was nearly 10 percentage points faster than the pace of growth from number one AWS. Microsoft’s CEO Satya Nadella says the growth in cloud services is just starting:

“We’re still in the early innings of the cloud transition.” Nadella also predicted that further growth in the cloud would lead to a jump in “lower-margin services first [and] higher margin services over time”.

Under Nadella’s leadership, Microsoft is once again a growth company. I don’t see that changing any time soon.

Amazon Blows Away Wall Street

That brings me to the aforementioned Amazon, which completely blew away all of Wall Street estimates by posting earnings that were more than twice as good as had been expected – $3.36 a share versus $1.27.

Revenues for the first quarter jumped 43% to $51 billion. Amazon’s net income more than doubled to $1.6 billion, due largely to what it called “very strong customer demand” in its cloud computing services business and a darn good performance in its online advertising business. Its AWS business grew by 49% to $5.4 billion and now makes up about 11% of its total sales and almost 75% of its operating income, at $1.4 billion.

And talk about positive forward guidance… in its outlook, Amazon said operating income might triple in the current quarter. It gave a guidance range of $1.1 billion to $1.9 billion, up from $628 million in the second quarter of last year, with net sales growing as much as 42% to between $51 billion and $54 billion. That sort of growth is almost unheard of in a company the size of Amazon.

Add in the $3.1 billion that Amazon Prime (with 100 million subscribers) and services like Amazon Music Unlimited brought in and you have an almost unstoppable juggernaut.

This growth is the main reason why Amazon is the top challenger to Apple (Nasdaq: AAPL) in the race to a $1 trillion valuation. A race where one company is still sprinting and another company seems to have dropped the innovation ‘baton’.

The bottom line for you is that even if you are worried about growth or inflation, stick with the companies like these three that have idiosyncratic growth. And that can raise prices like Amazon, which is raising the price for its Prime membership by $20, from $99 to $119 a year, adding billions of dollars to its revenues to the bottom line.

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What is it?
It's not gold, crypto or any mainstream investment. But these mega-billionaires have bet the farm it's about to be the most valuable asset on Earth. Wall Street and the financial media have no clue what's about to happen...And if you act fast, you could earn as much as 2,524% before the year is up.
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Source: Investors Alley

How to Protect Your Retirement Funds Using Foreign Currencies

Can an average investor use foreign currencies as a hedge against the rapid decline of the purchasing power of the US dollar?

Last week, friend Chuck Butler and Idiscussed WHY investors should use currencies as an inflation hedge. This week we discuss HOW even small investors can do so from the comfort of their own home.

The discussion continues…

DENNIS: One final tidbit about foreign accounts before we move on.

Some pundits believe that having money in several countries is the ultimate diversification – out of reach of the US government.

Despite the fact that foreign money managers with US clients must go through an extensive process to comply with SEC regulations, many readers, particularly small investors, are understandably not comfortable with the idea.

When investing in foreign stocks you can make/lose money in different ways.

For example, Parkland Fuel is traded on the Canadian exchange. 25% Canadian tax is taken out of their monthly dividends. I’ve given up trying to figure out how to get the taxes back. Readers should look at their NET return before buying an investment.

Additionally, the stock may rise or fall, and so does the Canadian dollar.

Look at each element independently. Your profit/loss on the stock comes when you sell it; whereas your profit/loss on the currency comes when you move to a different currency.

Do your homework. Deciding what foreign companies to buy, what currencies to use, and the timing of buying and selling is what international traders deal with daily.

If you pick the right stock – and the right currency – you can do very well. Don’t be shy about asking for help.

Let’s look at other alternatives. There are several Exchange Traded Funds (ETF) that allow you to invest in foreign currency.

Chuck, can you explain how these ETF’s work?

CHUCK: Currency ETF’s are just like their brothers on the U.S. stock side. The ETF represents the currency it says it does. For example, FXA is for the Aussie dollar ETF, and FXE is for the euro ETF, etc.

I’ve never been a real fan of currency ETF’s because you would have to jump through fire hoops to get the currency out of the ETF delivered to your foreign bank account. When you sell, the currency is converted back to dollars and put in your brokerage account.

As we discussed, diversification is an added layer of safety. If an investor wants to go the ETF route, again I’d recommend they diversify among several.

DENNIS: You mention the funds are only redeemable in dollars. When would an investor want to have their account credited in foreign currency as opposed to US dollars?

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CHUCK: Anytime you sell a currency ETF you are converting back to dollars. You’re not only creating a taxable event, you’re also incurring conversion fees.

Here’s a couple of examples where you may not want to do that.

I used to run a foreign currency trading desk. We had people all over the world use our currency deposit accounts to hold euros, while their BMW or Mercedes was being built. They would go to Europe, pick up the vehicle, pay for it in local currency and drive it through Europe. You can’t do that with an ETF, you would end up paying fees to convert out of, and then back in to Euros.

Using your Parkland Fuel example. If an investor had a Canadian dollar ETF and wanted to buy a Canadian stock for better yield, they would have to sell the ETF – pay taxes on any currency gains – then pay fees to convert to US dollars and then back to Canadian dollars.

If they held Canadian dollars in a Canadian denominated savings or brokerage account, they would just buy the stock on the Canadian exchange, avoiding the taxable event and double conversion fees.

DENNIS: EverBank, your former employer, offers Certificates of Deposit (CD) denominated in foreign currency. Can you explain how they worked, and how they differ from the other options we discussed?

CHUCK: Ahh yes… my former employer… In June the EverBank name will be no more. Last year they were purchased by TIAA and soon the name will be changed to TIAA Savings Bank.

There are many differences, so here we go!

EverBank World Markets offers CD’s denominated in the foreign currency of an investor’s choice (about 25 currencies).

When the CD is opened your dollars will be converted to the foreign currency and put on the bank’s books denominated in the foreign currency you selected. The account is FDIC insured. FDIC insures the deposit in case of failure by the bank, it does NOT cover currency fluctuations.

There’s a conversion fee (less than 1%) when you open the CD, and another when you decide to close it. The CD’s are automatically rolled over with no conversion fee at maturity until you tell the bank to close out the CD.

Since there is no conversion on rollover, the holder maintains their original cost basis in the currency. If the currency gains in value VS the dollar, the holder of the CD can close out the CD and convert the principal and interest back to dollars, with a gain that would be used to offset the loss of purchasing power of a weaker dollar.

They also offer several baskets of currencies, allowing an investor, to diversify for added protection.

Unlike a US dollar CD, where you are encouraged to tie up your money for years, many investors ladder EverBank CDs with three-month maturities so one matures each month, which makes their funds fairly liquid.

You can also have a savings account, which most people use to hold currencies for short periods of time, waiting for the right time to convert, or for whatever they have bought from a foreign business, or a house to be ready to purchase, or a deposit on a vacation rental, etc. The savings accounts were created in 1988 by a man named Frank Trotter.

Help keep us on the air!I’m committed to keeping our weekly letters FREE.

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And thank you all!

DENNIS: Investing and holding foreign currencies is not as complicated as it sounds. Let me try to break things down into simple steps and you can tell me if I am accurate.

  • Step 1 – Decide if you want more inflation protection by diversifying into foreign currencies.
  • Step 2 – Decide what currencies you want to own.
  • Step 3 – How much do you want to invest? Consider fees of the various options as they could become a factor.
  • Step 4 – What are your risk priorities? Are you comfortable just holding currency, or do you want to invest in stocks or bonds that may provide yield and appreciation?
  • Step 5 – Where do you want to invest? Are you comfortable going offshore, or do you want to stay in the US?
  • Step 6 – Do your homework! You have many options:

– offshore account
– international account with US broker
– mutual funds
– exchange traded funds
– FDIC insured CDs like EverBank

I’m confident if you talk to a US broker, an ETF salesperson, EverBank or an offshore money manager they would be very persuasive about why their alternative is best for you.

Do your homework; make your own determination. You may find that diversifying among the options works best.

And most of all:

  • Step 7 – don’t get discouraged! Remember the goal. If you feel the dollar is falling in value, you must protect the buying power of your life savings. Investing in foreign currencies is like a bicycle helmet – you don’t need it until you crash! Then you’re doggone glad you have it.

Chuck, did I miss anything?

CHUCK: Dennis, you did a great job of taking all the mumbo jumbo and putting it in precise words for your readers!

A couple more points before I finish…

Currencies are an excellent way to diversify your investment portfolio. IF the dollar continues its decline that began last year, you’ll be able to offset the loss of purchasing power, which I’ve always considered to be a “tax”. I hate to see baby boomers and retirees lose purchasing power of their life savings!

I don’t believe that anyone should go “all-in” with currencies or Gold/Silver. Use them as a diversifying tool for your investment portfolio protection.

I told my audiences… You buy fire insurance and hope you never need it right? You buy health insurance with hopes that you never need it, and flood insurance, etc. Diversifying one’s investment portfolio is insurance against a falling dollar.

Unlike an insurance premium, there is no expiration date on foreign currencies, they will always hold some value.

DENNIS: Chuck, thank you so much for your time. I get a lot of email from readers who say good things….

CHUCK: It’s always a pleasure Dennis, thanks for inviting me.

Dennis again. Regular readers know I’m doggone concerned about inflation destroying the purchasing power of our nest egg. As Chuck said, “It’s a hidden tax”; and I don’t want to pay it.

Gold isn’t the only option. For investors, big and small, buying and holding foreign currencies has never been easier.

Jo and I have been invested in foreign currencies for almost a decade. The Fed is targeting 2% inflation using the bogus accounting, so it could easily be much worse. While currencies rise and fall with the market, we’re not going back to “all in” with dollars. It’s much too risky!

Buffett just went all-in on THIS new asset. Will you?
Buffett could see this new asset run 2,524% in 2018. And he's not the only one... Mark Cuban says "it's the most exciting thing I've ever seen." Mark Zuckerberg threw down $19 billion to get a piece... Bill Gates wagered $26 billion trying to control it...
What is it?
It's not gold, crypto or any mainstream investment. But these mega-billionaires have bet the farm it's about to be the most valuable asset on Earth. Wall Street and the financial media have no clue what's about to happen...And if you act fast, you could earn as much as 2,524% before the year is up.
Click here to find out what it is.

Source: Investors Alley

10 Small-Cap Stocks With Large-Cap Potential

Source: Shutterstock

Small-cap stocks. They fly under the radars of most investors, who struggle to look past behemoths like Apple Inc. (NASDAQ:AAPL) and familiar names like Facebook, Inc. (NASDAQ:FB). Small-cap stocks that are well worth owning are out there though. They’re just usually overlooked because they can’t get enough people’s attention.

Investors willing to look under a few unturned rocks, however, can sometimes find buried treasure.

To that end, here’s a run-down of the top 10 small-cap stocks to consider right now as the broad market continues to toy with a more serious breakdown. Not only are some of these names high-potential possibilities in their own right, quite often smaller names trade out of sync with the overall market and may well offer a refuge should things get ugly for the market’s bigger players. In some cases, the underlying chart is just as compelling as the fundamental argument is.

In no particular order, here are the top 10 small-cap stocks with large-cap potential:

Small-Cap Stocks With Large-Cap Potential: Sunrun (RUN)

Source: ©iStock.com/Dovapi

While the broad solar-power movement may be bumping into headwinds — ranging from subsidies to cheap natural gas to consumer hesitance — not every name is getting caught up in the industry’s entanglements. Sunrun Inc (NASDAQ:RUN), which not only installs solar panelsbut will also facilitate the financing of them, continues to make forward progress.

Quantifying this growth is this year’s expected revenue growth of 26%, which should be enough to crank per-share profits up from last year’s 86 cents to $1.16 this time around. More of the same is in the cards next year as well.

RUN stock is on a tear too, up 71% for the past twelve months, and knocking on the door of a new multi-year high.

Small-Cap Stocks With Large-Cap Potential: CubeSmart (CUBE)

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Not all small-cap stocks to buy have to be ‘stocks’ in the traditional sense. They can be REITs too, and offer the same kind of upside.

Enter CubeSmart (NYSE:CUBE) — a real estate investment trust that specializes in self-storage facilities. Americans are keeping as much of their junk as ever — if not more — and CubeSmart is more than happy to capitalize on consumers’ unwillingness to let things go. The clincher: A dividend yield of 4.1% is above the market average. And this company has a history of strong and steady increases in its payout.

Yes, the prospect of more rate hikes looms above and that could put downward pressure on CUBE shares. There may be more bark than bite to that possibility though, and most of the downside is already baked into the REIT’s price.

Small-Cap Stocks With Large-Cap Potential: G-III Apparel (GIII)

It would be easy to dismiss G-III Apparel Group, Ltd. (NASDAQ:GIII) as just another eventual casualty of the so-called retail apocalypse. But doing so oversimplifies G-III Apparel’s position in this marketplace .

You know the company, even if you don’t think you know the company. G-III is one of the names that makes clothing which eventually carry labels from Calvin Klein, DKNY, Levi’s, Starter, Guess and more. It operates on the less volatile side of the business, supplying clothing for brands that take the bulk of the risk.

One only has to look at GIII’s Q4 report, which boasted a nearly 18% improvement in year-over-year sales at a time when most retailers are thrilled just to match their year-over-year comps.

Small-Cap Stocks With Large-Cap Potential: Simply Good Foods (SMPL)

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If you’ve not heard of Simply Good Foods Co (NASDAQ:SMPL), there’s a good reason — the company didn’t exist until June of last year, when it was formed to capitalize on a branch of Atkins Nutritionals (Editor’s Note: Source is behind a paywall).

Despite a sub-$1 billion market cap that keeps it off a lot of investors’ radars, Simply Good Foods has attracted the attention of several high-profile players. All four of the research outfits that have initiated coverage of the company have called it a “Buy,” and Goldman Sachs Asset Management owns a little more than 7% of the company.

Moreover, the pros collectively say SMPL is worth $16.20, up 27% from its current value.

Small-Cap Stocks With Large-Cap Potential: R1 RCM (RCM)

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Not only is R1 RCM Inc (NASDAQ:RCM) another one of those small-cap stocks that not many investors have  heard of, but the name doesn’t really inspire investors to dig much deeper. Nevertheless, R1 RCM is one of a handful of small-cap stocks to buy sooner than later.

R1 RCM helps healthcare facilities manage their revenue cycle. In other words, the company offers a platform that helps hospitals reduce waste, eliminate mistakes and collect patient fees faster and more effectively.

Baird analyst Matthew Gillmor noted in his recent upgrade of RCM stock: “our prior survey work suggests hospitals are increasingly receptive to outsourcing, especially for RCM,” adding “Additionally, the run-rate exiting 2020 should be even higher (perhaps >$250M), as margins will still be ramping and R1 should benefit from automation initiatives.”

Small-Cap Stocks With Large-Cap Potential: Sally Beauty Holdings (SBH)

Calling a spade a spade, it will take some guts to step into Sally Beauty Holdings, Inc.(NYSE:SBH) here and now. The stock is down 10% for the past twelve months, never catching the wave that pushed most other stocks higher for the better part of 2017.

Of course, with stagnant revenue and a net income that’s slowly-but-surely shrinking, who can blame the doubters?

The company finally seems to have had a much-needed wake-up call though. A month ago it unveiled credible plans to do some serious cost-cutting that will ultimately fund long-term growth. The ‘growth’ plans themselves are still scant, but it’s a start. Any progress from a company with a stock that’s only trading at 7.0 times its forecasted earnings has a lot of potential.

Small-Cap Stocks With Large-Cap Potential: Diebold Nixdorf (DBD)

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It’s another unfortunately-named organization. And, there’s no sales growth to speak of, and earnings growth is minimal. So why bother looking at Diebold Nixdorf Inc (NYSE:DBD)? Because a new CEO could be just the tweak this ATM and POS technology provider needs become a great company.

That’s what activist investor Alexander Roepers says anyway. He’s thrilled about Gerrard Schmid, who took the helm in February. “The newly combined company is now set up for success,” Roepers explained, adding that he felt DBD might even double in value within the next 18 months.

The analyst community sees better days too, even if they’re not as optimistic as Roepers is. They’re calling for earnings of $1.56 per share next year, up from this year’s outlook of $1.16.

Small-Cap Stocks With Large-Cap Potential: Quidel (QDEL)

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Quidel Corporation (NASDAQ:QDEL) makes a variety of medical diagnostic equipment. Nothing earth-shattering, but all of it marketable.

Don’t let the boring product line fool you though. It won approval for a couple of key products in the last year, and the acquisition of Triage late last year led to a 118% increase in Q4 revenuethat gave the company the scale it needed to clear significant profits.

It’s all enough for Raymond James analyst Nicholas Jansen to tout the stock, upgrading it to a “Strong Buy” and upping his price target to $69. Jansen feels the market underestimates the growth opportunities that will arise as its platforms add to their functionality and cross-selling begins in earnest.

Small-Cap Stocks With Large-Cap Potential: Rayonier Advanced Materials (RYAM)

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In case you’re wondering, yes, Rayonier Advanced Materials Inc (NYSE:RYAM) is an offshoot from Rayonier Inc. (NYSE:RYN). The 2014 spinoff was meant to give the company’s cellulose division its best shot at realizing its full value, and not get in the way of everything else forestry player Rayonier was doing.

Yep, it’s boring. Cellulose and pulp, used to make paper, is anything but cutting edge. There’s a lot to be said for boring products though, and for Rayonier Advanced Materials in particular.

Hedge fund manager Mick McGuire, of Marcato Capital Management, sees the full potential, but adds that to unlock it the “company should concentrate on integrating its recent acquisition, paying down debt and buying back stock.” If it can do that, he feels RYAM shares could be worth as much as $60 within three years. That’s almost three times as much as its current price.

Small-Cap Stocks With Large-Cap Potential: TiVo Corp (TIVO)

Last but not least, add TiVo Corp (NASDAQ:TIVO) to your list of small-cap stocks to buy for their unexpected growth.

Yes, this is the same TiVo that makes set-top television tuners/boxes used by cable television subscribers. It seems like a bit of an uphill battle, with the cord-cutting movement in full swing, and with streaming boxes like the Apple TV or Roku being the go-to alternative platform that makes cord-cutting possible.

Take a closer look at what’s going on with the cord-cutting movement though. Many consumers are hesitant to give up their cable boxes because in so doing, they also give up their video-recording capabilities and their access to sports and special broadcast events.

TiVo’s solution is a set-top box that allows for the recording of antenna-delivered broadcasts. As more and more consumers realize TiVo can deliver the best of all worlds without an actual cable subscription, it’s positioned to be one of the centerpieces of the cord-cutting movement.

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Source: Investor Place