My Top 8 Growth Stocks for the Next Decade

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As you well know, it only takes a handful of stocks to make — or break — your portfolio.

The economic turmoil of the past decade has drained investors’ portfolios, leaving many to stay in the work force well into their “Golden Years,” and has left those already in retirement wondering if there will be enough money at the end of the day.

That’s why I’ve put together this collection of my top eight stocks you should own now and hold for the long term.

Buy now for earnings growth and profits in the year ahead and hang onto them because they represent some of the best long-term stocks in the market today.

Top Growth Stocks: IPG Photonics (IPGP)

Top Growth Stocks: IPG Photonics (IPGP)

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IPG Photonics (NASDAQ:IPGP) is the world’s leading provider of high-power fiber lasers. These lasers are used in a variety of different devices and applications, ranging from materials processing to broadband internet to medical pumps.

The bottom line is, the demand for fiber optic laser technology is a growth industry for a very long time, and IPGP is one of the major players.

Fiber lasers are the next generation of laser technology and offer many advantages over traditional lasers. They’re more energy efficient, they’re easier to maintain and they last longer.

As companies upgrade their current technologies with fiber-laser applications, IPG Photonics’ sales and earnings continue to soar.

In March IPGP entered the S&P 500, which is a big deal because every index fund linked to S&P 500 performance now needs to own the stock.

But IPGP stock has been up and down on tariff talk, so it’s a great time to get in.

Top Growth Stocks: Ferrari (RACE)

Top Growth Stocks: Ferrari (RACE)

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Ferrari NV (NASDAQ:RACE) is the world-renowned Italian sports car maker. Founded by Enzo Ferrari, the company developed and built its first sports car back in the late 1940s.

Today, Ferrari offers seven vehicle models, including four sports cars (488 GTB, 488 Spider, F12 Berlinetta and special series F12 Tour de France) and three GT cars (California T, FF and GTC4Lusso). The company also plans to replace the F12 Berlinetta with the 812 Superfast coupe.

Demand for its cars continues to rise and its line of clothing and accessories is also growing at a brisk pack.

Ferrari expects to ship more than 9,000 vehicles in 2018 and is looking for revenues of 3.4 billion euros. Company management also noted that it expects to double core earnings to 2 billion euros ($2.5 billion) by 2022.

RACE stock is up nearly 30% year to date, so none of this trade war talk or political turmoil in Italian politics is slowing its performance.

Top Growth Stocks: Weibo (WB)

Top Growth Stocks: Weibo (WB)

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Known as “China’s answer to Twitter,” Weibo (NASDAQ:WB) is a social media company that allows Chinese users to express themselves, connect with others, discover Chinese-language content and use push notifications on their mobile devices.

While its Twitter of China description was pretty accurate in its early days, now it’s much more diversified — it’s more like the Facebook of China at this point.

Weibo now offers online games and mobile apps that have created a very complete social media experience in a young, enthusiastic consumer demographic.

It’s no surprise then that WB has experienced tremendous growth since its launch in 2010, and it shows no signs of slowing down.

Trade war talk has soured the market on WB, but that’s to our advantage. WB has enormous potential growth in China and Asia, without any need to look to the U.S.

Top Growth Stocks: Arista Networks (ANET)

Top Growth Stocks: Arista Networks (ANET)

Based in San Jose, California, Arista Networks (NYSE:ANET) provides cloud networking solutions to 4,000 customers across five continents.

Arista specializes in high-speed network switches that enable cloud service providers, internet companies and data centers to run faster networks. Arista also provides technical support, hardware repair and parts replacement.

When it comes to the lucrative high-speed network switches market, Arista Networks goes toe-to-toe with Cisco Systems (NASDAQ:CSCO). But while its larger competitor is struggling to grow sales and earnings, Arista Networks is growing by leaps and bounds.

Part of ANET’s competitive advantage is that it isn’t tied down to legacy systems like CSCO is. Its equipment is next generation, built for the next iteration in networking and cloud services.

It has had a bumpy ride in 2018, but this is a long-term player with huge potential. It is a force in crucial megatrend sectors that will grow regardless of economic ups and downs.

Top Growth Stocks: Nvidia (NVDA)

Top Growth Stocks: Nvidia (NVDA)

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Nvidia (NASDAQ:NVDA) is a leading computer graphics company, making graphic processing units (GPUs) for consumers and businesses.

These GPUs enhance the processing capability of its users’ computers.

The company has been in the computer graphics business for more than two decades — it invented the GPU in 1999 — so it is a well-established player.

In a recent earnings report, company management noted that NVDA “achieved another record quarter, capping an excellent year.” The fact is, this could be almost any quarter since 2016.

If you look at NVDA’s historic price chart, you can see that the stock goes parabolic in 2016. That’s when the mobility trend took off and enabled all the sectors that NVDA has come to dominate: cloud, augmented reality, virtual reality, Internet of Things, Big Data, smart devices, etc.

NVDA is to the future of computing what Amazon (NASDAQ:AMZN)has become to ecommerce.

Top Growth Stocks: Sociedad Quimica Y Minera de Chile (SQM)

Sociedad Quimica Y Minera de Chile (NYSE: SQM), or the Chemical & Mining Co. of Chile, is the largest producer of specialty plant nutrients, lithium and derivatives, iodine and derivatives, industrial chemicals and potassium in the world.

Not surprisingly, given that list of materials, its products have a range of uses.

Its Specialty Plant Nutrition division provides nutrients and fertilizers to boost crop output. Increasing productivity is crucial to farmers, especially when prices (and margins) are low.

Its Iodine division offers derivatives that are used in medical and industrial applications, as well as in antiseptics, disinfectants and polarizing films for LCDs.

Its Lithium division provides lithium carbonates for batteries, heat-resistant glass, air conditioning chemicals and more. With electric and hybrid vehicle demand growing, consistent lithium supplies are crucial.

Its Industrials Chemicals division produces industrial nitrates that are used to manufacture glass and explosives.

Its Potassium division focuses on the sales of two potassium fertilizers. Trade issues have discounted the stock and make it a bargain long-term investment now.

Top Growth Stocks: UnitedHealth Group (UNH)

Top Growth Stocks: UnitedHealth Group (UNH)

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UnitedHealth Group (NYSE:UNH) is the largest single health carrier in the United States. It serves more than 85 million people worldwide and is a parent company to six businesses, including UnitedHealthcare — health insurance that offers policies to businesses and individuals, including Medicare and Medicaid policies.

Its other main branch, Optum, administers everything from mental health and substance-abuse programs to mail-order pharmaceuticals.

While many drug store stocks were rocked by the news that Amazon has now entered the pharmacy business, UNH has been relatively undisturbed because of its integrated strategy.

Looking ahead to full-year 2018, the healthcare giant is targeting adjusted earnings between $12.30 and $12.60 per share, which is a 22% to 25% year-over-year increase and up from its previous guidance of $10.55 to $10.85 per share.

Additionally, cash flows from operations are expected to be in a range between $15 billion and $15.5 billion, and UnitedHealth Group is calling for total revenues between $223 billion and $225 billion.

Top Growth Stocks: Intuitive Surgical (ISRG)

Intuitive Surgical (NASDAQ:ISRG) is in a business that sounds like it comes straight from a science-fiction novel: Surgical robotics.

However, luckily for patients around the world, this revolutionary technology is not only possible, it is becoming more and more integrated into everyday hospital use.

Intuitive Surgical got its big break in 1999 when it introduced the da Vinci surgical system. Complete with a surgeon’s console, a patient-side cart, a 3-D vision system and wrist instruments, this system allows doctors to perform minimally invasive surgery with enhanced dexterity, precision and control.

In the end, this technology benefits the patients, who usually experience less pain, a shortened hospital stay, fewer infections and less scarring.

Nearly 20 years later, the company has developed several models of this surgical system and even offers a training program that brings surgeons up to speed on this technology.

This system has steadily caught on in the healthcare industry; last year alone, the company’s systems were used in 650,000 procedures around the world.

ISRG stock is up more than 30% so far this year, but that is still just the beginning for this next generation healthcare company.

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Source: Investor Place 

Five 5% Payers That’ll Fund a “Dividends-Only” Retirement

Do you have a reliable way to generate monthly cash flow from the dividend stocks you own today? If not, why not?

Many “first-level” investors hope that their stocks will go higher so that they can sell them for cash flow. But, if you follow rich people, you’ll notice that they never actually sell any assets – they instead use them to generate more and more cash flow.

We can – and should – do the same. We can “tap” dividend stocks for regular cash flow. We can even turn the shares we own today into monthly dividend payments that provide us all the income we ever need for the rest of our lives (and we can hang onto the shares and enjoy price upside, too!)

Some financial advisers (many of whom haven’t even retired successfully themselves!) pitch a “4% withdrawal rate” where you “safely” withdraw roughly 4% each year that you use as spending money. Sometimes they’re right … but when they’re wrong, they risk your entire retirement with “reverse” dollar-cost averaging:

This Is What Reverse Dollar-Cost Averaging Looks Like

If you’re following the 4% withdrawal strategy, you usually take money out at precisely the wrong time. You sell more when shares are low – precisely the opposite of the behavior you used to build your nest egg in the first place when you bought low and sold high!

This is reverse dollar-cost averaging – selling more when prices are low and less when prices are high.

The solution? Never have to sell a share by requiring meaningful dividends of 6%, 7% or 8%. This way, you can collect cash from your portfolio quarterly (or sometimes even monthly!) without selling low – or ever!

I also suggest you take one extra step: That’s buying when prices are low and yields are high.

The stock market offers far more upside than bonds, so going too lean on stocks opens you up to a pair of risks:

1.) Outliving your savings, and

2.) Missing out on the gains only the stock market can offer.

One way to do that? Target what I call “Dividend Stocks with Double-Digit Upside” potential.

These shares yield more than 5% each today. Plus these firms have been raising their dividends every year, which means your “yield on cost” will soon grow to 6%, 7% or even 8% or more.

BUT – investors who buy these shares next year likely won’t see a 6% to 8% yield. They’ll probably see the same 5%, give or take – which means your shares will have increased in value. (Investors pay more for a stock price over time as its underlying dividend increases.)

Looking for meaningful yield today with better payouts and price upside tomorrow? Here are five 5%+ payers with 25%+ upside each – thanks to future dividend hikes and the fact that these shares are cheap with respect to cash flow (as indicated by FFO, or their funds from operations).

National Health Investors (NHI)
Dividend Yield: 5.2%
Dividend Hike Streak: 8 years
P/FFO (Price to Funds From Operations): 13.7

Baby Boomers have been an unquestionable economic force their whole lives – and now they’re impacting new industries as they hit retirement age. Roughly 10,000 Boomers are hitting retirement age every day, which is expected to double Medicare spending between 2017 and 2020. Not to mention, an average couple is expected to shell out some $275,000 in out-of-pocket healthcare costs during retirement.

This is a trend that will play out for more than a decade – a dream for buy-and-holders looking for growth and dividends in the healthcare space.

It’s also a trend that has been lifting the fortunes of National Health Investors (NHI) for a roughly a decade already.

National Health Investors owns and provides financing for senior housing and other medical real estate, via a number of methods, including joint-venture, sale-leaseback, mortgage and mezzanine. The company has 225 portfolio companies across 33 states, including 147 senior housing facilities, 73 skilled nursing facilities, three hospitals and two medical offices. Its leases are long-term in nature – none of its current leases expire until 2026! – and they include annual escalators, which helps smooth out expectations for profits.

NHI has been a growth machine for years; the chart below tells the tale:

National Health Investors (NHI) Is Ticking Like a Champ

The good times kept rolling in National Health Investors’ first quarter, including a roughly 10% jump in revenues that filtered down to an 8% improvement in adjusted funds from operations (AFFO). The company also continued growing by devouring, announcing or completing nearly $100 million in real estate acquisitions and loans for the quarter.

Better still, the REIT (real estate investment trust) just boosted its dividend by 5% to $1 per share, and it’s still well-covered at a healthy 83% of AFFO.

LTC Properties (LTC)
Dividend Yield: 5.4%
Dividend Growth Streak: 8 years
P/FFO: 13.8

Let’s stay on the seniors/health care theme by exploring one of my favorite monthly dividend stocksLTC Properties (LTC). It’s very similar to NHI in several ways.

For one, the company invests and finances senior-living and health care properties, with similar breadth – more than 200 properties across 29 states. NHI’s split is 99 assisted-living facilities, 97 skilled-nursing facilities and seven that fall under the “other” basket.

The company also has a similar yield, similar valuation and the same eight-year dividend-growth streak as National Health Investors. Leases are long-term, with none expiring until after 2024, so cash flow looks safe. FFO payout ratio sits just a hair above 76%, so that looks good, too.

Top- and bottom-line growth? LTC looks good, just like NHI.

LTC Properties (LTC) Is as Healthy as a Horse

If you’re worried about the 4% year-over-year dip in FFO last quarter, don’t sweat it too much. That was heavily impacted by property sales in 2017, plus a defaulted lease that investors seemingly already baked in.

Tanger Factory Outlet Centers (SKT)
Dividend Yield: 6.1%
Dividend Growth Streak: 25 years
P/FFO: 9.0

The majority of retail plays on the market stink from a long-term perspective. Whether you’re talking about the brick-and-mortar operators themselves, a la Macy’s (M) and Sears (SHLD), or the real estate investment trusts (REITs) that lease to them, there’s very little upside in a space that’s not just getting upended by the likes of Amazon.com (AMZN), but also by more agile operators such as Williams-Sonoma (WSM) that have “figured out” the internet.

In fact, only a few retail REITs are worthy of consideration, and Tanger Factory Outlet Centers (SKT) is one of them.

Tanger Factory Outlet Centers is a bit different from most retail operators, but that difference counts. Rather than operating traditional retail space such as malls or single-tenant buildings, Tanger operates 44 large outlet malls across 22 states, where brands such as Coach (COH)Michael Kors (KORS), Ecco and Tumi for outrageous discounts, attracting its own type of bargain-hunting crowd.

Meanwhile, investment bargain hunters are sure to like the single-digit P/FFO.

It’s hardly immune from the factors weighing on the retail space – the company actually adjusted its occupancy forecasts lower in May, during its Q1 earnings report, as a result of store closings and bankruptcies. But SKT provided reason for optimism, too, in the form of several operational improvements. FFO improved by 3% year-over-year to 60 cents per share, same-center tenant sales performance improved 1.7% year-over-year for the 12-month period ended March 31, and average tenant sales productivity improved during the same period.

One last feather in the cap: Tanger increased its dividend for the 25th straight year, making it eligible to become a Dividend Aristocrat – making it a rarity among REITs.

Enterprise Products Partners L.P. (EPD)
Dividend Yield: 6.1%
Dividend Growth Streak: 19 years
P/DCF: 11.8

Enterprise Products Partners, L.P. (EPD) is one of the largest master limited partnerships (MLPs) on the market, boasting roughly 50,000 miles of pipelines dedicated to moving natural gas, nat-gas liquids (NGLs), crude oil, refined products and petrochemicals – NGLs are king, though, at 57% of revenues. EPD also features storage, fractionation, natural gas processing and import/export terminaling operations.

Pipeline contracts mostly range between 15 to 20 years, helping to ensure stable cash flows. That in turn has allowed EPD to be one of the most prolific income growers of the past decade-plus, with Enterprise Products Partners boasting 55 consecutive quarters of distribution hikes.

Enterprise Products Partners, L.P. (EPD): Distribution Growth That’s Smoother Than a Baby’s Bottom

EPD’s most recent quarter was a blowout affair. Earnings per share grew 11% to 41 cents per share to easily best estimates, and distributable cash flow jumped 23% year-over-year.

Continued dividend growth seems likely, too. At 63.8 cents in the first quarter, EPD sports a coverage ratio of 150%. So despite its frequent payout growth, there’s still plenty of room in the trunk.

W.P. Carey (WPC)
Dividend Yield: 6.1%
Dividend Growth Streak: 20 years
P/FFO: 12.3

W.P. Carey (WPC) is a single-tenant net-lease REIT, which means that the obligation of real estate taxes, maintenance and building insurance all fall to the tenants. The company operates in both North America and Europe, and its properties span industrial, retail, self-storage, hotels and other categories. That kind of diversification helps insulate WPC from violent fits in any one area.

Like the previous picks, W.P. Carey has a fairly dependable cash stream in that the vast majority of its leases include rent increases.

Unlike the previous picks, W.P. Carey is entering a brand new chapter of existence, announcing in mid-June that it was going to merge with CPA:17 – a non-traded REIT that W.P. Carey’s management team helped advise. The deal gives WPC a hefty dose of exposure to warehouse space, office space and retail; the new assets are geographically diverse, too, with 44% of CPA:17’s net leases coming from international clients.

This merger should only improve WPC’s cash-flow situation, which in turn should fuel continued growth in the dividend. W.P. Carey already is no slouch on that front, having expanded its payout every year since hitting public markets in 1998.

W.P. Carey: Robust Dividend Growth (And The Occasional Special Payout)

How to Retire on 8% Dividends Paid EVERY MONTH

The 5% to 6% yields on this five-pack are nice, but 8% current dividends are of course even better. And how about a monthly payout instead of a quarterly one?

I have a handpicked portfolio of 8%+ monthly payers that not only will pay you four times more than the market average … but will pay you three times more often!

In retirement, it’s important to line up your dividend income with your regular expenses (which are billed monthly). But most publicly traded companies pay dividends quarterly, leaving us high and dry for an extra 60 days in between payments.

Possible to align quarterly dividend payments to show up roughly in equal amounts every 30 days? Sure – but the effort isn’t necessary.

There are cheap monthly dividend stocks (and funds) available today that pay 8%+ per year and pay the same reliable distribution every 30 days, like clockwork. My readers regularly collect $3,000-plus in dividends every single month – and do it with a nest egg as modest as $500,000. (And less money is fine, too – a $250,000 portfolio would yield $1,500+ in monthly income. With price upside to boot.)

My “8% Monthly Payer Portfolio” checks off every box that investors need from retirement:

[X] Monthly dividend income to pay your monthly bills.

[X] Dividends checks large enough to allow you to live off investment income entirely. That means no selling your stocks and shrinking your nest egg, which ultimately shrinks your regular dividend paycheck.

[X] Better returns on any dividends you choose to reinvest. If you don’t need the income from your portfolio right away, you don’t have to wait every three months to put dividends to work – you can sink them back into new investments just about every 30 days!

These monthly dividend payers include a few picks that have remained mostly under the radar despite their high payouts and general quality. For instance, this portfolio includes an 8.7% payer trading at a bizarre 5.3% discount to NAV, and an 8.5% payer that not 1 in 1,000 people even know about.

Editor's Note: The stock market is way up – and that’s terrible news for us dividend investors. Yields haven’t been this low in decades! But there are still plenty of great opportunities to secure meaningful income if you know where to look. Brett Owens' latest report reveals how you can easily (and safely) rake in 8%+ dividends and never worry about drawing down your capital again. Click here for full details!

Source: Contrarian Outlook 

How You Could Make 650% On This Copper Trade

The only thing certain when it comes to trading in 2018 is that this year has been far less predictable than previous years. While the last few years were marked by low volatility and a mostly bullish stock market, it’s obvious that 2018 is an entirely different animal.

So far, 2018 has been characterized by significantly more volatility than we’ve seen in recent times. While it wasn’t reasonable to assume low volatility would last forever (and it did feel that way for a time), the extreme moves in market volatility have caught many traders off guard.

The biggest source of market volatility has been the US administration, particularly the administration’s position on tariffs and international trade. In a nutshell, the US is levying new tariffs on international goods, and it’s slowly leading to a trade war. Whatever your opinion on trade wars and tariffs, it’s very clear the stock market doesn’t like the idea (based on substantial downturns in stock prices whenever a new tariffs is mentioned in the news).

Tariffs can be used to tax all sorts of trade goods, but are often levied on commodities and raw materials. The first ones used this year were on steel and aluminum imports, for example. These sorts of tariffs can wreak havoc on the commodities markets as well as stocks that are involved with the affected goods.

On the other hand, the global economy has been quite strong lately, and is showing no signs of abating anytime soon. So how do you weigh the pro and cons of investing in certain commodities? What do you do with an important trade good such as copper? The widely-followed industrial metal tends to perform well when the economy is growing, but also could feel the sting from a trade war.

As always, I like to look at the options markets for clues on traders’ sentiments. Options action can give insight into investing trends in all sorts of assets and products.

One very bullish case for copper came in the form a massive call spread in Freeport-McMoRan (NYSE: FCX). FCX generates revenues from several products, including copper, gold, and oil. However, roughly 60% of the company’s revenues come from copper, and it’s the largest copper company in the world. As such, the stock price tends be very sensitive to the price of copper.

This week, a size trader made a very big bet that FCX (and thus copper) is going to be climbing this summer. The particular trade was the August 17th 17-20 call spread (buying the 17 call, selling the 20 call) for $0.41. The stock was around $15.50 at the time of the trade, and breakeven is $17.41.

The trade was executed 19,500 times, which means the trader is risking $800,000 on the strategy. That’s no small sum, so he or she must be pretty confident that copper has some upside. What’s more, the trade can make $2.59 in profit should FCX go to $20 or above by mid-August. That’s over $5 million in profit or 650% gains!

This is exactly the sort of long options trade that I would recommend. You aren’t risking too much in capital, and the returns are outsized if you get it right. Plus, you are buying a decent amount of time for your thesis to work out. If you think copper has a bullish future (though this summer), you’ll be hard pressed to find a more efficient trade than this one.

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FRED Starts Publishing Crypto Data

When does something cross over from fad to part of life? It’s a question that’s vexed investors for decades.

Sometimes it’s easy to pinpoint the moment.

Before there were smartphones, there were personal digital assistants (PDAs) and electronic organizers. They did almost everything a smartphone did except make phone calls. For 23 years, they were barely a niche product. Objects of curiosity, if you want to be generous. And if you were one of the few people who used one, there was a good chance you would be mocked for it.

Then came the iPhone in 2007. It was basically a PDA that could make phone calls and play music. But consumers loved it. And the smartphone became a fixture of modern life.

Sometimes, it’s much more difficult to pin down the moment that changed everything.

In the mid-‘90s, the conventional wisdom was that the internet was a fad that wouldn’t take off. This line of thinking from author and astronomer Clifford Stoll was par for the course in 1995:

Then there’s cyberbusiness. We’re promised instant catalog shopping – just point and click for great deals. We’ll order airline tickets over the network, make restaurant reservations and negotiate sales contracts. Stores will become obsolete. So how come my local mall does more business in an afternoon than the entire internet handles in a month? Even if there were a trustworthy way to send money over the internet – which there isn’t – the network is missing a most essential ingredient of capitalism: salespeople.

Whoops. Stoll clearly didn’t see Amazon coming.

Newspaper publishers told the people building their online brands (their own employees!) that the internet was a waste of time and money and people wouldn’t want to read news online. I know – because I was there. I was one of the journalists creating online journalism content and business models.

Music companies didn’t believe people would want to listen to digital music. The list goes on.

So when did the internet move from fad/object of derision to our constant companion?

It wasn’t in 1993 when the first web browser (Mosaic) was released. Nobody knew what was going on then.

It wasn’t in 2000, when the tech bubble burst. That was a time for “I told you so’s” – proof that the internet wasn’t going to last.

It wasn’t 2001, when the number of adults using the internet in the U.S. finally reached 55%, according to the Pew Research Center.

And it wasn’t in 2007, when broadband penetration cracked the 50% barrier.

The die had been cast well before then. Most people just missed it.

The moment the internet gained the credibility it needed to last came in 1994, when the White House released its first website. By today’s standards, the 1994 White House site is terrible. But that doesn’t matter.

What counts is that, by publishing a website, the White House gave the web legitimacy. It went from a slightly underground publishing platform to a legitimate way to publish information and reach people. If the White House was publishing on the internet, it meant the internet was safe to explore and use. It gave permission to skeptics to start using the internet. It told them the web was worth their time.

It was the type of endorsement money couldn’t buy.

Cryptocurrencies received that kind of endorsement this week when the Federal Reserve began tracking and publishing the prices of bitcoin and other key cryptocurrencies. The research division in the St. Louis branch of the Federal Reserve (FRED) is publishing the data.

This is the 2018 equivalent of the White House publishing a website. The central bank of the United States, in its own understated way, legitimized cryptocurrencies. Why would the Fed track assets it didn’t believe were legal, legitimate and worth tracking? The short answer: It wouldn’t.

Bitcoin and other digital currencies like it have become an important asset class in the investment community. The Fed just acknowledged it.

FRED is one of the go-to resources for economic data. Investors and economists from all over the world rely on FRED for information. And FRED just lent its credibility to bitcoin and cryptocurrencies.

This is a significant moment.

But it’s not this week’s only significant crypto moment. Facebook is starting to allow cryptocurrency advertising again as long as the ads – and the companies buying the ads – meet strict guidelines.

And top venture capital firm Andreessen Horowitz announced in its blog that the company has launched a $300 million “venture fund that will invest in crypto companies and protocols. (The) fund is designed to include the best features of traditional venture capital, updated to the modern crypto world.”

FRED’s decision to list cryptocurrency data is a significant milestone in cryptocurrency history. It marks a final countdown to mainstream (and Main Street) acceptance and investment. The Facebook and Andreessen Horowitz announcements take us further down that path.

Good investing,

Vin Narayanan
Senior Managing Editor, Early Investing

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Source: Early Investing 

How the Blockchain Will Lower the Cost of Imported Goods

In last week’s article, I told you that some of the world’s leading firms that are making blockchain technologies a part of their everyday business operations, benefiting both the companies and consumers. And how, using current technology, it is difficult to trace every item through every step of a supply chain that is often very lengthy and complex, involving multiple parties and multiple jurisdictions.

Let me give you a brief glimpse at shipping a product. The very long paper trail begins when a cargo owner books space on a ship to move goods. Documents need to be filled in and approved before cargo can enter or leave a port. A single shipment may require hundreds of pages that need to be physically delivered to dozens of different agencies, banks, customs bureaus, etc.

And make no mistake – shipping is the very core of global trade…

The cost and size of the world’s trading ecosystems continue to grow exponentially. More than $4 trillion in goods, including 80% of consumer goods, are carried by the ocean shipping industry. Just about every item in your home today arrived there via a vast network that transports everything from food and medicine to apparel and electronics from around the world. Total trade represents 60% of the world’s GDP, and yet global supply chains are clogged with inefficiencies and heavily reliant on complex paper-based systems that I described above.

Related: Free Gold-Plated Bitcoins Available to the First 100 Investors

However, distributed ledger technology is changing the equation. For example, even Brexit Britain is looking at how the technology makes Brexit a smoother process.

You see, certificates of origin, typically provided by chambers of commerce, are needed to prove where goods were made for customs purposes. If the U.K. after Brexit is no longer in a customs union with the EU, it will be subject to complex “rules of origin” and companies will need to show which part of which product was made where in order to benefit from preferential trade deals.

The number of certificates of origin needed will likely rise sharply after Brexit. Such documents, and the many other requirements for exporting goods, could be digitized and shared through a blockchain. A standardized process could simplify and make it easier to check many parts of the supply chain including customs declarations, bills of lading [certifications of ship loads] and letters of credit. Shipments entered in a blockchain will remain there forever and can be tracked via a QR code.

Even if Britain does not go down this path, there are companies are the forefront of using blockchain to track shipments around the world.

IBM and Maersk Partner

One company leading the way in practical applications of blockchain technology is IBM (NYSE: IBM). It is teaming up with the world’s largest container shipping company A.P. Moller-Maersk (OTC: AMKBY) to help make companies’ supply chain more efficient and safer through the use of blockchain. The joint venture – 51% owned by Maersk and 49% by IBM – also hopes to automate and digitize the filing of paperwork for shipping cargoes.

The goal is to use distributed ledger technology to create an unchangeable record of transactions along a supply chain that can be shared in real time with whichever companies are necessary. The technology would allow companies at different stages of the supply chain to see the information they need about each transaction in one flow of information.

The two companies began testing the system as early as 2016 and ran a pilot program in 2017, which involved major businesses such as DowDuPont, the ports of Houston and Rotterdam, and the US and Dutch customs authorities. Other companies that are very interested in this new platform include the likes of General Motors and Procter & Gamble, as well as the port operator in Singapore, PSA International and the port operator based in the Netherlands, APM Terminals. The new venture may begin full operations later in 2018 and, on its first day, it will be tracking 18% of containerized sea trade.

A Revolution in Shipping

While there are competing platforms being developed, this is a real opportunity for IBM and Maersk since it is estimated that businesses spend up to 20% of the cost to transport their goods on processing documents and administration. The cost savings, of up to 15% says IBM, for companies should show up on their financial statements within two years.

The adoption of blockchain technology in shipping will reshape the the industry as it has not been since the move to standard containers in the 1960s. But to make it work, dozens of shipping lines and thousands of related businesses around the world — including manufacturers, banks, insurers, brokers and port authorities — will have to agree to standards and work out a protocol that can integrate all the new systems onto one vast platform.

Related: Buy These 3 Leading Blockchain Technology Stocks

When this eventually does happen, documentation that takes days will eventually be done in minutes, much of it without the need for human input. And the cost of moving goods across the world would likely drop dramatically, adding fresh impetus to the globalization that President Trump is fighting so hard against.

The adoption of blockchain in trade would do so much more too. The World Economic Forum estimated that just improving communications and border administration using blockchain could generate an additional $1 trillion in global trade. IBM and Maersk believe global trade volumes would rise by 15% when blockchain becomes the norm in the industry.

Change in the shipping industry is inevitable and is coming quickly. IBM and Maersk should be two of the main beneficiaries. Next week, I will bring you more companies developing practical uses for blockchain technology.

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A Quick 185% on an ETF That’s Just Now Bottomed

If you have any interest in economic policy, especially macroeconomic policy and repercussions, now is about as interesting as it gets. I realize most people don’t get a hoot about macroeconomics, but it can be very useful for analyzing trading opportunities. (For me, it goes beyond that since I have a degree in economics which focused heavily on the macro side of things.)

We’re experiencing a real life experiment on how tariffs and trade wars are bad for an interconnected global economy. Tariffs can gain political traction because they are supposed to create or protect domestic jobs. However, as soon as other countries imposed their own tariffs, it generally just comes back to bite the industries that initially were supposed to be insulated.

For a developed nation like the US, a trade war would probably result in something like a 3% decrease in GDP. That’s a big deal when you’re talking about trillions of dollars, but it’s also not catastrophic. On the other hand, tariffs can be extremely detrimental to the growth of emerging market economies.

iShares MSCI Emerging Markets ETF (NYSE: EEM) is an extremely popular ETF for trading a basket of emerging market stocks. The heavily traded EEM does almost 70 million shares per day in share volume plus 400,000 options on average.

As you can see from the chart below, emerging markets have taken a pretty big hit lately. EEM started trending down when tariffs became a major news item. Since the actual implementation of the tariffs, it has dropped even lower.

However, a massive options trade last week in EEM suggests that the ETF is done falling for the rest of the month. This trade, known as a put ratio spread, involved a 100,000 by 200,000 put spread – which is about as big of an options trade as you’ll ever see.

More specifically, a trader purchased the June 29th 42.5 puts 100,000 times (with the stock at $43.50) while simultaneously selling 200,000 of the 42 puts in the same expiration. Now, buying a put spread is normally a bearish strategy, but the trader actually collected a credit of $0.06.

That means if EEM stays where it is or moves up, the position will generate $600,000 in profit. The max gain is at $42 on expiration, where the trade would earn $0.56 or $5.6 million. However, below $42 in EEM is where the risk comes in. Every $1 below $42 would result in roughly $10 million in losses. Clearly, there’s big money betting on EEM staying above that level through the end of June.

I like the idea of this trade, but obviously not the risk involved. In fact, selling a put spread is tough in general because the options are so cheap. I think you may be better off betting on a reversal straight up using a call spread.

For instance, with EEM at just under $44, you could buy about a month of time and get the July 20th 44-46 call spread for about $0.70. Break even is $44.70, you can make $1.30, and max risk is just the $0.70 you pay in premium. That’s a very reasonable amount to pay for a month-long trade that has 185% max gain upside.

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5 Up-And-Coming Stocks That Investors Should Consider

Source: Shutterstock

One constant in the human journey remains the creativity of the human mind. Ideas can emerge from this wellspring that not only change the way we live, they also bring new businesses to the market. From a stock market perspective, this leads to new up-and-coming stocks. Other ideas breathe new life into old stocks whose older business lines fell out of favor. In reality, investors do not make outsized returns by buying stocks like Apple Inc (NASDAQ:AAPL) or Amazon.com, Inc. (NASDAQ:AMZN) at their current sizes. They make money buying the future Apple or Amazon that has not yet become well-known.

What the technology world has experienced recently has become nothing short of another Industrial Revolution. I believe historians will look back upon the 2010s as a time when many of these ideas spring forth.

Fortunately, several up-and-coming stocks have appeared that will allow investors to profit from this growth and change. These 5 stocks hold potential for investors to bolster their portfolios on revolutionary change.

5 Up-And-Coming Stocks: ETFMG Alternative Harvest ETF (MJ)

 

Source: Shutterstock

Marijuana is by no means a new substance. This revolution is more of an attitudinal change which has brought the market numerous up-and-coming stocks. The ETFMG Alternative Harvest ETF (NYSEARCA:MJ) stands at the forefront of this revolution. As of now, this has become the first and currently only marijuana ETF to trade on U.S. exchanges.

ETF inflows have stagnated as of late while as their counterparts on the Toronto Exchange continue moving higher. This pause likely hinges on the uncertainty surrounding federal marijuana laws in the U.S. However, I think this uncertainty creates opportunity. And this opportunity comes from an attitudinal change from an unexpected source: the Republican party.

Former House Speaker John Boehner, once a staunch opponent of cannabis, joined the board of a marijuana company. President Donald Trump recently proposed removing legal restrictions on marijuana. And just this week, Oklahoma, one of the most deeply Republican states in the Union, approved a permissive medical marijuana law.

Such changes will only bolster the cannabis industry, especially with regard to U.S. companies. Though the ETF holds several U.S. stocks, Canadian stocks The Green Organic Dutchman Holdings (OTCMKTS:TGODF), Canopy Growth (NYSE:CGC), and Aurora Cannabis (OTCMKTS:ACCBF) stand as its largest holdings. It also trades about 25% below its January high, despite the solid performance of many of its Canadian holdings. Between Canada’s legalization and loosening restrictions in the U.S., MJ stock should provide a safe and profitable segue into the cannabis industry.

5 Up-And-Coming Stocks: IPG Photonics (IPGP)

 

Source: Shutterstock

IPG Photonics Corporation (NASDAQ:IPGP) develops and manufactures high-performance industrial lasers. Industries ranging from automotive to aerospace to semiconductors use IPG’s technology in their manufacturing processes. In addition to lasers, it also produces equipment for medical and telecom applications.

Growth has remained both robust and steady. Both revenue and profits have increased at an annual rate of about 20% for the last five years. Although revenue growth will likely slow in future years, earnings increases should maintain their current pace for the foreseeable future.

Recent geopolitical events have created opportunity in IPGP stock. IPG earns about one-third of its business from China. The escalating trade dispute with China had led to a massive selloff.  IPGP stock has fallen by over 17% since the beginning of June as a result.

Despite this drop in the stock price, massive growth has defined this stock for most of the decade. Few up-and-coming stocks have seen this level of growth. The stock has risen from a low below $7 per share in 2009 to as high as $264 per share. However, even with this increase, IPGP stock trades at around 32 times current earnings. With this high level of growth expected to continue for the foreseeable future, interested investors should take advantage of this China uncertainty to buy into IPGP.

5 Up-And-Coming Stocks: iRobot Corporation (IRBT)

 

Why the Rebound in IRBT Stock Will Continue

Source: Shutterstock

iRobot Corporation (NASDAQ:IRBT) should serve as one of the more recognizable up-and-coming stocks. It leads its industry in the emerging field of consumer robots. Founded in 1990 by a group of MIT graduates, it expanded the reach of artificial intelligence (AI), settling on a niche in consumer robots. Its most commercially successful robot has become the Roomba vacuum. Its floor mopper, Braava, and other consumer robots also continue to sell well.

The Bedford, Massachusetts-based company has enjoyed years of high growth as a result. Annual revenue growth tops 15% per year. Profits have also seen double-digit percentage growth in most years. In fact, analysts expect yearly profit growth to exceed 20% per year through 2021.

Considering the stock price has increased by more than tenfold since its 2009 low, the company trades at a fair valuation. That growth has taken the market cap to about $2.1 billion. Its current PE now stands at about 40. While that may appear high, it also trades at about 2.3 times sales and around 4.2 times its book value.

It also has fallen substantially from its 52-week high. SharkNinja has posed a challenge to iRobot’s market dominance. Between July and February, IRBT stock lost over 50% of its value as Shark claimed a market share exceeding 20%. However, since early May the stock has jumped from about $56 per share to around $76 per share today. Although analysts expect its 60% market share to fall, profits should continue growing at 20% per year. And with only about 11% of U.S. households owning a robotic vacuum, growth should continue for years to come.

5 Up-And-Coming Stocks: Nokia (NOK)

Source: Shutterstock

As the oldest company on this list, Nokia Oyj (ADR) (NYSE:NOK) makes the up-and-coming stocks list on reinvention. The company began its history in the mid-19th century in present-day Finland as a pulp mill. As late as the 1960s, they produced toilet paper. Moving from that point to achieving the domination of the mobile phone market required a radical change. With the decline of non-smart mobile phones, Nokia has reinvented itself once again. It now stands at the forefront of the 5G revolution.

5G promises to increase connection speeds by as much as 100-fold from the current 4G technology. Most of the major wireless companies throughout the world will each invest tens of billions of dollars to upgrade their wireless networks. Since Nokia has become a leading producer of 5G equipment, it will derive massive benefits from this upgrade.

Still reeling from its loss of the mobile phone market, NOK stock still trades under $6 per share. However, 5G leads the way in its comeback. The company expects earnings of between 23 and 27 euro cents (between 27 and 31 cents) per share this year. By 2020, NOK expects earnings to reach between 37 and 42 euro cents (between 43 and 49 cents per share). For 2018, this takes the forward price-to-earnings (PE) ratio to between 18.8 and 21.6.

Growth would also remain in the double-digits by even the most conservative estimates. If NOK stock can maintain such a growth pace, perhaps it could return to the $42 per share high it saw in 2007 and maybe beyond.

5 Up-And-Coming Stocks: Teladoc Inc (TDOC)

 

 

Teladoc Inc (NYSE:TDOC) is one of the up-and-coming stocks that continues to bolster its dominance in the emerging telehealth industry. The Purchase, New York-based provider boasts of a 75% market share in an industry that could claim a significant percentage of the market for doctor’s office visits.

For $40, patients can visit a Teladoc doctor 24 hours a day, seven days aweek. Assuming the doctor can evaluate the patient this way, the patient can receive a diagnosis and, if necessary, have a prescription sent to a pharmacy within a few minutes. Similar services from an in-person physician can run more than three times the cost and are only available during regular business hours. TDOC also offers similar services for behavioral health services.

Analysts believe this service, which serves under 1% of patients now, could cover up to 30% of all doctor visits within a few years. It will also receive a boost when it begins to cover Medicare Advantage patients starting in 2020.

Best of all, TDOC stock has worked to expand what might otherwise be described as a thin moat. In 2017, it acquired Best Doctors to improve its diagnosis capabilities. This year, it acquired Advanced Medical. This will bring Teladoc’s services to several other countries.

Investors will have to exercise patience as a positive net income remains a few years off. However, revenue continues to grow by about 50% per year. The number of patient visits increases by nearly the same amount. With that level of growth and its market share, TDOC stock has positioned itself to both grow quickly and dominate the telehealth industry.

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Buy These 3 High-Yield Stocks Up Over 20% YTD

The signs are that the energy infrastructure/midstream sector have set up for a multi-year bull market recovery from the declines of the previous two years. A handful of energy midstream companies have gotten a jump on their peers and have already put up nice gains to date in 2018. Even with the 20% to 30% gains over the last few months, these energy sector leaders still have plenty of upside runway. It is not time to sell and it is not to late to join the ride with these stocks.

Prior to 2015, the majority of energy midstream service companies were organized as master limited partnerships –MLPs. These companies provide the assets and services needed to move energy commodities such as crude oil and natural gas from the well to the end user. The companies provide gathering and processing services in the energy plays, pipeline and other transport services, and own storage and terminal facilities. The energy sector crash that started in 2015 and lasted well into 2017 forced a lot of the infrastructure companies to restructure their balance sheets and business models. Now you will find a larger number of companies organized as corporations. However, about two-thirds of the publicly traded infrastructure/midstream companies are still organized as MLPs.

The steady growth in North American production of crude oil and natural gas is increasing the need for midstream services. The energy infrastructure companies are filling their pipelines, processing plants and storage terminals. They are launching new projects to handle the forecast growth. Revenues, free cash flow, and dividends paid to investors are on the upswing. Most of the companies have not seen the rising values reflected in their share prices. In contrast to the herd, a small number of the best run midstream companies working in the most prolific energy plays are up 20% to 30% (plus distributions) already this year. You can expect these companies to lead the pack for the rest of the year.

Related: 10 Highest Yield Dividend Stocks Going Ex-Div This Week

CNX Midstream Partners LP (NYSE: CNXM) is up 23.7% so far this year. CNXM is an MLP that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. The company operates in the Marcellus and Utica shales, the most prolific natural gas play in the U.S., if not the world. This MLP primarily provides services to CNX Resources Corporation (NYSE: CNX), which has a significant portfolio of midstream assets to be transferred to the MLP. CNXM has provided distribution growth guidance of 15% per year through at least 2022. The CNXM units currently yield 6.7.

Plains All American Pipeline LP (NYSE: PAA) is up 20.5% year to date. Plains owns and operates the largest independent network of crude oil gather systems, crude oil long distance pipelines, and crude oil storage facilities. The company has the largest gathering presence in the rich Permian energy play. It has one of the best pipeline takeaway capacities and is leading the charge to build new pipelines out of the Permian. This region is the growth engine of U.S. oil production and Plains All American Pipelines is best positioned to benefit from the production growth. The company offers alternative shares in Plains GP Holdings LP (NYSE: PAGP). Both securities pay the same distribution rates (each PAGP share is backed by a PAA unit. The difference is that PAGP is a 1099 reporting company for taxes. Plains should resume distribution growth in 2019. The shares currently yield 5.0%.

ONEOK, Inc. (NYSE: OKE) is up 29.8% so far in 2018. ONEOK (pronounced one-oak) is one of the largest energy midstream service providers in the U.S., connecting prolific supply basins with key market centers. It owns and operates one of the nation’s premier natural gas liquids (NGL) systems and is a leader in the gathering, processing, storage and transportation of natural gas. ONEOK’s operations include a 38,000-mile integrated network of NGL and natural gas pipelines, processing plants, fractionators and storage facilities in the Mid-Continent, Williston, Permian and Rocky Mountain regions. In mid-2017 the company merged its controlled MLP into the corporate parent. The share price gains show that the market likes this energy midstream company as a corporation. The OKE dividends increase every quarter and are forecast to grow by 10% per year. The shares currently yield 4.6%.

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10 Highest Yield Dividend Stocks Going Ex-Div This Week

Ticker Ex-Div Date Pay Date Div Amt Yield
TEI 6/27/2018 7/10/2018 $0.21 24.28%
NDRO 6/28/2018 7/16/2018 $0.06 20.24%
ORC 6/28/2018 7/10/2018 $0.09 13.90%
AI 6/28/2018 7/31/2018 $0.38 13.71%
CBL 6/29/2018 7/16/2018 $0.20 12.92%
NYMT 6/27/2018 7/26/2018 $0.20 12.86%
EARN 6/28/2018 7/25/2018 $0.37 12.79%
DRW 6/25/2018 6/28/2018 $0.92 11.65%
TWO 6/28/2018 7/27/2018 $0.47 11.62%
WMC 6/29/2018 7/26/2018 $0.31 11.51%

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Source: Investors Alley 

F.A. Hayek Saw Bitcoin Coming 34 Years Ago

Independent money, free of government control, has long been a dream of liberty-minded individuals.

Nobel Prize-winning economist and free thinker (a rare thing) F.A. Hayek described the main problem with a single group having a monopoly on money: a profound lack of innovation. Here’s an excerpt from his 1984 interview with the Cato Institute:

The great trouble is that money wasn’t allowed to develop. After 200 or 300 years of the use of coins, governments stopped any further developments. We were not allowed to experiment on it, so money hasn’t been improved, it has rather become worse in the course of time.

Money certainly has devolved over time. It has descended from being backed by hard assets, like gold and silver, to its 100% fiat status today. There’s nothing backing it, and there’s no limit on the amount that can be printed.

There’s not even precious metals in coins anymore – not even copper in pennies! So we can see that innovation dies and money loses value when centralized powers have control over it. It’s happened throughout history.

But Hayek was truly ahead of his time. He went so far as to think about how we could develop an alternative monetary system. Here’s a Hayek quote from a different 1984 interview:

I don’t believe we shall ever have a good money again before we take the thing out of the hands of government – that is, we can’t take them violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can’t stop.

So Hayek thought that we could create independent money in a “roundabout way… something that they can’t stop”…

Sounds like crypto to me…

It uses a decentralized network of computers to solve the “something they can’t stop” part of his idea. Nobody owns bitcoin. It is an independent network of millions of people voluntarily using it and improving on it.

Finally, Innovation in Money

Cryptocurrencies are the first real innovation in money in centuries. Think about the implications of that…

For most of modern history, governments have not allowed any competition in money. But now, the cat is out of the bag. The code is out there and free for anyone to use. Shutting it down is next to impossible.

Hayek realized that a clever system like crypto would be needed for money to be truly free.

The pioneers who helped bring bitcoin and cryptocurrencies to life, such as Nick Szabo and Satoshi Nakamoto, designed the systems brilliantly. Good cryptos are decentralized – running on tens of thousands of computers all over the world. There are checks, balances and incentives built in. Bitcoin has proven itself to be remarkably secure over the last nine years. And it’s constantly evolving and improving.

Hayek predicted the usefulness of independent money, but I don’t think he imagined the incredible flexibility of it in action.

It’s independent money. And it’s the first truly programmable money. Both concepts are revolutionary.

We’re beginning to see these concepts in action. In countries where inflation is high, cryptocurrency is becoming an everyday part of life. It’s a way to protect and preserve value where government money is failing.

On the “programmable money” side of things, projects like Ethereum are leading the way. This is an equally promising aspect of crypto. Having programmable, flexible money is allowing for all sorts of innovation. Initial coin offerings are the first killer application, but it certainly won’t be the last.

We’ve only just begun to see the potential of crypto. Personally, I can’t wait to see what pops up over the coming years. Independent currencies capable of being programmed like software offer nearly unlimited possibilities.

Hayek died in 1992, but I’m certain he would love cryptocurrency if he were still around. The fact that he predicted something like crypto would be necessary to move money forward is nothing short of remarkable.

Good investing,

Adam Sharp
Co-Founder, Early Investing

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