Monthly Archives: October 2017

Energy

My Recommendation Is Up 19% Since August. Did You Buy It?

Back on August 4, I told you that major oil companies were raking in record cash flows. Giants like BP (NYSE: BP) and Royal Dutch Shell (NYSE: RDS) made more cash in the first half of 2017 than they did in 2014, when oil was more than $100 per barrel.

However, one critical sector didn’t see the benefits of that cash flow at the time — oil service stocks.

At the time, Schlumberger Ltd. (NYSE: SLB) had its best quarter since the end of 2015. Revenue and earnings spiked higher.

It was clear that these companies made it through the bear market. The fundamentals headed higher … but share prices just hadn’t moved yet.

As I told you in August, there was zero chance that the service companies will continue to fall if the major oil companies are making record gains. That’s exactly what happened in mid-August. Oil service companies bottomed, as you can see from the chart below:

As I told you in August, there was zero chance that the service companies will continue to fall if the major oil companies are making record gains.

The chart above is the VanEck Vectors Oil Services ETF (NYSE: OIH). It found a bottom at $21.76 per share in mid-August.

Since then, shares rose steadily. Today it trades at $25.84 per share. That’s a 19% gain in less than two months.

The price these companies charge oil companies is flexible. Oil service companies can raise their rates as their clients make more money.

The service companies, like the oil companies, took a huge hit in 2015 and 2016 as oil prices fell. Now rates are going back up. More earnings will drive the shares of these companies higher.

It’s still early in the game for oil services. If you haven’t gotten in yet, you have plenty of time to make some gains here.

Good investing,

Matt Badiali
Editor, Real Wealth Strategist

Right now, an untapped ocean of energy—found underneath all 50 states—is about to transform the world’s energy industry. In fact, there’s enough of this energy in the first six miles of the earth’s crust to power the United States for the next 30,000 years. Wanna know this untapped energy source? Learn NOW! And as companies rush to extract this energy from the ground, they’ll need the help of one Midwestern company’s technology to make use of it. This is your chance to take advantage of John D. Rockefeller-type fortunes. Early Bird Gets The Worm...

Source: Banyan Hill 

Technology

3 Stocks on Apple’s ‘Hit List’ to Buy Next

While most investors are focused on the introduction of the iPhone8 and iPhone X from Apple (Nasdaq: AAPL), I am much more interested in other news the company is making. It is involved in the consortium that submitted the winning (for now) $14 billion bid for 60% of the semiconductor manufacturing business of struggling Japanese conglomerate Toshiba (OTC: TOSYY).

This move further highlights to me a major change underway at Apple. The company famously outsources almost its entire supply chain. But that seems set to change, especially with regard to semiconductors.

The reason is straightforward. . .as I discovered in my Singularity project research, semiconductors are the lifeblood of our technological world, including the iPhone.

Apple and Semiconductors

Apple and its rival, Korea’s Samsung Electronics (OTC: SSNLF), remain the top two semiconductor buyers. Together, the two consumed $61.7 billion of semiconductors in 2016. Last year was the sixth consecutive year that the two companies led the way in usage of semiconductors.

But there is a difference between the two.

You see, Samsung is also a major manufacturer of semiconductors. So it consumes its own chips.

But Apple buys memory chips (and OLED screens) from Samsung for its iPhones. The Wall Street Journal reported that Samsung stands to make about $4 billion more in revenue from Apple’s iPhone X components than from components made for its own Galaxy S8 in the 20 months following the iPhone release.

I’m sure that doesn’t make Apple happy. But Samsung is one of the few firms globally that can make enough small chips packed with extra memory capacity (or enough OLED screens).

That is simply due to the exorbitant cost of building a new plant to make semiconductors, which are called foundries or fabs. Even back in 2010, a new foundry set Taiwan Semiconductor (NYSE: TSM) back $9.7 billion. Today, that cost is likely doubled.

That brings us back to Apple’s interest in Toshiba’s chip business. It is heavily involved in the manufacture of NAND memory chips similar to the ones that Apple is currently buying from rival Samsung.

Apple’s Growing Chip Expertise

There is a lot more, however, to the story surrounding Apple and semiconductors.

The company has long been known in technology circles as having prowess in chip design. After all, it did build core processors for both the iPhone and iPad (manufactured by TSM). And it has created fingerprint chips as well as a unique chip for AirPods that allows seamless pairing with other Apple hardware.

Now, Apple is believed to be expanding efforts in developing proprietary semiconductors in artificial intelligence (AI chips). In mid-September, Apple revealed an AI chip that would power facial recognition for iPhone X.

And its plans don’t stop there. Apple may also be interested in building designs for core processors for notebooks, modem chips for iPhones, and a chip that will integrate touch, fingerprint and display driver functions.

This should not come as a surprise to anyone. It has made six semiconductor-related acquisitions since 2008 and is also vacuuming up AI chip-related start-ups. And it poached a top modem chip engineer from Qualcomm (Nasdaq: QCOM) earlier this year as well as engineers from Taiwan’s leading display-driver designer Novatek Microelectronics. And it also took talent from Broadcom (Nasdaq: AVGO) and Texas Instruments (Nasdaq: TXN)among others.

Related: Buy These 3 Hot Semiconductor Stocks for Long-Term Profits

According to research firm IC Insights, Apple ranked as the world’s fourth biggest chip design firm as of the end of 2016. It trailed only Qualcomm, Broadcom and Taiwan’s Mediatek (OTC: MDTKF) and was one spot ahead of semiconductor stock market darling Nvidia (Nasdaq: NVDA).

Investment Implications

The emphatic move by Apple into semiconductors is not good news for many of its suppliers. One example is Germany’s Dialog Semiconductor (OTC: DLGNF), which had Apple poach many of its engineers and will design its own power management chip that Dialog was supplying to it.

Or the U.K.’s Imagination Technologies (OTC: IGNMF), after Apple said it would no longer use its intellectual property surrounding graphics processors. Imagination had to sell itself to a Chinese company in order to survive. Apple also took its chief operation officer before it announced it was building its own graphics processor.

The damage will not be restricted to less well-known overseas Apple suppliers. The damage will eventually spread to those suppliers that trade here in the U.S. too.

I believe at the top of Apple’s ‘hit list’ are Qualcomm and Intel (Nasdaq: INTC). Both provide baseband modem chips responsible for mobile communications to Apple. The ongoing legal battle between Apple and Qualcomm over the latter’s licensing fee model for the modem chip tells you all you need to know there. Qualcomm got 40% of its revenue last year from Apple and Samsung.

Intel, in addition, may be on the way out not only with regard to modem chips but also with chips for the iPad. Notebooks are becoming thinner and consumers are demanding longer battery lives. This tilts the playing field away from Intel chips and toward the architecture from ARM Holdings, which is now owned by Japan’s Softbank (OTC: SFTBY).

Other companies possibly in Apple’s firing line in the future are Analog Devices (Nasdaq: ADI) and Synaptics (Nasdaq: SYNA), which are Apple’s key suppliers for touch sensors and display-driver integrated circuits currently.

And don’t forget about Apple’s radio frequency chip supplier, Skyworks Solutions (Nasdaq: SWKS), or its audio and voice chip provider, Cirrus Logic (Nasdaq: CRUS). They may also be at risk.

Are there any possible winners here from Apple’s aggressive push into semiconductors?

Yes, I believe the foundry service providers that actually make the chips for Apple are safe for now since it has no plans at present to actually move into manufacturing.

That points to the company that currently dominates Apple’s chip production – the world’s largest contract semiconductor manufacturer, with 56% of the market – Taiwan Semiconductor. Apple became the company’s biggest client in 2015 and it accounted for 17% of its revenues at just under $30 billion for 2016. This year, Apple should make up about 20% of TSM’s revenues. And Apple has already engaged TSM to begin work on its core processor iPhone chips for 2018.

Taiwan Semiconductor’s stock is up 33% year-to-date and 25% over the past year, and it has a dividend yield of 3%.

There is no doubt about Apple’s new and almost ruthless aggressiveness regarding its supply chain. One of the very few beneficiaries will be Taiwan Semiconductor.

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

Technology

Tesla Is Going to Embarrass Warren Buffett

“I’ll meet you at Pilot” my future wife said to me before hanging up the phone.

She was explaining to me how to get to her parents’ house. (This was before our phones were a GPS device.)

But by meeting me at the Pilot gas station, I knew exactly where that was.

In the town she grew up in, it was a local landmark. Right off the highway, Pilot always had the cheapest gas and was a spot everyone knew of.

That was over 10 years ago, though.

Now it’s just another gas station along the Interstate 40/Interstate 85 corridor in the middle of North Carolina.

However, even though it is just one of many gas stations with competitive gas prices across the country, legendary investor Warren Buffett felt the value was now ripe for an investment.

Last Tuesday, he announced his company, Berkshire Hathaway, would buy a 38.6% stake in Pilot Flying J, which operates the little truck stop I was meeting my future wife at.

To me, he is clearly going against one of his investing rules — never buy a stock you are not comfortable owning for 10 years.

And if you typically follow Buffett’s investments, this is one you should pass on. Here’s why.

The Oracle of Omaha

I have a lot of respect for the Oracle of Omaha. Who wouldn’t? He is the world’s third-richest person, and his success story is one of the greatest.

Many investors idolize him and simply buy whatever he buys.

However, I think he is making a mistake on his latest acquisition, Pilot Flying J.

It actually goes against one of his main rules, if you ask me.

I have used his No. 1 rule before, which is to never lose money, but he has a few other rules to invest by. One of them is to never buy something you don’t want to own for 10 years.

That’s his investment time frame in a nutshell. “If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes.”

But Buffett’s latest acquisition is one I am uncertain about in just five years, and I question its existence 10 years from now.

Still, that hasn’t stopped investors from chasing his trade.

TravelCenters of America LLC (Nasdaq: TA) jumped 10% on the news, without even knowing the financial details of the transaction. That’s partly because the announcement of the Pilot acquisition mentioned Berkshire Hathaway’s capital and ability to expand, and TravelCenters may be one acquisition it is eying.

However, I doubt the usefulness of a truck stop/gas station in a future that is going electric and self-driving.

Going Electric

I find it extremely ironic that Buffett made this acquisition in the same month that Tesla planned to unveil its electric, self-driving semitruck. Granted, it is several years away from being operational, but the fact remains that in five years, almost all of the new cars being released will be electric, as indicated by the major automobile manufacturers.

I’m sure Buffett has thought about this, and still finds the real estate that Pilot owns to be a worthy acquisition. But to me, in just five years this is a company that will be searching to find its place in a world that is going electric and autonomous.

Does Pilot just become a place to stop on long trips and use the restroom? Somewhere to get junk food? Or will it be branded as a completely different use? I don’t know.

But I do know that when major manufactures like Ford, General Motors and BMW make the shift over the next few years to an almost entirely electric and automatic fleet, the amount of charging stations will multiply. And I may be five years off, but that brings up Buffett’s 10-year time frame, and I don’t know what a gas station will be like in 10 years.

I just know it won’t be your typical gas station anymore. Because instead of having to stop at a gas station before you get home, you’ll simply charge up at your house.

And instead of having to stop for gas after a 300-mile trip, you’ll simply pull into the hotel and charge up while you stay there.

So this is not an investment I would want to own for the next 10 years. And I think trading TravelCenters is a risky bet at the moment too.

If you buy it, you’re hoping Berkshire Hathaway has its sights set on that company. Because if it doesn’t, TravelCenters will likely fall back. But betting against it is too much of a risk because of the possible acquisition.

For now, this is simply not the investment to follow Buffett on. And I don’t say that often.

Regards,

Chad Shoop, CMT
Editor, Automatic Profits Alert

In this exciting NEW VIDEO, Wall Street legend and former multibillion hedge fund manager Paul Mampilly pulls back the curtain on the biggest investment opportunity in the market today. What insiders are calling “The Greatest Innovation in History,” this revolution will mint more millionaires and billions than any technology that came before it. Right now, the current market for this technology is just $235 billion, but given how fast this technology is moving experts predict it will soar to $19 trillion by 2020. But 8,000% growth is just the beginning—and now’s your chance to get in on the action. [CONTINUE TO VIDEO]

Source: Banyan Hill

REITS

The 6 Stock High-Yield Portfolio in an Amazon World

The Amazon.com, Inc. (Nasdaq: AMZN) juggernaut has been and continues to be a disruptive force across a wide sector of the U.S. economy. Much of the financial news focuses on how Amazon’s growth may put traditional retailers out of business. The perception of massive e-commerce growth has hurt retail store and mall owning real estate investment trust (REIT) values. For the conservative income focused investor, a six stock REIT portfolio can be built to take advantage of the Amazon effect on the economy.

In spite of its two decades of rapid growth, as of mid-2017 Amazon had a 5% share of total retail sales, excluding food. In August, the company completed its acquisition of Whole Foods Markets, giving Amazon a foothold in the grocery sector. However, Whole Foods accounts for less than 2% of the grocery market. These facts lead to a pair of competing investment themes. First, with less than 5% of the total retail market, there is lots of room for Amazon to grow revenues. Second, the idea that more than 95% of retail sales happens away from the Amazon machine indicates that people still like to touch and feel before buying, that some types of retail are immune from e-commerce competition, and product companies want to have multiple outlets for the sales of those products.

Predicting the future is tough, and Amazon may succeed in taking over the world, but that is unlikely. Retail will evolve, and Amazon will be a major player and likely the biggest influence on that evolution. Let’s start two REITs each from three themes related to Amazon’s effect on the economy.

Theme #1: The financial news experts are wrong: brick-and-mortar retail will not be decimated. However, store based retail must evolve and adapt to a world of mixed direct and ecommerce sales. The one-sided reporting on this subject has led to a sell off retail property REITs and now the better companies are attractive value investments.

  • With a $50 billion market cap, Simon Property Group Inc (NYSE: SPG) is the largest publicly traded REIT. Simon owns and operates premium shopping and outlet malls. If a company needs to have retail stores, it wants to locate them in Simon run malls. The SPG dividend has been increased 15 times in the last five years, with the payout growing by 80%. This is a very successful mall operator. This stock is on sale, with a current share price down 30% from the July 2016 peak. Yield is 4.6%.
  • National Retail Properties, Inc. (NYSE: NNN) is a $6.1 billion market cap REIT that focuses on single tenant retail properties. The company owns over 2,500 stores, leased to 400 tenants operating in 40 different retail categories. Most of these categories are businesses which cannot be replaced by ecommerce alternatives. Business such as restaurants, health clubs, fuel and convenience stores and auto parts stores. National Retail Properties has increased its dividend for 28 Sconsecutive years. Dividend growth will be in a 3% to 5% annual range. NNN shares are down 19% since the 2016 high and yield 4.5%.

Theme #2: Most products sold by Amazon can’t be delivered over the Internet. Amazon’s business requires large amounts of warehouse space to fulfill and ship orders. Processing e-commerce orders takes up to three times as much warehouse space compared to the amounts needed by traditional retail for the same amount of product. Amazon possesses its own order fulfillment centers and also leases warehouse space. Companies that generate the other 50% of e-commerce sales also need warehouse space and services. These two REITs are the two largest Amazon landlords when it comes to owning large-scale fulfillment facilities.

  • Prologis, Inc. (NYSE: PLD), with a $33 billion market cap, is a global logistics giant. The company owns or partially owns properties and development projects across 676 million square feet in 20 countries spanning four continents. Industrial/warehouse REITs are one of the hot REIT sectors. These companies can easily fill new projects and realize nice rental rate growth on existing properties. Prologis has increased its dividend by 50% over the last four years. The stock yields 3.4%.
  • Duke Realty (NYSE: DRE) is an industrial REIT with a large US portfolio. Duke Realty is the largest, pure play, domestic only industrial REIT. The company owns 475 facilities in Tier 1 markets. Duke is highly focused on serving e-commerce sales and fulfillment. The company notes that projected e-commerce growth through 2020 will require almost 300 million square feet of additional industrial space. Amazon.com is Duke Realty’s largest tenant. The DRE dividends should grow by about 6% per year. The stock yields 2.6%.

Theme #3: Growth in e-commerce means growth in Internet connectivity and data storage. Amazon Web Services is the company’s primary profit source. AWS is a secure cloud services platform, offering compute power, database storage, content delivery to help businesses scale and grow. Data center REITs are the high growth beneficiaries of the paradigm shift toward cloud computing and the trends toward distributed IT architecture, co-location and connectivity. Two data center REITs offer high-speed on-ramps to Amazon Web Services, including Direct Connect in many metros areas.

  • Equinix, Inc. (NASDAQ: EQIX) is a 19-year old S&P 500 company which became a REIT in 2015. Equinix owns and operates the largest global network of data centers, which focuses on connectivity and interconnection. The company’s revenues and EBITDA are growing at a high teens annual rate. AFFO (adjusted funds from operations) per share is increasing by over 20% per year. The dividend was increased by 14% this year. Equinix also has a history of paying large stock + cash special dividends. EQIX yields 1.8%.
  • CoreSite Realty Corp. (NYSE: COR) focuses on connectivity, primarily in eight major US markets. Here are the company’s amazing annual compound growth rates for the last six years.
    Revenue: 18%
    Adjusted EBITDA: 26%
    Funds from operations: 25%
    Dividends: 35%.
    This is outstanding growth from any type of business. COR yields 3.2%.

Companies able to adapt to changing economic and business environments – like Amazon encroaching on just about every business sector – are able to not only grow when everyone else is panicking but also reward investors. The six stocks above have a history of generously raising dividends so that for early investors their yield on cost can quickly become many times higher than the advertised regular rate.

Its high flyers and high-yield dividend stocks for income that constitute the core of the portfolio holdings in my Monthly Dividend Paycheck Calendar, a system used by thousands of income investors.

The Monthly Dividend Paycheck Calendar is set up to make sure you receive a minimum of 6 paychecks every month and in some months up to 14 paychecks from reliable high-yield stocks built to last a lifetime.

This unique tool will set you up to receive a more predictable dividend stock income stream that you can count on every month instead of just once a quarter like most other investors. Joining my calendar by Thursday, October 19th will give you the opportunity to claim an extra $1,820 in dividend payouts by October 27th.

The Calendar tells you when you need to own the stock, when to expect your next payout, and how much you can make from these low-risk, buy and hold stocks paying upwards of 12%, 13%, even 18%. I’ve done all the research and hard work, you just have to pick the stocks and how much you want to get paid.

Get up to 14 dividend paychecks per month from safe, reliable stocks with The Monthly Dividend Paycheck Calendar, an easy-to-use system that shows you which dividend stocks to pick, when to buy them, when you get paid your dividends, and how much.  All you have to do is buy the stocks you like and tell them where to send your dividend payments. For more information Click Here.


Source: Investors Alley

Uncategorized

This Early Warning Sign Shows That All Is Not Well

On Friday, the employment report for September will be released. This report often moves the stock market. On average, daily volatility is three times more than normal.

But not all employment report days see large moves. The big days tend to follow unexpectedly good or bad data.

Stocks can rally on bad news, or they can fall on good news. The news isn’t as important as how it compares to expectations.

This month, analysts are expecting a small gain in employment and no change in the unemployment rate. Payroll tax receipts growth confirms that outlook. Given the data, there’s likely to be little movement on Wall Street this week.

Stocks can rally on bad news, or they can fall on good news. The news isn’t as important as how it compares to expectations.

(Source: Mathematical Investment Decisions)

Payroll taxes are a leading indicator of the unemployment rate. When businesses hire more workers, they pay more taxes. Declines in hiring, or replacing high-wage workers with lower-paid workers, result in less money for the government.

The growth rate of payroll taxes started declining even before hurricanes destroyed businesses in Texas, Florida and Puerto Rico.

For now, there is no sign of a recession. But this indicator could be an early warning sign that all is not well.

It’s important to watch the economic news. In the long run, that will warn us before there’s a bear market.

In the short run, stocks have run up pretty fast in the past month. Like a runner after a sprint, they need a rest. Friday could be a day for stocks to rest after the employment report shows the economy is growing slowly.

Next week, after reading the details of the report, the uptrend in stocks should continue.

Regards,

Michael Carr, CMT
Editor, Peak Velocity Trader

It’s not silver or platinum. It’s not aluminum, nickel or lithium, either. But this “magic” METAL is found in everything from cars to airplanes, smartphones and computers, even batteries and cosmetics. It even has the power to fight diabetes, depression, weight loss and cancer. It’s worth billions, even trillions. But here’s the problem—this metal is disappearing. The world’s reserves are quickly being sucked dry. But a group of geologists have just struck the motherlode, and the one company behind it could earn investors an absolute fortune as they solve the greatest commodity crisis in human history. [FOR MORE INFORMATION CLICK HERE]

Source: Banyan Hill

Growth Stocks, Technology

Warren Buffett Bought These 3 Airline Stocks for Their Wifi

One certainty I discovered when conducting my Singularity research project is this. . .that new technologies will disrupt nearly every industry.

Take the stodgy airline industry. The Internet of Things (IoT) is about to make airlines more profitable than they’ve been in the past. I’m sure you wondering how this will be accomplished. Simple – instead of treating their passengers as travelers, consider them online consumers.

Before I go into more detail, let me fill you in on more background on the industry.

Low-Cost Carriers and Services

In this age of low-cost airlines, the days of when airlines made the majority of their money from airfares are largely gone.

Today, so-called ancillary services have become an important source of revenues. On average, airlines today earn about $17 per passenger from add-on services such as food and drink, and duty-free goods purchases. The estimated total for the entire industry is $60 billion from add-on services.

Looking more closely at the top 10 airlines (ranked by add-on services), just 10 years ago, they earned only $2.1 billion from ancillary services. But research from IdeaWorksCompany and CarTrawler found that last year these airlines earned $28 billion from add-on services.

However, the lure of buying duty-free goods on airlines has become stale for passengers. A 2016 report from m1nd-set Generation forecast such sales would experience an annual growth rate of minus 1.5% for airlines through 2025.

Another revenue source has to be found and quickly. And it’s there. . .awaiting the airlines that adopt in-flight broadband and Wi-Fi – the Internet of Things in the air.

Passengers Want to Be Connected

Passengers’ expectations of the in-flight experience have changing rapidly. They now expect the same level of connectivity at an altitude of 30,000 feet as they do on the ground.

That much was pretty clear in a study conducted by the market research firm GfK and Inmarsat PLC (OTC: IMASY), the world’s leading provider of global mobile satellite communications. Here are the most interesting results:

  • 60% of passengers believe in-flight WiFi is a necessity, not a luxury.
  • 61% of passengers said Wi-Fi is more important than onboard entertainment.
  • 45% of passengers said they would gladly pay for WiFi rather being stuck with the onboard entertainment options.
  • 66% of passengers traveling with children would consider in-flight internet a “life saver”.

Connectivity now ranks behind only ticket prices and flight slots as a priority for passengers. That could be seen when that same survey revealed 44% of passengers would switch airlines within a year if what they considered to be a minimal level of connectivity was available. This is especially true of business travelers, as 56% said they want the ability to work while in flight.

Shopping at 30,000 Feet

Yet, most airlines still lag in offering connectivity to their passengers. The aforementioned report from IdeaWorks found that a mere 53 of the world’s estimated 5,000 airlines offer “in-flight broadband connectivity.”

Many seem unaware that they now have access to a global, reliable broadband network in-flight. As David Coiley of Inmarsat Aviation told the Financial Times, “Airlines have to adapt to this new opportunity.”

And it is an opportunity. Consider shopping an online store at 30,000 feet filled with everything from ground transport options to tours to other destination-related activities. Or returning passengers could do their grocery shopping while in-flight to have the groceries delivered when they arrive home. The possibilities are almost endless.

A study conducted by the London School of Economics and Inmarsat said that in-flight broadband – offering streaming and online shopping to passengers could create a $130 billion global market within the next 20 years. The study estimated that the airlines’ share of that total could amount to $30 billion in 2035. That’s quite a jump from the forecast $900 million in 2018.

Investing in Airlines

With this possibility of e-commerce revenue streams in the not too distant future, it may be time to look at the airlines. Even long-time skeptic Warren Buffett now owns airline stocks including Southwest Airlines (NYSE: LUV), American Airlines (Nasdaq: AAL), Delta Air Lines (NYSE: DAL) and United Continental Holdings (NYSE: UAL).

I would stick with the airlines that have the best Wi-Fi connectivity. Conde Nast Traveler magazine reports that a survey from Routehappy found that U.S. airlines are leading the way, with at least a chance of Wi-Fi on 83% of the total seating capacity.

Two of the top three airlines globally with the highest percentage of seats with Wi-Fi connectivity, according to the survey, are Delta Air Lines and United. Other smaller airlines with good connectivity are JetBlue (Nasdaq: JBLU)and Virgin America, which was sold to Alaska Air Group (NYSE: ALK). I would focus on Delta,United, and Alaska Air.

Delta operates a fleet of over 700 aircraft and serves more than 170 million customers annually. Its revenues fell 3% in 2016 to $39.64 billion, giving its efforts to reduce its debt levels more urgency. Its management is also maintaining capacity discipline while simultaneously trying to modernize its fleet and expand its operations.

The company is trying to enhance its shareholders’ wealth through dividends and share buybacks. In May 2017, Delta announced that its board of directors approved a new share repurchase program worth $5 billion and raised its quarterly dividend by more than 50%.

United is the world’s largest airline, operating about 5,000 flights a day. However, the merger of UAL with Continental has left the merged company with a significant debt load. Its significant exposure to Houston also means it was greatly affected by Hurricane Harvey.

Its return on equity (ROE) is 29.5%, above the industry average of 27.6%, offering growth potential. And it is cheap. Its trailing 12-month enterprise value to earnings before interest, tax, depreciation and amortization ratio is only 3.9. That compares to the value for the S&P 500 of 11.1.

Alaska Air operations cover the western U.S., Canada and Mexico as well as, of course, Alaska. I like the purchase of Virgin America, despite the rise in the amount of debt it now has. The company’s August traffic report showed that its load factor (percentage of seats filled by passengers) increased to 86.2% from 85.8% in the year ago period as traffic growth exceeded capacity expansion.

I think that is due to the company’s expansion efforts. One example is the frequent-flyer partnership with the European airline Finnair, announced in May 2017. This customer friendly move aims to provide the members of the program, at Alaska Air Group as well as Finnair, the opportunity to earn miles/points on flights of either carrier.  

It has been a turbulent year for airline stocks as the combination of natural disasters and terrorist attacks have taken their toll. Not to mention overcapacity, high labor costs, and now rising fuel costs. That’s largely why the three stocks are down respectively.

But now may be the time for contrarian investors to look past the short-term turbulence and take a small position in the airlines that are forward-looking. I fully expect we won’t recognize the industry in a decade as technology disrupts it.

source: Investors Alley

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.
Technology

China Leads the Robot Revolution

When it comes to factory automation, China is way ahead of the game.

In fact, the demand for robots in China is more than twice as high as any other country. As the chart below shows, it is seeing huge growth in the field of factory automation.

When it comes to factory automation, China is way ahead of the game. In fact, the demand for robots in China is more than twice as high as any other country.

By 2020, an estimated 1.7 million new robots will be “hired” by factories all over the world.

An example of this revolution is a Chinese factory that recently cut its number of employees from 650 all the way down to 60. About 90% of the laid-off workers were replaced by robots.

The factory’s general manager predicts that the number of employees will drop to 20.

Things have only gotten better for that factory since the robots took over. Defects in their products have been reduced by 80%, while efficiency has gone up by 250%.

This is just one example of the many factory transformations going on today. Foxconn, a manufacturer of iPhone parts, has set a goal of 30% automation in its factories by 2020.

Robots taking jobs may seem scary, but when they can work around the clock without getting tired, and assuming maintenance costs are less than hourly wages, it makes sense.

To profit from the robot revolution, you can buy the Robo Global Robotics and Automation Index ETF (Nasdaq: ROBO). This exchange-traded fund is already up 34% since the start of the year.

Regards,

Ian Dyer
Internal Analyst, Banyan Hill Publishing

In this exciting NEW VIDEO, Wall Street legend and former multibillion hedge fund manager Paul Mampilly pulls back the curtain on the biggest investment opportunity in the market today. What insiders are calling “The Greatest Innovation in History,” this revolution will mint more millionaires and billions than any technology that came before it. Right now, the current market for this technology is just $235 billion, but given how fast this technology is moving experts predict it will soar to $19 trillion by 2020. But 8,000% growth is just the beginning—and now’s your chance to get in on the action. [CONTINUE TO VIDEO]

Source: Banyan Hill 

Uncategorized

3 Crash-Survival Tips Every Investor Should Know

It’s a question I’m hearing from a lot of investors these days, and it just came up again a few days ago:

How should I prepare for the next market crash?

It’s not hard to see why folks are worried about their nest eggs, with the S&P 500 bubbling along at 24 times earnings and the Fed talking about faster rate hikes.

So today I’m going to dive into 3 simple strategies I use to protect and grow my own money, starting with…

“Crash Insurance” Tip No. 1: The Best Defense …

When I’m looking for stocks that hold their own in a crash or snap back for big gains when the dust settles, I zero in on three things: hefty discounts, share buybacks and quick dividend growth.

And a little over a year and a half ago, Boeing (BA) certainly qualified: it was a bargain at less than 12 times free cash flow, and management knew it: they’d been ramping up BA’s buybacks for nearly two years!

Buybacks Rise …

That was enough for me: I urged members of my Hidden Yields dividend growth service to buy Boeing on December 18, 2015. As if on cue, worries about Chinese stocks sent the S&P 500 into an 11% tailspin from January 1 to February 11.

How did we do?

Boeing did fall further than the market, but it wasn’t long before its share price caught up with its rising earnings per share, which got a nice assist from management’s timely buybacks. Today, shareholders are sitting on an 85% total return since the trough of the selloff, tripling the market’s gain in that time!

… and Boeing Ignites

As you can see above, BA really hit the afterburners starting in late 2016. That’s when it hiked its dividend by a monster 30%, yanking in new investors and setting us up for a nice 4.1% dividend yield on our original buy today—nearly double the 2.2% you’d get if you bought Boeing now.

“Crash Insurance” Tip No. 2: Buy Cheap in Your Sleep

My next strategy is as boring as its name suggests: dollar-cost averaging.

But that masks its power, because this savvy move not only lets you survive the next wipeout but use it to snap up great stocks at terrific prices.

It couldn’t be easier: all you have to do is buy a fixed-dollar amount of a particular stock on a set schedule. That way, you’ll be locked in to buy more shares when they’re cheap and fewer when they’re pricey.

Here’s how it works: let’s rewind to 2007 and say you decided to “gradually” invest in Pfizer (PFE), one of the 3 buy-and-hold “forever stocks” I just recommended. And let’s say you invested $7,000 annually in PFE on the last trading day of the year for the following decade.

On December 31, 2008, in the depths of the meltdown, Pfizer closed at $17.71, so your $7,000 would have gotten you 395 shares (excluding commissions). But on your priciest “buy” day (December 30, 2016, when PFE traded at $32.48), you would have automatically tempered your purchase, adding just 215 shares to your holding.

This is hands-down my favorite way to “time” the market—and you can do it with no extra legwork at all!

Which brings me to…

“Crash Insurance” Tip No. 3: No Withdrawals

Of course, the best crash-survival strategy is to be able to ignore the crash completely!

That’s where my “No-Withdrawal” plan comes in—especially if you’re retired or leaning on your portfolio for income. All you have to do is buy stocks (or funds, as I’ll show you in a moment) paying high, safe dividends … and hold for the long haul.

How high are the dividends we’re talking about here?

How does a 7.5% yield sound? That will send a nice $37,500 our way on a modest $500,000 nest egg. It’s also where my plan gets its name, as an income stream like that lets you live on dividends alone—without being forced to sell into a downturn.

And you might be surprised to hear that there are plenty of “unicorns” out there throwing off safe 7.5%+ payouts. We just have to go where other investors aren’t.

A great example is the Nuveen Tax-Advantaged Dividend Growth Fund (JTD), a closed-end fund my colleague Michael Foster analyzed on May 1.

Funny thing is, despite its gaudy yield, JTD’s top 10 holdings don’t look much different than those of any other equity mutual fund.


Source: Nuveen

However, it throws in three smart twists to squeeze that 7.5% payout out of household names like Apple (AAPL), owner of a 1.6% yield, and JPMorgan Chase & Co. (JPM), at 2.4%.

First, it devotes about 19% of the portfolio to preferred shares, many of which boast higher yields than common stocks.

Management then adds its own secret sauce: a modest amount of leverage (currently 29.9% of the portfolio) borrowed cheaply to reinvest in higher-yielding common stocks and preferreds. JTD also uses a savvy call-option strategy to smooth out volatility and protect its portfolio from a downturn.

As an extra bonus, it minimizes your tax bill by focusing on long-term capital gains and qualified dividend income, both of which are taxed at lower rates than short-term capital gains.

And this stealth income play is just the start. Because now I’m going to show you 6 other “unicorns” that combine to hand you a payout that’s even safer than JTD’s—and higher, too!

Your Own Personal 8% “No-Withdrawal” Plan

What I’m about to reveal is a 6-stock portfolio I spent months crafting for one purpose: to hand you a solid 8% income stream no matter what the market does.

That’s enough to generate a $40,000 a year on your $500,000 nest egg (with plenty of room for more payout hikes, to boot).

And with just one click, you can get all the details on these 6 income wonders now.

This 8% “No-Withdrawal” portfolio is far safer than making an all-in bet on a fund like JTD because it spreads your cash out across 6 investments—CEFs, real estate investment trusts (REITs) and preferred shares.

Here are just a few of the retirement lifesavers you’ll discover:

  • A CEF that’s the brainchild of one of the top fund managers on the planet and pays 8.6% every year in cash.
  • This REIT is a dividend machine! It pays 8% now and has boosted its dividend for 20 quarters in a row!
  • A preferred fund that gives you an extra layer of protection because it doesn’t move in tune with the stock market. It pays a reliable 7.3% and can easily keep that up no matter what the market does.
Please don't make this huge dividend mistake... If you are currently investing in dividend stocks – or even if you think you MIGHT invest in any dividend stocks over the next several months – then please take a few minutes to read this urgent new report. Not only could it prevent you from making a huge mistake related to income investing, it could also help you earn 12% a year from here on out! Click here to get the full story right away. 
Technology

3 Electric Car Winners That Don’t Sell Electric Cars… Or Batteries Either

One obvious theme I picked up in my Singularity research project is the fact that it seems like everyone is jumping into the electric car ‘race’. By 2018, there will be 112 battery electric and 72 plug-in hybrid models available globally, says Bloomberg. That is up from 76 and 36 respectively just a year ago.

Adding to an already crowded field is Dyson. Yes, that Dyson from the U.K., founded by inventor James Dyson, that is best known for its vacuum cleaners. And no jokes please about how the Dyson electric car will be loud, made of cheap materials, underpowered and yet make Elon Musk blush with its exorbitant price.

The point you need to realize is that electric cars are beginning to reach the tipping point. My physics background tells me the tipping point is when a balanced object tips over after an additional weight was added to it.

But in societal terms, a tipping point is the point when a quick and dramatic shift in behavior occurs.

We’re not there yet with electric vehicles, which account for only roughly two million of the two billion vehicles on the road in 2016. But the point is approaching, according to some surprising sources.

EVs Tipping Point?

One such source is the world’s largest mining company, BHP Billiton (NYSE: BHP). Its chief commercial officer, Arnoud Balhuizen, said to Reuters: “I think if we look back in a few years we would call 2017 the tipping point of electric vehicles.”

It’s easy to see why BHP thinks 2017 is such an important year for the future of electric vehicles. There have been a number of very positive developments pushing forward EVs.

First, we have countries including France, Norway and the U.K. setting firm dates for when vehicles powered by fossil fuels would no longer be sold in their countries. India has taken similar action with a 2030 target date and China is working on setting a definite deadline for ending sales of internal combustion engine vehicles.

China’s expected move is so important because of its size – it accounts for one-third of the entire global auto market. It is also the biggest electric car market, with 507,000 such vehicles produced domestically last year, a rise of over 50% from the prior year.

And keep in mind, still only one in five Chinese citizens own a vehicle!

The most likely date China will set is 2040. But the founder and head of BYD (OTC: BYDDY), Wang Chuanfu, is lobbying the government for a 2030 date.

He may not get his wish but the Chinese government is already helping companies like his. It plans to launch a carbon trading scheme, likely in 2019, whereby traditional automakers in China will have to produce a certain number of electric vehicles or else be forced to buy credits from electric car makers such as BYD.

For those of you not familiar with BYD, it is China’s largest electric vehicle maker and the largest producer of lithium-ion batteries. It is bringing online an additional four gigawatts of battery-making capacity by year’s end. That will make its annual battery output 12 times larger than the expected production from Tesla’s Gigafactory. Warren Buffett owns 8.5% of the company.

Source: Investors Alley

Related: 3 Stocks to Profit from No-Profit Electric Cars

Bottom line – almost 80% of the global auto market is pushing toward the phase-out of fossil-fuel-powered vehicles and toward electric cars.

Why the Optimism

Of course, it isn’t just government action that says we may be near a tipping point. It’s also the economics of batteries.

Bloomberg New Energy Finance (BNEF) forecast that, in a mere eight years, electric vehicles will be as cheap as gasoline autos. All thanks to the plunging price of producing lithium-ion batteries.

These batteries have already fallen in cost by 73% since 2010. Batteries currently account for roughly 50% of the cost of an electric car, but BNEF says these costs will fall another 77% by 2030.

However, the BNEF scenario all depends on whether the battery makers can get their hands on the necessary metals and minerals – what I call the technology metals – in sufficient quantities. After all, there are expected to be built dozens of gigafactories (nearly all in Asia) in a forecast $240 billion battery industry within the next 20 years.

EVs and Copper

So what will be the effect on commodities?

My thinking is in line with that of BHP Billiton. . .that the impact for producers of raw materials would first be felt in the metals markets (positively) and then felt in the oil market (negatively). By the way, I talk about all sorts of technology related-commodities in my new newsletter – Growth Stock Confidential.

BHP expects there to be about 140 million electric vehicles on the road in 2035, or about 8% of the global fleet. If so, that is great for big copper mining companies like BHP since an electric car uses approximately four times as much copper as does a gasoline or diesel vehicle.

A report released this summer from the industry body, the International Copper Association (ICA), forecast demand from the auto sector for copper will increase nine-fold in a decade, from 185,000 metric tons this year to 1.74 million tons in 2027. That would be the equivalent of about 6% of global copper demand in 10 years.

Electric vehicles use a substantial amount of copper in their batteries and in the windings and copper rotors used in electric motors. A single car can contain over three miles of copper wiring, according to the ICA.

This presents an investment opportunity with rising demand meeting supplies that will struggle to keep up. That’s due to the fact that current mines are aging (ore grades are dropping) and few major discoveries have occurred in the last two decades.

Three Copper Investments to Buy

One company worth consideration to buy is the aforementioned diversified miner BHP Billiton (NYSE: BHP). It was the world’s fourth largest producer of copper in 2016 at 1,113 kilotons. A kiloton is equal to about 1,120 of our U.S. tons. BHP’s stock has risen 12% year-to-date and 17.6% over the last 12 months.

Its copper assets include the Escondida and the Spence mines in Chile and the Olympic Dam mine in Australia. BHP is investing into copper’s future with the recent announcement of a $2.5 billion project to extend the life of the Spence mine by 50 years. There is expected to be an additional 185,000 tons extracted annually thanks to the investment.

The company is also spending $43 million on a new facility to produce 100,000 metric tons of nickel sulphate – a key component in lithium-ion batteries – annually. Production is expected to start by April 2019.

Next on the list is the world’s largest publicly-traded (Chile’s Codelco is government-owned) copper producer, Freeport-McMoran (NYSE: FCX), which trailed only Codelco in copper production last year (1,696 kilotons). Its stock is up 5.5% year-to-date and 27.5% over the past year.

It produces copper at seven mines in Arizona and New Mexico, as well as the El Abra mine in Chile and the Cerro Verde mine in Peru. And, of course, its crown jewel is the Grasberg mine in Indonesia, which is one of the world’s largest deposits of copper and gold. A dispute with the Indonesian government over the mine was recently settled.

Like many miners, Freeport suffered under the burden of too much debt incurred during the commodity supercycle (2001-2014). But it has lowered its debt by $9.5 billion since the end of 2015, thanks to strong cash flow from its copper operations.

Another possibility is the fifth-biggest producer of copper in 2016, Southern Copper (NYSE: SCCO), which indirectly is part of Grupo Mexico and has operations in Peru and Mexico. Its stock rose 22% so far in 2017 and is up more than 46% over the past 52 weeks.

The company hit a record high for copper output in 2016, at 900 kilotons, which translates to a 21% year-on-year growth. That is really good news since it is the highest margin major copper producer globally with a cost of only $0.95 per pound. Copper is trading currently at about $2.95 a pound.

Southern Copper also happens to be sitting on the largest proven copper reserves in the industry. And its mines have an expected 90+ years of life, giving you a great long-term play on copper and the whole electric vehicle revolution.  

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 

Insider Trading

The End Is Near

There’s been something missing from the current market.

Throughout history, we haven’t had a bubble until there was a new way of thinking in the markets.

Well, I think the Spirited Funds/ETFMG Whiskey & Spirits ETF (NYSE: WSKY) proves that final piece of the puzzle is in place.

WSKY is an ETF that invests in companies that make booze.

Too much of a niche product for you? Then maybe the ETFMG Video Game Tech ETF (NYSE: GAMR) is for you. This one buys only video game companies.

Exchange-traded funds (ETFs) are baskets of stocks that are bought or sold as a unit.

ETFs offer investors a low-cost way to obtain a diversified portfolio. They are a good thing, but Wall Street always takes good things too far.

The Final Piece of the Bubble

The number of ETFs has grown as Wall Street created indexes. Any index can be turned into a fee-generating ETF. That explains why we now have more indexes than individual stocks.

ETFs offer investors a low-cost way to obtain a diversified portfolio. They are a good thing, but Wall Street always takes good things too far.

(Source: Bloomberg)

The history of Wall Street excesses includes turning subprime mortgages into derivatives that would destroy the financial system we knew in 2008.

In the late 1990s, Wall Street used accounting rules to turn internet startups into billion-dollar companies.

In 1987, portfolio insurance led investors to believe it was impossible to suffer a large loss in stocks.

You’ve probably noticed all these developments ended in disasters. In 1987, the Dow Jones Industrial Average fell more than 22% in one day. In 2000 and 2008, the Dow fell more than 50%.

This desire to take things too far predates Wall Street. The very first bubble in history imploded after futures on tulip bulbs were created in 17th century Holland.

The creation of stocks led to a bubble in 18th century England. Railroad bonds led to several bubbles in the 19th century. Emerging market debt first imploded in the early 20th century.

As stocks rallied this year, valuations became stretched. Irrational valuations are one part of a bubble. We were missing the final piece of the bubble, which was the new way of thinking.

ETFs now provide that piece of the bubble.

The Most Likely Path of the Stock Market

Some investors are buying ETFs because they think stocks only go up. This group is ignoring valuation and buying plain vanilla index funds. Trillions of dollars are now in funds that are designed for long-term investors.

When the next bear market comes, this money will drive downside risks when investors see stock prices go down as well as up.

Billions of dollars are in leveraged ETFs. These funds move two or three times more than their underlying index. They will lose money twice or thrice as fast, as plain vanilla funds are another source of selling pressure.

Volatility funds also hold billions of dollars. These ETFs will move wildly in a bear market as volatility increases, scaring investors out of the funds and creating even more volatility.

All of this means the end is near.

Bubbles always end with a sharp rally up. That’s the most likely path of the stock market through the end of the year.

In a bubble, some investors wonder what to buy. The answer is to buy everything until the bubble pops. It’s time to enjoy what’s likely to be a once-in-a-generation rally.

Regards,

Michael Carr, CMT
Editor, Peak Velocity Trader

The 145 Companies Your Stockbroker Will NEVER Tell You About Did you know more than 145 tiny companies have grown to $1 billion-plus valuations since 2012? SpaceX  is up 26,309% in value... Dropbox 31,733%... and Pinterest 487,404%. All of these 145 businesses started out as private companies your broker would have NEVER told you about. But now there’s a great way to find the next private companies poised for hyper-growth. Full Details Here.

Source: Banyan Hill