Monthly Archives: March 2018

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10 Best Stocks Under $10

Source: Shutterstock

Good things come in small packages goes the saying. Nowhere is that truer than in the markets where stocks under $10 grow to be $100 and possibly even $1,000 over time.

A classic example is Amazon.com, Inc. (NASDAQ:AMZN), which traded under $10 in November 2001, hit $100 in October 2009 and $1,000 in May 2017.

On both occasions, it took approximately eight years to achieve cumulative total returns of 900%. For anyone who’s held AMZN stock for the entire 18-year period, I salute you because a $10,000 investment today is worth $1.5 million.

Who needs to work, right?

However, picking stocks under $10 is easier said than done. In March 2014, I selected five cheap stocks under $10 to buy now.

Here’s how they did.

Stock

% Return

Notes

Fortress Investment Group

25%

Acquired in December 2017 for $8.08 per share

Acco Brands Corporation (NYSE:ACCO)

110.8%

Aegon N.V. (ADR) (NYSE:AEG)

-8.2%

Cencosud S.A.

N/A

Voluntarily Delisted from NYSE on June 19, 2017

Aeropostale

N/A

Sought bankruptcy protection in May 2016. Acquired by two mall owners for $243 million in September 2016.

Ok, so my five picks had a few bumps in the road, but that’s going to happen with stocks under $10.

A glutton for punishment, I’m going to do it again. Only this time I’m picking ten stocks, not five. 

Best Stocks Under $10: Arcos Dorados (ARCO)

I might be going to the well once too often picking Arcos Dorados Holding Inc (NYSE:ARCO), the largest franchisee of McDonald’s Corporation (NYSE:MCD) and a major player in the Latin American restaurant industry, but I just love this company.

In January last year, I recommended ARCO as one of three restaurant stocks to buy in 2017; it gained 92% in 2017 on the heels of a 74% gain the year before that.

McDonald’s is facing tougher market conditions at the moment and that’s got analysts a little concerned in the near term, but over the long haul, Arcos Dorados is in an enviable position.

“While we are cautious on MCD in the near term, we believe the chain has ample opportunities to course correct and re-accelerate SSS growth in the coming quarters,” wrote RBC Capital Markets analyst David Palmer in a note to clients.

Best Stocks Under $10: Trivago (TRVG)

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If you didn’t know who Trivago NV (ADR) (NASDAQ:TRVG) was a year ago, you probably do now, given how much advertising the hotel comparison site’s doing to spread the word.

“The past year has been focused on building a solid foundation that we can use to execute our vision of building the best product for our users, and to further strengthen trust in our brand,” stated CEO and founder Rolf Schrömgens in the company’s Q4 2017 press release. “Having significantly increased our brand awareness, optimized our back-end structures and broadened our offering to include alternative accommodation over the course of the year, we believe we are now in the strong position to move forward.”

While Trivago is still growing — revenues grew by 37% in 2017 — it is still losing money. However, on the plus side, it was able to cut the loss by almost 75% in the past year, providing hope to investors that it will deliver GAAP profits in 2018.

I like its chances to break through $10 by the end of the year.

Best Stocks Under $10: Algonquin Power & Utilities (AQN)

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I figure if I’m going to pick the ten best stocks under $10, being Canadian, at least one of my selections ought to be based north of the border.

Algonquin Power & Utilities Corp. (NYSE:AQN) is an Ontario-based diversified power generation, transmission and distribution utility with CAD$10 billion in total assets.

It operates two primary businesses: Liberty Utilities, which provides rate-regulated natural gas, water, and electricity to over 785,000 U.S. customers; and Liberty Power, which generates renewable power from wind, thermal, and solar energy.

Thanks to tax reform, the company feels it will be able to grow its rate base at a faster pace than it otherwise would have been able to do before the December 2017 corporate tax cut.

Acquisitions over the past year have helped the company grow. First, in January 2017, it paid $2.4 billion to acquire Empire District Electric Co., which has 200,000 customers in four states.

Then, this past November, it entered into a joint-venture partnership with Spanish utility Abengoa SA to develop renewable energy projects around the world. As part of the agreement it acquired a 25% interest in Atlantica Yield PLC from Abengoa; Atlantica Yield operates renewable energy facilities in Europe, Africa, and South America.

Going global will pay dividends, literally and figuratively, in the years to come.

Best Stocks Under $10: Sirius XM (SIRI)

A lot’s going right for Sirius XM Holdings Inc. (NASDAQ:SIRI) these days pushing SIRI stock to recent 52-week highs; yet it still only trades between $6-$7.

A big highlight from the satellite radio company’s fiscal year was the addition of 1.56 million self-pay subscribers in 2017, 160,000 higher than its projections, bringing the overall total to 27.5 million.

Another notable highlight was the Trump tax cut which is expected to add $900 million in operating cash over the next four years.

And if that wasn’t enough, Sirius XM’s board approved a $2 billion increase in its share buybacks as well as a 10% hike in the dividend. While you’re not going to buy SIRI for the dividend, the company is trying to increase the rate at which it rewards shareholders.

When you generate as much free cash flow as SIRI does, it’s only natural that share repurchases and dividends are a part of its capital allocation program.

SIRI could be my favorite large-cap stock under $10.

Best Stocks Under $10: ICICI Bank (IBN)

Source: Shutterstock

India is one of my three favorite emerging markets; Brazil and South Africa being the others.

Canadian financier Prem Watsa has done very well in recent years by investing in the country where he was born. Watsa’s considered the Canadian version of Warren Buffett.

In July 2017, Watsa’s company, Fairfax Financial Holdings Ltd (OTCMKTS:FRFHF), terminatedits joint venture with ICICI Bank Ltd (ADR) (NYSE:ABN) after 17 years to carry out the IPO of ICICI Lombard General Insurance Company, itself a joint venture between the two companies.

ICICI Chairman M.K. Sharma finished his 2017 message to shareholders by stating:

“The ICICI Group represents a unique financial services franchise that will benefit from the growth and formalisation of the Indian economy and the Indian financial sector. It will continue its commitment to being a partner in India’s growth and development.”

I believe that India will continue to grow at a faster rate than the emerging markets as a whole. Owning the largest private sector bank in India is a good proxy for benefiting from that growth.

Best Stocks Under $10: Gazit Globe (GZT)

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Talk about your global real estate company.

Based in Tel Aviv, Gazit Globe Ltd (NYSE:GZT) owns properties in Israel, U.S., Canada, Brazil and Europe; its stock trades on three major stock exchanges: New York, Toronto and Tel Aviv. It’s about as internationally diverse as they come.

Its best-known investment here in America would probably be its 11% ownership interest in Regency Centers Corp (NYSE:REG), a REIT with 59 million square feet of retail space with 80% of its 426 centers anchored by grocery stores, a stabilizing factor in a changing retail marketplace.

I’m more of a fan of Gazit Globe because of its 32.6% ownership interest in First Capital Realty Inc (OTCMKTS:FCRGF), one of Canada’s most interesting retail real estate owners.

Not coincidentally, Gazit-Globe director Dori Segal, was CEO of First Capital for 15 years from 2000 to 2015 when he stepped down to devote more time to Gazit-Globe.

Segal’s one of the most respected real estate people anywhere.

Best Stocks Under $10: WisdomTree Investments (WETF)

WisdomTree

Focused on ETPs, WisdomTree Investments, Inc. (NASDAQ:WETF) has taken a long and very circuitous route from its founding in the 1980s as a finance magazine to where it is today — an ETP provider with $46 billion in assets under management.

The company’s stock has performed poorly in 2018, down 21% year to date through March 6. As a result, it now trades below $10, a level it hasn’t seen on a consistent basis since 2013.

Why the retreat? The quick answer is it missed its Q4 2017 earnings estimate by three cents. Bigger picture, things look pretty good.

In 2017, if you exclude both the WisdomTree International Hedged Equity Fund (NYSEARCA:HEDJ) and WisdomTree Japan Hedged Equity Fund (NYSEARCA:DHJ) ETFs, it had net inflows of $2.9 billion. In the fourth quarter, also excluding DXJ/HEDJ, it had $1.1 billion in net inflows, its strongest quarter in the last five years.

In November, WisdomTree announced it was acquiring $18 billion worth of European AUM from ETF Securities. The $611 million cash-and-stock deal, which is expected to close by the end of March, will bring the ETP provider’s global AUM to more than $66 billion making it the ninth largest ETP sponsor in the world.

New products and innovations along with future potential acquisitions will help WisdomTree thrive in an increasingly competitive marketplace.

Best Stocks Under $10: BBX Capital (BBX)

Last July, I called BBX Capital Corp (NYSE:BBX) one of the seven best buy-and-hold “holdings” on Wall Street. Since then, it’s up 45% and ready to blow past $10. BBX stock hasn’t had a losing year since 2011.

BBX Capital is probably best known for its vacation ownership business, Bluegreen Vacations, which operates in a very hot industry. Marriott Vacations Worldwide Corp (NYSE:VAC), the industry leader, has delivered an annualized total return of 25% over the past three years as consumers look to own a tiny fraction of the places they choose to vacation.

In November, BBX Capital spun-off its timeshare business into its own publicly traded company, Bluegreen Vacations Corp (NYSE:BXG), selling 10% of the company to investors at $14 a share; it’s now close to $20.

In addition to its vacation ownership business, it also has a private equity division that invests in middle-market consumer-facing companies such as IT’SUGAR, a candy company it acquired in June 2017 for $57 million. It’s also opening as many as 50 MOD Pizza locations in Florida.

Now that Bluegreen Vacations is operating on its own, I’d look for BBX Capital to pick up the M&A pace and burst into the mid-teens.

Best Stocks Under $10: J. Jill (JILL)

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This is a speculative bet all the way, so if you’re thinking about using your retirement fund or your kid’s college fund, don’t. Run away from J. Jill Inc (NYSE:JILL) as fast as you can.

However, if you’re an aggressive investor and can afford to lay down a small bet with the full understanding you could lose the entire sum, by all means, take a closer look at it.

First, a little history.

J. Jill was founded in 1959 as an apparel brand catering to women over 40. Fast forward to 2015; it was acquired by TowerBrook Partners, the same private equity firm behind True Religion Brand Jeans, for $400 million.

Two years later, J. Jill did an IPO in March 2017 at $13 a share allowing TowerBrook to get back a big chunk of the cash it put into acquiring J. Jill back in 2015. Still owning 59% of the company, TowerBrook wants to exit with as much cash as it possibly can.

Retail holiday sales across the industry were good this past year, so I’m hoping the two-day delayof Q4 2017 results isn’t anything more other than the retailer wanting to get the numbers right.

Analysts expect J. Jill to be one of the big retail beneficiaries from the corporate tax rate cut, so that’s a bonus.

Bottom line: At $13, JILL stock was probably a little pricey. At $8 and change, it’s got some upside, especially given the extra profits from lower taxes.

Best Stocks Under $10: Oaktree Specialty Lending (OCSL)

Source: Shutterstock

Business Development Companies (BDCs) aren’t nearly as popular as they once were, but this one caught my attention while writing a piece about the best alternative asset management stocks available.

Oaktree Specialty Lending Corp (NASDAQ:OCSL) is managed by Oaktree Capital Group LLC (NYSE:OAK), the alternative asset management firm co-founded by Howard Marks, one of the best investors of our time.

Oaktree Specialty Lending provides first and second lien loans, unsecured and mezzanine loans, as well as preferred equity to middle-market companies across all industries, preferably ones with strong financials.

It’s been less than a year since Oaktree Capital acquired Fifth Street Finance Corp. It’s going to take the asset manager time to remodel the 122-company portfolio.

At $4 and change, I’m betting Oaktree Capital will turn this around.

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Source: Investors Place

Uncategorized

What Happens to Your Money Under High Inflation and a Recession?

In a recent interview with Chuck Butler, he warned us that we may be in for a significant “Minsky Moment”.

The federal reserve is raising interest rates and unloading trillions in their US debt holdings. Countries that normally buy our bonds are slowing down their purchases or reducing their holdings. With fewer buyers, what happens if interest rates continue to climb?

Chuck then sent me an article by David Stockman which concerns me; the issues we discussed are happening worldwide.

David Stockman presented an eye-popping graph. Debt being held by central banks has tripled in ten years to well over $20 trillion.

If world-wide central banks are working in unison unloading debt – the Minsky Moment could be much bigger than I originally imagined.

It’s time to get some input from someone outside the US who is involved in global finance on a daily basis. I contacted Rob Vrijhof, President and Senior Partner in Weber Hartmann Vrijhof & Partners Ltd. located in Zurich, Switzerland.

DENNIS: Rob, thanks for taking the time for our education. Several experts are warning about the world-wide, staggering government debt. Central banks have reversed course – some have stopped buying, while others are selling off some of their holdings.

What are you seeing in Europe, China, Japan and elsewhere?

ROB: Thanks for inviting me.

The debt that has been building up by the world national banks is indeed staggering.

After the real estate bubble burst in the USA, enormous amounts of money created out of thin air were being pushed into the system trying to avoid a complete collapse of world economies. It seems that national banks, working in tandem, saved us from a total downfall – with interest rates falling into negative territory in Europe.

Reality is now kicking in and these enormous accumulated debts will eventually have to be paid back. The big question is how this will be done. This question is faced not only by the USA but also by Europe and Japan to name just a few.

This presents a real challenge for central banks for the years ahead. Higher interest rates are poison – perhaps it could be done through inflation.

Unfortunately, we strongly believe there will be no happy end to this party of cheap money.

DENNIS: The law of supply and demand hasn’t been repealed. When supply of debt instruments (bonds) is higher than demand, interest rates will rise. Interest rates on US treasuries have already doubled since July 2016.

A two-part question. What are you seeing outside the US? Are the days of negative interest rates disappearing?

ROB: The interest rate hikes started in 2017 by Madame Yellen of the Fed. We believe new Fed chairman, Mr. Powell, will continue the process. We anticipate he will increase rates by 0.25% in March followed by another two hikes in 2018. While he says he will keep a close eye on inflation, we believe the 2% target will be shuttered – we may be in for a period of higher inflation.

The European Central Bank headed by Mr. Draghi is under no pressure to hike interest rates. We feel he will wait and we expect the first rise in interest rates in Europe during the fourth quarter of 2018.

The Swiss National Bank will do everything they can to keep their negative interest rates in place, inflation in Switzerland is still not on the horizon. We strongly believe that the negative interest rates will be with us for another 12 to 18 months. We don’t expect the Swiss National Bank to raise rates until well into 2019.


Wouldn’t inflation have to be considered?DENNIS: Rob, I’m concerned about the bond market. Central banks alone hold over $20 trillion in bonds that pay interest rates well below the market. What are you telling your clients who may be holding long-term bonds?

ROB: We’ve been telling our clients to use any rally on long-term bonds as an opportunity to sell since we strongly believe this everlasting bull market in bonds could be coming to an ugly end.

We are always looking for short-term bonds that are paying higher interest rates than the ones in the USA. In foreign currencies, you profit from higher interest rates and also from the weaker US Dollar. High-quality foreign currency bonds are available and very liquid, so we view this as a solid alternative.

Yes, inflation is a big concern. We anticipate a revival of inflation with most of the world economies blasting ahead at full speed, wages and interest rates moving up.

We should all hope that it will not be galloping away since high inflation numbers could also be bringing the ugly “R” – word (recession) back into circulation.

DENNIS: I’ve wondered if I would ever see safe, high quality 6% bonds again in my lifetime. When we did our retirement projections, 6% was a given. Do you feel it’s possible to return to those days? At 6%, how could debtor nations possibly afford to pay the interest on their current debt levels?

ROB: This is a very tough question at my age. It seems not very long ago that we were getting well above 6% interest on Swiss Government bonds, this was back in 1991.

When we bought our first house in 1998, our mortgage was a 4.5% fixed rate. I believed I had the best deal of the century. My last fixed 10-year mortgage rate was 1.25%.

To address your question, yes interest rates could be heading up to these levels during the next few years; helping lenders and hurting borrowers.

You are correct, the gigantic debt of our central banks will then also have to be paid back at a much higher interest rate – which could end in a catastrophe. It would probably mean higher taxes and inflation.

While lenders may like the higher rates we are seeing today, if we see galloping inflation, the higher rates will do us no good. Unless interest rates (after taxes) are higher than true inflation, you are losing buying power every day.

DENNIS: It looks like we’re anticipating a huge Minsky Moment. A bond market collapse, high inflation, and rising interest rates will certainly affect businesses all over the world and their respective stock markets.

No one can time the market; we expected the issue of skyrocketing debt to come to a head years ago. If/when it does happen, there will have to be some real bargains for investors who have cash and were patient.

What are you advising your clients?

ROB: There are times where cash could or should be looked at as an investment and we strongly believe this is the time to have cash on the side. This doesn’t have to be in US Dollars it could also be in Swiss Francs, Pounds or Euros.

We are currently underweight in equities and overweight in cash, foreign currency bonds, and precious metals.

We do not know when this party will end but we want to make sure that we are not the last ones to exit.

You have to stay ahead of the crowd, patience is a virtue and will be rewarded. The stock markets might be holding at these skyrocketing levels for another few quarters, but a big correction is in the cards, then be ready to go all in.

DENNIS: Market historians like to point to an event that sparks a crash. What do you think readers should be looking for? Are there any countries or markets that you feel might be leading indicators of what’s to come?

ROB: What we’ve been seeing since the beginning of the year is indeed very scary, with the Dow dropping 1100 points, and then ending up with a small gain in only one trading day. We do feel a large correction is in the cards in the not too distant future for many reasons.

  • We have experienced one of the longest-running bull markets in history.
  • Inflation and interest rates might surprise market makers to the upside, bad news for stocks.
  • Profit taking on stocks could easily start an avalanche of stop losses, particularly with the programmed traders.
  • North Korea, Syria, Iran, Israel etc. could scare investors which could lead to the large correction we expect.
  • A trade war between the USA, China and/or Europe could also spark the expected fire.

Pick any of the above, but then again it might come from a completely different angle. We just don’t know. We will be told by historians after it happens and that won’t be very helpful.

It appears that a serious correction is imminent and that investors need to make wise decisions now.

DENNIS: Rob, one last question. I’ve had some readers ask if you ever come to the US. Are you going to be speaking/attending any events in the US in 2018?

ROB: I will be speaking at the Four Seasons in Las Vegas from March 15th until the 18th for the Oxford Club. I’ll be back there again in September for the Total Wealth Symposium organized by Banyan Hill.

DENNIS: As a reminder, I have an account with Rob’s firm, however, we have no other financial arrangements. He graciously gives of his time. On behalf of our readers, thank you again.

ROB: My pleasure, Dennis.

Waiting (and waiting) for something to happen is difficult. With today’s computer traders, a Minsky Moment can be sudden. I agree with Rob, better to be patient than the last to exit the party!

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Source: Investors Alley 

Dividends

3 High-Yield Dividend Stocks in the Income Stock Sweet Spot

The stock market has turned volatile, and the income stock sectors feel downright unwelcoming. Since I have contact with thousands of investors I learn there are a thousand different situations in the market. The investor who bought at a higher price doesn’t like to see the share price drops in his portfolio. Another is expecting a cash infusion next week and hopes prices will stay down until she gets the money and can load up on shares at the current low prices.

I tell my Dividend Hunter readers that you can’t earn dividends unless you own shares of dividend paying stocks. Trying to time the market can leave an investor without any shares that are paying dividends. It takes a somewhat different mindset to get away from worrying about share prices and to focus on building an income stream. The good part is that when the stock market corrects, or becomes volatile, or forgets which way is up, the income investor will continue to rake in dividends. In a choppy market I like to add to those stocks that hit my “sweet spot” combination of current yield and dividend growth.

In a flat or volatile market, cash dividends are real returns, so a higher yield can be viewed as a cushion against share price movement. Dividend growth is a factor that can make a stock more attractive even if the market is not in a price appreciation mode. You can find dividend stocks with low yields, such as 3% or less and double digit annual dividend growth. At the other end of the spectrum are the 10% yield stocks, but with little potential for dividend growth.

If total stock market returns go flat, I recommend going for the middle ground. Find stocks with attractive yields. I the current market the range would be 5% to 7%. These stocks need to have recent history and prospects of mid to high single digit dividend growth. The dividend payments give you solid cash returns, and the dividend growth prospects can give support to share prices in a volatile market. In the long run, this combination should produce total annual returns in the low double digits.

Here are three stocks that fit the criteria discussed above:

Aircastle Limited (NYSE: AYR) owns approximately 220 commercial aircraft that are leased to 81 airlines around the world. Aircastle must be nimble to adjust for changing needs for aircraft type and client airlines financial conditions. For example, in 2017, Aircastle purchased 68 aircraft and sold 37. The business is very profitable. The company generated a 15% return on equity last year and reported adjusted net income of $2.15 per share.

The current dividend rate of $1.12 per share per year is well covered by net income and free cash flow. In recent years, Aircastle has been increasing the quarterly dividend by 7% to 8% per year. The foundation of Aircastle’ s results is the steady growth in international air traffic, which appears to be immune to global economic conditions. The shares currently yield 5.75%.

Brixmor Property Group Inc (NYSE: BRX) is a real estate investment trust (REIT) that owns community and neighborhood strip malls. These malls are typically anchored by a grocery store and the tenants are often in businesses that are largely immune from ecommerce sales competition, or in recent terminology, “being Amazoned”.

The company’s board of directors recently shook up the management team, with the goal of more active rental rate management. The REIT’s major tenants are financially strong, but there is a group of weaker tenants with absurdly low rental rates. Replacing these tenants will allow Brixmor to grow revenue and free cash flow. The company should be able to continue its recent history of 5% to 6% dividend growth. The BRX shares yield 7.1%.

Related: Buy This Stock Paying 15% That’s Better Than Paying 20%

ONEOK, Inc. (NYSE: OKE) is an energy sector infrastructure services company. ONEOK (pronounced “one-oak”) focuses on natural gas and natural gas liquids, also called NGLs. The company provides gas gathering services in the energy plays, facilities to process NGLs into the different components like ethane and propane, and interstate pipelines to transport natural gas and NGLs to their demand centers.

The growth in gas production has been lost in the news about the U.S. becoming the world’s largest crude oil producer. Oil wells also produce natural gas and NGLs. ONEOK is the primary, and often the only, company gathering and processing gas in the major crude oil plays.

The company expects to grow its dividend by 8% to 10% per year. OKE currently yields 5.5%.

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

Technology, Uncategorized

3 Tech Stocks to Buy as Apple Moves Into Healthcare

More disruption is headed to the healthcare industry, challenging the power of the incumbents in the sector. I’ve already told you about the recently announced effort by JPMorgan, Warren Buffett’s Berkshire Hathaway and Amazon.com (Nasdaq: AMZN) to get into the healthcare space. Their aim is to create a not-for-profit healthcare company to try to lower the cost of healthcare for their collective one million employees.

Now, it seems that Apple (Nasdaq: AAPL) is also getting serious about its push into healthcare. The hint about Apple’s seriousness came at a keynote speech by CEO Tim Cook in September 2017 when he said the sector is one where Apple can have a “meaningful impact”.

At the recent shareholders meeting, Cook again was critical of the healthcare system in the United States. He said it “doesn’t always motivate the best innovative products”. Healthcare companies are designed based on reimbursements rather than the patients’ best interests, he said.

Apple Seizing the Opportunity

Cook said that Apple sees healthcare and wellness as a core part of its app, services and wearables strategy. Cook added that the healthcare market makes the smartphone market look small by comparison. He’s right – with over $7 trillion in healthcare spending annually (about half of that in the U.S.), it’s already about 10% of global GDP.

And think about Apple’s built-in opportunity… the company has over 85 million iPhone users and over one billion Apple devices are actively being used around the globe. That is a number than dwarfs what any health insurer or healthcare provider can boast.

Apple has been slowly building its push into healthcare over the past several years.

Apple’s first foray into the health segment occurred in 2014, with the release of the Health app and HealthKit. Then in March 2015 came the release of ResearchKit and the Apple Watch. Apple has used its HealthKit and ResearchKit software and data platforms to connect users’ health information across third-party apps and into clinical research projects.

The move by Apple into health accelerated in 2016 with the purchase of the digital health company Gliimpse, along with some health-related hires such as experts in remote health monitoring. In 2017, Apple joined with start-up Health Gorilla to advance its quest to turn the iPhone into a comprehensive repository of users’ electronic health records.

Today, Apple is working with Stanford University on a study to see if the Apple Watch’s sensors can detect heart abnormalities. Apple is also working on a number of other health-related solutions, usually using the Apple Watch, such as non-invasive blood glucose monitoring.

And with an upcoming software update, iPhone owners will be able to download their electronic medical records directly from some US hospitals. In January, Apple announced it was teaming up with 12 major hospital systems, such as John Hopkins, to enable patients to see all of their medical records on their iPhone.

And now Apple is taking an even bolder step…

Last month came word that Apple was preparing to launch a network of medical clinics for its employees and their families. The network is named the AC Wellness Network and is scheduled to launch this spring. On Apple’s website, it is described as an “independent medical practice dedicated to delivering compassionate, effective healthcare to the Apple employee population”.

Apple Partners

This move to open its own medical practice doesn’t mean Apple isn’t willing to work with some of the incumbents in the sector. Here are just several examples:

In November, the company came to an agreement with Aetna (NYSE: AET) to distribute more than 500,000 Apple Watches to its customers in 2018, broadening a pilot program that gave Apple Watches to Aetna employees. The special Watches will be loaded with apps co-developed by the two companies to do things like reminding users when to take their medications.

The goal is to, when the technology is perfected, to give the Watch to all of Aetna’s health-insured population. This Apple strategy strikes me as sharing parallels with Apple’s initial strategy of using carriers to subsidize the cost of the initial iPhone, essentially using the carriers as distribution channels.

Apple has also teamed up with several medical device makers to create iPhone-enabled devices, including Dexcom (Nasdaq: DXCM) for glucose monitoring and Cochlear (OTC: CHEOY) for hearing aids. As software becomes more and more important for medical device companies going forward, Apple could be positioning itself as an analytics, software, and patient health platform for these companies to plug into rather than having to build these capabilities themselves.

And at this week’s HIMSS18 annual conference, Apple is teaming up with Cerner (Nasdaq: CERN) to showcase to make health care records accessible in the Apple Health app. Cerner will also be offering a look at virtual health solutions that empower individuals to manage their health via telemedicine and remote monitoring technologies as well as intelligent solutions for hospitals as they adjust to rising costs and new technologies.

Brave New Healthcare World

The bottom line for you is that technology is finally changing healthcare as we know it. The one sector where costs have continued to inflate every year looks to be set for technology to have its deflationary effect.

That means the middlemen companies in the sector – with the fat profits – are going to be going on a ‘diet’. In other words, profits will be squeezed as Apple, Amazon and others move in.

Related: Sell These Healthcare Middlemen About to Get Amazoned

Healthcare could end up being a major part of the services business for Apple in a few years. Bad news for the incumbents, unless they have smart managements like the aforementioned companies and are teaming up with Apple and other technology firms.

All those in the health field now need to remember the old saying, “An Apple a day…”

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Source: Investors Alley

Uncategorized

10 Stocks That Are Screaming Buys Right Now

Source: Shutterstock

Buckle up — the market is looking jittery right now. If it’s not the threat of further Federal interest rate hikes, its the possibility of a full-blown trade war with China and Europe. Most recently, President Donald Trump announced steep tariffs on steel and aluminum imports. The news saw the S&P 500 close down 2% last week. This is nearly twice as much as any decline in 2017.

However, for investors prepared to put in the work, there are still gems to be found. I set out to pinpoint the best stocks to buy right now using the Street as my guide. TipRanks tracks and measures the performance of over 4,700 analysts enabling investors to identify consistently outperforming experts.

Analysts are ranked based on two crucial factors: success rate and average return per recommendation. Following top analysts is an easy way to identify stocks that experts believe have strong investing potential. That’s why here I only include stocks with a ‘Strong Buy’ top analyst consensus based on the past three months of ratings. Using this consensus, investors can be reassured that these stocks are the crème de la crème as far as the Street is concerned.

Bearing this in mind, let’s dive in and take a closer look at these 10 screaming buy stocks to invest in right now:

Best Stocks to Buy: Facebook (FB)

Best Stocks to Buy: Facebook (FB)

Social media giant Facebook, Inc. (NASDAQ:FB) is one of the best stocks to invest in right now. Shares are cheap at $182 down from $193 at the beginning of February. And now we have a clear buying opportunity on our hands according to two top analysts.

Five-star MKM Partners analyst Rob Sanderson says FB’s current valuation is “highly attractive.” Shares have pulled back as investors “debate the impact of an expected decline in engagement, revenue growth deceleration and an elevated spending outlook.” With another strong quarter of robust top-line growth in the bank, Sanderson sees prices spiking 32% to $240.

Meanwhile Top-100 analyst KeyBanc analyst Andy Hargreaves adds “We believe this provides an opportunity to purchase above-average growth at Facebook for a price that is well below average.” He believes investors are heavily discounting FB’s growth prospects and extraordinary core momentum. His $245 price target suggests even greater upside potential of 35%.

Over the last three months, this “Strong Buy” stock has scored 28 buy ratings, two hold ratings and one sell rating.

Best Stocks to Buy: Boeing (BA)

Best Stocks to Buy: Boeing (BA)One of the world’s largest aerospace companies, shares in Boeing Co (NYSE:BA) slipped last week on trade war fears. But Head of Research at Fundstrat Tom Lee believes the market is overreacting.

He has calculated that Boeing actually has a trade war exposure of just 35.2%. To calculate this figure, Lee looked at the company’s overseas sourcing as a percentage of cost of goods sold and exports as a percentage of sales. A percentage under 40% means the company has a low trade was exposure says Lee.

And in this case, despite all the trade war noise, I would recommend carefully considering Boeing right now. After all, this “strong buy” stock has received 11 recent top analyst “buy” ratings, with three analysts on the sidelines. With a $398 average price target, upside potential stands at 15%. But some analysts are much more bullish than consensus.

For example, five-star Cowen & Co analyst Cai Rumohr singles out BA as a top pick. He has a bullish $415 price target but sees $455 as a potential target.

Best Stocks to Buy: Alexion Pharmaceuticals (ALXN)

Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) is a U.S. pharma company best known for its development of Soliris, a drug used to treat rare blood disorders. And top Oppenheimer analyst Hartaj Singh has just selected ALXN as his top stock idea for February-March. Bear in mind this is a five-star analyst with a top-200 ranking on TipRanks (out of over 4,700).

Singh is confident that Alexion can explode 48% from just $118 to $175. He says the stock’s risk/reward profile is oriented to the upside making this a top stock to invest in right now.

He concludes: “With a robust rare disease platform, a slowing yet cash-generating asset in Soliris, and two newly launched products in Strensiq and Kanuma, we believe that it is not a question of if, but rather when, the shares positively re-rate.”

In total, Alexion has scored 13 buy ratings and only one hold rating from best-performing analysts in the past three months. These analysts predict that Alexion will rise 34% to reach $157.

Best Stocks to Buy: Pioneer Natural (PXD)

Best Stocks to Buy: Pioneer Natural (PXD)

Texas-based Pioneer Natural Resources (NYSE:PXD) is on the cusp of great things. The company has just announced that it is divesting all non-Permian assets. This asset sale should raise PXD about $1 billion and transforms PXD into a pure-play on the Permian Basin. Given that this is one of the world’s most lucrative oil fields, that’s no bad thing.

B.Riley FBR analyst Rehan Rashid applauds the company’s ‘strategic realignment.’ He says the move will enable PXD to ramp up its investment in its Permian assets. “We believe this platform and the substantial resource base it has to offer are simply not replicable. We reiterate our Buy rating and $305 price target and add PXD to the B. Riley FBR Alpha Generator list” says Rashid. He calculates “new” resource potential of nearly 20 billion BOE (barrels of oil or equivalent).

Over the last three months, TipRanks shows that Pioneer has received 16 buy ratings and three hold ratings from top analysts. Given that the stock is now at $169, analysts are projecting (on average) big upside potential of 28%.

Best Stocks to Buy: Vertex Pharmaceuticals (VRTX)

Best Stocks to Buy: Vertex Pharmaceuticals (VRTX)

Global biotech stock Vertex Pharmaceuticals Inc(NASDAQ:VRTX) is a prime investing pick right now with a growing portfolio of cystic fibrosis (CF) drugs. This is a genetic disorder that causes severe damage to the lungs, digestive system and other organs in the body.

The company is buzzing after scoring a key approval from the FDA for its third CF drug, Symdeko. The approval came two weeks earlier than expected and “potentially speaks to the FDA’s growing comfort with the suite of VRTX medicines” says JP Morgan’s Cory Kasimov. Management is now anticipating a “strong launch” for Symdeko with EU approval on track for 2H18.

“We continue to believe that VRTX’s dominance in the CF space, compelling bottom-line growth trajectory (43% CAGR through 2022), and significant free cash flow generation could potentially allow the company to substantially expand the breadth of its investor base” cheers Kasimov. So watch this space.

Overall, this “strong buy” stock scored 16 top buy ratings and just two hold ratings in the last three months. Meanwhile the average analyst price target of $192 works out at 14% upside from current share levels.

Best Stocks to Buy: Raytheon (RTN)

Best Stocks to Buy: Raytheon (RTN)

Defense giant Raytheon Company (NYSE:RTN) is the world’s largest producer of guided missiles. As with Boeing, you may be concerned that this stock would suffer in the event of a trade war. However, you can rest easy. According to research firm Fundstrat, it actually has a trade-war exposure percentage of 35.2% (again, anything under 40% is considered low).  And from a Street perspective, the outlook on RTN is also very bullish right now.

“Strong broad order momentum, a large Patriot backlog, and untapped financial firepower give RTN extended EPS and cash flow per share growth potential” cheers five-star Cowen & Co. analyst Cai Rumohr. He notes that the Harpoon replacement missile bid, a massive $8 billion opportunity, could be decided as soon as fall 2018.

With a strong outlook for 2018 and the subsequent years, RTN has received seven buy ratings from the best analysts in the last three months. In this same period, only one analyst has decided to stay on the sidelines. The average analyst price target indicates 9% upside potential from the current share price.

Best Stocks to Buy: Alibaba (BABA)

Chinese e-commerce giant Alibaba Group Holding Ltd (NYSE:BABA) has a “strong buy” analyst consensus rating with big upside potential of 23%. The Street is unanimous in its take on BABA as one of the best stocks to invest in right now. I say that because in the last ten months this stock has received no hold or sell ratings from the Street. Just 100% buy ratings.

On Feb. 2, top Oppenheimer analyst Jason Helfstein reiterated his “buy” rating and $220 price target. He doesn’t mince his words when he says: “Our positive thesis is based on the company’s unrivaled dominant position in its core business, its pioneer ecosystem that creates a long-standing barrier to entry, and numerous drivers including enhancing monetization and stable GMV (gross merchandise volume) growth outlook.”

Key growth drivers to keep a close watch on include rural/cross-border/cloud/logistics. For example AliCloud (Alibaba’s answer to Amazon Web Services) revenue is soaring with triple-digit y/y growth.

Best Stocks to Buy: Skechers USA (SKX)

Best Stocks to Buy: Skechers USA (SKX)

Skechers USA Inc (NYSE:SKX) is primed for significant expansion. Even after a 60% rise last year, the company remains notably undervalued compared to its athletic retail peers. Top Susquehanna analyst Sam Poser recently pushed up his target from $46 to $52. The new target indicates a further 25% upside from the current share price.

Following a blowout fourth-quarter earnings report, Poser is confident that the stock’s solid momentum is here to stay. “Another significant earnings beat reinforces our belief that SKX is at the beginning of a multiyear run of superior earnings growth and outsized investor returns,” he said.

According to Poser, SKX is now seeing strength in ‘all its businesses.’ The company’s domestic wholesale business is inflecting while the potential for growth in international markets is robust. He predicts that strong Chinese growth will enable management to meet its targeted $6 billion in revenue by 2020. This suggests an impressive CAGR rate of roughly 13%.

“A premium multiple is warranted as we are confident that the SKX business is on the verge of a material positive inflection,” Poser concludes in his Feb. 9 report. On Skechers specifically, Poser has a 75% success rate and 37.6% average return across 43 stock ratings.

In the last three months, Skechers has received 100 percent Street support with six consecutive analyst buy ratings and an average price target of $48.60.

Best Stocks to Buy: 2U Inc (TWOU)

Best Stocks to Buy: 2U Inc (TWOU)

Source: Apple

Online education platform 2U, Inc.(NASDAQ:TWOU) has just received a slew of price target increases from the Street. On Feb 27, the company reported Q4 results ahead of expectations. This marks its 16th consecutive quarter of outperformance. 2U’s 4Q organic revenue growth accelerated to about 30% year-over-year, and 2018 guidance implies another year of “Tier 1” industry revenue growth.

But for top Oppenheimer analyst Brian Schwartz it’s not just about 2018 — it’s about the changes sweeping through the education industry. He sees a “high migration” likelihood toward the digital channel for students and learning over the next decade. “We believe long-term investors will be rewarded over the years as 2U disrupts and transforms the post-secondary education landscape with little credible threat over the medium term” states Schwartz. This top-10 analyst has a $91 price target on TWOU.

In the last three months, the stock boasts eight back-to-back buy ratings from the Street’s best analysts.

Best Stocks to Buy: MasTec (MTZ)

Best Stocks to Buy: MasTec (MTZ)

Last but not least of all the best stocks to invest in for 2018, we have Florida-based specialty contractor engineer MasTec, Inc. (NYSE:MTZ). The company’s work spans electric power infrastructure, oil and natural gas pipelines, renewable energy facilities and wireless networks. Strength across the board has resulted in 100% Street support with seven top analysts publishing recent buy ratings. These analysts spy 34% upside potential for MTZ.

The company has just released very strong Q4 results. Notably cash flow and liquidity remained strong, giving MTZ flexibility for organic and acquisitive growth. “Guidance for 2018 was solid and suggests another record year for the company, with strong market trends across all of its segments. We believe MTZ is well positioned across all of its end markets to benefit from multiple opportunities for long-term growth” states top B.Riley FBR analyst Alex Rygiel.

His buy rating comes with a very bullish $71 price tag (44% upside). We can also see that this is one of the top 200 analysts on TipRanks out of over 4,700 based on his precise stock picking ability.

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Source: Investor Place

Options

Here’s How to Generate Huge Returns From Trump’s Trade War

As if there hasn’t been enough political and economic news lately – now we have a trade war to contemplate. In case you haven’t been following, the current administration is imposing a 25% tariff on steel imports and 10% on aluminum imports. Non-US steel producing countries are sure to follow suit with their own tariffs, and thus a trade war is born.

Generally speaking, a trade war isn’t a good thing for the global economy. It may protect (or even create) jobs in the short-term, but in the longer-term other jobs will be lost somewhere else. In a zero-sum game, someone is going to be losing somewhere.

In the meantime, the new tariffs are roiling the financial markets. At the very least, we can try to find a way to profit from the stock market swings taking place as investors digest the implications of a trade war.

Of course, domestic steel and aluminum companies, at least the ones that source their raw material from the US, are attracting buyers. The whole point of these types of tariffs is to get buyers to purchase goods from local companies. It makes sense that a company like US Steel (NYSE: X) would go up on the news, for instance.

And as you can see, it did go up immediately on the day the news came out (second to last bar on the chart above). However, the next day, the stock dropped, basically back to even. That’s because the market realized a trade war would eventually hurt everyone (as foreign trade partners raise prices to compensate).

So how do you trade a trade war? Well, at least some big traders think the tariff will help some companies more than it hurts. Domestic steel producer AK Steel (NYSE: AKS) is one company that options buyers seem to really like.

On the day the tariff was announced, nearly 40,000 April AKS 7 calls were purchased for $0.21 with the stock at $5.60. Normally, cheap out-of-the-money calls like this are just fliers that traders take now and then… more like lottery tickets. After all, to break even the stock needs to get to $7.21, which is over 20% higher than the current price.

Nevertheless, when 40,000 contracts trade (over $800,000 in premiums), then there’s a real belief the stock is going up in the coming weeks. The type of large blocks that traded that day (over 10,000 calls per trade) are the sort of trades typically made by funds or very wealthy investors. It certainly adds some legitimacy to the thesis.

I’m okay with doing this kind of trade since the calls are so cheap. However, you need to go into a trade like this not expecting to make money. Twenty-cent options rarely expire in the money. There’s enough action in this strike that it’s worth a shot, but AKS certainly has an uphill battle ahead of it. On the other hand, if the trade does work, the returns could be pretty impressive.

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Uncategorized

These Snubbed Funds Crush the Market and Yield Up to 8.5%

Remember early February’s stock-market rout?

I know. Seems like a weird question. It was just a few weeks ago, after all. But many folks seem to have forgotten how stocks fell 10% from their 2018 high in a matter of days:

Amnesia Sets In

As you can see, the benchmark SPDR S&P 500 ETF (SPY) is already recovering, and stocks are now up 3.3% for 2018. That’s still well below the 8% climb we saw in January alone, but it’s a solid return, and it means more (formerly) skittish folks will likely trickle their cash into stocks, keeping the market buoyant.

But they aren’t putting their money in all sectors equally, and that’s where our opportunity comes in, starting with the 3 closed-end funds (CEFs) I have for you below, which are boasting some of their highest dividend yields ever—up to 8.5%!

What sector am I talking about? To answer that, we only need to look at this heat map of the S&P 500.

Where the Bargains Are

A quick glance tells us that consumer discretionary, financial and technology stocks are far outperforming the rest of the market, with year-to-date returns between 3.5% and 5.9%.

But we’re mainly interested in the red sectors—one in particular. And it’s not consumer staples.

That’s because the consumer staples selloff can best be understood as a “risk-on” move—staples, of course, are things people must buy all the time, so these stocks are attractive in tighter times. And since we’re in a time of growing incomes and falling joblessness, staples aren’t where you want to be.

That means the drop in consumer staples isn’t a great contrarian opportunity—it’s a falling knife. But when we compare ETFs benchmarking two other lagging sectors—the Energy Select Sector SPDR (XLE) and the Utilities Select Sector SPDR (XLU)—a terrific opportunity pops up.

Utilities Go Up, Energy Goes Down—Until Now

As you can see, it’s rare for utilities and energy to fall at the same time; they tend to be inversely correlated.

When you stop and think about this, it makes sense. Utilities sell energy they produce using fuels from oil and gas producers; higher profits in the oil patch, therefore, mean lower profits for utilities, and vice versa.

But as you can see, both sectors are headed down today—and that’s why utilities look so attractive: because they’re buying energy cheap while selling more of it into a surging economy!

And when you add in the fact that many utilities have something near a monopoly in their market, this opportunity gets better still.

3 Ways to Buy In

We could just buy XLU and call it a day. With a 3.5% dividend yield, we could feel satisfied that we’re getting utility exposure and a “set it and forget it” investment.

But you’d be leaving a lot of cash on the table when you stack up XLU next to those 3 high-yielding CEFs I mentioned off the top. They are the Reaves Utility Income Fund (UTG), the Cohen & Steers Infrastructure Fund (UTF) and the DNP Select Income Fund (DNP).

I’ve chosen these funds not only because of their strong historical returns, which I’ll get to in a minute, but also because of the quality of their management and their portfolios.

UTG, for example, has one of the best asset management teams in the utilities space, and UTF’s diversified portfolio across North American, Asian and European assets has protected investors from a major market downturn for years. Finally, DNP’s focus on high-yielding large cap US utilities and telecommunications companies provides stability and a dividend investors can count on.

Each one specializes in utilities and has beaten XLU’s dividend yield while matching—or even topping—the ETF’s performance since the 2014 commodity crash.

Topping the Benchmark—With Big Cash Payouts, Too

On a longer term basis, these funds have all crushed XLU.

Winning Out Over the Long Haul

But how do these funds’ dividend yields compare to that of XLU? Quite nicely.

The bottom line? Utilities have tremendous upside, and it’s only a matter of time till the market picks up on this. The 3 CEFs I just showed you are a great way to get in on the action.

4 Must-Buy CEFs for 2018 (Huge Cash Dividends and 20%+ GAINS Ahead)

Utilities aren’t the only shockingly cheap corner of the market resulting from the selloff. There are 4 more markets that are even better places for your money now. But you won’t find them by looking at the S&P 500 “heat map” above—they’re well off most investors’ radar screens.

But these 4 obscure markets boast cash payouts 4 TIMES BIGGER than what the average S&P 500 stock pays!

They’re plenty safe, and even more undervalued than utilities are now.

That means one thing: we’re looking at massive upside here, especially if you buy my 4 favorite funds—one from each of these 4 unloved markets—today: I’m talking 20%+ price gains in a year or less!).

AND you’ll collect an outsized 7.6% average dividend payout while you watch these 4 incredible funds’ share prices arc higher.

Michael Foster has just uncovered 4 funds that tick off ALL his boxes for the perfect investment: a 7.4% average payout, steady dividend growth and 20%+ price upside. — but that won’t last long! Grab a piece of the action now, before the market comes to its senses. CLICK HERE and he’ll tell you all about his top 4 high-yield picks.

Source: Contrarian Outlook 

Technology

5 Top Warren Buffett Stock Picks

Source: Shutterstock

Sometimes identifying the best stocks to buy can be difficult, but you could do a lot worse than checking out the stocks selected by one of the world’s savviest hedge fund managers: Warren Buffett. Warren Buffett stock picks are a popular source for an investors, and for good reason.

Billionaire Buffett is many things: one of the world’s most successful fund managers, legendary philanthropist and owner of over 60 companies. His formidable stock picking ability has given him the nickname ‘the Oracle of Omaha’ and a fortune of over $87 billion. “He beats everybody all the time when it comes to picking stocks” writes Bloomberg’s Nir Kaissar. Indeed, the per-share market value of Berkshire has returned an incredible 20.9% annually from October 1964 through 2017.

And now we can track the latest trades of his $191 billion Berkshire Hathaway fund. Just-released SEC forms reveal a valuable glimpse into which stocks Buffett likes, and which he doesn’t.

Bear in mind that these are the trades the fund made in Q4 rather than the current quarter — so it is possible that the positions have changed since the filing date.

Here I also include TipRanks’ stock insights from Wall Street’s best-performing analysts. Does the Street sentiment match Buffett’s latest stock picks — or is he going rogue with his investing decisions? We can check the overall analyst consensus as well as analysts’ average target price. This is a crucial indicator of how far the Street sees a stock moving over the coming months.

Let’s take a closer look at the top Warren Buffett stock picks now:

Warren Buffett Stock Picks #1: Apple (AAPL)

Source: Apple

Apple Inc. (NASDAQ:AAPL) shares spiked higher on the news that this is now Buffett’s largest investment. Following a 23% increase of AAPL shares, Buffett now holds $28 billion in AAPL stock. This is about 14.6% of the total portfolio.

According to Time, Buffett explained that:

“Apple strikes me as having quite a sticky product and an enormously useful product to people that use it, not that I do.”

Indeed, the facts bear this out with Morgan Stanley pegging the iPhone’s retention rate at 92% vs just 77% for Samsung phones.

Guggenheim’s Rob Cihra echoes Buffett’s bullish Apple stance. He has a $215 price target on AAPL (21% upside potential). After dissecting the stats, this top analyst sees ‘Other Products’ revenue hitting $22 billion in 2019.

For Cihra:

“Apple has never been about going after a whole market’s unit share but rather peeling off the high-value tops for max revenue and profit share. It can then compound that by selling MORE into its ‘niche’ installed-base of loyal, high-value customers.”

Overall analysts are cautiously optimistic on AAPL right now. The stock has a Moderate Buy analyst consensus rating with 17 buy ratings and 13 hold ratings. With an average price target of $193, the Street is predicting 8% upside for AAPL from current prices.

Warren Buffett Stock Picks: BNY Mellon (BK)

Source: Shutterstock

Buffett has now ramped up his holding of this financial stock by 21% to $3.275 billion. This makes Bank of New York Mellon Corp (NYSE:BK) the 10th biggest stock in Berkshire’s portfolio. Although Buffett has held BK since 2010, he began to pour money into the stock in 2017 with two 50% increases.

From a Street perspective, analysts are divided on BK’s outlook. We can see that BK has a Moderate Buy analyst consensus rating with This includes a recent stock upgrade (from Morgan Stanley) and a downgrade (JP Morgan).

Somewhere in the middle we have one of TipRanks’ Top 10 analysts, Vining Sparks’ Marty Mosby. He maintains his Hold rating on BK with a $60 price target (3.5% upside potential). This is slightly under the average analyst price target of $61.39.

He sees growth ahead but adds a note of caution:

“Looking into 2018E, we believe that BK is still positioned to generate another year of double-digit growth in earnings per share, as its tax rate is reduced and share count continues to be managed lower; however, we believe most of this upcoming benefit is currently priced into BK’s current valuation.”

Warren Buffett Stock Picks: Teva (TEVA)

Buffett surprised the market with a big bet on flailing pharma giant Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA). He snapped up 19 million shares in TEVA, worth about $358 million. This is the only new position initiated by Buffett in Q4. On the news Teva shares climbed over 10%.

But this bump turned out to be short-lived. Shares fell after the Oracle of Omaha revealed that he has no idea why the fund bought Teva. It turns out that one of his investment deputies made the purchase. This isn’t so surprising. Teva is currently one of the most-shorted stocks on the market and has just begun a restructuring program to deal with its massive $35 billion debt burden.

However, given that shares are trading at just $19 vs the 5-year peak of over $70, perhaps this will be a bargain buy. And as Buffett famously says: When others are fearful, be greedy.

Indeed, five-star Mizuho analyst Irina Rivkind Koffler calls the stock a Buy. She sees the stock leaping by more than 10% to $23 in the coming months and says:

“We expect slow but gradual appreciation in TEVA shares. While the 2018 outlook introduced on the 4Q:17 call came in below expectations, we believe there is downside protection, and even longer-term upside to the stock.”

Overall, TipRanks shows TEVA has a Hold consensus rating from top analysts. These analysts have an average price target on Teva of $21- 8% upside from the current share price.

Warren Buffett Stock Picks: US Bancorp (USB)

Source: Shutterstock

Minneapolis based U.S. Bancorp (NYSE:USB) is the fifth largest US bank — and one of the top 10 holdings in the Berkshire portfolio. Following the purchase of almost 2 million USB shares in Q4, Buffett’s USB stake now totals $4.66 billion.

The bank has just announced a fine of $613 million for ‘willful’ anti-money laundering (AML) shortcomings from 2009-2014. “We regret and have accepted responsibility for the past deficiencies in our AML program,” said CEO Andy Cecere on Feb. 15. “Our culture of ethics and integrity demands that we do better.”

For five-star RBC Capital analyst Gerard Cassidy this $613 million resolution is ‘good news’. He says:

“USB has made significant investments to improve its risk controls in the intervening years, and we believe that today’s resolution will allow USB to move past this issue…[Ultimately] US Bancorp has demonstrated, through the compound annual growth rate of shareholders’ return over the last 10 to 20 years, to be consistently one of the best-performing banks in the US.”

He has a buy rating and $61 price target on USB (10% upside potential). Note that this analyst is currently the no.1 analyst on TipRanks for his precise stock picking ability.

In contrast, the Street is taking a backseat on USB right now. The stock has a Hold consensus rating while its average analyst price target of $59.95 indicates just over 7% upside potential.

Warren Buffett Stock Picks: Monsanto (MON)

Source: Shutterstock

Last but not least we have biotech giant Monsanto Company (NYSE:MON) — one of the world’s top suppliers of farm pesticides and seeds. Throughout 2017, Buffett made a number of bullish MON trades. Starting in Q4 2016 he initiated a position — which he then increased in both Q3 and Q4. Now the fund holds 11,708,747 MON shares worth close to $1.37 billion.

German drugs and pesticide group Bayer AG (ADR) (OTCMKTS:BAYRY) is planning a massive $66 billion takeover of Monsanto. The deal was supposed to go through in 2017, but it has been delayed by an antitrust review from the European Commission (EC). The EC will now deliver their verdict on or before April 5.

Bayer CEO Werner Baumann said on Feb 28:

“We see ourselves on a good path for the regulatory approvals that are still outstanding, In Europe, as far as the process goes, we are further along than in the USA, but in the USA we will certainly also make progress in the coming weeks.’’

Baumann also revealed that the company is planning to sell its entire veg-seed business to secure regulatory approval.

However, the Street is staying on the sidelines right now. With a “Hold” analyst consensus rating, analysts are predicting just 4.3% upside from the current share price.

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: Investor Place 

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2 Stocks Winning the Cable Cutting Wars

The media wars have heated up, all thanks to a British company called Sky PLC (OTC: SKYAY). The company has three American suitors – Comcast (Nasdaq: CMCSA), Walt Disney Company (NYSE: DIS) and Twenty-First Century Fox (Nasdaq: FOX) – all vying to tie the knot with Sky.

It seemed straightforward enough… as Disney’s $66 billion offer for some of Fox’s assets that would include 39% of Sky, allowing Disney to expand its international presence. Separately, Fox is trying to buy the 61% of Sky that it does not own with an offer worth in excess of $16 billion. So eventually, it was thought, Disney would own all of Sky.

But then Comcast jumped in with a $31 billion all-cash bid for the entirety of Sky. Comcast is desperately looking for growth outside of the moribund U.S. cable business where cord-cutting by consumers makes Comcast particularly needy.

The faster-growing European market offers it an opportunity to strengthen a major weakness (little overseas exposure). Comcast currently has about 29 million U.S. customers, while Sky has about 23 million subscribers. If Comcast is successful, its international revenues will climb to 25% of total revenues from just 9% currently.

I do think this is a good attempt by Comcast to improve its fortunes. So I’ve been amused by some of the comments from U.S. analysts on the proposed offer for Sky by Comcast. As I’ve found all too often, there is a lack of understanding about businesses overseas by analysts in the U.S. Some U.S. analysts have given the deal a thumbs-down, saying why would Comcast want to buy a satellite TV company?

Sky is a whole lot more… as Comcast CEO Brain Roberts said, “There’s nothing as great in the United States.” Here’s why…

A Look at Sky

First, Sky is much more than a U.K. satellite TV company. It is pan-European, having expanded into Germany, Italy, Switzerland, Spain, Austria and Ireland. But more importantly, Sky is both a telecoms operator (selling TV, internet and phone services), and a media company with its own original news, sports and entertainment programming.

The company is not sitting by idly as rivals such as Netflix (Nasdaq: NFLX) and Amazon.com (Nasdaq:  AMZN) enter their turf. Sky recently launched a low-cost plug-in stick that will provide access to its films, television shows, and live sports including English Premier League soccer matches on any TV set.

Sky is also launching a download service called Now TV – after customers with children clamored for such a feature – to watch programming any time you’re away from home and have no internet or Wi-Fi connection.

These innovations let a customer avoid the expense of a high-end Sky set-top box and pay £14.99 ($20.61) for the smart stick and remote, choosing to buy Now TV day- or week-passes to watch box sets, films and Premier League sport without being stuck in a monthly contract. Sky has positioned Now TV as a lower-cost streaming competitor to Netflix and Amazon since it costs less than £10 ($13.75) a month. Later this year, Sky is also planning to unveil a broadband TV service that will allow customers who want its full TV service to do so without the need for a satellite dish.

So in effect, Sky is a smaller European version of what the U.S. media giants like AT&T (NYSE: T) with its proposed takeover of Time Warner (NYSE: TWX) are trying to become. That is, an integrated distribution platform that produces its own content.

Higher Bid Likely

It is highly likely that Fox/Disney will raise their bid for control of Sky. In addition to the reasons above, Sky is now worth more than the original Fox bid because of its recent success in securing rights to the lucrative and extremely popular English Premier League soccer for another three years at a very good price.

One reason I expect a higher bid (to be absorbed by Disney) is the aforementioned Netflix. The rise of streaming video from pioneers such as Netflix and Amazon upended the staid television industry, eroding audiences and sapping advertising revenue. As the industry tries to deal with changing viewer habits, traditional media distributors realized they are exposed and may not survive without making major changes.

As Rich Greenfield, an analyst with BTG Research, told the Financial Times “Netflix has changed people’s desire to watch linear TV,” he adds, referring to traditional broadcast or cable TV where viewers tend to tune in at particular times. “And it has killed the concept of channel brands.” Viewers, he says, “no longer know or care” which channel their programs come from after “decades of broadcast and cable networks trying to build brands”.

The Two Best Stocks to Buy

Investors have it right when they give Netflix such a rich valuation because its model is the right one – direct-to-consumer and global. I see Netflix continuing to power ahead in the industry.

I also like Disney a lot. Sky will only add to its move toward more streaming services of its own. Disney is launching a streaming service for its Disney and Pixar brands and one for sports fans (ESPN).

The big plus as it moves toward streaming is Disney’s vast array of popular content including the traditional Disney cartoon characters as well as Marvel super-heroes and Star Wars. You need only to look at the popularity of Shanghai Disneyland – where the number of visitors (over 11 million) in its first year blew away even the most aggressive estimate – to understand the global appeal of the Magic Kingdom.

Disney’s wide array of assets, including its parks & resorts, as well as highly successful movie franchises (and marketing opportunities from that) make it the safest bet to be one of the long-term survivors in the new media landscape.

No matter the outcome of the bidding for Sky – although I’m betting on Disney – Netflix and Disney will be the two companies to own in this sector.

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 

Uncategorized

Make Up to 165% Returns on This Surprising Chip Stock

Following big options trades can be a very smart way to see what upcoming moves seasoned investors are betting on. In my experience, many of the smartest traders use options to make directional bets on stocks and indexes.

Let’s take a look at a particular “smart money” trade in the options market, why it may have come about, and how we can profit from it.

The trade I’m referring to took place in Micron Technology (NASDAQ: MU). Micron is a semiconductor company which focuses on storage and memory chips. After struggling for several years, the stock has had a solid past year of performance.

Well, a very big trader, or perhaps a couple different traders, are betting big money that MU is going to continue going up through March 22nd earnings. Although the company pre-announced strong earnings and raised guidance, the smart money seems to believe the good times will continue, at least until April expiration.

Here’s the deal…

A couple very large call spreads traded this week in MU April options which are very bullish for the stock. Both trades involved buying the April 50 calls while simultaneously selling the April 55 calls. The trades occurred with MU stock at right around $48 per share.

In total, over 30,000 of these 50-55 call spreads traded for about $1.38 per spread. The premium cost of $1.38 is also the max loss on the strategy and it puts the breakeven point at $51.38. That also means max gain is $3.62. In dollar terms, the trader(s) spent about $4.1 million on the trade with the potential to earn $10.9 million if MU goes to $55 by expiration.

So why make such a bullish bet if the company pre-announced strong earnings? It could be investors believe the details of the earnings call will be even more bullish than the broad numbers already released. Or perhaps, it’s the result of the semiconductor industry seeing a lot of strong results overall.

Demand for flash memory is certainly increasing, judging from MU’s competition. And since flash memory is one of Micron’s specialties, investors may be betting on a bright future for the company – at least for the next few months.

That being said, what can we do to profit from knowing where the smart money is positioned on MU? It’s pretty easy in this case because we can do the exact same trade. There’s nothing fancy or prohibitive about a call spread, so there’s no reason we can’t emulate the trade.

Now, you can pay a bit less on the spread by not going all the way out to April expiration. For instance, if you think the stock is going to jump immediately after earnings, the earnings week 50-55 call spread (expiring March 23rd) is trading for $1.30 with the stock at $48.70.

However, I believe in this case, buying a little extra time is a good idea. And, since the stock has gone up almost a $1 since the big trades were made, it makes sense to save a bit in premium costs by not going out quite so far.

I recommend the March 29th 50-55 calls trading for about $1.37. At that price, max gain is $3.63 which works out to 165% returns if the stock goes to $55 or above by the expiration date.

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Source: Investors Alley