Is the stock market reasonably priced or expensive? That’s the question investors are asking themselves these days, leaving many to wonder if there are any stocks to buy at this point in the cycle.

A couple of metrics have investors scared about stock prices, suggests Jim Paulsen, the chief investment strategist at The Leuthold Group. According to Paulsen, the median U.S. stock has a P/E multiple today that is almost 50% more expensive than during the dot.com bubble of 2000.

The second metric that should make you think twice is the value of U.S. stocks relative to foreign stocks. Paulsen suggests that U.S. stocks are 17% more expensive than foreign stocks, the highest spread since 2002. Also, the price-to-sales ratio hasn’t been this high since the end of World War II. Marijuana stocks are definitely contributing to this third metric.

So, what’s an investor to do?

Ben Graham used to talk about a margin of safety to protect against the potential downside of owning a stock. That’s especially true when a re-evaluation of stock prices will eventually take place.

In the past, I’ve followed stocks that have dipped by more than 10% in a certain period — a week, a month, a quarter — and what I’ve found is that they often recover over a period of months. Shortly after that, they often test 52-week or all-time highs.

It’s not a strategy I’d pursue if you’re an anxious investor, but for those people who can handle a little volatile, here are seven stocks to buy that are down 20% or more over the past three months.

The Stars Group (TSG)

3-Month Performance: -31%

It’s hard to believe that The Stars Group (NASDAQ:TSG) stock is still up over 9% year to date despite a 31% rout over the past three months.

If you bought TSG stock in July, I feel your pain, because your position is seriously upside down.

Not to fear, it will soon be back over $30. Here’s why.

In July, it completed its $4.7 billion acquisition of Sky Betting & Gaming, one of the leading gaming and sportsbook operators in the UK. The purchase not only gives it a bigger foothold in Europe, but it also cements its position within the lucrative sports betting market that’s ready to take off in the U.S.

Yes, the deal required the company to leverage itself to the hilt while also diluting shareholders to pay for Sky Betting & Gaming, but I believe this is this kind of transformational move that separates the professionals from the amateurs.

The future of online gaming is tremendous. Any correction like the one over the past three months is an opportunity to buy TSG stock at a reasonable price.

Zillow Group (ZG)

3-Month Performance: -31%

In early August, Zillow Group (NASDAQ:ZG) stock dropped 16%, its worst single-day performance since November 2011.

What sparked the selloff?

The company reported its Q2 2018 earnings. The top-line missed slightly while the bottom-line beat expectations by three cents. That wasn’t it.

It did, however, lower its guidance for the full-year from at least $1.43 billion in revenue to $1.32 billion, a drop of $110 million. Add to that its entry into the mortgage lending market through the acquisition of Mortgage Lenders of America, which prompted a downgrade from Merrill Lynch because of the stress it will put on profits, was enough to send the stock spiraling lower.

Zillow Group is moving away from its traditional areas of strength — Advertising and technology applications — into the buying and selling of homes through Zillow Offers, hence the need for a mortgage lender.

“It allows us to monetize the Zillow Offers business a second way,” Zillow CEO Spencer Rascoff said in August on CNBC. “First, we can make money from buying and selling. Second, we can make money from mortgage origination. Third, we can make money by passing the homeseller, who doesn’t want to sell their home to us, off to a premier agent.”

Personally, I’ve been a fan of Zillow stock since 2013. I like what Zillow Offers does for the house seller.

I think the market’s got it wrong. Those willing to experience a little volatility through the remainder of 2018 should be rewarded with a higher stock price.

Noah Holdings (NOAH)

3-Month Performance: -27%

I first recommended Noah Holdings (NYSE:NOAH), a Chinese wealth management company, back in June 2013 when it was trading around $13; it’s now over $40 despite the 27% haircut in the past three months.

“The most compelling reason for investing in Noah Holdings is its revenue structure, which has evolved over time since its inception,” I wrote June 6, 2013. “Three years ago it earned 77.2% of its revenue from one-time commissions from the third-party firms it represented, with the remainder in recurring service fees. Today, it earns almost 46% of its revenue from recurring service fees.” 

Fast forward to 2018.

NOAH earns about 41% from recurring service fees, 41% from commissions, about 6% from performance fees and the rest (12%) from its online brokerage and education business.

Investors likely weren’t impressed with the company’s drop in earnings in the second quarter.

However, as a glass-half-full type of person, I look at its online brokerage and education business’s results in the second quarter — revenues were 73% higher with half the operating losses year over year — and see a stock that’s ready to rebound.

At less than $40, it’s a steal.

Ultrapar (UGP)

3-Month Performance: -25%

A year ago, Ultrapar (NYSE:UGP) was trading above $25. Today, it’s below $10.

What the heck is going on at the Brazilian conglomerate?

Well, Brazil and the rest of South America haven’t exactly been a beacon of stability in recent months. However, the issues that prevent Brazil’s economy from really taking off — low productivity, political corruption and too much spending by governments — have been around for years, making it very difficult for businesses to grow there.

However, a quick look at Ultrapar’s Q2 2018 report suggests business is just fine at most of its operating segments.

If not for a strike by truck drivers across Brazil in May, making it impossible to get fuel to its gas stations, the company’s adjusted EBITDA would have increased by 18% in the second quarter, and revenues likely would have been up more than the 19% year over year increase.

Ultrapar runs gas stations, convenience stores, pharmacies, liquified petroleum gas, specialty chemicals and a liquid bulk storage business.

It has been around for almost 80 years and will probably be around for another 80 years.

Mastec (MTZ)

3-Month Performance: -21%

New Jersey-based CressCap Investment Research provides independent analysis of over 7,000 stocks using statistics and data to help separate the winners from the losers. In May, CressCap CEO Steven Cress suggested Mastec (NYSE:MTZ) would be a big beneficiary of U.S. President Donald Trump’s push to rebuild America’s infrastructure.

Like much of the president’s economic agenda, it relies more on style than substance. The odds of a trillion-dollar-plus infrastructure bill getting passed anytime soon is fair at best.

That said, I do agree with Cress that the infrastructure construction firm is ideally positioned to benefit from any large infrastructure projects initiated by the federal government.

The company’s Q2 2018 results show a business that’s experiencing declining revenue and EBITDA, a big no-no in an economy that’s booming and corporate earnings are at a record level.

However, look more closely at its earnings and revenue, and you’ll see a business that’s doing just fine. With a $7.7 billion backlog at the end of June, Mastec has plenty of work ahead of it without the assistance of the president.

Down 21% over the past three months, now is an excellent time to consider MTZ stock. 

Tata Motors (TTM)

3-Month Performance: -23%

The year-to-date price chart for Tata Motors (NYSE:TTM) stock looks a lot like a ski run in that it’s downhill all the way. The maker of Jaguars and Land Rovers started the year at $35 and now it trades for half that.

It seems like the turnaround job Tata Motors executives performed on Jaguar Land Rover (JLR) between 2008 and 2015 has been forgotten by investors; an amazing thought considering all of the beautiful cars it has released over the past two years.

I believe JLR makes the perfect spinoff stock for investors to bet on; the news that Aston Martin’s looking to go public with a $6.7 billion valuation suggests the investor appetite for luxury cars is high at the moment.

That said, it better not wait too long, or Volvo might reconsider shelving its plans for an IPO.

The other fly in the ointment for Tata Motors: As it ramps up spending at JLR, Fitch is concerned that Tata’s free cash flow will turn negative, putting a damper on future profits.

I think the risk-to-reward ratio is good at prices under $20.

Acadia Healthcare (ACHC)

3-Month Performance: -19%

If there’s a company whose services are needed in America, Acadia Healthcare (NASDAQ:ACHC) has got to be at the top of the list. Acadia provides inpatient and outpatient behavioral health services to people in the U.S. and UK. Whether it’s anxiety, an opioid addiction, PTSD or something else, Acadia is there to help. 

Not only does Acadia provide the care, but it also owns many of the facilities where this care takes place.

As you can imagine, Acadia’s biggest expense is wages. After all, you can’t help people without providing professional care, and that costs money.

Its revenues grow at a reasonable pace and deliver about 7 cents to the bottom line for every dollar of revenue. It’s not a tech company to be sure, but it serves a vital service whose need won’t go away anytime soon.

Its stock dropped in July after the company’s CEO reduced its revenue and earnings guidance for 2018 as a result of higher interest rates and foreign exchange.

Those two items are a natural part of doing business. I see the company’s stock rebounding from this latest concern in the final months of 2018 and into 2019.

As of this writing Will Ashworth did not hold a position in any of the aforementioned securities.

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 

The cannabis market is starting to soar.

The United States is a huge market opportunity, with market projections growing from an estimated $8.5 billion last year to $23.4 billion in 2022, if only a few additional states legalize recreational use. And we’re talking about as much as $50 billion if most states follow the trend.

But the biggest opportunity of all could come in a form people hadn’t been talking about as much…

It’s an opportunity that runs counter to the recreational market trend and the obsession with the cannabinoid THC – the one that causes users to get “high.”

I’m talking about some of the other highly prized cannabinoids present in marijuana – one in particular that one of the world’s biggest, most well-known companies has taken a sudden interest in…

There’s Much More Than THC at Work in Marijuana

My colleagues, friends, and readers have all heard me talk (or seen me write) about cannabidiol (CBD) in terms of its health impact.

It’s just one of the non-psychoactive cannabinoids in cannabis.

Renegade Investment Expert: “It’s time to double down – or even triple down – on your cannabis investments!” Read more…

CBD helps relax people, reduces inflammation, eases pain, and can potentially treat many diseases, including chronic traumatic encephalopathy (CTE), as we discussed earlier this month.

With all those effects, it’s no wonder that it’s also being explored as a potential general health ingredient.

If the health effects of CBD and other cannabinoids prove out, the regulated pharmaceutical market will be unimaginably large – $50 billion, $100 billion, or more.

This past week, an explosive new projection and the rumored participation of a very surprising company both advanced the idea that CBD will be even bigger than THC – even if you don’t count the pharmaceutical market.

The company we’re talking about is one of the largest brands in the world.

It makes perfect sense for this company to be looking at CBD as a health ingredient, since it’s been diversifying away from the product that made it famous for years.

This company owns coffee drinks.

This company owns bottled water brands.

This company owns fruit juice.

This company owns vitamin-infused water.

And in what could play out as a blockbuster, it looks for all the world like it wants to own a cannabis-infused beverage…

Look Who’s “Kicking the Tires” with the Cannabis Industry

Coca Cola Co. (NYSE: KO) is rumored to be seeking a joint venture or other arrangement to make CBD-only beverage products. BNN Bloomberg had the scoop, saying that Coke is looking to make CBD-infused health or “recovery” drinks, which would be positioned similarly to energy drinks or Gatorade.

The shock is how early and quickly Coca-Cola is ready to get into the CBD beverage business.

Urgent Briefing: Discover exactly how to position yourself to cash in after historic new cannabis legislation takes effect – and how to get the names of the top three stocks to buy right away. Click here now…

Most market observers believe that the association of CBD with cannabis would have kept companies out of that market until consumer understanding of the difference between CBD and THC increased over time.

For Coke to have its wholesome image associated with cannabis products is a critical endorsement of the changing consumer perception of cannabis and of the potential opportunity a plunge into the CBD business presents.

But the best way to make money on this monumental rise in the CBD market that’s coming isn’t buying Coke’s stock. It’s not even necessarily in grabbing shares of cannabis giant with which Coke is negotiating, either.

The smartest, most lucrative plays are still off the mainstream radar… for now.

Here’s what I mean…

CBD Is a $22 Billion Sub-Industry in the Waiting

The current rumor is that Coca-Cola is talking to Aurora Cannabis Inc. (OTC: ACBFF), one of the four biggest cannabis companies in the world. And because CBD is legal across the United States, there’s no reason it could not also seek a separate domestic deal.

For its part, Aurora – which itself has been involved in a binge of cannabis-related takeovers in the last year – emphasized Tuesday in a carefully worded statement that it has no deal with any beverage company… yet.

First, that can change tomorrow. That’s often how it goes.

Second, it doesn’t matter whether Coke strikes a deal with Aurora or some other cannabis company.

This is a flag in the ground about how serious, how potentially lucrative the legal cannabis market will grow to be.

So, how large is the CBD industry that it’s pushed the largest soft drink company in the world to act?

Brightview, a respected cannabis industry analysis firm, now believes that the CBD-only market worldwide will grow to $22 billion by 2022. That’s in the United States alone. From under $600 million this year, that represents a growth of 132% per year for four years.

Brightview thinks of CBD as the future vanguard of an “anti-pharma” health movement, with people taking daily supplements of CBD, using it to substitute for pharmacological disease treatments, adding it to their food, and as Coca-Cola probably foresees, taking it in their beverages.

In this landscape, CBD supplements would become much more widely available. Consumers will be buying them at big-box discounters like Costco, grocery stores, health food stores, drug stores, and more.

If Brightview’s projection is even partially right, the cannabis companies that can execute on sharp, CBD-focused business plans will make vast fortunes for their investors.

And that’s why we’re here, continuing this conversation about cannabis investing… and why I’m so excited about CBD.

But as I said, the owners of Coca-Cola stock – or even Aurora, for that matter – aren’t going to be the beneficiaries of this market sea change when we look back a few years from now.

It’s going to be in the smaller companies that are just finding market penetration because of constantly improving consumer sentiment and education.

It’s going to be the companies that aren’t yet on the radars of big beverage, big pharma, or big alcohol yet… some of which not even publicly traded.

It’s going to be the companies that resemble penny stocks in price… but not in know-how, experience, and leadership in an industry space that outsiders like Coca-Cola still know far less about.

These winners aren’t easy to find without rolling up one’s sleeves and doing hours and hours of the right kind of research. And not all CBD companies are created even close to equal.

And that’s why we’re going to keep this conversation about cannabis – and specifically, the CBD market – going here in the coming days and weeks. I can’t wait to share more of my research and predictions on this with you.

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.

The $5.1 billion deal to buy the Costa Coffee chain by Coca-Cola (NYSE: KO) is just the latest example highlighting the great lengths to which food and drinks companies are trying to keep pace with rapidly changing consumer habits that are upending traditional business models across the sector.

The former owner, Britain’s Whitbread, had said it would spin off Costa, the world’s second largest coffee shop chain after Starbucks. But the price Coke offered for Costa was simply too good to pass up.

For Coca-Cola, the transaction represents a full-fledged leap into the global coffee market, where it has little presence currently. “Hot beverages is one of the few remaining segments of the total beverage landscape where Coca-Cola does not have a global brand,” said James Quincey, president and CEO of Coke. “Costa gives us access to this market through a strong coffee platform.”

This move continues Coke’s process of diversifying away from the fizzy and sugary drinks that made the company famous. These type of drinks have declined in popularity among increasingly health-conscious consumers. The deal is all part of the company’s effort to reposition itself as a “total beverage company”. As Mr. Quincey said, coffee was among the “strongest growing [beverage] categories in the world” and the company was missing out.

As the chart above shows, the potential for growth of coffee beverages versus soft drinks is high. So with Coke now entering the market, it sets up a battle royal for coffee sales between the world’s biggest beverage maker and the other giants in the sector including Starbucks, Nestlé and privately-held JAB Holdings. More on that later.

Consumer Drinks Pressure

Coke’s proposed transaction is just the latest in a series by established consumer brands, which are taking divergent approaches in response to the demand from consumers globally for fresher and healthier products.

Some consumer companies are expanding into territories or products with brighter growth prospects. Coke’s arch-rival PepsiCo recently struck a $3.2 billion deal to buy SodaStream, which makes home carbonation products. This deal came mere days after Coke agreed to buy a minority stake (with a path to full ownership) in BodyArmor, a sports drink maker backed by US basketball star Kobe Bryant.

Coke has struggled for years to loosen the hold of Pepsi’s sports drink business Gatorade with its Powerade drink. But it may have struck gold with BodyArmor. Its products use coconut water, have higher levels of potassium than its competitors, do not use artificial colors, allowing the company to market its products as a healthier alternative to Gatorade and Powerade. Now it will gain access to Coca-Cola’s bottling system, allowing it to increase production.

The research firm Euromonitor said that sports drinks volumes were flat last year in the U.S., as both of the big two brands struggled. The one real exception, according to Euromonitor, was BodyArmor. Analysts with Wells Fargo, relying on Nielsen data, estimated that Body Armor retail sales had climbed 90% over the past year to $288 million. Much of that market share came from Gatorade.

Both Coke and Pepsi are coming under increasing pressure from JAB Holding, a Luxembourg-based investment vehicle backed by the billionaire Reimann family. As part of its international buying spree JAB bought the Keurig Green Mountain coffee business, best known for its single-serve brewing machines, in December 2015 for $13.9 billion. And JAB made a more direct threat to the two incumbents when, in January 2018, it struck a $18.7 billion deal to acquire Dr. Pepper Snapple and combined it with Keurig to create a beverage group with almost $11 billion in annual revenue.

The Steaming Hot Coffee Market

Once you get to the global coffee market, the competition gets even hotter as global food and beverage giant Nestle is a major player. Its recent deals in the space include acquiring the rights to sell Starbucks products and taking a majority stake in roaster Blue Bottle.

According to Euromonitor, the global coffee industry is valued at more than $80 billion, and has been expanding at an annual rate of more than 5%. Here in the United States – the world’s biggest coffee market – most of the growth is coming from a resurgence in the café culture among millennials aged 18 to 34.

According to a recent survey conducted by the National Coffee Association, 15% of millennials had their last cup of coffee in a café and 32% had an espresso-based drink the day before the survey, the highest share for any age group. These are the type of consumers Coke is trying to reach through its purchase of Costa.

This data is also why Dunkin Brands (Nasdaq: DNKN) is Wall Street’s hottest takeover target, sending its stock to all-time highs. Dunkin is a lot more than a donut shop today and has pushed into more upmarket coffee offerings such as cold brew and espresso drinks. It will likely be added to the $250 billion in deals in the coffee business over the past six years.

But what about Coca-Cola? Was the purchase of Costa a smart move?

Coke and Coffee

Not surprisingly, I am once again in disagreement with the Wall Street consensus. They hate the deal and I love it.

Analysts are saying that Coke knows nothing about brick-and-mortar stores even though Coke insists “this is a coffee strategy, not a retail strategy.”

Maybe the analysts are right, but they are ignoring that the entire Costa team is staying in place. When Whitbread bought Costa in 1995 it was a company that was just a small chain of 39 cafes across Britain to today having 2,400 shops in Britain and another 1,400 in more than 30 countries with a brand that is recognized in most parts of the world.

Costa has recently begun its push into China, where it pitches its drinks to Chinese consumers as a luxury treat. It still has only 460 shops there, so the potential for growth is enormous. Starbucks has 600 shops in Shanghai alone.

Costa just did not have the financial firepower for a major push into China, but now with Coke’s financial muscle, it does. It will help too that surveys show Chinese consumers consider Costa to be of higher quality than Starbucks. And the trade war may play right into Costa’s hands if Chinese consumers begin boycotting American products.

And I like the deal for its symmetry. Think about it – Coke started out being served as a flavor of syrup in the soda fountains of little neighborhood stores (drug stores, etc.) in the late 19^th and early 20^th centuries. The soda was mixed by black-tied “soda jerks” behind marble counters – the forerunners of today’s baristas. Then Coke completely moved away from direct contact with consumers…

But now it’s back with Costa’s coffee houses and its baristas. Just for nostalgia’s sake, I hope they succeed. And they might – after all, Amazon had little brick-and-mortar experience before it bought Whole Foods and Apple does have its physical stores. Coke going back to its roots looks like a winner to me.

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.

It was nice to see the New York Times catching up to what I told you months ago here… the headline read ‘Amazon Sets Its Sights on the $88 billion Online Ad Market’. I first brought this to everyone’s attention an article in early June. You can read it here.

So get ready everyone… it looks like Amazon (Nasdaq: AMZN)is getting ready to dominate in another sector of the economy. But this time it is not going after traditional industries such as retailing or logistics or even healthcare.

No, this time it is gunning for the online advertising business that is currently controlled by the duopoly of Google [Alphabet (Nasdaq: GOOG)] and Facebook (Nasdaq: FB). That sets up a battle of the tech titans.

Amazon Advertising

One needs only to look at Amazon’s last earnings report to see that its advertising business is just starting to grow. The company’s CFO, Brian Olsavsky, called Amazon’s ad sales business “a multibillion-dollar program and growing very quickly.” Advertising sales made up the majority of sales in Amazon’s “other” section of their earnings.

The signs were clear to see even a year ago. In October, internet research firm eMarketer forecast Amazon would hit $3.2 billion in net U.S. digital ad revenues in 2019, or 3% of total digital ad spending. That is dwarfed by Google and Facebook, but the trend is there.

Even traditional advertising firms have taken notice. Martin Sorrell, the founder of the world’s largest advertising company WPP, who stepped down in mid-April, in March said he saw Amazon in “head-to-head” competition with Google and Facebook. Sorrell added that WPP had directed $200 million of its clients’ ad budgets to Amazon in 2017 and predicted that number would rise to $300 million in 2018.

“Amazon is coming over the hill. Amazon certainly poses a big threat on search and advertising,” he said, adding that its voice assistant, Alexa, would make it an even stronger competitor.

Sorrell is right because Amazon has a natural advantage over both Google and Facebook. Google only knows what people are searching for and Facebook only knows what you want your ‘friends’ to think you like.

Amazon has actual shoppers purchase data and knows what they need. In other words, Amazon is richer than anyone else as far as purchase and consumer behavior data, especially on their 95 million U.S. Prime members.

 Amazon’s Battle Plan

In order to push its way into a sector that is overwhelmingly controlled by Google and Facebook, Amazon is making use of self-serve programmatic advertising. The company plans to spend the next year aggressively expanding their infrastructure that is hoping will get more brands to purchase ad space on its websites as well as through its ad platform. To help accomplish these goals, it will work with ad-tech companies, digital agencies, and media companies to build platforms that make buying Amazon ads as easy as filling up an online shopping cart.

Amazon is developing a “remarketing” ad type that will recommend products based on consumers’ purchase or search histories. Such ads will appear on several different sites visited by consumers, effectively retargeting and following them around the web and linking them back to Amazon if they click. Such retargeting is especially popular with apparel brands, so the company’s move into this area could prove very appealing  to apparel marketers.

One obvious advantage to these type of ads for Amazon is it gives it an edge while the customer is hunting for the best deal. The ad will remain on the screen while the customer searches for alternatives, and thus get reconsideration before purchase.

Amazon also plans to grow its advertising base by opening access to the Amazon Ad Platform that connects to display and video inventory outside of its own. They will be opening up the ad platform to everyone that has a product on Amazon.

And is undercutting Google on ad-tech fees as it recruits for Amazon Publisher Services, a division offering ad marketplace services that will compete directly with Google’s DoubleClick for Publishers. Google does offer similar ad-bidding technology for publishers, but it takes up to 5% from a deal, however, Amazon is planning not taking any percentage at the moment to people to buy in.

What the Future Holds

Amazon looks to be jumping in to this lucrative business at just the right time. According to eMarketer, by 2021, advertising on websites and mobile devices will account for half of all ad spending in the U.S., capturing greater share than television, radio, newspapers and billboards combined.

In negotiations with advertisers, Amazon bills itself as a better advertising investment than Google’s search engine and Facebook’s social media platform, since people on Amazon are looking to buy. And it does have has an advertising platform no other company can match: a web store selling hundreds of millions of products combined with a streaming entertainment service and a trove of data about customer preferences. Amazon attracts 180 million U.S. visitors each month, most with shopping on their minds. And as more people shop on smartphones, they’re skipping search engines such as Google, with many turning instead to Amazon’s mobile app.

Advertisers are paying attention. Similarly to how major brands pressed their ad agencies a few years ago to devise plans to get the biggest bang for their ad bucks with Google and Facebook, they’re now demanding an “Amazon strategy.” This should not be surprising… China’s e-commerce giant, Alibaba, gets more than half of its revenues from advertising.

In the latest earnings period, the ad business looked to be growing at a 72% annualized clip. Revenues in advertising for 2018 should be about $10 billion, which is about half the size of AWS, Amazon Web Services. Expect it to catch up to AWS in size soon with perhaps even fatter profit margins. Good news for Amazon, but not good for Google and Facebook.

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 

The $5.1 billion deal to buy the Costa Coffee chain by Coca-Cola (NYSE: KO) is just the latest example highlighting the great lengths to which food and drinks companies are trying to keep pace with rapidly changing consumer habits that are upending traditional business models across the sector.

The former owner, Britain’s Whitbread, had said it would spin off Costa, the world’s second largest coffee shop chain after Starbucks. But the price Coke offered for Costa was simply too good to pass up.

For Coca-Cola, the transaction represents a full-fledged leap into the global coffee market, where it has little presence currently. “Hot beverages is one of the few remaining segments of the total beverage landscape where Coca-Cola does not have a global brand,” said James Quincey, president and CEO of Coke. “Costa gives us access to this market through a strong coffee platform.”

This move continues Coke’s process of diversifying away from the fizzy and sugary drinks that made the company famous. These type of drinks have declined in popularity among increasingly health-conscious consumers. The deal is all part of the company’s effort to reposition itself as a “total beverage company”. As Mr. Quincey said, coffee was among the “strongest growing [beverage] categories in the world” and the company was missing out.

As the chart above shows, the potential for growth of coffee beverages versus soft drinks is high. So with Coke now entering the market, it sets up a battle royal for coffee sales between the world’s biggest beverage maker and the other giants in the sector including Starbucks, Nestlé and privately-held JAB Holdings. More on that later.

Consumer Drinks Pressure

Coke’s proposed transaction is just the latest in a series by established consumer brands, which are taking divergent approaches in response to the demand from consumers globally for fresher and healthier products.

Some consumer companies are expanding into territories or products with brighter growth prospects. Coke’s arch-rival PepsiCo recently struck a $3.2 billion deal to buy SodaStream, which makes home carbonation products. This deal came mere days after Coke agreed to buy a minority stake (with a path to full ownership) in BodyArmor, a sports drink maker backed by US basketball star Kobe Bryant.

Coke has struggled for years to loosen the hold of Pepsi’s sports drink business Gatorade with its Powerade drink. But it may have struck gold with BodyArmor. Its products use coconut water, have higher levels of potassium than its competitors, do not use artificial colors, allowing the company to market its products as a healthier alternative to Gatorade and Powerade. Now it will gain access to Coca-Cola’s bottling system, allowing it to increase production.

The research firm Euromonitor said that sports drinks volumes were flat last year in the U.S., as both of the big two brands struggled. The one real exception, according to Euromonitor, was BodyArmor. Analysts with Wells Fargo, relying on Nielsen data, estimated that Body Armor retail sales had climbed 90% over the past year to $288 million. Much of that market share came from Gatorade.

Both Coke and Pepsi are coming under increasing pressure from JAB Holding, a Luxembourg-based investment vehicle backed by the billionaire Reimann family. As part of its international buying spree JAB bought the Keurig Green Mountain coffee business, best known for its single-serve brewing machines, in December 2015 for $13.9 billion. And JAB made a more direct threat to the two incumbents when, in January 2018, it struck a $18.7 billion deal to acquire Dr. Pepper Snapple and combined it with Keurig to create a beverage group with almost $11 billion in annual revenue.

The Steaming Hot Coffee Market

Once you get to the global coffee market, the competition gets even hotter as global food and beverage giant Nestle is a major player. Its recent deals in the space include acquiring the rights to sell Starbucks products and taking a majority stake in roaster Blue Bottle.

According to Euromonitor, the global coffee industry is valued at more than $80 billion, and has been expanding at an annual rate of more than 5%. Here in the United States – the world’s biggest coffee market – most of the growth is coming from a resurgence in the café culture among millennials aged 18 to 34.

According to a recent survey conducted by the National Coffee Association, 15% of millennials had their last cup of coffee in a café and 32% had an espresso-based drink the day before the survey, the highest share for any age group. These are the type of consumers Coke is trying to reach through its purchase of Costa.

This data is also why Dunkin Brands (Nasdaq: DNKN) is Wall Street’s hottest takeover target, sending its stock to all-time highs. Dunkin is a lot more than a donut shop today and has pushed into more upmarket coffee offerings such as cold brew and espresso drinks. It will likely be added to the $250 billion in deals in the coffee business over the past six years.

But what about Coca-Cola? Was the purchase of Costa a smart move?

Coke and Coffee

Not surprisingly, I am once again in disagreement with the Wall Street consensus. They hate the deal and I love it.

Analysts are saying that Coke knows nothing about brick-and-mortar stores even though Coke insists “this is a coffee strategy, not a retail strategy.”

Maybe the analysts are right, but they are ignoring that the entire Costa team is staying in place. When Whitbread bought Costa in 1995 it was a company that was just a small chain of 39 cafes across Britain to today having 2,400 shops in Britain and another 1,400 in more than 30 countries with a brand that is recognized in most parts of the world.

Costa has recently begun its push into China, where it pitches its drinks to Chinese consumers as a luxury treat. It still has only 460 shops there, so the potential for growth is enormous. Starbucks has 600 shops in Shanghai alone.

Costa just did not have the financial firepower for a major push into China, but now with Coke’s financial muscle, it does. It will help too that surveys show Chinese consumers consider Costa to be of higher quality than Starbucks. And the trade war may play right into Costa’s hands if Chinese consumers begin boycotting American products.

And I like the deal for its symmetry. Think about it – Coke started out being served as a flavor of syrup in the soda fountains of little neighborhood stores (drug stores, etc.) in the late 19^th and early 20^th centuries. The soda was mixed by black-tied “soda jerks” behind marble counters – the forerunners of today’s baristas. Then Coke completely moved away from direct contact with consumers…

But now it’s back with Costa’s coffee houses and its baristas. Just for nostalgia’s sake, I hope they succeed. And they might – after all, Amazon had little brick-and-mortar experience before it bought Whole Foods and Apple does have its physical stores. Coke going back to its roots looks like a winner to me.

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

A New York Times (NYT) headline blared, “Too Little Too Late’: Bankruptcy Booms Among Older Americans”. They reference a Consumer Bankruptcy Project (CBP) study, “Graying of U.S. Bankruptcy: Fallout from Life in a Risk Society”:

“For a rapidly growing share of older Americans, traditional ideas about life in retirement are being upended by a dismal reality: bankruptcy.

…. Driving the surge …. is a three-decade shift of financial risk from government and employers to individuals, who are bearing an ever-greater responsibility for their own financial well-being as the social safety net shrinks.”

While the NYT is noted for wrapping selective facts inside an article pushing a political ideology, the study appears well-researched. Look at the source data and form your own conclusions.

How bad is the problem?

The study shows triple-digit gains in bankruptcy for those over 55:

“The number of senior households filing bankruptcy is not negligible. With 800,000 household filings annually, approximately 97,600 (12.2 percent) of those are households headed by seniors. The drivers of these bankruptcies were reported by our respondents. The most pressing was inadequate retirement and employment income.(Emphasis mine)”

In 2013, John Mauldin and Jonathan Tepper authored, “Code Red, How to protect your Savings from the Coming Crisis”. Central banks lowered interest rates to historically low levels (Zero Interest Rate Policy – ZIRP); forcing yield-starved savers into the stock market:Why inadequate income?

“(Fed Chairman) Bernanke openly acknowledges that his low interest-rate policy is designed to get savers and investors to take more chances with riskier investments. The fact that this is precisely the wrong thing for retirees and savers seems to be lost in their pursuit of market and economic gains.” (Emphasis mine)

The CBP weighs in:

“While many Americans confront these risk shifts, they profoundly affect older people….

…. With the 401(k)-style of savings, payout during retirement is not defined or predictable,employees bear all of the market risks, and returns depend on employees’ investment skills.” (Emphasis mine)

Retirees saw their guaranteed, safe income projections fall woefully short. There was zero risk in FDIC insured CDs!

This 2013 New Yorker magazine article, “Shut Up, Savers!” marginalizes the critics of Fed Chairman Ben Bernanke:

“…. to his detractors, Bernanke is guilty of waging a “war on savers”-fleecing people, especially retirees, of hundreds of billions of dollars that they could have earned in interest.

Certainly, it’s not the easiest time to live off interest income. The average rate on a savings account is less than 0.25 percent. Long-term certificates of deposit offer rates well below inflation, and even a ten-year government bond yields less than two percent.”

…. It’s easy to understand why savers feel like collateral damage (Emphasis mine) in the Fed’s fight against recession, but too much sympathy for their plight is dangerous.”

Dr. Ron Paul recently took another look at the economic fallout in, “The Dollar Dilemma: Where To From Here?”

“…. It is true that the rich are getting richer and the middle class is being wiped out. (Emphasis mine) …. The seriousness of the problem, …. explains the anger and frustration the people feel.”

Wiping out the middle class and almost 100,000 bankruptcies in a single year is a heck of a lot of collateral damage!

A second opinion

I reviewed the “Employee Benefit Research Institute 2018 Retirement Confidence Survey”. The EBRI is non-partisan. Retirement confidence is rapidly declining:

Their press release says:

“This year’s Retirement Confidence Survey (RCS) finds …. retiree confidence in having enough money to cover basic expenses and medical expenses has dropped: 80 percent say they are very/somewhat confident about covering basic expenses this year compared to 85 percent in 2017; and 70 percent say they are very/somewhat confident about covering medical expenses this year vs. 77 percent in 2017.

The EBRI discusses how important Defined Contribution (DC) plans, like a 401(k), are for retiree confidence.

“Those with a defined contribution (DC) plan like a 401(k) are far more likely to say they are confident in their ability to live comfortably in retirement: 76 percent of workers with a DC plan are at least somewhat confident in their ability to live comfortably in retirement versus 46 percent of those without a DC plan.

…. However, the data suggests many plan participants don’t know what to do with their DC plan assets at retirement.” (Emphasis Mine)

Here is what the New Yorker wants us to shut up about….

Ten years ago the government bailed out the banks at the expense of seniors and savers. Social security benefits won’t keep up with inflation while medical costs rise by double digits.Americans are problem solvers and will deal with it, but I hope they never shut up.

While Dr. Paul is correct, there is a lot of anger and frustration, it’s foolhardy to expect the government to fix anything.

What can WE do?

Two major factors affect us all. Even though they may not push us into bankruptcy, they should be understood and dealt with as best you can.

Debt is the enemy.

CBP weighs in:

…. 71.6 percent either “very much” or “somewhat” agreed that they filed because of the stress of dealing with debt collectors. Collectors called their homes, their workplace, their families, and knocked on their doors.

They quoted several respondents:

“All things went up in price. Retirement never went up. Had a part-time job that was helping to meet monthly payments.House payment kept going up.” ….

“Mismanaged my retirement savings…. Tried to restructure my debts but creditors refused. Unable to find suitable employment to pay my credit cards.” ….

“My wife developed medical problems and had to leave her job…. About two years later, I developed medical problems and was not able to continue working. We …. simply could not handle the debt load. The constant calls from bill collectors forced us to contact an attorney for help.”

The EBRI also discusses debt:

It appears that the majority of workers and retirees are not concerned about debt impacting their ability to save or retire until they suffer an income loss while the debts remain.

Dump the debt! Save your line of credit for real emergencies. Downsize and do what it takes to be debt free!

The debt rule is simple, “get out, stay out, and don’t ever come back!” I’ve never met anyone who lamented being debt free.

CBP weighs in heavily on medical costs:Medical Costs

“Despite the widespread belief that Medicare meets health needs of older Americans, …. it is utterly inadequate. Out-of-pocket spending among older Americans with Medicare comprises about 20 percent of their income, and the estimated total of all noncovered medical expenses for a 65-year-old retired couple during their retirement years is $200,000….

…. Respondents were asked to list the single most important thing that they or their family members were unable to afford in the year before their bankruptcies. Over half of older filers (52 percent) who responded indicated that the single most important thing they had to forego was related to medical care-surgeries, doctor visits, prescriptions, dental care, and health/supplemental insurance. These responses continue to suggest that their health care coverage is inadequate.”

EBRI shows the public has little confidence in the government providing medical care, social security – or doing the right thing:

What is the solution?

The NYT and CBP pushed for government-provided funded health care for all.

I prefer to avoid partisan politics; the entire political class governs against the will of the majority.

When I was with Casey Research I spent countless hours researching government health care. I interviewed doctors who practiced worldwide. I spoke with experts and a member of Congress who was on the committee that drafted Obamacare.

I’ve concluded:

• Government sponsored health care sounds good, but in practice it is terrible.

• While the motives of the health care workers may be pure, quality health care deteriorates. If the VA had to care for all Americans – do you think their quality would improve?

• Government health care is fiscally impossible. Health care costs in the UK are bankrupting the country.

• The underlying (unstated) motive of government health care is to ration care for seniors. A senior congressman told me the basis for care was the value of the citizen to society. Seniors could eventually expect end of life counseling as opposed to health care.

• Most countries have a two-tiered system; one for the masses and one for the elite who can afford to pay out of pocket. Many Canadians come to the US for treatment that they cannot get in Canada. I spent an hour with the president of a big-name hospital in central America. They were gearing up for hundreds of US patients once government medical is fully implemented.

• Expect social engineering. Politicos always pander for votes. I’m confident the majority of US citizens oppose paying for health care for those in the country illegally.

Buy good insurance! Medicare by itself will not provide quality coverage. The old adage, “you get what you pay for” applies to insurance premiums also. Many who bought inexpensive coverage did not realize it was inadequate until it was too late.

Those filing for bankruptcy are the tip of the iceberg. No one wants to live out their golden years constantly worrying about money. Get out of debt, save your money, learn how to invest wisely and buy good insurance.

And most of all – don’t ever be bullied into shutting up by anyone pushing a political agenda, whatever it may be.

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As editor of Growth Stock Advisor, I’m always on the lookout for disruptors… trends that will change forever the way things are done. And of course, the companies that are at the forefront of the disruption and that will benefit from it.

One such disruption is occurring right now in my former field of employment – the brokerage industry and commission-free trading. It is perhaps apropos that the first disruptor in the sector is a company called Robinhood, which sent shockwaves through the brokerage industry in 2015 when it launched, offering free stock trades.

Robinhood (and others) to the Rescue with Zero Commissions

And like the hero of English folklore, this stock-trading app was designed to support the little guy by providing commission-free trading to individual investors. “We didn’t build Robinhood to make the rich people richer,” says Baiju Bhatt, co-founder and co-chief executive, to the Financial Times, “If they think it is useful that is wonderful, but the mission is to help the everyman, the rest of us, to be part of the financial system.”

The company is still growing rapidly. It added about 3 million accounts over the past year, bringing its total number of customers to 5 million, which is more than twice the big three incumbent discount brokerage firms combined. It remains the only venue that offers trading on stocks, cryptocurrencies and options all in one place.

The success of Robinhood is well known in the industry – it is now valued as a tech ‘unicorn’. That is, the private company is valued at more than a billion dollars. In fact, at its latest funding round, it was valued at $5.6 billion. But its very success has attracted the attention of the competition…

And you can’t get any bigger in the U.S. financial industry than JPMorgan (NYSE: JPM). It is launching its own low-cost digital trading platform, throwing down the gauntlet to online brokerages such as my former employer, CharlesSchwab.

You Invest, offers clients 100 free trades in stocks and exchange traded funds in their first year and the opportunity to earn unlimited free trading going forward. However, a minimum balance of $15,000 is required to maintain free trades beyond 100 per year. That may exclude many of the investors it is trying to pull away from Robinhood, which has no minimum balance required.

Robinhood Strikes Again

What really caught my attention is how Robinhood immediately responded to this challenge. It made the biggest addition to the number of stocks eligible for no commission since its launch three years ago.

But it is doing so with a twist that I love – Robinhood is adding 250 ADRs (American depositary receipts of companies from Japan, China, Germany, the U.K. and elsewhere. ADRs of companies from France will be added in the coming months. ADRs are stocks of foreign companies that trade and settle in the U.S. market in dollars, allowing investors to avoid having to transact in a foreign currency.

“We looked at what customers were searching for and not getting,” Robinhood co-founder and CEO Vlad Tenev told CNBC. “It allows customers to get some exposure outside of the U.S.” The company discovered its users wanted access to global stocks by looking at its own search data. Robinhood’s staff has access to what people are typing into the app’s search and looking to trade. Names such as Nintendo, Adidas, BMW and Heineken continued to pop up. The company used similar reasoning in February when it decided to add cryptocurrency trading after users repeatedly searched for bitcoin.

As someone that owns a good number of foreign stocks personally, this is fantastic – it caused me to open an account at Robinhood to take advantage of the zero commissions. This move has just made investing in the top overseas stocks easy, safe, and cost-efficient. While there are hundreds of quality foreign companies to choose from on Robinhood’s platform, let me briefly highlight just three…

Adidas

One such blue chip you can buy now for no commission at Robinhood is the world’s number two sportswear maker, Adidas (OTC: ADDYY), which is catching up to Nike.

The company reported an excellent set of second quarter results. It increased quarterly sales 4.4% year-on-year to €5.3 billion, compared with €5.2 billion expected by analysts. With the effect of foreign exchange movements stripped out, the increase was a very impressive 10%. Operating profit in the three months to June was 17.2% higher than a year ago and at €592 million beat analyst expectations of €546 million. Adidas said it is on track to meet its full-year guidance of 10% revenue growth excluding foreign exchange movements, as sales in the two key markets of North America and Asia are increasing at double-digit rates.

Adidas has stayed on top of fashion more than most of its peers. It nicely exploited the “athleisure” trend and is doing well again with its clunky, retro-inspired trainers popular with millennials called “Dad shoes”. Innovation also limits the amount of inventory that ends up being sold cheaply on Amazon. At Adidas, 80% of sales are generated by products that are less than a year old. That gives it strong control over pricing.

And while Nike’s operating margins at over 12% are still nearly two points higher than Adidas, the German group is catching up fast, thanks to economies of scale from growing sales, higher price points and growing online sales. Its margins should reach record heights this year.

More: Buy These 5 High-Yielders from Someplace You Wouldn’t Expect

Shiseido

Another very high quality company that is doing very well is Asia’s largest cosmetics company, Japan’s Shiseido (OTC: SSDOY).

A macrotrend that has gone almost unnoticed by U.S. investors is growth in the use of cosmetics by China’s millennial generation, which has benefited a number of companies including Shiseido, whose ADR has nearly doubled over the past year.

One area of growth for the company is online sales. It expects e-commerce to account for 15% of its global sales by 2020 compared to just 8% last year. The key driver will be China, where Shiseido expects the e-commerce segment to rise by 40%.

Tourism is another bright spot for the company. In 2017, Chinese visitors to Japan hit a record of about 7.35 million, a 15% increase over the previous year. Cosmetics are increasingly popular as souvenirs, ranking alongside cameras and watches. It is believed that about 80% of Chinese tourists purchase beauty products in Japan.

Finally, it is also expanding in China itself. Shiseido sells its biggest brand through about 270 stores in China. During 2018, it has started opening spaces for people to test products, assisted in some instances by beauty consultants. The company aims to have the spaces installed in all their stores by 2020. This is similar to its stores in Japan where Shiseido provides detailed consultations that are customized for individual skin types.

CSL Ltd

For those of you looking for a biotech company, there is Australia’s CSL Limited (OTC: CSLLY), whose stock is hitting record highs nearly every day. In May, the company raised its guidance for 2018 by an amount that surprised the market.

It is a major company with a $45 billion market capitalization, nearly $7 billion in revenues, and last year had net profit of $1.3 billion. CSL does business in over 60 countries, with major facilities in several countries including the United States. It has been around for more than a century and has several core focuses – influenza vaccines, blood plasma derivatives, and rare and serious diseases.

It is one of the biggest and fastest-growing protein-based biotech firms. Its drugs are used to treat bleeding disorders, immunodeficiencies, hereditary angioedema, Alpha-1 antitrypsin deficiency and neurological disorders.

I urge all of you to look into Robinhood and especially its addition of ADRs. Drop me a line if do open an account there or if you are interested in hearing more about ADRs.

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 

The Nasdaq was stymied on Wednesday as Congressional leaders grilled Facebook (FB) COO Sheryl Sandberg and Twitter (TWTR) CEO Jack Dorsey. “We were too slow to spot this and too slow to act,” Sandberg said of Facebook’s failure to identify fraudulent accounts ahead of the 2016 elections. With mid-term elections a mere two months away the social media companies did not convince the hearing members they had adequately addressed the problem. This prompted comments from the committee that Congressional action may be necessary. That did not sit well with the market, and the stocks of both companies, as well as Alphabet (GOOG), led the Nasdaq lower.

On Thursday Broadcom (AVGO) will step in front of the investing community and report earnings. The company’s stock has been guided by merger news for most of 2018. The stock started its move downward when it was denied in its bid to take over Qualcomm (QCOM) earlier this year. The subsequent announcement of a takeover of CA Technologies (CA) has resulted in a 14% decline for the stock and made it the worst major chip company in 2018. Analysts will be looking for information on the merger, and how management plans to optimize the combination. Also reporting on Thursday is value retailer Five Below (FIVE). The company’s stock has been very kind to investors the past year, rising almost 150% and far outpacing the competition. Analysts expect sales to increase 18% year-over-year, and are looking for $.38 per share.

The economic reports for both Thursday and Friday are all about jobs. Thursday we’ll get the Challenger Job-Cut Report, the ADP Employment Report and jobless claims. ADP is hoping to do a better job on Thursday when it reports projected employment numbers. The July estimate, at 219,000, was much higher than the actual numbers, missing the final government reported number by almost 50,000. The August projections are for the number to come in at a more modest 182,000. Friday the employment situation numbers are released with the unemployment rate, and payroll and wage gains. The unemployment rate is expected to move down slightly by .1% to 3.8%. Analysts will be focusing on wage gains to gauge any wage pressure impact on the Fed and its plans to gradually raise interest rates.

The first Friday of September has a limited earnings lineup, with only three companies scheduled to report. Genesco (GCO), Shiloh Industries (SHLO) and Tsakos Energy Navigation (TNP) will share the stage. Genesco is looking for a turnaround from last quarter. CEO Robert Dennis reported improved results from Journeys and Johnston & Murphy, but the gains were offset in poor performance from at Schuh and Lids. Analysts want to know if the underperforming businesses showed signs of improvement this quarter. Investors will be interested to hear how the new CFO of Shiloh Industries is taking to the position. Lillian Etzkorn

A few weeks ago I shared with you an article on the generous dividend stream coming from Asian companies. However, the growth in dividends is a global phenomena, with the actual rise in dividend payments elsewhere outpacing the dividend raises here in the U.S.

Global dividends reached record levels in the second quarter of 2018, reflecting strong earnings and economic growth. Headline dividends jumped 12.9% in the second quarter of 2018 compared with the same period last year to reach a record $497.4 billion, according to the Janus Henderson Global Dividend Index. The Janus Henderson Global Dividend Index ended the quarter at a new record reading of 182.0, meaning that global dividends have risen by more than 80% since 2009.

Here are some highlights, courtesy of data from Janus Henderson:

• 12 countries saw record payouts including Japan, and the United States. Most of the records though occurred in Europe, where total dividend payouts hit record levels in France, Germany, Switzerland, the Netherlands, Belgium, Denmark and Ireland, said Janus Henderson.
• Underlying growth of dividends was 9.5%, the fastest pace in three years.
• Forecast for the underlying growth rate of dividends going forward was upgraded by Janus Henderson from 6.0% to 7.4%.

It’s interesting to note that, despite dividend payouts in the U.S. hitting a record $117.1 billion in the quarter, the growth rate of dividend payments was less than elsewhere in the world, with a rise of only 4.5% in headline terms. European companies paid a record $176.5 billion in dividends, an 18.7% jump year-on-year. Asia’s dividends, excluding Japan, jumped 29.2 % in headline terms to $42.8 billion, or 13.5% in underlying terms. Japanese dividends rose 14.2% in headline terms.

Related: Buy This Profitable Tech Stock Beating the FAANGs

How to Invest for Global Dividends

And as I told you in my article on Asian dividends, this region was a standout in the growth of underlying dividends according to Janus Henderson. Here are just a few examples. . .

In Singapore, Southeast Asia’s largest bank DBS Group Holdings (OTC: DBSDY) took advantage of higher profits and surplus capital to make a very large increase in its dividend and accounted for half the growth in dividends from the country. In Hong Kong, China Mobile (NYSE: CHL) made the biggest contribution to growth. And in mainland China, China’s Sinopec, the world’s largest oil refiner almost tripled its dividend thanks to improved refining margins and a better sales mix. Sinopec is also known as China Petroleum & Chemical (NYSE: SNP).

Of course, if you opt to buy individual companies, you run the risk of losses in the underlying stock. Out of three stocks mentioned above, two – DBS and China Mobile are down on the year. So in this case, this is one of the few times I would actually go with exchange traded funds (ETFs) to alleviate somewhat the risk of losses.

One excellent option to consider among international dividend ETFs is the iShares International Select Dividend ETF (CBOE: IDV). This ETF’s portfolio consists of companies taken from developed countries in Europe, Pacific, Asia and Canada. Securities must also meet requirements on dividend payout consistency and growth metrics, along with profitability and minimum liquidity levels. The fund holdings are then weighted by dividend yield.

The majority of the holdings seem to be in three sectors – drugs, such as AstraZeneca, oil, such as Royal Dutch Shell; financials, such as Macquarie Bank. IDV is down 1.85% over the past year (due likely to a strong dollar), but does have a 4.64% 12-month yield.

Another good choice is the Legg Mason International Low Volatility High Dividend ETF (CBOE: LVHI). The underlying index the ETF tracks seeks to provide more stable income through investments in stocks of profitable companies in developed markets outside of the U.S. with relatively high dividend yields or anticipated dividend yields and lower price and earnings volatility- while mitigating exposure to exchange-rate fluctuations between the dollar and other international currencies.

This fund also has exposure to drug companies, banks and oil companies. But it also owns telecom firms such as Japan’s NTT Docomo and Britain’s BT Group. LVHI is down 2.5% over the last year, but does have a 4.34% yield.

Finally, there is a fund I like because it excludes financial stocks – the WisdomTree International Dividend ex-Financials Fund (NYSE: DOO). It is based on an index that includes high-dividend yielding international stocks outside the financial sector, which is subject to interest rate risk.

The fund has a lot of telecom and utility firms in the portfolio such as Vodaphone and Spain’s Endesa. DOO is up 1.5% over the past year and has a dividend yield of 3.63%.

There are numerous other international dividend ETFs, of course. One common factor you will find is that a strong U.S. dollar (as we’ve had the past few months) will adversely affect the price of the stocks in the ETF. However, when the dollar inevitably turns the other direction, you will find a strong tailwind at your back. In other words, a good dividend yield and capital appreciation.

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.