Technology

3 Breakout Stocks to Spice Up Your Portfolio

Source: Shutterstock

The pace of technology is breathtaking. Just some of the trends include cloud computing, AI (Artificial Intelligence), machine learning and the IoT (Internet of Things). So for investors, there are many opportunities.

But then again, breakout stocks are usually volatile — and expensive. It can be tough to make a purchase decision when the returns have already been over triple digits for the past year! And because the expectations are at lofty levels, it does not take much to deflate the stock when there is some bad news.

This is why investors need to be cautious with breakout stocks. Basically, they really should only be a small portion of your portfolio.

So then, what are some companies to consider that could spice up your portfolio? Here’s a look at three:

Breakout Stocks to Buy: Okta (OKTA)

Breakout Stocks To Buy: Okta (OKTA)

Source: Shutterstock

Okta (NASDAQ:OKTA) is a next-generation cloud operator that develops identity services for enterprises. For the most part, the focus is on helping to secure access to critical information. The platform has more than 5,500 pre-built integrations and over 5,100 customers.

Okta has also been seeing a strong acceleration in its growth. Just look at the latest quarter, as the company pummeled Wall Street expectations. Revenues soared by 57% to $94.6 million, compared to the consensus forecasts of $84.8 million. The company also raised its full-year guidance to $372 million to $375, up from the prior forecast of $353 million to $357 million.

A key is that the company has been getting much more traction with large customers. During the past year, there was a 55% increase in the number of customers that generate subscriptions of $100,000 or more. This is all part of the so-called “land and expand” strategy.

But it does look like the opportunity for Okta is still in the early phases. According to CEO Todd McKinnon, during the latest earnings call: “It starts with the significant market tailwind in our favor. Every organization is moving to the cloud. Every company has to become a technology company and everyone is worried about security. We are seeing identity become mainstream as organizations recognize the critical role that identity plays in their environment.”

Breakout Stocks to Buy: Advanced Micro Devices (AMD)

Breakout Stocks To Buy: Advanced Micro Devices (AMD)

Source: Shutterstock

Despite a rough ride today, the turnaround of Advanced Micro Devices (NASDADQ:AMD) is starting to show big-time results. CEO Lisa Su has done an amazing job of focusing on the major opportunities while also being disciplined with the bottom line.

Even though AMD has been around since the late 1960’s, the company now looks more like a scrappy startup. In the most recent quarter, revenues jumped by 53% to $1.76 billion.

As for the main driver, it is the enormous datacenter market. Keep in mind that AMD’s EPYC server processor has gotten adoption from companies like Cisco (NASDAQ:CSCO) and HP Enterprise (NYSE:HPE). It also helps that rival Intel (NASDAQ:INTC) has stumbled, as it has been slow to introduce new chipsets. The company currently has about 99% of the market for datacenters.

In other words, it is a very juicy target for AMD.

Wall Street is definitely getting excited, with multiple upgrades. For example, FBN Securities analyst Shebly Seyrafi notes that the server-chip market is about $16 billion and that the EPYC chip is poised for strong gains.

Breakout Stocks to Buy: Cloudera (CLDR)

Breakout Stocks to Buy: Cloudera (CLDR)

Source: Shutterstock

Back in early April, big data company Cloudera (NYSE:CLDR) stock got crushed, plunging by more than 40%. The company whiffed on its earnings as the growth engine stalled.

Yet management at CLDR took swift action, especially with the restructuring the sales team. And it looks like things are getting back on track. In the second quarter, revenues rose by 23% to $110.3 million, while the Street was looking for $107.7 million. The 8-cent loss was also much better than the consensus forecast of 15 cents. What’s more, CLDR increased its full-year guidance to $440 million to $450 million, up from $435 million to $445 million.

The company certainly faces tough competition from companies like Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL). But the market size is large enough for multiple players. Besides, CLDR’s strategy of disrupting the traditional data warehousing market appears to be spot-on, as functions like machine learning, AI (Artificial Intelligence) and analytics move towards cloud platforms.

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Dividends

2 Dangerous Double-Digit Dividends to Sell NOW

One of the best characteristics about dividends is they usually offer a consistent, preferably growing stream of income. However, investors can easily fall into the trap of becoming complacent that future payments will continue to flow in, even when the business isn’t generating enough cash to fund the dividend.

The higher the yield being offered generally means the riskier the dividend is and sometimes losses can outweigh the expected income. For example, Dynagas LNG Partners (DLNG) cut its 16% yield back in April and shares are down 24% since.

With government bonds paying around 2% to 3%, dividends above 10% need to be scrutinized closely and I’ve identified two that are in danger of disappearing.

Dangerous Dividend No. 1: Legacy Investments Could Smother the Dividend

Blackrock Capital Investment (BKCC) is a business development company (BDC) that is trading below its net asset value, which generally signals a potential buying opportunity. That said, the company’s portfolio includes legacy investments that are a wet blanket and could smother the 11.5% dividend yield.

Blackrock Capital generated net operating income (NOI) of just $0.16 a share in the second quarter, which was not enough to cover the quarterly dividend of $0.18. In fact, management has failed to generate enough NOI to pay the dividend four of the past five quarters.

The company’s net asset value actually fell during the period, as management had to write down legacy investments in the industrials, insurance and metals businesses.

Another red flag for Blackrock Capital is the current leadership vacuum in the C-suite. The company has been without a full time CEO since April and its interim CFO has been “filling in” for 11 months now.

Blackrock Capital’s bonds are currently rated BBB- by the major agencies, which is last level before reaching junk status. Debt investors will demand their interest before any dividends are paid and the next management team may have to sacrifice its payout if push comes to shove.

Dangerous Dividend No. 2: Feeling the Margin Squeeze

MFA Financial (MFA) is a real estate investment trust (REIT) that invests in mortgage securities. Like most others in the financial world, the company is feeling the squeeze of the flattening yield curve.

Simply put, mortgage REITs borrow at short-term interest rates and reinvest the funds into higher-yielding mortgage instruments. It’s no surprise that the Fed has been steadily increasing short-term rates, while yields on long bonds have remained stubbornly low, as far as MFA Financial is concerned.

The company earned $0.17 a share in the second quarter, aided by $0.02 of investment gains. Either way you slice it, management didn’t cover the quarterly dividend of $0.20. That’s the second time in the past four quarters MFA Financial has failed to earn enough to support the payout.

Not only is the yield curve working against the company’s favor, as evidenced by the 18% year-over-year revenue decline last quarter, but management also reported higher operating expenses in the period. In my experience, a stock that regularly under-earns its dividend will struggle to sustain the payout for more than a year.

Replace These Dividend Disasters in the Making with 7 Contrarian High-Yielders

Chasing double-digit yields is risky business. The investing graveyard is littered with dividend promises left unfulfilled when the cash was no longer flowing in to sustain these lofty payouts.

A stock like Dynagas or these two potential time bombs can spell disaster for your portfolio, especially when in or nearing retirement. Not only might you have to forego some much-needed dividend income, but you could also potentially lose your hard-earned nest egg.

The good news is: there’s a better way. My colleague Brett Owens has created an “8% No-Withdrawal Portfolio” that generates steady income and impressive capital gains.

Whether you’re already retired, or looking to augment your paycheck with the passive income that dividends afford, you no longer have to choose between measly 2% to 3% yields from dividend “aristocrats”, government-secured interest payments that barely keep up with inflation and dicey double-digit dividends.

Wall Street has tried to address this issue with structured products, such as single premium immediate annuities (SPIAs). But just like the casinos don’t pay for all the glitz and glamour because gamblers usually win, the big financial service firms charge hefty fees to provide you with that steady income.

Instead, Brett’s system could hand you $40,000 a year on every $500,000 invested with under-appreciated income plays like:

  • Closed-End Funds (CEFs)- We’ll share our top three CEF picks with you, each of which pay a monthly dividend. Many of these trade at a discount to net asset value; but unlike Blackrock Capital, actually can afford to pay their dividends.
  • Preferred Stock- Brett lets you know two of the best active managers in this space to invest alongside with.
  • Recession-Proof REITs- discover two REITs that actually benefit from higher interest rates; rather than being crippled by the Fed, like MFA Financial.

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Source: Contrarian Outlook 

Market Preview

Market Preview: Market Shrugs Off China Trade Posturing, Earnings from Oracle and Fedex Monday

Not even the announcement by President Trump that he is ready to levy tariffs on $200B of Chinese goods could keep the market down for long Friday. Maybe the market is catching on to the President’s hard-nosed negotiation style which has resulted in a new deal with Mexico and has Canada at the table? If the Chinese agree to the high level talks the administration has proposed, the market may take it as a green light that a deal will be reached. But, if they push back over the weekend, and return the tough stance with one of their own, investors could interpret it as going too far. Either way, all eyes have turned back to monitoring the proposed trade talks, and their direction is likely to drive market sentiment short term.

Two heavyweights, both of which stand to be impacted by trade talks, report on Monday. Oracle (ORCL) is in the midst of a business model change, and the market did not take kindly to transition problems it announced last quarter. The stock has since recovered, but analysts will expect more positive progress in the move to the cloud and Oracle’s new subscription model. Also reporting on Monday is Fedex (FDX). The package delivery company also took a beating after it’s last earnings report, but like ORCL has recovered much of that ground. Investors will be looking closely at the Fedex numbers to see if they indicate a cooling economy, or if competition from UPS, and Amazon’s growing delivery service, are eating into profits.

Monday we’ll get a look at the Empire State Manufacturing Survey. Analysts will chew on the number more than usual, as it’s the only economic release on Monday. The survey of over 200 executives in New York State provides both numbers from the past month, as well as an outlook on what is coming in the next six months. The rest of the week has Redbook retail numbers, and the housing market index on Tuesday. Wednesday’s focus will be on housing, as we get mortgage applications and housing starts. Thursday is the busiest day of the week with jobless claims, the Philly Fed Outlook, existing home sales, leading indicators, and the EIA Nat Gas Report. Friday wraps up the week with PMI flash numbers and the Baker-Hughes Rig Count Report.

While the onslaught of earnings season has waned, there are still some large market moving companies reporting next week. Tuesday investors will examine numbers from General Mills (GIS) and Autozone (AZO). Wednesday we’ll see software maker Red Hat (RHT) report, along with $15B Copart (CPRT).Thursday, Micron (MU), which is trading near it’s lows for the year, will report. The semiconductor provider may have a comment on the potential tariff dispute, and how it is projected to impact future earnings. Also reporting Thursday is Darden Restaurants (DRI) and Thor Industries (THO). Currently the slate is clean for Friday of next week.

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Uncategorized

Wall Street’s Hottest Takeover Target is Brewing Double Digit Gains

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 19th and early 20th 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.

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Pot Stocks

3 Marijuana Penny Stocks That Could Make You Rich

By investing in marijuana penny stocks now, you’re claiming your piece of what some are calling the new “gold rush.”

Legal marijuana sales in North America totaled $10 billion in 2017, and that’s expected to skyrocket 145% by 2021.

By now, everyone knows the dangers of investing in pot penny stocks. You should never invest what you can’t afford to lose.

But because the share price for one of these marijuana penny stocks is expected to climb over 300%, we had to make sure you saw this list today…

Marijuana Penny Stocks to Watch, No. 3: Easton Pharmaceuticals Inc.

Easton Pharmaceuticals Inc. (OTCMKTS: EAPH) is known for making motion-sickness gel Nauseasol and anti-aging wrinkle cream Skin Renou HA.

Now it’s getting into the cannabis industry…

According to a 2017 report from Benzinga, Easton is part of a $1.3 million cannabis business deal with a Canada-based company, the Alliance Group. It’s already advanced the company $575,000. When the deal is final, Easton will receive a stake in 45 acres of a 135-acre parcel of land used for cannabis cultivation and production.

Until money is generated from the cannabis crops, Easton will receive 50% of Alliance’s revenue from its other businesses.

NINE LITTLE WORDS that could make you up to $1 million richer this election year. Click here…

It’s unclear if Easton will use the cannabis for its own business or just sell it to other pharmaceutical companies.

However, with Canada ready to completely legalize marijuana by Oct. 17, there should be increased demand from pharmaceutical and recreational companies to buy cannabis.

Over the last 52 weeks, the EAPH stock price has traded between $0.01 and $0.03 per share. Currently, the EAPH stock price trades at $0.01 per share.

The next marijuana stock on our list is creating a cannabis advertising solution for the $10 billion legal North American industry…

Marijuana Penny Stocks to Watch, No. 2: MCig Inc.

MCig Inc. (OTCMKTS: MCIG) is a full-service cannabis company that offers everything from greenhouse construction to production packaging.

And it’s now trying to capitalize on its reach throughout the marijuana industry with an online ad network…

On Oct. 10, 2017, the company announced the launch of its new cannabis online ad network, eHESIVE. Through the network, mCig will offer online publishers and advertisers a platform to target cannabis users.

This is a big deal for marijuana companies…

Cannabis companies can’t advertise on Facebook Inc. (Nasdaq: FB) or Google.

And because Facebook has over 2 billion monthly active users and over 77% of global Internet searches are made on Google, these marijuana businesses are left at a disadvantage when it comes to reaching new customers.

The eHESIVE platform solves this problem by allowing marijuana businesses to advertise on its platform and reach new customers. And the company is extremely optimistic about its profit potential.

“DoubleClick, an ad network that survived the dot-com crash, was acquired by Google for $3.1 billion. As mCig develops its market share early in the game, the company also expects its advertising segment to also reach a significant valuation,” a 2017 MarijuanaStocks.com report said.

Over the last 52 weeks, the mCig stock price has traded at a low of $0.12 per share and a high of $0.42 per share.

Today (Sept. 13), the mCig stock price opened at $0.26 per share.

But as the company grows eHESIVE, it should increase its revenue and attract more investors, potentially sending the stock price higher.

“EHESIVE is the enterprise digital marketing solution I wish we had when mCig entered the cannabis industry,” mCig CEO Paul Rosenberg said, according to MarijuanaStocks.com.

And while mCig is certainly a marijuana stock to watch, the stock price of this next company is expected to go absolutely vertical in the next 12 months.

One year from now, shareholders could be smiling at their 324% return…

Marijuana Penny Stocks to Watch, No. 1: 22nd Century Group Inc.

22nd Century Group Inc. (NYSEAmerican: XXII) is a plant-biotech company known for its ability to regulate the level of nicotine in plants with advanced engineering technology. XXII grows tobacco with up to 97% less nicotine than conventional tobacco, according to its website.

Smokers are looking for reduced-risk tobacco products, which has made the U.S. e-cigarette industry worth $2.9 billion in 2017.

And with the total U.S. tobacco market worth $120 billion in 2018, it’s a profitable industry.

But in addition to tobacco, 22nd Century is using its advanced tech in the cannabis market…

Currently, the presence of THC (a psychoactive constituent of cannabis) in crops is one of the biggest challenges for hemp farmers. Hemp crops containing above 0.3% THC are required by U.S. law to be destroyed.

22nd Century is currently developing industrial hemp plants that contain zero THC.

Through its subsidiary, Botanical Genetics LLC, XXII is also working on optimizing hemp for various climates around the world.

By 2025, the global hemp market is expected to generate $10.6 billion in sales, according to Grand View Research Inc.

Today the XXII stock price opened at $2.71 per share. In the next 12 months, global investment bank Chardan expects the XXII stock price to climb to $11.50 per share.

That’s a potential 324% gain in a year.

But that’s not the only profit opportunity in the cannabis market.

This election year, four cannabis stocks are potentially destined to soar up to 1,000%…

In the election year of 2012, marijuana stocks started rare gains of as much as 3,240%.

In 2014, they started producing up to 4,606% profits.

In 2016, they began rare climbs of 6,074% and more.

How much richer could select cannabis stocks make YOU in the election year of 2018?

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Dividends

Earn $40K in Dividends on $500K? My 8-Step Plan to 8% Yields

Even with the 10-year Treasury “rallying” of late, it still pays just 2.9%. Put a million bucks in T-Bills, and you’re banking $29,000 per year. Barely above poverty levels!

Hence the appeal of closed-end funds (CEFs), which often pay 8% or better. That’s the difference between a paltry minimum-wage income of $29,000 on a million saved or a respectable $80,000 annually.

And if you’re smart about your CEF purchases, you can even buy them at discounts and snare some price upside to boot!

Here’s why: CEFs (unlike their ETF and mutual fund cousins) have fixed pools of shares. Meanwhile their prices trade up and down like stocks – which means these funds can sometimes trade at a discount to the value of their underlying assets!

And even though stocks-at-large are expensive today, this rising-rate (ironically) environment has income seekers scared of CEFs. Many of my readers have actually asked me if they should bail on our high paying vehicles. The financial media is in their heads, and they’re concerned that their funds are suddenly going to drop in price.

Please, don’t toss yourself into poverty by following this misguided herd!

With the markets in flux, we should review the principles of successful CEF investing. They are more nuanced than classic stock picking, because we’re analyzing managers, strategies and holdings versus simple businesses models. After all, for lazy investors, it’s easier to count on dividends via AT&T’s (T) declining subscriptions than it is to determine how much income for payouts Cohen & Steers’ Infrastructure Fund (UTF) has!

(The answer? Plenty. UTF not only pays 8% today, but the fund has raised its payout four of the last five years.)

Step #1: Be Careful With Price Charts

PIMCO’s Dynamic Income Fund (PDI) has been a great performer since its inception almost five years ago – but it’s price chart understates its brilliance:

Looks Like Pedestrian 33% Gains…

… Until You Add the Payouts Back for +192%!

Make sure the chart you’re reading includes dividends paid (so that it reflects total returns).

Step #2: Demand Alpha

Past performance can be an educational indicator about the quality of the management team and its strategy. PDI has had the benefit of the brightest bond minds on the planet calling the shots (from “Bond King” Bill Gross to current superstar Dan Ivascyn) and it delivered 192% total returns over the last six years, with most of these coming in the form of cash payouts.

Meanwhile Alpine’s Global Dynamic Dividend Fund (AGD) has delivered the worst of all worlds to dividend investors. It crashed harder than the broader markets in 2008, then provided almost no rebound as stocks themselves bounced back.

Dynamic dividends? Not here – this dog is still down 18% over the last eleven years!

More Downside, None of the Upside

Don’t be fooled by the siren song of its fat 7.6% current yield. Which brings me to our next point…

Step #3: Check Every Yield’s Back Story

Some funds pay big distributions that look great – but they’re not sustainable. However they continue to attract new (sucker) investors because they are able to fund their payouts – they just happen to shed their net asset value (NAV) at a similar pace!

For example, here are three more dogs that have grinded sideways or worse over the last three years (even when accounting for dividends paid) as the S&P 500 has soared:

Big Yields, But Lackluster Returns

Step #4: Know What’s Funding Your Distributions

A closed-end fund can pay you from some combination of:

  1. Investment income,
  2. Capital gains, and/or
  3. Return of capital.

Of the three, investment income is preferable because it’s usually the most reliable. Many CEFs pay monthly distributions, so it’s best if they match up their payouts with steady income streams themselves.

Capital gains from rising bond or stock prices can further boost distributions. But they are at risk of disappearing if the markets turn unfavorably.

Finally, everyone assumes return of capital is bad, because it’s simply shipping your money back to you. But as my colleague, the “CEF professor” Michael Foster, recently wrote, it’s often very good for investors.

What’s more, if the fund trades at a sizeable discount, this can actually be a savvy way to kick start the closing of a discount window. More on this shortly.

Step #5: Don’t Be Cheap About Fees

Most investors are conditioned by their experience with mutual funds and ETFs to search out the lowest fees, almost to a fault. This makes sense for investment vehicles that are roughly going to perform in-line with the broader market. Lowering your costs minimizes drag.

Closed-ends are a different investment animal, though. On the whole, there are many more dogs than gems. It’s an absolute necessity to find a great manager with a solid track record. Great managers tend to be expensive, of course – but they’re well worth it.

The stated yields you see quoted, by the way, are always net of fees. Your account will never be debited for the fees from any fund you own. They are simply paid by the fund itself from its NAV.

Step #6: Ignore Short-Term Interest Rates

Many funds are selling at bargain prices today thanks to the headline worry that higher rates hurt CEFs. But that’s just not true.

Libor is tied closely to the Fed funds rate. And the last time the Fed hiked its rate significantly, CEFs did just fine.

In June 2004, Fed chair Alan Greenspan began boosting rates from then-historic lows. Over a two-year period, he increased the federal funds rate from 1% to 5.25%. An earthquake.

How’d CEFs perform? Three prominent funds all outperformed the market during Greenspan’s aforementioned run:

Higher Rates No Problem for Top CEFs 2004-06

Regular readers will recognize the Greenspan example quite well, because I’ve been using it repeatedly to drive this point home. And I’m glad to share another data point – our own profits from this rate hike cycle!

The chart below illustrates three of my CEF recommendations rolling higher in lockstep with the Fed funds rate (and that rate is the orange line stair stepping from the lower left to the upper right):

This Rate Hike Cycle, Our CEFs Have Rolled Higher

Once again, the best CEFs are gaining value in the face of rate rises.

Step #7: Demand a Discount

One aspect of the CEF structure lends itself perfectly to contrary-minded investing: fixed pools of shares.

Mutual funds issue more shares whenever they want. But closed-ends have a fixed share count, with their funds trading like stocks. As a result, from time to time a fund will fall out of favor and find its shares trading at a discount to its NAV.

This is basically “free money” because these underlying assets are constantly marked to market. If a fund trades at a 10% discount, management could theoretically liquidate the fund and cash out everyone at $1.10 on the dollar immediately. Or it can buy back its own shares to close the discount window (and boost the share price).

A discount is a great start, but do make sure that management has a plan to close that window!

Step #8: When Possible, Buy Along Insiders

It’s rare to see any fixed income manager put his or her own money on the line at all, unfortunately. According to a recent Barron’s article, nearly half of all closed-end funds have no insider ownership whatsoever.

Why would we want to own any of them, if the managers don’t?

The 3 Best Closed-End Funds to Bankroll Your Retirement

Closed-end funds are a cornerstone of my 8% “no withdrawal” retirement strategy, which lets retirees rely entirely on dividend income and leave their principal 100% intact.

Well that’s not exactly right.

Their principal is more than 100% intact thanks to price gains like these! Which means principal is actually 110% intact after year 1, and so on.

To do this, I seek out closed-end funds that:

  • Pay 8% or better…
  • Have well funded distributions…
  • Trade at meaningful discounts to their NAV…
  • And know how to make their shareholders money.

And I talk to management, because online research isn’t enough. I also track insider buying to make sure these guys have real skin in the game.

Today I like three “blue chip” closed-end funds as best income buys. And wait ‘til you see their yields! These “slam dunk” income plays pay 8.7%, 8.9% and even 10.1% dividends.

Plus, they trade at 10 to 15% discounts to their net asset value (NAV) today. Which means they’re perfect for your retirement portfolio because your downside risk is minimal. Even if the market takes a tumble, these top-notch funds will simply trade flat… and we’ll still collect those fat dividends!

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

Source: Contrarian Outlook 

Uncategorized

Sell These Advertising Giants About to Be Amazoned

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 

Market Preview

Market Preview: Marketing Holding Steady Ahead of Florence, Earnings from Kroger and Dave & Buster’s

The market went on a bit of a rollercoaster ride Wednesday. News that high level conversations with China may begin soon sparked a morning rally. But the exuberance wore off later in the day, with markets finishing relatively flat. Weighing heavily on the Dow was 3M (MMM). The CFO, speaking at an investor conference, complained of rising input costs and the stock began to fall. The stock finished the day down over 2%. Apple, announcing its new lineup of phones, did not spark a rally of enthusiasm, and also finished down over 1%. New tariffs on China, which many thought might be announced this week, appear to be delayed, as the government is focusing on Florence and what response may be necessary as the monster storm hits the Carolinas.

Thursday morning Kroger (KR) will report earnings. The $25B company gapped up and has continued to run into this latest release. In order to remain competitive the company has been on a buying and partnering spree to introduce meal kits, grocery pickup at your car, and online ordering. The conference call should provide an interesting update on how the company is innovating and where management sees their progress. Brady Corp. (BRC) will also announce earnings on Thursday. The identification and workplace safety company has been expanding margins, but growth has remained relatively flat. Analysts would like to hear where growth is going to come from when margin expansion runs its course.

The economic calendar on Thursday brings CPI and jobless claims. Following the 3M announcement CPI may be of more concern than was thought earlier in the week. Economists are expecting a moderate month-over-month rise of .3%. Friday the action picks up as we get retail sales, import export prices, industrial production, business inventories and consumer sentiment. Industrial production is expected to bounce back after a somewhat disturbing July number. August is projected to increase .4%, more in line with what the economy appears to be demanding.

The second full week of September will close out with earnings from Dave and Buster’s (PLAY) and MAM Software Group (MAM). Dave and Buster’s should provide an update on how its new store opening plan is coming along. The stock has been solidly to the upside this year. PLAY jumped substantially after its last earnings report, sold off, and is now back to those post earnings levels. MAM, the micro-cap company that provides software to aftermarket automotive suppliers, last quarter reported stable growth and a strengthening balance sheet. The company is transitioning to a SaaS model, and analysts will would like to hear the SaaS business continued at, or even outpaced, the 33% growth provided last quarter.

 

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Get your hands on my most comprehensive, step-by-step dividend plan yet. In just a few minutes, you will have a 36-month road map that could generate $4,804 (or more!) per month for life. It's the perfect supplement to Social Security and works even if the stock market tanks. Over 6,500 retirement investors have already followed the recommendations I've laid out.

Click here for complete details to start your plan today.
Technology

5 Hot Artificial Intelligence Stocks to Buy

Everyone is buzzing about artificial intelligence right now. Before we know it, AI will be part of our everyday lives.

Market experts say artificial intelligence will lead the next wave of economic growth and productivity for at least the next couple of decades. But many AI stocks have a cautious outlook from the Street.

Take, for example, Nvidia Corporation (NASDAQ:NVDA), which despite its gains has a “moderate buy” consensus rating from the analyst community. And then there’s  Advanced Micro Devices, Inc. (NASDAQ:AMD) and Tesla Inc (NASDAQ:TSLA), which each average out to “hold” ratings. In many cases, that’s largely because of high valuations and overheated shares.

To find the best investing opportunities in AI right now, we looked for five stocks with a “strong buy” consensus rating from the Street’s top analysts. These are analysts with the highest success rate and average return. By limiting the ratings to best-performing analysts, we cut out analysts with poor track records to find recommendations investors can trust.

Stocks with “strong buy” ratings are also more likely to have significant upside potential from the current share price.

[Editor’s note: This story was originally published June 22, 2017. It has since been updated and republished, as we believe the stock picks remain valuable.]

Hot Artificial Intelligence Stocks to Buy: Salesforce (CRM)

salesforce stock

Source: Shutterstock

On June 15, cloud computing giant Salesforce.com, Inc. (NYSE:CRM) launched its Einstein Analytics platform. “We have more customer data than ever before and we need AI to turn data into something actionable for the business user,” says CRM exec Arijit Sengupta.

Salesforce wants a slice of the fast-growing AI market. A new report by IDC and commissioned by CRM found that AI technologies will create more than 800,000 new jobs and add $1.1 trillion to global GDP by 2021.

CRM has a very strong outlook from the Street, with 13% upside potential from its current share price.

Hot Artificial Intelligence Stocks to Buy: Microsoft (MSFT)

Time to Buy Microsoft Corporation Amid Tech Stock Rout?

Source: Shutterstock

Microsoft Corporation (NASDAQ:MSFT) acquired Canadian AI company Maluuba this year. Maluuba teaches machines to think and ask questions through deep learning. You may have heard of Maluuba when it made the impossible possible and used AI to beat the notoriously difficult Ms. Pac-Man arcade video game.

Microsoft CEO Satya Nadella says he wants to “democratize AI” and bring the technology to more industries such as healthcare, education and manufacturing.

“Microsoft is back to showing durable double-digit EPS growth — and investors should be willing to pay a higher multiple for that growth,” says Morgan Stanley’s Keith Weiss. He raised his price target from $72 to $80 on June 19.

Artificial Intelligence Stocks to Buy: Alphabet (GOOGL)

Google Stock Is a Winner, but Upcoming Earnings Could Be a Road Bump

Source: Shutterstock

Alphabet Inc (NASDAQ:GOOGL) has made the most AI purchases out of any tech firm calculated research firm Quid, which shows that GOOGL has made 20 acquisitions, including predictive analytics platform Kaggle in Q1 2017.

Google CEO Sundar Pichai recently spoke about Google’s “AI first” future. At Google’s developer conference, he showed the Google Lens (a camera that can recognize what it sees) and AutoML. AutoML uses neural networks to build better neural networks, essentially creating an AI that can create itself.

GOOGL received 18 buy and four hold ratings in three months, and has 11% upside.

Hot Artificial Intelligence Stocks to Buy: Baidu (BIDU)

Baidu Inc stock bidu stock

Source: Shutterstock

Chinese internet company Baidu Inc (ADR) (NASDAQ:BIDU), the “Google of China”, has been investing heavily in AI. It thinks artificial intelligence can give it an edge over local rivals Tencent Holdings Ltd. (OTCMKTS:TCEHY) and Alibaba Group Holdings Ltd (NYSE:BABA).

Baidu spent $2.9 billion on R&D in just 2.5 years, with most of this going on AI. The money has funded a 1,700-member research team and four separate research labs. Crucially, Baidu has an AI advantage because of the huge data it gains from its 665 million monthly search engine users.

BIDU received four buy ratings and one “hold” rating in three months, and has impressive upside of 17%.

Hot Artificial Intelligence Stocks to Buy: Delphi Automotive (DLPH)

Source: Shutterstock

U.K.-based auto tech company Delphi Automotive PLC (NYSE:DLPH) is on the rise. Delphi grew by 30% in 2016 and is predicting revenue of $16.5 billion to 16.9 billion for the full year 2017.

Delphi has just dropped its powertrain business to focus on self-driving cars and electrical vehicles. With BMW, Intel Corporation (NASDAQ:INTC) and Mobileye NV (NYSE:MBLY), Delphi plans to launch self-driving cars by 2021.

DLPH received five buy ratings and one hold” rating recently and has 12% upside potential for the next 12 months.

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.
Pot Stocks

9 Marijuana Stocks to Play the Pot Craze

Source: Shutterstock

Most of the time, most stocks move in the same direction as the broad market … a troubling reality given the market’s recent lack of traction.

There are occasional, story-driven exceptions to that rule of thumb though. Marijuana stocks, fueled by what may well be the biggest legal and medical revolution in years, have already proven they’re blazing their own trail. Stepping into the right pot stocks at the right time can translate to incredible gains, whether or not that outfit is profitable. (And, most aren’t.)

To that end, here’s a rundown of the market’s top pot stocks for the foreseeable future. They may each require different trading treatment. Some are long-term positions, while others are nothing more than hype-driven trades.

In all cases, though, there’s explosive potential on the table — the legal marijuana industry’s story has just gotten that compelling, as more states seek to legalize it while regulators finally start to see its legitimate medical benefits.

In no certain order…

Marijuana Stocks to Buy: Canopy Growth (CGC)

Source: Shutterstock

Marijuana Stocks to Buy: Canopy Growth (CGC)

Of all the marijuana stocks worth a look right now, Canopy Growth (NYSE:CGC) has garnered the most attention of late. Spirits and liquor giant Constellation Brands (NYSE:STZ) upped its stake in the company from 10% to 38%, lending a great deal of credibility to up-and-coming company. All told, Constellation committed almost another $4 billion to Canopy Growth.

The deal-making didn’t stop there though. Canada’s Centric Health announced just a few days later it had entered a multiyear supply and service agreement with Canopy Growth … a deal that makes Canopy a supplier of medical cannabis to the specialty pharmacy.

There’s a reason other outfits are choosing to work with, and invest in, Canopy.

Marijuana Stocks to Buy: Cara Therapeutics (CARA)

Source: Shutterstock

Marijuana Stocks to Buy: Cara Therapeutics (CARA)

At first glance Cara Therapeutics (NASDAQ:CARA) looks like any other pharmaceutical company. It’s got a pipeline largely based on a unique molecular science and serves up regular updates on its R&D.

A closer look at Cara’s pipeline though — and specifically, the science behind it — reveals it is indeed a cannabis play. The drug designated as CR701, in preclinical development, leverages the pain-fighting properties of cannabis as a way of combatting neuropathic pain. Ultimately it may serve as an alternative to highly addictive opioids as a means of treating pain, including chronic and post-operation pains.

It’s certainly not a “pure play.” Cara stock has got five drug trials underway, none of which are cannabis-based. An opioid alternative is a huge opportunity though.

Marijuana Stocks to Buy: GW Pharmaceuticals (GWPH)

Source: ©iStock.com/CapturedNuance

Marijuana Stocks to Buy: GW Pharmaceuticals (GWPH)

GW Pharmaceuticals (NASDAQ:GWPH) is another traditional-looking biopharmaceutical developer. Though it’s also not a pure cannabis play, it’s certainly more focuses on the use of cannabis than Cara Therapeutics is.

GW Pharmaceuticals’ claim to fame is Epidiolex … an epilepsy treatment that was the first cannabidiol (CBD) based drug approved by the FDA for that indication. It could launch any day now.

It won’t be cheap. The annual cost of the treatment will run about $32,500 per year, pointing not just to the effectiveness of the Epidiolex, but also to the rarity of the kinds of epilepsy it’s approved to treat; it’s limited to those patients with Dravet Syndrome and Lennox-Gastaut Syndrome. Regardless, Cowen believes annual sales of the drug could exceed $1 billion by 2022.

The first one is always the hardest win. Now that the FDA has given the green light to its first cannabidiol therapy, other cannabis-based drugs in its pipeline have at least slightly-lower hurdle to clear.

Marijuana Stocks to Buy: Cannabis Sativa (CBDS)

Source: Shutterstock

Marijuana Stocks to Buy: Cannabis Sativa (CBDS)

Don’t let the OTC-listing fool you. Cannabis Sativa (OTCMKTS:CBDS) has a stronger foundation and faces a brighter future than many of its exchange-listed peers and rivals.

Cannabis Sativa, in simplest terms, sells a variety of hemp-based products. Its lineup includes several CBD and THC infused goods, sold through a variety of different venues. Presto Doctor, Wild Earth Naturals, White Rabbit and hi Dispensaries are just some of the names operating under the Cannabis Sativa umbrella.

That being said, don’t misread what Cannabis Sativa is. It’s still booking heavy losses, and would only qualify as a speculative-grade play. Its best shot at long-term viability is a sweeping change in North America’s views on, and laws restricting, the use of marijuana. That change may be underway, but it remains to be seen if it’s moving fast enough.

Marijuana Stocks to Buy: Tilray (TLRY)

Source: Shutterstock

Marijuana Stocks to Buy: Tilray (TLRY)

Tilray (NASDAQ:TLRY) is another one of the names that’s been in the spotlight of late, and for good reason. The company’s fiscal Q2 report posted last month — its first ever quarterly report as a publicly traded company — indicated revenues had nearly doubled year-over-year.

The company is still losing money, to be clear. In fact, the net loss grew from $2.4 million in the second quarter of last year to a loss of $12.8 million last quarter. Investors weren’t deterred though, knowing the company is a work-in-progress.

They’re not wrong to be optimistic about future growth. Tilray was recently chosen by Nova Scotia Liquor Corporation to be a supplier of the adult-use cannabis products it intends to begin selling next month, and just last week the company announced that Prince Edward Island Cannabis Management Corp. had also tapped Tilray for adult-use cannabis products. It’s quickly becoming a go-to supplier.

cbd medicine

Source: Shutterstock

Marijuana Stocks to Buy: Insys Therapeutics (INSY)

Insys Therapeutics (NASDAQ:INSY) is yet another pharmaceutical developer aiming to harness the medical benefits of marijuana.

It has already got two of them on the market. Sybsys is a sublingual spray approved for the treatment of pain in cancer patients, and Syndros is an oral solution that treats people suffering an HIV-related loss of appetites or the nausea and vomiting often resulting from anti-cancer medications. Several more are in the works.

Perhaps just as important is the fact that Insys is attracting its fair share of developmental partners too. The company announced a week ago that it would be expanding its collaboration with UC San Diego’s Center for Medicinal Cannabis Research to explore the use of cannabidiol as a treatment for psychosis.

Marijuana Stocks: Two to Consider, Two to Avoid

Source: MarihuanayMedicina via Flickr

Marijuana Stocks to Buy: 22nd Century Group (XXII)

Most investors familiar with 22nd Century Group (NYSEAMERICAN:XXII) know it as a smoking-cessation play … or at least an outfit that’s capable of growing less-dangerous tobacco.

That’s not all 22nd Century Group is, though. Investors who look closely will see that this company controls several patents related to cannabis plants, which in turn gives the company a hand in the cannabinoid business. Akin to its low-nicotine tobacco plant, it’s been working on the development of a no-THC cannabis plant.

It has not done a great deal with that technology yet. But, with years of work on low-nicotine tobacco about to bear fruit (mandates for low-nicotine tobacco are now being discussed) 22nd Century Group may soon be able to put more focus on its next big evolution.

Marijuana Stocks to Buy: ETFMG Alternative Harvest ETF (MJ)

Source: Shutterstock

Marijuana Stocks to Buy: ETFMG Alternative Harvest ETF (MJ)

Can’t decide which of these marijuana stocks to buy? You don’t have to. Own a piece of all of them via the ETFMG Alternative Harvest ETF (NYSEARCA:MJ). Four of its top five holdingsearned a spot on the list you’re reading right now, collectively comprising about one-third of the fund’s portfolio alone.

Where the ETFMG Alternative Harvest ETF really stands out, however, is its capacity to offer U.S. investors exposure to several Canadian cannabis stocks that may be difficult to purchase outside of that country.

It matters. Although the United States is increasingly open-minded and educated about the use marijuana, Canada has proven far more liberal and progressive. It’s easier for small start-ups to do well there. MJ allows non-Canadians an opportunity invest in that more fostered growth.

Marijuana Stocks to Buy: Cronos Group (CRON)

Source: Shutterstock

Marijuana Stocks to Buy: Cronos Group (CRON)

Last but not least, add Cronos Group (NASDAQ:CRON) to your list of marijuana stocks to mull.

Cronos is a little of everything. Not unlike the ETFMG Alternative Harvest ETF, Cronos Group owns a stake — in some cases a 100% stake — in a handful of cannabis-related organizations. Unlike the ETFMG Alternative Harvest ETF though, Cronos isn’t a mere passive holder. It’s also an incubator of sorts, and will leverage its properties to create new growth opportunities. Case in point: Last month the company inked deals that make it a supplier to several Canadian retail distributors of recreational cannabis. Shortly before that, Cura also tapped Cronos as a supplier.

The company has been on the receiving end of some tough criticisms of late, and is now being targeted by attorneys hoping to build a class-action investors lawsuit. Those claims are often non-starters though. While they may push and pull the stock in the short run, often times news-prompted tumbles turn into opportunities.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter, at @jbrumley.

Pay Your Bills for LIFE with These Dividend Stocks

Get your hands on my most comprehensive, step-by-step dividend plan yet. In just a few minutes, you will have a 36-month road map that could generate $4,804 (or more!) per month for life. It's the perfect supplement to Social Security and works even if the stock market tanks. Over 6,500 retirement investors have already followed the recommendations I've laid out.

Click here for complete details to start your plan today.

Source: Investor Place 

Stock Research Made Simple