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

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

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

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

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

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

A Look at Sky

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

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

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

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

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

Higher Bid Likely

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

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

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

The Two Best Stocks to Buy

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

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

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

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

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

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Source: Investors Alley 

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

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

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

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

Here’s the deal…

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

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

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

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

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

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

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

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

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Source: Investors Alley 

Stocks to Sell in March: Big 5 Sporting Goods Corporation (BGFV)

Source: Shutterstock

When I think of stocks to sell, Big 5 Sporting Goods Corporation (NASDAQ:BGFV) comes immediately to mind. Unfortunately, BGFV suffers from two double whammies: a terribly poor retail environment for sports equipment, and rising outcry over gun violence.

My first point is obvious. A surefire way to fail in business is to open a sporting goods store. The more specific the endeavor — in this case, outdoors sports — the more likely you’ll fail. Consider that in the past few years, specialty retailers Golfsmith and Eastern Outfitters filed for bankruptcy. Additionally, big name stores like Sports Authority and Sport Chalet closed their operations.

As a forgotten side note, the upside to BGFV stock is extremely limited. Even worse, the company will have to deal with the stigma of selling guns and ammunition. That in and of itself wouldn’t be a significant problem if it weren’t for the fact that Big 5 sells boring guns at ridiculous premiums.

Whenever gun control fears spike, people buy out politically targeted firearms; namely, the maligned AR15 and Kalashnikov-style rifles. Unfortunately, Big 5 doesn’t sell these guns. Instead, they offer shotguns, bolt-action rifles among other firearms. Thus, they deal with the stigma without any of the “benefit.”

That’s bad news for BGFV stock, and I don’t think circumstances will improve.

Stocks to Sell in March: New York Times Co (NYT)

Source: Shutterstock

The bear case for New York Times Co (NYSE:NYT) is a tough pill to swallow for me. Last year, I stated that NYT stock will win big in the era of “fake news.” No matter what side of the political spectrum you belong, we can say that everyone loves drama. Despite the NYT obviously not liking President Trump, he ironically gave the Times a reason to exist.

Since I last wrote about NYT stock, shares have gone up a whopping 67%. On a year-to-date basis, the Times has, in my view, inexplicably gained nearly 34%. I was bullish on this iconic news organization, but I think enough’s enough. The rally has gone too far, too fast and it’s time for a pullback.

Supposedly, rising sales in digital advertising and digital-only subscriptions contributed heavily to NYT stock. I say big deal. Not only are we experiencing a media revolution in which mainstream outlets are falling behind, people simply don’t get their news from the news anymore. How else can you explain Alex Jones’ popularity?

We live in a world where conspiracy theorists are given a (generous) platform simply because they’re not mainstream. And while NYT benefits from Trump scandals, I think the American people have had enough.

NYT stock deserves to be up, but not by this much!

Stocks to Sell in March: Jack in the Box Inc. (JACK)

Source: Rojer via Flickr (modified)

When I was growing up, eating a McDonald’s Corporation (NYSE:MCD) Big Mac was considered a rite of passage. Today, it’s rightfully considered child abuse. That’s why I was so shocked when I read our Will Ashworth’s latest piece on MCD. Mind you, I don’t care that he’s bullish on the company. Rather, I was floored when he gladly admitted to eating the stuff!

Joking aside, American public sentiment towards fast food is sharply declining. Most people are concerned about their health than ever before, particularly the younger generation. With several fast food companies having made strong gains in recent years, I think now is a great time to take profits. This goes double for smaller eateries like Jack in the Box Inc. (NASDAQ:JACK).

The McDonald’s eating Ashworth made strong points about MCD, noting their aggressive push into budget meals and food deliveries. You combine this with their overall image renovation, and you have an outperformer in a soon-to-be-declining industry. McDonald’s can afford to do this. I’m not so sure that JACK can pull it off.

While I appreciate Jack in the Box’s humorous commercials, the competition moving forward will be fierce. McDonald’s has the brand, the locations, and the resources. JACK has funny advertisements. Beyond that, its shares’ technical volatility concerns me.

JACK stock enjoyed a stellar run from 2016, but it’s time to take some profits off the table.

Stocks to Sell in March: Twitter Inc (TWTR)

Source: Shutterstock

Admittedly, I’m not the social media platform’s biggest fan. Therefore, it’s no surprise that I’ve been rather dim on Twitter Inc (NYSE:TWTR). While TWTR stock’s recent meteoric rise has been nothing short of stunning, I don’t like to chase momentum. I especially don’t like to chase investments that are not fundamentally sound.

Say what you want about the nearer-term trading opportunities for TWTR; its organizational structure is pure chaos. As my InvestorPlace colleague Dana Blankenhorn explained, COO Anthony Noto left the company to seek greener pastures. We all know that head executive Jack Dorsey is a part-timer. Blankenhorn writes that “Twitter has lost its adult supervision.” I do not disagree.

A breaking Reuters story, though, offers a contrasting take. TWTR is gaining both subscribers and ad revenues in Japan. The implication is that Twitter can duplicate the Japanese success in other markets.

To that, I say, good luck. Things are different in Japan. Facebook Inc (NASDAQ:FB) isn’t the undisputed, dominant social media platform. The Japanese prefer the Yahoo search engine over Alphabet Inc’s (NASDAQ:GOOG,NASDAQ:GOOGL) ubiquitous Google.

Even if Twitter manages to turn Japan into its own powerhouse asset, one country won’t solve its problems. Specifically, its subscriber growth is stagnating and until they figure that out, TWTR is just floating on empty speculation.

Stocks to Sell in March: Dillard’s, Inc. (DDS)

Source: Shutterstock

Business owners always fear market saturation, but in reality, saturation in and of itself isn’t a problem. Issues arise when the underlying industry cannot support the present number of competitors; that’s when market saturation rears its ugly head. I believe that head is turning quite aggressively against Dillard’s, Inc. (NYSE:DDS).

With e-commerce giants like Amazon.com, Inc. (NASDAQ:AMZN) tearing into market share, being a specialty department store was always going to be a challenge. What brick-and-mortars had to their advantage was the apparel industry: you don’t know if something is going to fit you until you try it. But because every other brick-and-mortar have rebranded their businesses, DDS looks ancient.

It lacks Nordstrom, Inc.’s (NYSE:JWN) pizzazz. More people recognize the Macy’s Inc(NYSE:M) brand than Dillard’s. Neither of the companies have investors aching to buy their respective shares. Unfortunately, the physical retail market is shrinking, and DDS is the odd man out.

But the most important point to consider is the technical argument. On a year-to-date basis, DDS stock is up nearly 36%. Does it, or any other specialty department store, deserve to be up this high so quickly? I seriously doubt it, which is why I placed DDS on this stocks to sell list.

Editor’s note: Today we’re running an article Adam wrote in March 2017. It’s about one of the only legitimate pure marijuana stocks in the world. When this article first went out, Canopy Growth Corp. shares were trading around $11. Today they’re more than $27, and the company received an investment from Constellation Brands, one of the largest liquor companies in the world. We think it’s worth keeping an eye on this one.

Dear Early Investor,

If you’re a longtime reader of Early Investing, you know I’m always on the hunt for great marijuana investments.

After all, it’s not every decade that a $141 billion global market goes from prohibited to legalized. That’s exactly what we’re seeing play out across the world.

Today I’m going to look at one of the most intriguing cannabis stocks I’ve found so far.

That company is Canopy Growth Corp. (TSE: WEED), and it has become a massive player in Canada’s booming medical marijuana industry.

Canopy is a vertically integrated cannabis company. It does it all: grow, process, market and distribute. It’s as “pure” of a play on cannabis as you’ll find.

Canopy is expected to produce revenue of $44.8 million in fiscal 2017, up roughly 180% from 2016. The company is not yet profitable, but that hasn’t stopped enthusiastic investors from pushing the company’s share price up from a 52-week low of $2.40 to $11.05 as of March 16, 2017. (Note: All financial numbers are in Canadian dollars.)

The company’s market capitalization has risen to an impressive $1.7 billion. And in a vote of confidence, its shares were recently added to the S&P TSX Composite Index, Canada’s benchmark stock index.

Canopy operates out of an abandoned Hershey factory in Ontario, which it purchased for the bargain price of $6.6 million. This is a massive facility with more than 500,000 square feet of space.

Canada’s Plan to End Marijuana Prohibition

As you can see, Canopy’s medical marijuana business is humming along nicely. But the real potential comes as early as next year, when Canada is expected to legalize pot for recreational use.

A study by Deloitte estimates that Canada’s retail marijuana sales could grow to $8.7 billion annually as a result.

And when you factor in the entire market (growing, processing and testing), that number could grow to a massive $22.6 billion per year.

Canopy is positioned nicely to take advantage of this shift. The company is well-capitalized, with more than $90 million in cash and just $7 million in debt.

My primary concern with the stock, however, is a significant one. The price of marijuana is likely to crash once recreational pot is legalized in Canada.

In Colorado, for example, wholesale prices have dropped a whopping 48% since the state legalized weed back in 2014.

With cannabis becoming “commoditized,” Canopy and other producers will need to focus on efficiency.

If the company can grow sales sufficiently to survive the price shocks that are likely to hit in the near future, I’d say Canopy has a very bright future indeed.

Bottom line: This company has a good shot at becoming the “Philip Morris of cannabis.”

Have a great weekend, everyone.

Adam Sharp
Co-Founder, Early Investing

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Source: Early Investing 

Remember early February’s stock-market rout?

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

Amnesia Sets In

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

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

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

Where the Bargains Are

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

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

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

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

Utilities Go Up, Energy Goes Down—Until Now

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

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

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

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

3 Ways to Buy In

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

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

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

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

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

Topping the Benchmark—With Big Cash Payouts, Too

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

Winning Out Over the Long Haul

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

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

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

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

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

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

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

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

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Source: Contrarian Outlook

Financial risks can seemingly come out of nowhere. Think about how many on Wall Street were caught off guard by the 2008-09 financial crisis or even the volatility of a few weeks ago. Yet the potential risk emanating from the packaging of bad mortgages was in plain sight, but ignored.

Today, there is another financial risk lurking in plain sight. It lies in the vast overseas holdings of technology giants like Apple, Alphabet, Microsoft and many others. I discussed this topic to my subscribers in the October issue of Growth Stock Advisor. But since there is so much misunderstanding about the roughly $1 trillion (or possibly as high as $2 trillion) in funds held overseas by U.S. multinationals, I wanted to clear it up for you.

I know there is much misunderstanding about this subject just from gleaning the comments section on several recent articles published by The Wall Street Journal. Apparently, Americans are under the impression that this $1 trillion is just sitting in bank accounts overseas and that both the overseas banks and host countries don’t want to lose control of this money. Nothing could be further from the truth. Let me explain…

The New Force in Global Bond Markets

I want you to think about it for a moment, and it will make sense. Over the past decade, the largest U.S. companies have built up cash piles of as much as $2 trillion, rising more than 50% in that time period. Why would these firms let all that cash sit there idly, parked in a bank account?

Well, they haven’t. Instead, these aforementioned technology companies – they control about 80% of the overseas hoard – and other U.S. multinationals have put the money to work by snapping up all sorts of bonds. The purchases have mainly been the bonds of other corporations, but government bonds have also been bought.

In fact, companies like Apple, have actually issued their own low interest rate bonds and then used some of the proceeds to invest into the higher-yielding debt of other firms. In some cases, it has taken a large anchor position in certain offerings à la an investment bank like Goldman Sachs. In effect, it has become one of the world’s largest asset managers.

According to the Financial Times, thirty of the top U.S. companies have more than $800 billion worth (mainly short- and medium-term) of fixed-income investments. The breakdown is as follows:

• $423 billion of corporate debt and commercial paper (very short-term corporate debt)
• $369 billion of government and government agency debt
• $40 billion of asset and mortgage-backed securities
• $10 billion of cash

Those 30 aforementioned companies have accumulated more than $400 billion worth of U.S. corporate bonds. That is nearly 5% of the $8.6 trillion market. Apple itself owns over $150 billion of corporate bonds, more than most asset managers. And Microsoft owns over $112 billion in government securities.

This should not come as a shock to students of history. Some of the banking industry’s most venerable names started out in other businesses. The Rothschilds were merchant traders that became the most powerful banking empire in Europe. As Mark Twain is reputed to have said, “History doesn’t repeat itself, but it often rhymes.”

Related: 3 Stocks to Sell Under Trump’s New Tax Law

The Risk to the Bond Market

I now want you to think about this scenario… let’s say most of these companies bow to political pressure and bring “home” this overseas hoard.

That would mean selling a lot of corporate and government bonds. The likely result would be a massive spike higher in interest rates. Just look at how poorly the market acted when there was just a hint of a tapering of purchases by the Federal Reserve. A massive unloading of bonds could quickly turn into a nasty market event starting in the bond market and quickly spreading to the stock market.

Ironic, isn’t it? A massive tax cut and ‘patriotically’ bring money back to the United States could end up being the trigger event for a recession caused by much higher interest rates.

Luckily, from what most of the technology companies (with the exception of Apple) have said in their latest conference calls, they are making no major plans to sell their bond holdings.

Microsoft – with the second biggest pile held overseas – said it had already been able to make all the investments it wanted under the old tax regime, and didn’t expect anything to change as a result of the law. Alphabet said, “There’s no change in our capital allocation.”

What It Means to You

As market participants, I think we should all breathe a collective sigh of relief. As of the moment, nothing has changed and you should just stick to your current investment plan.

But what if the political pressure heats up and these tech companies wilt and decided to liquidate their bond holdings?

Then putting money into the ProShares UltraShort 20+Year Treasury ETF (NYSE: TBT) would make a lot of sense. This ETF uses futures and swaps to correspond to twice the inverse of the ICE U.S. Treasury 20+Year Bond Index. It is up 15% year-to-date thanks to the recent bond market scare, but is little changed over the past year.

Since most of the tech companies own a lot of corporate bonds, and if you have a high risk tolerance, you could short corporate bonds ETFs such as the Vanguard Long-Term Corporate Bond ETF (Nasdaq: VCLT), which is down 4.7% year-to-date and the SPDR Barclays High-Yield Bond ETF (NYSE: JNK), which is down 0.6% year-to-date.

But only think about these trades if and when the technology companies begin liquidating their holdings. I do not think that will happen any time soon, but stay tuned.

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 

On the surface, the 72% surge in year-over-year revenue that Snap Inc. (Nasdaq: SNAP) – parent company of camera and video app Snapchat – notched in the fourth quarter is mighty impressive. The total $285.7 million beat expectations by $33 million.

The firm also added 8.9 million new daily active users (DAUs) during the quarter – up 18% year-over-year to 187 million. That beat projections, too. Revenue per user rose 46% year-over-year to $1.53.

Look beyond the numbers, though, and you’ll see an uglier picture (no pun intended).

For starters, the company had to spend big to get that user growth, with sales and marketing costs up 119% and R&D expenses soaring by 260%.

And while Snapchat may be popular with the kids, it ain’t profitable.

The company lost $350 million during the quarter, compared with a $170 million loss in Q4 2016. Operating income also tanked from $169.7 million to $361 million over the same period. Adjusted EBITDA and free cash flow also dropped. In fact, for the full year, Snap’s free cash flow sank by $819.2 million.

You don’t need me to tell you that losses that large are completely unsustainable over the long run.

And as for that strong user growth… well, it’s not as strong as Instagram, which boasted 150 million DAUs in early 2017, but had ballooned the number to 500 million by September.

And speaking of Instagram, Snapchat may have caused itself a problem: Users hate the company’s redesigned app – and it’s pushing some of them to Instagram’s similar features instead.

A petition on Change.org received over one million people imploring Snapchat to scrap the new layout – an unusually large number, even for a social media platform.

And as if things could not get any worse for Snap, on Wednesday Kylie Jenner of Kardashian fame wiped out $1.3 billion in market value for Snap as shares plummeted from her short tweet:

“sooo does anyone else not open Snapchat anymore? Or is it just me… ugh this is so sad.”

That’s all it took for the stock to drop 6% in a matter of hours. And this is after it had already been on a downward slide since the beginning of the week. All told investors have lost close to 15% just this week. Ouch.

Snap may be improving its top-line numbers, but the company still isn’t anywhere near profitability. Until it manages to arrest the negative profit and cash flow trends, as well as add new users more cheaply (and not anger its existing base!), it’s an expensive and risky stock to own in a more volatile market.