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  • An Undervalued Income Stock That Pays A Sustainable 16%
    Tue, Oct. 28 SDRL 88 Comments

    Summary

    • Despite market sentiment, deepwater and ultra-deepwater production enjoys stronger margins than unconventional and oilsands production.
    • Demand for oil over the next decade should support higher domestic and international prices.
    • Seadrill is the leader in ultra-deepwater production with the youngest fleet and strong financials.
  • Believe It Or Not, Europe Will Drive Ford Higher Soon
    Tue, Oct. 21 F 5 Comments

    Summary

    • Shares were hit late September on lowered guidance and a $1.2 billion loss on European operations.
    • Rates in Europe are set to remain exceptionally low and ECB monetary policy should support auto sales even if it fails to start wider growth.
    • Shares are priced attractively with margin improvement and cost-cutting that could help surprise higher.
  • General Motors' Problems Are About To Get Worse
    Thu, Oct. 16 GM 44 Comments

    Summary

    • Shares of General Motors have fallen in light of the recalls but stronger sales have helped to support the company.
    • Strong sales may be a result of recall customers coming into the dealerships and big discount programs - both unsustainable over the long-term.
    • Not only are high sales numbers likely unsustainable, the company has had to issue stop-sell orders on many new models which may further hurt its reputation.
  • Oil Spreads Show Relief Is Coming For Coal By Rail
    Wed, Oct. 8 ANR, BTU, WLT 8 Comments

    Summary

    • Massive demand for crude transport by rail has displaced coal shipments and limited coal prices.
    • Lower spreads for Gulf Coast oil relative to Brent and increased pipeline capacity could soon weaken demand for crude transport by rail.
    • Peabody Energy is likely to weather the weak coal environment for long-term gains, while smaller peers could see a larger near-term gain.
  • 3 Catalysts To The Upside For Undervalued Bank Of America
    Mon, Oct. 6 BAC 21 Comments

    Summary

    • Leadership in municipal underwriting and investment banking present two strong catalysts to higher sales.
    • The eventual increase in rates could provide another catalyst through better reinvestment opportunities, while high non-interest income helps offset rate risk.
    • Shares are undervalued on a price-to-book ratio and could rise 13% on conservative estimates for book value and an improvement in sentiment.
  • Johnson & Johnson's Growth Potential Is Stronger Than You Think
    Sun, Oct. 5 JNJ 3 Comments

    Summary

    • 2nd quarter sales jumped as recent drug launches pushed sales of pharmaceutical sales higher by 21% with carryover possible to the 3rd quarter.
    • Johnson & Johnson is in phase III trials for more than 18 indications across ten drugs, many of which have already been approved for other indications.
    • Improving cash flow trends should support acquisitive growth and could help beat management's goal of 4.5% growth in annual drug sales through 2017.
  • If You Own Coal Stocks, You Need General Electric Too
    Wed, Oct. 1 GE 11 Comments

    Summary

    • While the long-term outlook on coal is still positive, investors need to diversify across other energy sources.
    • General Electric books a third of its sales in energy-related segments and is developing innovative products that could revolutionize energy usage.
    • Shares of GE trade relatively cheaply against peers and offer an attractive cash return to supplement capital appreciation.
  • Can Pfizer Grow Without A Big Acquisition?
    Mon, Sep. 29 PFE 11 Comments

    Summary

    • Positive results on AstraZeneca trials for its combination lung cancer treatment likely take it off the table for an acquisition.
    • While Pfizer may shift its sights to another big acquisition, valuations may be stretched and smaller portfolio acquisitions may be more attractive.
    • Even without a large acquisition, the company has good growth in its existing pipeline and stronger fundamentals from a recent restructuring.
  • 3 Dividend Aristocrats You Can Hold Forever
    Wed, Sep. 24 ED, JNJ, MCD 6 Comments

    Summary

    • Even the yields on the Dividend Aristocrats have fallen and income investors may need to look deeper for stocks that can provide long-term cash returns.
    • McDonald's and Consolidated Edison have both come under pressure over the last year but offer good long-term value and yields that are among the highest in the group.
    • Johnson & Johnson has enjoyed a rising stock price but strong dividend growth has kept the yield attractive while a high R&D budget offers upside price potential.
  • The Most Hated Stock In The S&P 500 Dominates Its Industry
    Tue, Sep. 23 GME 2 Comments

    Summary

    • Despite a 39% drop in industry revenue, GameStop has increased sales through product diversification and market share.
    • The short position has increased to 33 million shares, nearly a third of shares outstanding, and represent considerable demand when positions are closed.
    • The stock is attractively valued with a 17.5% upside on conservative estimates and a 3% dividend yield.
  • Peabody Energy: Buy While There Is Blood In The Streets
    Tue, Sep. 16 BTU 25 Comments

    Summary

    • Sentiment in coal producers has fallen to extremes with share prices touching lows not seen in a decade.
    • Near-term market continues to look weak on competition from natural gas and transportation problems, the long-term outlook is much stronger and could rebound in 2015.
    • Peabody Energy is a best of breed in the industry with diversified revenues and assets in competitive coal regions of the U.S.
  • Republic Services: The Best Of Bonds And Stocks
    Sun, Sep. 14 RSG 4 Comments

    Summary

    • Revenue and cash flows have a bond-like risk profile but offer the upside of equity returns.
    • Price restrictions on rates and a correlation to housing have limited growth but may clear over the next few years as inflation and housing pick up.
    • An annualized return of nearly 10% over the last decade on lower risk has attracted big institutional support, including a $4 billion investment from Bill Gates.
  • Utilities To Get A Boost Despite Rate Worries
    Fri, Sep. 12 AEP, BTU, SO 7 Comments

    Summary

    • Utilities underperformed over the last three months but could see improved sentiment on colder weather this week and over the winter.
    • Look for companies with assets concentrated in the Central and Eastern regions of the U.S.
    • Coal may also see a relief rally if colder weather hits key consumption regions.
  • Living Off Dividends With My 3 Favorite Monthly Payers
    Tue, Sep. 9 FSC, LTC, LINE 43 Comments

    Summary

    • Investors may need to increase their allocation to stocks as historically low bond yields fail to satisfy their income promise.
    • Monthly dividend payers offer an opportunity to fill the gap left by quarterly dividend payers but should be diversified across sectors.
    • LTC Properties, Linn Energy and Fifth Street Finance all offer sustainable dividends with upside potential in share appreciation.
  • An Undervalued Income Stock That Yields Almost 8%
    Tue, Sep. 2 RIG, RIGP 18 Comments

    Summary

    • Undervalued on a price-multiple basis with 7.9% upside to the average industry valuation.
    • Spin-off of assets into a tax-advantaged partnership is a more efficient use of assets and improves access to low-cost funds.
    • Transocean's size will help it through weakness in dayrates while significant deepwater potential ahead could boost shares over the long-term.
  • Walgreen: This Retail Leader Is No Longer A Safe Dividend Bet
    Mon, Aug. 4 WAG 25 Comments

    Summary

    • A 46% increase in the share price has driven the yield below 2%, and management may not be able to increase the payout appreciably.
    • Sales growth improved over the last quarter, but has been stagnant for two years on pricing pressures.
    • The acquisition of Alliance Boots may disappoint investors on poor earnings quality and a backlash to tax inversion deals.
  • This Megatrend Company Has Strong Catalysts For A Turnaround
    Wed, Jul. 30 SYMC 1 Comment

    Summary

    • Though lagging peers over the last few years, Symantec is a strong name in the cybersecurity megatrend and has the cash to reposition itself.
    • An acquisition of a smaller peer in cybersecurity could help position in mobile or enterprise security while a spin-off would unlock value.
    • Beyond an acquisition or spin-off the reorganization may also lead to change strong enough to improve sentiment and send shares higher.
  • The Best Buy In Healthcare REITs Is The Worst Performer
    Tue, Jul. 29 HCP 15 Comments

    Summary

    • HCP has underperformed other healthcare REITs and the general market, but is a better buy on long-term income and a less risky business model.
    • The only REIT in the S&P 500 Dividend Aristocrats and a strong commitment to shareholder cash return.
    • Strong position in the theme of aging demographics and a diversified investment strategy.
  • A VMware Spinoff Is Not Coming But EMC Will Still Go Higher
    Mon, Jul. 28 EMC, VMW 3 Comments

    Summary

    • The case for a spinoff of the cloud virtualization business is supported with nearly a 15% upside.
    • The company realizes significant benefits from the combined structure and the long-term upside is likely higher than the potential in a split.
    • Management is likely to respond over the near-term and other options may help drive the shares higher.
  • Buy McDonald's Before This Storm Subsides
    Mon, Jul. 28 MCD 29 Comments

    Summary

    • Weak earnings and a meat scandal have driven McDonald's shares significantly lower recently but both may prove transitory.
    • Talk of an increase in the minimum wage ahead of November elections may limit upside but any increase will ultimately be mitigated by price increases.
    • Even on conservative estimates for growth next year, the shares can return an annualized 12% over the next 18 months.
  • Chair Yellen Or The World Cup: Who's Right On Social Media
    Wed, Jul. 16 FB 10 Comments

    Summary

    • Comments by the Fed Chair on Social Media valuations contrast with recent news on Facebook usage during the World Cup.
    • Facebook still has the potential to reach more than 4.3 billion that are not on the internet and 1.7 billion that are connected but not active users.
    • Acquisition of LiveRail and success in video advertising could drive potential even higher.
  • Ford: Double-Digit Growth In China Makes This A Strong Turnaround Play
    Tue, Jul. 15 F 22 Comments

    Summary

    • Weakness in fleet sales and the F-series have limited sales growth.
    • Strong U.S. vehicle sales and a new F-series launch should support sales over near term.
    • Recent reports from China joint ventures point to strong potential in the world's largest market.
  • Are Your MLP Investments At Risk From Rising Rates?
    Tue, Jul. 15 KMP, LINE, AMLP 8 Comments

    Summary

    • Despite a subdued rate environment, yields are likely to increase into 2015 and income investors need to evaluate their rate exposure.
    • MLPs have performed well in a rising or falling rate environment, only dropping when rates change sharply.
    • Risk-averse investors may prefer MLP funds, while yields and upside may be higher in individual partnership names.
  • Fannie Mae Takes A Step Closer To Normal
    Fri, Jul. 11 FNMA 8 Comments

    Summary

    • Proposed insurer rules by the FHFA help to ensure that the government will not need to bail out the mortgage giant.
    • The confirmation of Julian Castro as HUD Director has depressed the shares lately, but efforts to reform the GSEs do not have the political backing to do much harm.
    • Reaffirm my previous price target of $14 per share on higher G-Fees and a recovering housing market.
  • 3 Growth Stocks You Can Hold Forever
    Mon, Jun. 23 CTSH, EBAY, FTI 2 Comments

    Summary

    • For long-term growth holdings, look for companies that are consistently profitable with little debt.
    • Companies with strong brands and market share can maintain decent growth even when industry growth slows.
    • Always remember to diversify strategies within your portfolio with companies from different sectors and industries.
  • The Most Hated Stock In The S&P 500 Is Proving Shorts Wrong
    Mon, Jun. 23 X 3 Comments

    Summary

    • U.S. Steel is the most heavily shorted stock in the S&P 500 with 26.7% of shares borrowed to sell short.
    • Shares jumped 64% in the six months to January as shorts bought back shares but upside catalysts could cause more shorts to get squeezed.
    • A key decision on tubular imports and a general rebound could provide further upside.
  • McDonald's Shares Undervalued Even With Higher Minimum Wage
    Tue, Jun. 17 MCD 5 Comments

    Summary

    • An increase in minimum wage would decrease earnings by less than 6% in 2015, while growth in sales would support value.
    • McDonald's is relatively better positioned against peers like Burger King and Wendy's, which have a larger exposure to the United States.
    • Real estate owned presents an upside to McDonald's share value on top of solid fundamentals.
  • Johnson & Johnson: A New Marketing Strategy Could Drive Growth
    Thu, Jun. 12 JNJ 1 Comment

    Summary

    • Shares are around fair value or higher, but upside exists on catalysts for higher earnings.
    • A strong R&D budget and few major patent expirations should support sales with potential in a new marketing strategy for faster growth.
    • A renewed focus on cost management should improve margins and bottom-line results.
  • NQ Mobile Just Doubled Its Potential Value
    Tue, Jun. 10 NQ 82 Comments

    Summary

    • NQ Mobile announces a deal that values its subsidiary NationSky at $530 million and calls for an IPO within two years.
    • The company is aggressively seeking deals for its subsidiaries that improve its balance sheet and bring in investors.
    • Even without the announced deals, the company is trading for a significant discount on sales and is a good risk-return tradeoff given the release of the special investigation.
  • GM Is Turning The Recall Into A Big Opportunity
    Tue, Jun. 10 GM 14 Comments

    Summary

    • Shares of GM are relatively undervalued on an enterprise to sales basis and strong earnings growth should drive price gains.
    • Shares have lagged on uncertainty around the recall but customers do not appear to be leaving the brand.
    • Strong incentives could get customers to use their recalled cars to trade into newer brands and drive sales this year.
  • Intel Is Not The Dinosaur You Thought It Was
    Mon, Jun. 9 INTC 34 Comments

    Summary

    • Strong cash flow and earnings power should support shares around fair value.
    • PC decline could slow with some sub-segments like the micro-mini PC seeing growth.
    • Potential for upside growth in aggressive funding program of start-up tech firms.
  • These 3 Strategies Could Drive Growth For Microsoft
    Sun, Jun. 8 MSFT 8 Comments

    Summary

    • Shares may be slightly undervalued on a DCF basis but are trading well above historic price multiples.
    • A strong balance sheet and cash flow support an increase in dividends and buybacks.
    • Three strategies in particular; Cloud and Saas, Competition in Tablets, and the potential for Skype could drive faster growth.