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  • EMC Shares Are Cheap And A VMware Spin-Off Could Still Be A Future Catalyst
    Wed, Mar. 25 EMC 3 Comments

    Summary

    • A pullback in EMC shares is a buying opportunity.
    • Investors are disappointed by a few recent events such as earnings results, dollar strength and no timeline for CEO succession or a VMware spinoff.
    • EMC shares are trading at strong support levels and the stock is cheap which means downside risks could be limited.
    • A strong balance sheet, rising dividend and the 80% stake in VMware (worth about $25 billion) makes the stock even more attractive.
  • How I Am Playing The Rebound In High Yield Bonds And Getting Paid 9.5%
    Thu, Mar. 19 HNW 18 Comments

    Summary

    • Junk bonds make sense for 2015.
    • Concerns about the decline in oil prices have faded and few asset classes offer yields of 6% or more.
    • The European Central Bank's bond buying program just made junk bonds even more attractive.
    • While some junk bond ETFs make sense, better values and higher yields are possible with closed end funds that trade at a discount.
  • Genworth: Why Investors Should Take Advantage Of The 50% Off Sale
    Thu, Mar. 19 GNW 25 Comments

    Summary

    • Genworth shares appear to be very undervalued after a decline of roughly 50%.
    • This decline was primarily caused by reserve charges, and appears excessive based on the actual numbers.
    • Genworth shares are undervalued, based on book value and the price-to-earnings ratio.
    • With the long-term care reserve charges out of the way, this stock could be poised to rebound.
  • Metalico: Buyout Deal Arbitrage Could Offer 50% Gains
    Wed, Mar. 18 MEA 11 Comments

    Summary

    • A credible offer appears to put Metalico in play.
    • The bidder already owns a major stake in Metalico and appears to have the resources, as well as strategic motivations for buying this company.
    • Metalico management appears aloof regarding the offer, but that could be just a negotiation tactic in order to seek a higher bid.
    • Metalico has responded by retaining an investment banking firm.
    • I think this deal will happen at 78 cents per share, (or more) which represents an attractive premium of about 50% and an arbitrage play for investors who buy now.
  • Sterling Construction: I See Very Significant Upside In This $3 Stock
    Thu, Mar. 12 STRL 20 Comments

    Summary

    • Sterling Construction shares appear to be a bargain at $3, which is well below book value.
    • Investors seem to have overreacted to some recent news and that has created an ideal buying opportunity.
    • A new and highly experienced CEO has just been appointed to turn around the company and he is taking just $1 in salary and stock options.
    • Based on multiple analyst price targets of $9 per share, book value at $7.49 per share, and a DCF valuation of $14 per share, I am a buyer of this.
  • 2 Stock Bargains 'Hiding' In Plain Sight
    Fri, Mar. 6 GNW, GILD 6 Comments

    Summary

    • Genworth Is And Out Of Favor Play That Is Undervalued Based On Book Value.
    • The market is trading near record highs, but there are always undervalued stocks worth buying.
    • The stocks detailed below are well-known and yet trade at bargain valuations based on the price to earnings ratio and other metrics.
  • Genworth: A Cheap Stock With Bullish Long-Term Upside Catalysts
    Mon, Mar. 2 GNW 13 Comments

    Summary

    • Genworth Shares trade at "dirt-cheap" levels based on book value and PE ratios.
    • The company has some challenges, but it also has some major long term trends going for it.
    • Long-term care policy premium increases are coming and many of these policies will terminate in the coming years.
    • Rising interest rates and a $100 million cost saving plan should also cause profits to increase.
    • Genworth could be a prime candidate for a spin-off in 2016, which could create more shareholder value.
  • U.S. Steel Is One Of The Few Bargains Left In This Market
    Wed, Feb. 25 X 28 Comments

    Summary

    • This company recently beat analyst estimates and the stock remains cheap as it trades below book value.
    • U.S. Steel shares also appear undervalued based on analyst price targets and the price to earnings ratio.
    • U.S. Steel's CFO just purchased about $1 million worth of stock.
  • At $85, Caterpillar Shareholders Are In Deep Denial
    Mon, Feb. 23 CAT 10 Comments

    Summary

    • Caterpillar appears expensive even after a recent drop.
    • This company has a significant amount of debt on the balance sheet and results have been underwhelming.
    • I believe Caterpillar management has over-promised and under-delivered for years.
    • New investigations add new potential expenses and risks, plus other significant challenges loom.
    • Caterpillar shareholders appear to be in denial and this stock is likely to remain a poor performer.
  • Is $6 Possible For Transocean Shares?
    Fri, Feb. 20 RIG 51 Comments

    Summary

    • Transocean shares have rebounded from recent lows and the stock held up well after the company announced a major dividend cut, but risks remain.
    • Transocean is trading at the high end of the recent range, therefore upside could be limited for now.
    • A number of potential downside risks remain which include high debt loads, an aging fleet, and possibly even a secondary offering.
    • One credible analyst has a $6 price target which implies this stock could plunge about 70%, before reaching the bottom.
  • Managed High Yield Plus Fund: A 9% Yield And A 12.5% Discount Is Hard To Resist
    Wed, Feb. 18 HYF 12 Comments

    Summary

    • Investors are showing renewed interest in high-yielding junk bonds.
    • With yields of government bonds near record lows, high yield bonds look increasingly attractive.
    • Concerns about exposure to the energy sector appear overblown, especially as oil is now rebounding.
    • Closed end funds offer some of the highest yields and still trade at significant discounts to net asset value.
    • The Managed High Yield Plus Fund offers a rare combination of high yields and professional management, while trading at a major discount to net asset value.
  • Secular Trends And Overvaluation Make McDonald's A Strong Sell
    Wed, Feb. 18 MCD 36 Comments

    Summary

    • McDonald's shares should be sold on the recent spike.
    • This company is like a aging rock star that is trading on past glory.
    • McDonald's shares are too expensive at nearly 20 times earnings.
    • Competitive pressures are strong and likely to keep weighing on McDonald's financial results and share price.
  • Seadrill: Is It Finally Time To Start Buying?
    Tue, Feb. 17 SDRL 56 Comments

    Summary

    • Seadrill shares appear cheap but significant risks remain.
    • The big question could be whether or not Seadrill can avoid breaching debt covenants in the future and thereby avoid a secondary offering.
    • On the positive side, the recent dividend cut preserves cash and will improve balance sheet strength.
    • With a compelling valuation, but with potential downside risks looming, it only makes sense to consider a small position and average in over time.
  • Petrobras: This Stock Is So Bad It Might Be Good To Buy
    Mon, Feb. 16 PBR 57 Comments

    Summary

    • Petrobras shares trade for about one-third of the September 2014 highs.
    • The negative investor sentiment towards the oil sector and towards Petrobras could be creating a very attractive buying opportunity.
    • Petrobras shares appear to have hit rock-bottom levels and oil also may have bottomed out.
    • This stock appears unloved and cheap and that could mean it is positioned to outperform.
  • I Am Buying The Pullback In Johnson & Johnson For Yield And Break-Up Potential
    Fri, Feb. 13 JNJ 59 Comments

    Summary

    • Johnson & Johnson shares look increasingly attractive after a pullback.
    • This company offers relative safety and stability due to its product line and balance sheet strength.
    • This stock deserves to trade at a premium thanks to its yield and history of dividend increases.
    • Johnson & Johnson shares look downright cheap when compared to the 10-year Treasury Bond.
    • In the future, this company might be poised for a break-up into three separate companies.
  • Dreyfus High Yield Strategies Fund: This Net Asset Value Bargain Offers A Generous 9.7% Yield
    Thu, Feb. 12 DHF 9 Comments

    Summary

    • High yield bonds are rebounding and still offer generous yields.
    • The Dreyfus High Yield Strategies Fund is trading at a significant discount to net asset value.
    • With a yield of nearly 9.7% and a discount of nearly 6%, this closed end fund looks particularly attractive now.
  • Buy Russia: Now A Bargain At Just About 6 Times Earnings
    Tue, Feb. 10 RSX 12 Comments

    Summary

    • Russian stocks are very cheap at just over 6 times earnings and should be appealing for bargain hunters and contrarians.
    • Weak oil prices have hurt Russia's economy, but oil may have bottomed out and could rise in the future.
    • The issue with Ukraine remains a wild card, but it appears that all parties have too much to lose and that means a resolution could be likely.
  • Parker Drilling Is A Survivor And Too Cheap To Ignore At $3
    Mon, Feb. 9 PKD 10 Comments

    Summary

    • Parker Drilling shares now trade at a significant discount to book value.
    • This company has a long history that should make investors confident it can manage the weakness in oil prices.
    • International exposure reduces risks for investors.
    • Oil prices appear to have bottomed and oil sector stocks are worth averaging into for a long-term rebound.
  • Think Blue Chip, Think Exxon: There Was No Blood And There Won't Be
    Wed, Feb. 4 XOM 19 Comments

    Summary

    • Many investors are hoping and waiting for a bigger buying opportunity in Exxon, but that doesn't seem likely for a number of reasons.
    • Exxon just reported better than expected earnings results and the stock remains a blue chip favorite for many investors.
    • The oil price drop is not likely to last and the relative strength in Exxon shares could be a signal that energy prices will rebound fairly soon.
    • Exxon shares look downright cheap on a yield basis, when compared to the ten-year U.S. Government bond.
    • Rig shutdowns and increased oil demand are likely to boost prices in the coming months and that should also support Exxon shares.
  • Update: American Superconductor Raises Guidance, And India Boosts Wind Goals
    Tue, Feb. 3 AMSC 9 Comments

    Summary

    • American Superconductor provides preliminary results that beat prior guidance.
    • GE sees the potential in resilient grid systems.
    • India recently boosted wind power targets and this could benefit American Superconductor.
    • Stock remains undervalued.
  • Oil Prices Spike 8%: This Is Another Potential Sign Of A Bottom
    Mon, Feb. 2 COP, CVX, USO 11 Comments

    Summary

    • After a big plunge, oil appears to have been building a solid base for the past couple of weeks.
    • Geopolitical risks appear to be coming back into the picture to support oil prices.
    • Eni's CEO believes the next oil spike could take it to $200 per barrel, if OPEC does not react to keep prices at a healthy level soon.
    • Investors should realize that oil demand is expected to grow in 2015, and that with rig shutdowns taking place now, the seeds of another price spike are sown.
  • McDermott's Recent GE Deal And More Details On This $2 Stock
    Fri, Jan. 30 MDR 48 Comments

    Summary

    • McDermott shares appear severely undervalued by the market due to very negative investor sentiment.
    • A closer look into the financials, contract backlog and business model indicates that market pessimism is overdone.
    • This company has a contract backlog of about $4 billion, nearly $900 million in cash and no significant debt (of just $300 million) due until 2019.
    • Most analyst price targets suggest this $2 stock could double in value, if not more.
    • A recent deal with GE boosts the long-term outlook.
  • Caterpillar: After A Big Drop, Is This Stock A Buy?
    Wed, Jan. 28 CAT 10 Comments

    Summary

    • Caterpillar shares plunged due to disappointing earnings and weak guidance.
    • Many investors might be tempted to buy now, but this stock is not really cheap.
    • I believe investors should also consider the balance sheet as a potential downside risk factor more thoroughly.
    • With a number of remaining challenges, this stock might not have much upside for now.
  • Update: U.S. Steel Earnings Soar Past Estimates
    Wed, Jan. 28 X 3 Comments

    Summary

    • U.S. Steel easily beat results which shows management is executing and that the market has been too bearish on this stock.
    • This stock is cheap as it trades below book value and for just about 7 times earnings.
    • Shorts could help fuel gains in the coming days and the longer-term outlook could also brighten as cheap oil boosts consumer spending on autos and appliances.
  • OPEC Made A Huge Mistake That We Can All Profit From
    Tue, Jan. 27 CVX, MDR, X 19 Comments

    Summary

    • OPEC appears to have made a huge mistake financially by not simply cutting production.
    • OPEC members including Saudi Arabia are in this business for money and long-term decisions will be based on this point, not on politics or other short-term factors.
    • By doing some basic math, it's easy to see that OPEC could be much better off by simply cutting production rather than "cutting prices".
    • Production is being cut by companies in the U.S. and OPEC could also make cuts if oil prices don't rebound soon.
    • The inaction by OPEC is likely temporary as is the oil "glut" which makes this a potentially significant buying opportunity for values not seen in many years.
  • These 5 Signs Indicate That Oil May Have Already Hit Rock Bottom
    Tue, Jan. 27 COP, GE, MDR 13 Comments

    Summary

    • Oil appears to be stabilizing and could now be at or near the bottom.
    • The gold to oil ratio and a few key oil stock charts also indicate that we might have already seen the bottom.
    • Historical data from the 2008 Financial Crisis and data from past oil plunges now suggests a powerful rally may be looming.
    • New policies from Europe should boost demand for oil in the coming months which could begin to support prices now.
    • Significant new buying interest in the energy sector from industry insiders, major corporations and private equity firms also suggest a bottom may have been reached.
  • 'Smart Money' Keeps Buying Cheap Shares Of J.G. Wentworth
    Mon, Jan. 26 JGW 15 Comments

    Summary

    • This relatively unknown stock is trading for just about 6 times earnings estimates.
    • In this niche segment, J.G. Wentworth is an industry leader with a solid business model.
    • Kerrisdale Capital, and other "smart money" investors continue to hold large stakes and some have even bought significantly more in the past weeks.
  • Oil Doomsayer Price Predictions Could Be A Major Buy Signal For The Sector
    Mon, Jan. 26 XOM, USO 11 Comments

    Summary

    • Analysts and media outlets appear to be grabbing headlines with extremely bearish oil price predictions.
    • These types of predictions may never come to fruition, just as bold and overly bullish predictions have failed in the past.
    • Investors should avoid short-term and fear-based thinking and focus on the fact that oil prices rebounded after the 2008 financial crisis plunge.
    • Investors should also realize that rapid rig shutdowns will cure the current oversupply and balance will return to the market in the future.
    • It makes sense to be averaging into the oil sector while extremely negative headlines continue to capture the attention of the markets.
  • Oil Stocks: Buy Low (Now), Sell High (Later)
    Wed, Jan. 21 XOM, USO, OIL 13 Comments

    Summary

    • After a oil price plunge, investors are getting a chance to buy low and participate in a future potential rebound.
    • Supply destruction is taking place and that should begin to support oil prices.
    • Consumption remains solid and could grow by nearly a million barrels per day in 2015, according to the IEA.
    • Extremely bearish price predictions and cover stories for oil could be a major buy signal.
  • U.S. Steel: After A 50% Drop, This Stock Looks Strong For Value Investors
    Tue, Jan. 20 X 7 Comments

    Summary

    • While U.S. Steel is probably experiencing reduced demand for tubular steel products, it is not enough to warrant a 50% decline in the share price.
    • It is possible that increased demand from other sectors could offset any weakness in the energy sector, as cheap oil can boost economic growth.
    • This stock appears to be a bargain as it trades well below book value and for just about 7 times earnings.
    • Cost cutting measures continue and that could translate into higher profits in the future.
  • Update: American Superconductor Outlook Bullish With Growing Cyber-Security Threats And New $1.50 Price Target
    Fri, Jan. 16 AMSC 11 Comments

    Summary

    • The market appears to be unaware of the potential emerging from American Superconductor's resilient grid system.
    • New and bullish analyst coverage suggest this stock is worth double the current price.
    • Shorts continue to cover this beaten-down stock and it has built a solid base over the past few weeks which could signal that downside is limited.
  • Update: McDermott And General Electric Announce A New Oil And Gas Joint Venture
    Thu, Jan. 15 GE, MDR 31 Comments

    Summary

    • General Electric and McDermott have announced a new joint venture which could lead to significant opportunities.
    • General Electric is one of the world's largest companies and it has been expanding its oil and gas industry exposure.
    • McDermott shares are very undervalued due to negative investor sentiment in the oil sector and this has created a significant buying opportunity.
    • At less than $3, McDermott shares are near Financial Crisis lows of 2009, and investors who bought back then made huge gains as it rebounded to $25 by 2011.