Stock Trading

What do investors do when the major asset classes both stink the joint out? It can happen. It has happened. In the period of 1966 to 1981 bond prices and especially bond funds were at the mercy of interest rates that were rising at a stomach churning rate. Bond prices, especially longer dated bonds and bond funds were getting hit hard. Inflation was eating into any income that was generated. Those practicing asset allocation and hoping that the equities in their portfolio would pick up the slack were sorely disappointed. While stocks and bonds can often offer low or negative correlation, there's no guarantee. The S&P 500 from 1966 to the early 80s delivered very little. (Click to enlarge) In fact, according the returns function on moneychimp.com that adjusts for inflation, the S&P 500 (with reinvested dividends) returned nothing - nada. That goes back to one of my first articles

We've asked our friend Jim Robinson of profittrading.com to provide his expert analysis of charts to our readers. Each week he'll be be analyzing a different chart using the Trade Triangles and his experience. Today he is going to take a look at the technical picture of the Coffee. (EURGBP). I hope you are having [...]

With shares of AOL Inc. (NYSE:AOL) trading at around $36.54, is AOL an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework: C = Catalyst for the Stock’s Movement AOL is no longer cool. This is a company that has made some strategic moves over the past several years, but the brand is still lacking. When people hear the name “AOL,” they think archaic. AOL must do something to improve its image if it really wants to make substantial improvements in traffic and revenue. AOL’s traffic stats for the past three months have been ho-hum. According to Alexa.com, AOL.com pageviews-per-user declined 1.99 percent, time-on-site declined 2 percent, and bounce rate (only one page view per visit) increased 2 percent. Over the past three months, HunffingtonPost.com pageviews-per-user increased 2.3 percent, time-on-site declined 1 percent, and bounce rate increased 1 percent. NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW! Over the past three months, Games.com pageviews-per-user declined 4.30 percent, time-on-site increased 1 percent, and bounce rate increased 1 percent. However, Q1 traffic and subsequent revenue impressed on a year-over-year basis: Unique Visitors: Increased 3 percent Global Display Revenue: Increased 8 percent Third Party Network Revenue: Increased 10 percent Global Search Revenue: Increased 9 percent Subscription Revenue: Decreased 9 percent Most importantly, AOL has suffered consistent declines in revenue on an annual basis. AOL has made all kinds of moves to improve the bottom line, which has helped lead to stock appreciation, but for long-term success, there must be growth. Q1 did show revenue and earnings improvements on a year-over-year basis, but not on a sequential basis. This is all related to laying off employees and company culture. AOL has been laying off employees for years. This has helped cut costs and boost profits, but it has also lead to a shaky company culture. It’s not easy to work at top potential when the guillotine is always in operation. According to Glassdoor.com, 52 percent of employees would recommend the company to a friend. In regards to leadership, 66 percent of employees approve of CEO Tim Armstrong. The chart below compares fundamentals for AOL, Google Inc. (NASDAQ:GOOG), and Yahoo Inc. (NASDAQ:YHOO). AOL GOOG YHOO Trailing P/E 3.12 26.41 7.55 Forward P/E 19.97 16.61 17.01 Profit Margin 47.86% 20.92% 82.55% ROE 48.17% 16.36% 29.98% Operating Cash Flow 386.30M 16.56B -360.33M Dividend Yield N/A N/A N/A Short Position 11.10% 1.50% 2.80% Let’s take a look at some more important numbers prior to forming an opinion on this stock. T = Technicals Are Mixed AOL has outperformed Google and Yahoo over a three-year time frame. However, it has lagged its peers over the past year, especially as of late. 1 Month Year-To-Date 1 Year 3 Year AOL -4.50% 23.40% 52.90% 99.03% GOOG 8.99% 24.47% 44.47% 86.53% YHOO 6.73% 30.75% 69.18% 68.14% At $36.54, AOL is trading below its 50-day SMA and above its 200-day SMA. NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW! 50-Day SMA 38.55 200-Day SMA 35.30 E = Equity to Debt Ratio Is Strong The debt-to-equity ratio for AOL is stronger than the industry average of 0.10. Debt isn’t a concern. Debt-To-Equity Cash Long-Term Debt AOL 0.05 467.80M 104.20M GOOG 0.10 50.10B 7.38B YHOO 0.00 3.01B 36.00M E = Earnings Have Improved Annual earnings have made significant improvements. However, annual revenue has been in steady decline. Fiscal Year 2008 2009 2010 2011 2012 Revenue ($) in millions 4,166 3,257 2,417 2,202 2,192 Diluted EPS ($) -14.42 2.35 -7.34 0.12 11.21 When we look at the last quarter on a year-over-year basis, we see improvements in revenue and earnings. Quarter Mar.

Everywhere you turn these days, you hear about the wonderful miracle of the world's central banks creating trillions of dollars in new liquidity with no inflationary consequences. It's modern alchemy, in reverse: gold turning to lead. Last Wednesday and Thursday, for instance, we learned that inflation in America doesn't exist. Both of our major inflation indexes were under water, with prices contracting at 5% to 8% annual rates, despite five years of unprecedented monetary expansion at the Federal Reserve.Key short-term interest rates are now at or near zero in four of the world's most dominant currencies - the U.S. dollar, Japanese yen, British pound and euro. In the first half of May, six central banks cut their rates by 25 basis points - India, Australia, Poland, Korea, Israel, and the euro. According to Kopin Tan, writing in last week s Barron s, there have been over 510 acts

I will to try here to be very brief on the reasons why I think NII Holdings (NIHD) or just Nextel is a short at the current price of US $8.But, before I go through the rationale for the investment case, let me just say some words about the tower sales, something that has been getting a lot of attention lately. Make no mistakes, this is not a company that has a short-term liquidity issue that can be fixed via the sale of assets, its problems are much more structural. No matter how much capital it gets from selling its towers, it does not change the business model, it is just additional funding. By the way it is very expensive funding, as it sells these towers just to lease them back at a 10% rate. Compare this to the 3 to 4% rent that Oi (another very levered telecom

The market is on a tear, up 17% so far this year. Such strong short-term performance is reason for caution in the short-term … And we may be in for some pullbacks in the market in the near future. However, the medium and long-term outlook for the U.S. economy and stock market is excellent as I explained in my April 26th letter to investors, most of which I share below. Perma bears are not seeing the big picture. Now is not the time to predict the economic apocalypse or "Aftershocks". Investors need to beware those selling doom and gloom. The argument made by nearly every economist I know is the same: "the inflation caused when quantitative easing ends will ruin the U.S. economy for years … whenever the Fed's massive purchasing of treasury and mortgage bonds stops, the prices of those bonds will collapse." The Fed's purchases are artificial demand

This article covers a micro-cap stock. Please be aware of the risks associated with these stocks. The financial boost that patent assertion activities can lend to otherwise-struggling companies is by now well known. Even profitable companies have come to the realization that such patent-based activities can improve their financials. Traditionally, patents (a form of intangible assets) were thought of as defensive mechanisms - and less often used offensively for what they legally are, namely the right to exclude others from practicing the patentee's inventions. Companies such as Vringo (VRNG) and others have begun successfully using patents as a way to generate shareholder value and rising stock prices from what are at bottom depreciating intangible assets. Single Touch Systems Inc. (SITO.OB) is another company worth monitoring for those excited about the potential of these "patent plays." SITO is in the business of enabling marketers to reach consumers on all types of

Hitting showrooms now is Chevrolet’s (NYSE:GM) latest compact varient, the Cruze diesel. While the company has been busy juggling the spotlight on its recently price electric Spark, the new Cruze has slipped somewhat under the radar and landed in showrooms. Not only will the diesel varient of GM’s best-selling small sedan be the most fuelefficient of the line, but it will also reportedly be the quickest. Zero to 60 is taken care of in about 8.6 seconds, while the top spec gasoline version — the Cruze Eco — takes 10 seconds. NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW! More significantly, the Cruze diesel is the first American challenger in the diesel small car segment to take on Volkswagen, which has long enjoyed a monopoly on the American diesel market. However, as VW’s diesel models such as the Golf, Jetta, and Passat TDI lines have gained popularity, domestic companies have realized the potential market for the vehicles, which offer superior mileage, without a significant tradeoff in performance. At $25,695, the Cruze diesel will come in about $630 less than the $26,325 that the VW Jetta goes for, with an automatic transmission, the Cruze’s only transmission option. The Jetta, when equipped with the manual, will be cheaper than the Chevy. The car has been awarded a 46 mile per gallon average by the EPA, topping the 42 from the VW models (although in USA Today’s test run, that figure came to 41 — “eroded by a heavy right foot.”). “From a packaging standpoint what we offer in our vehicles, we think is a much more superior product,” Chevrolet Vice President of Marketing Chris Perry said. “As mentioned earlier, people getting into this marketplace are mostly concerned about performance and fuel economy. If you look at our numbers there, the Chevrolet clean turbo diesel offers better horsepower, better torque, more miles on tank of fuel, over 700 miles on tank of fuel. And the best news is we have achieved 46 miles per gallon highway.” NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW! The car will return about 151 horsepower, with peak torque of 264 foot-pounds from the 2.0 litre unit under the hood. Finding gas should be an issue either, as about 52 percent of gas stations in the U.S. carry diesel. While diesels account for about 3 percent of U.S. vehicle sales today, analysts like firm LMC Automotive have predicted diesels will rise to 7.5 percent of U.S. sales in five years. This can be attributed to rising costs of gas and people searching for more fuel efficient cars, as well as manufacturers desperately racing to raise the average MPG figures for their fleets to meet the stringent new standards kicking in in 2020. Investing Insights: Is General Motors the Great American Bailout Success Story? Read the original article from Wall St. Cheat Sheet

This is Part III of a three-part series on the importance of Return on Invested Capital (ROIC) as a fundamental analysis tool. Part I is here and Part II is here. While the first two articles focus on the utility sector and dividend yield, this article will expand to include all sectors and will review the concept of dividend growth investing, of which utilities are included.The origins of dividend growth are simple - expanding company profits and giving back to shareholders some of those higher profits in the form of higher dividends. It is easy to develop a spreadsheet with historical dividend growth data. It is also easy to develop the same data for firms that have been identified as long-term dividend growers, such as those known as Dividend Champions. Mr. Dave Fish, a SA contributor, offers very meaningful articles about Dividend Champions, such as this one

On May 21, Best Buy (BBY) reported 1Q2014 EPS of $0.29 on revenue of $9.38B. Consensus had expected EPS of $0.25 on revenues of $10.66B. Despite the consensus beat, the financial press had highlighted this revenue "miss" and the stock finished the day down 4.3%.Interestingly, there was no revenue miss at all. There was, however, an accounting adjustment not reflected in consensus numbers.Since BBY had announced the impending sale of their European operations, they recorded the attributable earnings as discontinued operations thereby removing all impact of Europe from the statement of earnings into a single line item, discontinued operations. Since the timing of the sale was so late in the quarter, consensus estimates had not made the adjustment.As Best Buy CEO Hubert Joly noted on the earnings call and even later on a segment on CNBC, including the operations from Europe (and adjusting for