Hedge Funds Are Buying These Cheap Stocks

Many analysts point to the fact that, as a group, hedge funds tend to deliver average to below average performance. That is true, but that is also not really a relevant fact to most investors. To begin with, remember that there is no requirement to be a hedge fund. Anyone can claim to be a hedge fund and self report performance to the indexing agencies. Regulation is required for larger funds but if an investment manager has few investors, regulations may not apply. That alone explains some of the performance. To some degree, for some participants, starting a hedge fund is like buyin...
More

A Look at Value in Facebook, Apple, Amazon, Netflix and Alphabet

Source: Apple.com FAANG is one of the most important stories in the stock market. These companies – Facebook (Nasdaq: FB), Apple (Nasdaq: AAPL), Amazon.com (Nasdaq: AMZN), Netflix (Nasdaq: NFLX) and Alphabet (Nasdaq: GOOGL) (parent of Google) – have been drivers of the stock market for the past few years. This presents a potential problem. This small group of stocks now represents a large part of the stock market. They make up nearly 40% of the Nasdaq 100 index and a large share of other broad indexes as well. Source: Yahoo In the past, when one group of stocks becomes a large part...
More

Stocks Under $10 With Growth and Income

Low priced stocks can deliver large gains, if the company can be successful. When considering what makes a company successful, many investors turn to earnings. They might believe that increases in earnings per share (EPS) are the key to success. But, for low prices stocks, that might not be true. EPS would, of course, be nice. But, there are many items that come before earnings on the income statement, a summary of a company’s financial operations. At the top of the income statement is sales. This could be the most important factor to success for a low priced stock. Sales are necessary t...
More

Looking for Bargains After the Marijuana Crash

Marijuana stocks have been in the news for months. Many investors believe there is a boom in the industry and regret missing out. The truth is that it’s not too late to profit from marijuana. The industry did boom, and then it crashed. Now, it’s time to look for bargains. The Grey Area That’s a Multibillion Dollar Market Marijuana is illegal under federal law. But, that hasn’t stopped states from changing how they regulate the substance. Nine states and the District of Columbia now allow for recreational marijuana use and 30 allow for medical use. Source: CNN.com It’s a big business...
More

6 Stocks That Analysts Say Could Double

Wall Street analysts often focus their research on up and coming companies. They do this for a couple of reasons. One reason is that they hope to generate new business. Another reason is that they hope to have some big winners to enhance their records. In focusing on cheap companies, analysts are exploiting an attribute that many individual investors already understand, which is that low priced stocks are the most likely ones to produce large gains. Individual investors that low priced stocks could be appealing for two reasons. One reason is that the low price means they have little ...
More

Is Walmart the Next Amazon?

Source: Walmart.com Recently Walmart announced plans to acquire a 77% stake in India’s Flipkart for $16 billion. Flipkart is an Indian eCommerce company that was initially focused on book sales, but soon expanded into other product categories such as consumer electronics and fashion. The story sounds similar to Amazon and the company has been able to fend off challenges from Amazon, a company that also started with a focus on books and then moved into all areas of commerce. Given that Walmart is now positioned to capture significant sales in India and bring Flipkart’s technology to ot...
More

Ben Graham’s Formula Says These Stocks Under $10 Are Buys

Warren Buffett obviously has an innate talent for finding investment opportunities. However, that talent is also, at least partly, a product of his education. Buffett completed his graduate degree at the Colombia Business School which he specifically chose so he could study under Ben Graham. Graham wrote the original textbook on investment selection with David Dodd. That book, Security Analysis, is still considered to be required reading by many market analysts. Graham also wrote The Intelligent Investor, a more accessible book designed for individual investors. Graham believed that ...
More

Can a Company Survive a CEO Meltdown?

Source: Tesla.com Every quarter, the leadership team of almost every publicly traded companies take questions from Wall Street analysts. This is a standard part of the quarterly earnings announcement. The company usually issues a press release and then conducts a conference call that includes a presentation followed by questions and answers. Few of these conference calls are remembered. One of the most famous calls occurred in 2001 when Enron's top executive called a fund manager an "a**” during a conference call. It’s a Wall Street legend. Enron President and Chief Executive Officer ...
More

How Small Investors can Benefit from Large Caps

Large cap stocks can be among the safest stock market investments. These are large companies and are known as blue chip investments. A blue chip company is defined as “a nationally recognized, well-established, and financially sound company. Blue chips generally sell high-quality, widely accepted products and services.” Analysts note that “blue chip companies are known to weather downturns and operate profitably in the face of adverse economic conditions, which helps to contribute to their long record of stable and reliable growth.” And, as a matter of interest, the name "blue chip" ...
More

Has Chipotle Overcome Its Problems?

Source: Chipotle.com Sometimes, success is an accident. Not a pure accident as in “I was walking down the street and found a gold coin on the sidewalk.” But, sometimes a business owner finds that sales and profits exceed expectations. That’s the case for Chipotle Mexican Grill (NYSE: CMG). The company’s founder has explained, according to CNBC, that he never expected the burrito maker to become a restaurant chain. He was simply trying to use cheap burritos to fund his plans for a fine dining restaurant. Steve Ells was working as a chef in San Francisco when “he decided to open up a sm...
More