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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 ...
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Facebook put the old adage that “all publicity is good publicity” to the test recently. The company has been under fire for spreading fake news since the 2016 Presidential election. Recent revelations related to the election have compounded that problem. News stories have detailed that political data company, Cambridge Analytica, had access to unsanctioned Facebook user data during the election. According to initial reports, of Facebook’s 2.14 billion users, only 2.33% (50 million) had their personal data shared with Cambridge Analytica. However, that number was recently revised up to 87 million, and could still go higher. That’s led to calls for ...
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Technology has always driven the economy and the winners in tech have been the winners in the stock market. This was recently highlighted in a report from Barclays that noted total output per hour across both the UK and the USA from 1760 onward, using an index where that year is considered to be 100. Productivity in 2018 is around 3,000 on this index. The increase in output has led to dramatic improvements in the quality of life for people all around the world. Those gains in the quality of life often result form changes in technology. For example, the ...
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Market volatility has increased and that makes cheap stocks potentially more appealing. Cheap stocks tend to be value stocks. They also tend to be beaten down from previous highs which is the reason that they offer value. But, value is a strategy that has been proven to work, in the long run. We began our screen by focusing on stocks that trade at a low price. These stocks could be appealing for two reasons. One reason is that the low price means they have little down side risk in dollar terms. The second reason is that low priced stocks are generally ...
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Source: Facebook.com Last week, Facebook’s founder and CEO, Mark Zuckerberg, endured two days of questions from members of the House of Representatives and Senators. Testifying before Congress must have been uncomfortable for Zuckerberg but the question for traders is how this could impact the stock. Congressional interest can carry a number of consequences. It could result in new regulations that limit the company’s operations. Or, the interest in the company could even lead to changes in the company’s operating structure. One extreme example of how Congress affected a company is found in the case of Standard Oil. The company was founded in ...
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It’s often said that cash is king. This is especially true for companies because they can use cash to reinvest in their business operations, pursue new business opportunities such as acquisitions or return cash to share holders in the form of dividends and share buy backs. Any of those uses for cash should increase share holder value. This indicates that cash, and the sound use of cash, are important to creating wealth for investors. This week, we focused on the availability of cash when we searched for companies as potential investments. We started our screen by searching for firms with high proportions of ...
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Stocks always go up, in the long run. At least that’s what every financial adviser seems to say. Because stocks always go up in the long run, many advisers tell us we should sit tight and never worry about a market decline. Patience will be rewarded. There are at least two problems with this line of reasoning. First is the fact that, as the economist John Maynard Keynes pithily noted, “in the long run, we are all dead.” Many will ignore Keynes wisdom here because it seems to be a hyperbole. But, it’s important. What Keynes was saying is that the long run ...
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Each week, we screen for stocks that could be headed higher. This week, we focused on just four criteria. This demonstrates that stock screens can be relatively simple, although we are harnessing hours of Wall Street research to help us speed up our own search. To benefit from Wall Street’s research, we included analyst’s ratings in our screen. According to one study, more than 3,000 analysts work for more than 350 sell-side investment firms in the United States. They provide analysis, earnings forecasts, and buy and sell recommendations on individual companies. Analysts are biased and tend to rate stocks as buys ...
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