Cheap Stocks Analysts Believe In

We’ve all seen it happen dozens of time. A stock sells off sharply after missing analysts’ expectations. Sometimes, earnings per share (EPS) come in just a penny below expectations. But that small miss can cost investors hundreds of millions of dollars.Of course, we’ve also seen the opposite happen. A stock soars after the company delivers EPS that beat expectations. It seems that beating expectations is all it takes for some stocks to end up on the list of the market’s biggest gainers on the day after they report earnings.As we look at these news stories, we noticed a common theme ...
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Spinoffs Can Unlock Value

We are always looking for ways to find value in the stock market. Our search includes researching for traditional value stocks and finding ways to identify high probability opportunities in growth stocks. We have researched momentum, size and other factors. Many strategies can be applied profitably. We also apply less well known strategies. These strategies often require more work but can offer larger rewards.Over the years, one of the strategies we have used with success involves spinoffs. A spinoff is a corporate transaction that is intended to unlock shareholder value. Based on experience, we know investing in spinoffs can be ...
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The Best Trades for May, Following A Strategy That Is up XX% This Year

At the beginning of the year, we began sharing real time buy recommendations with you for a successful trading strategy. This month, we continue with that process.The strategy is among the simplest seasonal trades possible. Few traders follow seasonal strategies although these strategies are often profitable. They are also relatively low risk because they limit market exposure to short periods of time. To apply this strategy, we are running a scan to find the stocks with the best historical performance in the month.To find trades for May, we started by looking at how stocks have performed, on average, during the ...
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Duplicating the Success of Sir John Templeton

Sir John Templeton was one of the world’s greatest investors. But, his investment philosophy is less widely studied than the philosophy of more famous investors like Warren Buffett or Peter Lynch. This is unfortunate because Templeton’s wisdom can help small investors succeed.Templeton started his Wall Street career in 1938 and would eventually gain some degree of fame as the founder of one of the world’s largest international mutual fund company. Templeton was among the first to recognize the power of global diversification. The mutual fund company he founded, now part of the $720 billion Franklin Templeton Investments family, was a ...
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Are Stocks Overvalued?

Investors are often worried about the next bear market. The reason for this concern is obvious. Avoiding the bear means they can preserve wealth. But, becoming defensive too soon means missing out on gains that allow investors to accumulate wealth. Both problems, losing wealth in a market decline and failing to accumulate wealth as the market advances, can prevent an investor from meeting their financial goals. This means investors will spend a great deal of time searching for clues that will help them spot the next bear market in advance, but not too far in advance.To spot the bear, many ...
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How to Trade in Stock Market like Warren Buffet’s Teacher

The greatest influence on the investment style of Warren Buffett was Benjamin Graham, widely considered to be the originator of value investing. In 1934, Graham even wrote the book on value investing when he published “Security Analysis” with David Dodd. This was the first book to provide a detailed explanation of how to value a stock. This book was one of the most important books ever written about finance and remains on the book shelves of many investment managers more than 80 years after it was published.After reading the book, Buffett decided he should go to Columbia Business School so ...
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Reading the Charts Right Now: Bullish Until This Happens

Many articles on chart patterns are theoretical. Instead of telling us about the market, the writer provides an abstract explanation of a pattern. There is a very good reason for this. Many of those articles are written for educational purposes. The author starts with the pattern and provides the reader with a roadmap of what to look for. In this article, we are going to turn the process upside down. We will start with the chart and explain what we see. Our goal is to explain how a chart can be read, moving from theory to practice.We are looking at ...
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The Best Trades for April, Following A Strategy That Is up 12% This Year

This month, we are continuing to apply our seasonal strategy. The strategy is among the simplest seasonal trades possible. We are running a scan to find the stocks with the best historical performance in the month.To find trades for April, we started by looking at how stocks have performed, on average, during the month. We assumed the stock was bought at the beginning of the month and sold at the end of the month every year. We then calculated how well that strategy would have done for every stock in the S&P 500 index. We limited our test to stocks ...
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