When you buy shares of a company, you’re getting an ownership slice. If the company does well, your shares should rise. The company may even pay a dividend, providing you with cash you didn’t have to labor over for a living. Sounds great! But, a company is more than just the sum of its shares. Companies have a capital structure, which includes a mix of stocks (called equity), and other types of financing, typically debt. Nearly all companies have debt. Some debt, relative to the stock value, is fine. It’s a lot like the mortgage on your home—borrowed money that lets the company do th...
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Unusual Options Activity: Las Vegas Sands (LVS)
A big, bearish trade implies more downside for the casino from here. At least one trader is betting on a big decline in casino firmLas Vegas Sands (LVS). On Tuesday, a large number of contracts traded on aDecember $40 put option. With shares currently trading around $55, which implies a 25 percent decline in shares between now and the end of the year for the put option to pay off like a winning slot machine. The contract had over 1,360 trades, against an existing volume of just over 200 contracts. Shares of the casino have traded as high as $81 in the past year. A slowdown in g...
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Unusual Options Activity: Facebook (FB)
Traders are betting that Facebook shares will bounce after Monday's decline. Some traders are betting that shares ofFacebook (FB) are oversold. The social media giant sold off with the other tech giants on Monday on news that the FTC will look into the company. Shares fell over 8 percent. However, some traders see the move as too much, too soon, and expect shares to potentially move higher from here, with bets on options expiring at the end of this week on June 7. With shares around $171 thanks to the selloff, a surge in call option buyers at the $170, $172, and $175 strike pri...
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Insider Activity: Sally Beauty Holdings (SBH)
Insiders are picking up shares at the cosmetics company. Multiple insiders atSally Beauty Holdings (SBH) have been adding shares in recent days. Chairman of the Board Robert McMaster picked up 5,000 shares, shelling out over $73,000 of his own money to add to his take. CFO Aaron Alt bought 1,500 shares, paying over $22,000 to add to the cosmetic supply company. On top of that, CEO Christian Brickman bought 5,000 shares for nearly $75,000 as well. This is a nice cluster of corporate insiders. The CEO, Chairman and CFO are typically the best informed about a company and its fu...
MoreBuy this Blue Chip Bargain
There are a lot of ways to make money in the market. But even if you find that rare company that can move ten-fold and provide one of the best profits of your lifetime, that will take time. Most investors get impatient. There are far more investors interested in companies likeAmazon (AMZN) today, now that it’s proven its profitability. But even if you invested in the company back when shares were far cheaper, chances are you wouldn’t have taken the full ride. Instead, you would have cashed out and left a huge chunk of potential profits on the table. Rather than try and find the next ...
MoreInvasion of the Unicorns
In Silicon Valley, there are hundreds of privately-held companies known as “unicorns.” That’s a term for a company that has a valuation of over $1 billion based on the last round of equity they sold to private investors. Many of these unicorns will continue to grow and increase in value. Others will fail. A handful will go public. A few have already gone public this year, with more on the way. Some of the biggest names this year have been the ride-sharing companies. In this space, the biggest company in terms of market share isUber (UBER). However, it let competitorLyft (LYFT) go pub...
MoreKey Takeaways From the Berkshire Hathaway Annual Meeting
While investors typically have a passive role in their investments, they do get to weigh in once a year during a company annual meeting. Usually, that’s a boring affair, laden with Wall-Street speak and accounting terms designed to make eyes glaze over. But there’s one huge exception: the annual meeting of Berkshire Hathaway (BRK-A). The meeting makes Omaha the ultimate travel destination in the first week in May for any investor. It’s a circus with all sorts of booths, attractions, and resembles a bit of a country fair or circus as much as a corporate business meeting. And while cor...
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Tesla Turns to the Markets But It Might Not Help in the Long Run
Tesla (Nasdaq: TSLA) recently announced that it would sell about $2 billion in stock and bonds to help fund its operations after a worse than expected first quarter. Regulatory filings show Tesla plans to raise between $2 billion and $2.3 billion, consisting of $1.35 billion to $1.55 billion in five-year convertible senior notes (debt with a low interest rate of 1.5%-2% that can be converted to stock if the share price rises roughly 30%), plus $650 million to $750 million of common stock. There is little chance of failure since the deal is being managed by Goldman Sachs, Citigroup, Morga...
MoreCrisis Investing 101: Buy During Panics
There’s an old investment adage to buy when things look dour. While that sounds great in theory, human psychology makes it difficult. Even thinking about investing in a stock that’s been declining—or has been making news headlines for a defective product—tends to put our caveman brain into flight mode and avoid it all together. But a pause to think more rationally is where the opportunity arises to beat the market. Recognizing that a company is out of favor for short-term reasons, we can then look a bit further down the line. If that company can solve the problem before it goes bankrupt...
MoreTake a Fast Pass on Disney Shares at This Price
The Walt Disney Company is known for many things—Mickey Mouse, princesses, world-class theme parks. Its more recent acquisitions into Marvel, Pixar, and now Fox Entertainment make it a great company. But a great company doesn’t always mean it’s trading at a great price for investors. That’s the case right now. Shares of the media conglomerate surged following the announcement of its new streaming service, Disney+. With a huge entertainment catalogue and a starting price point of $7 per month, the company will be going head-to-head with the lowest-cost streaming services, some of w...
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