Every industry will have several players. Depending on the structure of the industry, there may be dozens of players or just a few. The ease of entering the industry and successfully competing can make a big difference. That’s why the restaurant industry has dozens of options. But the credit card networks have just four players due to the high cost of entry and building a network. Today’s tech companies often have just a handful of players. That’s because these companies can successfully build a network and become the most-used in their industry before competition can set in. When...

For investors, a company’s prospects come down to earnings. Rising earnings will drive a stock higher over time. And when a company reports great earnings, but shares sell off, it may create a buying opportunity in the short-term. That’s especially true when a company isn’t just reporting great earnings but manages to consistently beat bullish expectations. Such a company can likely lead to far higher returns for investors when bought during a selloff. Right now, app performance monitoring companyDatadog (DDOG) fits the bill. Earnings surged and far exceeded expectations in each o...

Even with stocks near all-time highs, the recent pullback has left investors jittery. Small pullbacks are often just a healthy part of an overall longer-term market uptrend. However, they can also be the prologue to a bigger selloff. So far, it looks more like a normal pullback. For investors who want protection, however, the best strategy may involve buying a great company that’s also sitting on record cash. That company isBerkshire Hathaway (BRK-B), which is sitting on nearly $190 billion in cash. That’s a healthy level compared to its total market cap. But more importantly, its...

While investors have flocked to AI stocks in the past 18 months, some companies have sold off as AI technology threatens their business model. Software can now replace what an employee does, not only saving money, but also completing the work at a much faster rate. A third set of companies is one where AI may lead to some big opportunities but also has the potential to decimate an existing business. These companies are likely to get whipsawed. One such company isAdobe (ADBE). The software company’s core business could be under threat from AI. But the content creation ecosystem still ...

While the market focuses on earnings, companies can do a lot to impact that number. It’s harder to impact revenues, or the raw cash coming in the door. When business is good, more money is coming in. And that will translate to higher earnings and should also propel shares higher over time. When an industry leader is seeing higher revenues, it’s also a great sign for the sector as a whole Hotel and casino operatorMGM Resorts (MGM) just saw a big revenue beat, as well as strong earnings. Money is coming in hot for the company’s Macau operations, and Las Vegas revenues also look bull...

To get a great investment return, look for companies with a high barrier to entry. This likely means a sector only has a few players for customers to choose from. It also means that those companies can earn consistently high profits, which in turn is great for shareholders. A company with a high barrier to entry has a powerful business model that can allow it to earn big profits. Investing when those companies are down can lead to great returns. One area that investors can come back to time and again are the credit card companies. They’ve built up powerful networks that no startup co...

A company that’s out of favor with the market can see big returns once it moves back into favor. But first, it has to have been out of favor for so long that shares are cheap. It also helps if the company is growing earnings and revenues. From there, it’s best to wait until an uptrend starts. A hated company will typically start to move higher even if shares are out of favor with investors. Once perception flips positive, the rally can really take off. That could be the case with payment platformPayPal (PYPL). Shares have been out of favor with the market for years. Yet the company h...

The market is starting to show some mixed signals. The effects of above-average inflation over the past few years has hit a number of sectors hard. Investors are now learning that fast food may still be fast, but with soaring food prices it may not be cheap. However, there remain some opportunities in the restaurant industry. Particularly for companies that can keep costs down, consumers happy, and already have a reputation for beating the market. Pizza giantDomino’s (DPZ) just beat on earnings and revenues. The pizza chain’s focus on quality in the 2010s made it one of the market’s ...

While inflation is nowhere near its highs from the past few years, it’s still stuck at a higher level. That could weigh on company profitability, particularly for companies that can’t pass off higher prices to customers. However, companies with strong brands and low-priced items can typically raise their prices above and beyond inflation. That means that even as prices rise, they can continue to earn a solid return. These companies may be worth a closer look as inflation stays high. One such company with leading brands isColgate-Palmolive (CL). The manufacturer of household brands su...

Investors can make great returns with the right blue-chip stocks, provided they’re bought at the right time. Many companies go in and out of favor with the market for various reasons, and earnings season can lead to quick drops. However, for sectors that have bullish longer-term trends behind them, a drop following earnings can be a great investment opportunity. It can allow investors to buy in and get a reasonable price on a company likely to outperform for years. Right now, the United States is undergoing a construction boom. It’s related to a housing shortage, as well as industria...