The stock market is a complex interaction of several factors. And while the headline numbers for the stock market are still strong, behind the scenes, a rotation is underway. That rotation includes a shift away from high-flying tech stocks. Instead, other segments of the market are starting to show some strength here. That’s a good sign of a sector rotation underway, where different sectors take over the market lead. For instance, the healthcare sector was a poor performer in 2024. But it’s starting to show some signs of life, and is looking even better when measured against flatlini...

Over time, a company’s earnings are the key driver of its returns. However, many industries look at other metrics to determine the quality of earnings. Understanding these key metrics can give investors a sign as to a company’s long-term health beyond earnings. For instance, the restaurant industry may look at the turnover, or the number of times that customers sit down at tables during the course of a day. Many retailers use similar metrics. The simplest metric for retailers and fast food restaurants is same-store sales. That gives a sign as to whether a company is performing well, ...

One way investors can find good opportunities is to find stocks that institutional investors are buying. Institutions have to declare their stock purchases over time, from insurance companies to hedge funds, and any organization that becomes a major shareholder. When these big players buy in, it’s a sign that they expect shares to trend higher over time. It may not happen right away, but these large buys are usually a sign of a stock with significant upside. One recent institutional buy is Uber (UBER). Pershing Square, the fund managed by Bill Ackman, is built a large stake in the ri...

Companies have many ways to see faster growth. One way is to invest more into researching new products and services to offer. For some companies that have multiple departments and divisions already, a corporate spinoff may be ideal. That could include the direct sale of a division to another company. It could also mean that a company voluntarily splits itself up into two or more companies. That way, investors can view a company as a standalone business, not as just one part of a more unwieldy whole. General Electric made such a split in the past few years, splitting into three compan...

This earnings season, many companies with large exposure to cloud storage have reported weaker revenues. That’s been a big driver for a selloff, even if overall earnings have generally been bullish. That’s creating a short-term opportunity to buy a drop in these companies. After all, data needs only continue to rise. And companies that provide cloud services have more jumps in demand coming as AI programs continue to roll out. For instance, Google (GOOG) saw its largest one-day market cap decline ever following its latest earnings. Overall numbers were good, but revenues were a littl...

Over time, a stock will continue to rise thanks to growing earnings. That tends to be the stickiest metric for investors when it comes to rewarding a stock. However, over the course of a quarter, other factors may be at play. Consequently, that can mean that a company is capable of growing its earnings, but can also be susceptible to market fears along the way over other concerns. For instance, digital payments company PayPal (PYPL) just beat on earnings and revenues. But markets didn’t like that the company’s overall margins contracted compared to prior quarters. That’s a solvabl...

Earnings season is underway. And investors are finding reasons to be both bullish and bearish right now. For companies that are beating earnings handily, the market is generally rewarding those companies, especially if they also show the ability to raise their guidance. That includes tech and non-tech stocks alike. With some of the rising uncertainty the market, including uncertainty over AI investments and trades, investors may find better returns with more defensive companies beating earnings now. One such play is food giant Tyson (TSN). The company just reported fantastic results ...

As a company grows, it often requires investor capital to succeed. That can mean issuing shares over time. As a company matures, its cash flows rise, and they can start rewarding investors with buybacks and dividends. Dividends aren’t as tax efficient, but investors tend to flock to cash flows. If a company’s dividend comes under threat, however, a big selloff may be in the works. Shares of United Parcel Service (UPS) sank to a multi-year low, following earnings and a report that Amazon (AMZN) will be cutting its shipping volume. The company reports that its dividend, which has no...

Earnings season is in full swing. Investors have been willing to reward companies with strong guidance, and punish those with weak guidance. However, not all guidance is created equal. It’s a future estimate after all. Understanding why a company may struggle in the future can give a better understanding of whether or not a company has been fairly or unfairly punished when the market sends shares into a selloff. For instance, tech giant Microsoft (MSFT) sold off 6% on Thursday following earnings. The company’s web services division, Azure, was softer than expected. However, Microsoft...

Consumers have shifted tastes in recent years, spending less on goods and more on experiences such as travel and vacations. Part of that shift also includes a trend towards dining out more often. While there have been some worries about a slowdown in consumer dining, the latest earnings suggest that isn’t a worry. Customers continue to go out to dine, with many restaurant franchises benefiting from the ongoing spending. That includes Brinker International (EAT), owner of chains such as Chili’s. The company’s offerings are hitting the right price point to keep customers coming back...