In normal markets, news of a layoff can lead to a share price going higher. The market tends to interpret that as a company reducing headcount, especially if the company has been growing. Today, it may lead to a selloff, as traders may be concerned that the company is shrinking. But companies that are looking to streamline just parts of their business, particularly in its executive suites with cuts at the corporate level, can send a message that they’re concerned about costs. Apparel retailerThe Gap (GPS) is one company making such a move now. They’re eliminating 500 corporate jobs i...

The stock market will always be volatile. In today’s environment, big daily swings have been the norm. For investors who are using those swings to pick up quality companies at a reasonable price, they’ll be rewarded on top of any trading income as well. Right now, markets are fearful over a potential decline in corporate earnings. That’s already been the case for a few quarters, but high energy prices this year are causing higher prices in everything from electrical generation to shipping costs. The most recent company to warn on shipping costs has beenAutoZone (AZO). The automotive ...

Inflation continues to eat away at consumer’s purchasing power. And while it’s blindsided some investors, it’s also been tough to hedge right now. That’s because conventional hedges haven’t worked too well yet, as investors have gone through other alternatives first. However, gold is starting to look undervalued relative to other commodities. And it has a long history of holding up well compared to inflation, both expected and unexpected, over time. As gold prices look undervalued, so do prices for gold mining companies. These firms have been performing well operationally, but are do...

Inflation can be an insidious force, making investing a challenge. That’s because there are some areas where customers have to spend more due to inflation, whether they like it or not. Other businesses are more elastic, so higher prices can lead to a big drop in volume. Companies that have strong real demand now can likely perform well in the future as inflation starts to wane. The trick is in finding the right trend to track amid today’s high inflation. One trend gaining steam again is business travel. Largely shut down by the pandemic, it’s now coming back. Amid rapidly changing – ...

When an industry is new, it may result in dozens or even hundreds of companies creating a product or service. As it matures, an industry will tend to consolidate into just a handful of players. The classic example of this is the automotive industry, where a number of brands either went bankrupt, or were absorbed into what are now known as the “big three.” Other industries are consolidating now. Finding the best values out there can mean getting into companies poised to get bought out as the number of total players shrinks. One area that’s seen a big increase in competitors in the pas...

Many companies have been hit hard by the pandemic as they’ve failed to pivot to business strategies better suited to events. However, companies that have made the pivot have been faring better. Some are more profitable as a result, while some are still building out the infrastructure to succeed. That’s leading to a number of companies showing growth now, or in future quarters, that may be being discounted by today’s fearful markets… creating a solid long-term buying opportunity. One company still in transition isOracle (ORCL). The software and database giant has been shifting towards...

Some companies are simple, offering only one product or service. Others have many parts. And in bear markets, complicated companies may end up trading for less than the sum of their parts. That can attract value investors, as well as activist investors. Investors who can determine the true value of a company with a large number of different moving parts can potentially see big returns when there’s a divestment, successful activist investment, or even just a market turnaround. One company that may be worth more than its parts right now isThe Walt Disney Company (DIS). The entertainmen...

Valuations on tech stocks have been hit hard in the past year. That’s because a number of companies have shown that their growth projects were unable to handle a slowing economy. Other tech firms have had no such problems, however, even if these positive developments haven’t been reflected in their stock price. One way to look at how these companies are performing is by looking at how their billables are changing now. If a company is continuing to grow its customer base, or its revenue per customer, prices should go up in time. One company continuing to grow its customer base now ...

A few major themes have been at play over the past year. While tech stocks have largely sold off thanks to a decline in investors willing to take on risks, a shortage in the semiconductor industry has created a unique situation. These companies are poised for their best growth in years, yet are also trading at their best valuation in years. Investors who accumulate shares of these leaders now can benefit when that price trend changes. Among the semiconductor giants, there’s some jockeying between the big players in terms of new offerings and features. With what looks like the best co...

This year has been challenging for investors. A slowing economy and high inflation are creating a poor outlook for markets. Yet buying during challenging moments can be a solid time to invest. That’s particularly true when investors sell as soon as skies are clear. Many companies are facing challenges right now. But companies with a long operating history of succeeding in different environments should get through today’s troubles with ease… although it may take some time. One company struggling now isTarget (TGT). The “cheap chic” retailer has been cutting prices to clear inventory a...