In a rough market, even great companies will miss on earnings. But how they miss can be illustrative of their potential future returns. For instance, with inflation data coming down, companies dealing with high costs could see that factor fade away. With Wall Street looking at each quarter’s numbers compared to the year before, declining costs could lead to a big move higher for any company with something positive to report. For instance,Carnival Cruise Lines (CCL) reported a narrower loss in its most recent quarter. The biggest issue was rising food and fuel costs, which weighed on ...

In a bull market, investors can buy just about any stock and make money. While it’s tougher in a bear market, there are several stocks that can hold their own and even gain. That’s true of every bear market. 28 of the 30 Dow stocks dropped in 2008, but 2 of them managed to move higher. In this current market, with rising interest rates and a slow economy, it’s no surprise investors are turning to defensive stocks once again. One defensive stock – which closed higher in 2008 – wasWalmart (WMT). The retailer is likely best-positioned for a slowdown in retail spending going into 2023. S...

Investors tend to gravitate towards great companies. Those companies tend to dominate their industry, and tend to grow massive. That makes it easier for investors to justify owning. While we’re fans of big-name tech companies thanks to their high profit margins and industry positioning, many more off-the-radar companies can be big winners too. That’s especially true getting out of well-known tech and consumer brand name companies and into infrastructure and industrial stocks. These companies manufacture many of the products needed for other companies to succeed. One such company isRe...

The economy continues to slow. While that’s starting to show up in declining year-over-year inflation rates, the market is warning about a recession in several ways. Big businesses are one of the places where the alarm has been sounded. That’s because a few companies have announced layoffs, of anywhere from 5 to 30 percent of their workforces. Typically, a company that can do more with less can fare well over time, however. One of the most recent companies to announce layoffs isGoldman Sachs (GS). The investment bank sees its staff dropping by 8 percent in 2023, although it may not b...

In any sector or trend, a few companies come to dominate. The headline names may attract considerable attention, but the real returns can often be in the companies providing the infrastructure behind it. These “pick and shovel” plays may lack for an exciting story, but when it comes to investing, a boring idea that’s profitable tends to have a better valuation than going after the exciting story. In the cloud services space, server processors make the most attractive story. Rather than focus on tech conglomerates or software plays, companies making server chips could be the big winne...

Investors often see a trade-off between high growth opportunities and income. However, in a market selloff, growth names can go on sale. And when they do, any dividend that they may be paying can become much larger than average. Striking a balance between the two involves looking at where some of the best bargains lie under current market conditions. But investors looking for growth and income have a growing number of opportunities right now. One such opportunity is inQualcomm (QCOM). The manufacturer of wireless chips is a dominator in its niche. And with shares down 35 percent over...

There’s an old Wall Street saying that they don’t ring a bell at the top. That’s also true of the bottom for the stock market, a sector, or individual companies. The best that investors can do is look for companies that are growing during a tough time – and increasing their market share. These companies will survive, and likely be rewarded for their growth, even if that takes time to play out with a new bull market. One company we’ve seen play to this trend isOracle (ORCL). The database giant has made tremendous strides in the cloud services space. And in the most recent quarter, Ora...

A great company is one that comes to dominate its market. Some industries may have an oligopoly, with a few big players dividing the space up somewhat evenly. Others may have one or two big players that dominate the market. Either way, when there’s a bear market, these industry leaders will sell off with other stocks. And short-term hits to profitability can lead to enough fear to make for a compelling value moving forward, particularly for patient investors. Such a case is unfolding withAlphabet (GOOG), parent company of Google. The company continues to dominate in the search engine...

Investors tend to spend bull markets looking for opportunities in high-growth areas. But the economy isn’t always moving at full blast. For slower times, it may be prudent to focus on businesses that aren’t as cyclical, opting instead for companies more likely to be recession resistant. There are many sectors that fit the bill. Some are heavily regulated like utilities and telecoms. Others are more open, such as consumer goods. One niche of the consumer goods space is pet supplies. There’s a growing trend on pet spending overall that could even grow in an economic downturn.Chewy (CHW...

The stock market’s love of mergers and acquisitions has slowed in the past year, amid rising interest rates and declining stock prices. But there have been a few deals announced. Mergers can make companies bigger overall by providing an immediate and established source of revenue. Some deals will end up garnering regulatory scrutiny. Regulators want to ensure that a company doesn’t come to dominate the market it’s in via acquisitions. The FTC has come out againstMicrosoft’s (MSFT) proposed acquisition of gaming studioActivision Blizzard (ATVI). Valued at $69 billion, shares of the...