Many investment ideas run on the idea of a reversion to the mean. That’s just a fancy way of saying that stocks that have performed well will eventually underperform the overall market. And companies that have performed poorly will start to fare better. With the turning of the calendar year, a strategy of buying underperformers is appealing, depending on the name. One such name?Berkshire Hathaway (BRK-B), which has lagged the market by 44 points since early 2019. The case for outperformance is a relatively simple one. The company has been making more investments in high-tech areas. I...

Shares ofWalmart (WMT) have been trending down for a few weeks. To add insult to injury, the U.S. department of justice sued the company right before the holidays. Why? Because the firm’s pharmacies may have been underfunded, which in turn may have helped fuel the opioid crisis. While that headline sounds dire, it’s anything but. Walmart sued the DOJ earlier in the year, seeking clarification on the role of pharmacies, their employees, and their role under the law. In short, while this lawsuit sounds dangerous, it’s really just some legal jockeying. In any event, the news was enough ...

It’s been a banner year for companies going public, as well as mergers and acquisitions. Low interest rates have made financing a good deal. But an all-cash buyer? That may be a sign that a company is getting a true bargain. That seems to be the case withBlackstone (BX). The investment firm is making a $4.3 billion all-cash offer for Signature Aviation, a U.K.-based private jet services provider. It’s the kind of deal that fits in with Blackstone’s wheelhouse. The firm tends to buy in areas where others are selling. And aviation is out of favor right now thanks to travel trends. For ...

The days of physical manufacturing are far from over. But companies still in the space can embrace new technologies to produce better goods in less time and with lower expense. They can also use technology to add new lines of business that increase the bottom line without adding heavy fixed costs. That’s the case with a number of firms. But a surprising name has tilted heavily towards technology recently, and a new acquisition in artificial intelligence moves the needle even further. That company?Honeywell International (HON). The company has invested in blockchain technology to trac...

2020 saw a rapid acceleration of tech trends such as automation and remote work. That trend benefitted the larger area of cloud storage space. That’s helped a number of companies outperform the market this year. Now, Citigroup is upgrading one of the bigger plays in the space. It’s given the stock a street-high rating. And with an expected 20 percent return in 2021, it would add to gains of nearly 40 percent so far this year. That company?Microsoft (MSFT). The tech giant has started to make major inroads in the cloud space in the past few years to compete with Amazon Web Services (AW...

AfterNetflix (NFLX) was allowed to dominate the streaming world for nearly a decade, a number of media companies have belatedly created their own services to play on this growing space. The streaming wars have created a multitude of players. Unlike Netflix, most have operations in other areas outside streaming as well, which can create new opportunities in the post-Covid era. That’s particularly true for companies that have highly-profitable operations that can compliment their streaming activities. One such player isComcast (CMCSA). While still known for providing cable and internet...

For all the unexpected changes in 2020, a few sectors merely advanced goals that they thought would take years to complete. Major software companies shifted heavily towards work-from-home and other remote-work trends, allowing them to be top winners. That trend may not be over yet. The shift this year looks set to solidify next year. And many of the top-performing stocks in the space this year are likely to be big winners next year as well. Bank of America recently resumed coverage in the space, providing a number of buy ratings in attractive software names.Action to take: Of the buy...

It’s no surprise that the restaurant space has had a challenging year. Most small, family-owned restaurants are at risk of bankruptcy, if they haven’t yet gone under. But even publicly-traded companies in the sector have struggled as well. For those chains with poor delivery and takeout options, it’s been a challenge. But companies that have quickly adapted to the times are likely to thrive. That’s why Stifel just upgraded shares of burrito chainChipotle (CMG). While only another $100 was added to the stock’s price target, now at $1,500 per share, the analyst sees the company’s new d...

A company that’s successful will sometimes pivot to a new challenge. Sometimes, it may stay with its core focus. And at other times, it may rest on its laurels, allowing competitors to come in and find a better way to succeed in the sector. In that last case, an activist investor may step in to streamline operations, cut costs, and make the company competitive again. Such investments can often turn industry laggards into leaders. That could be the case withPublic Storage (PSA). Once the leader and starter in the self-storage industry, the company has underperformed competitors in the...