Look Beyond One-Time Events for Long-Term Winners
Life is complex. A company that is executing a long-term plan may have to contend with short-term unexpected events. At one point or another, every company hits an unexpected snag and has to report a one-time problem. Sure, for some companies, those one-time events seem to occur more often than others. For others, they truly are unusual events likely to become a distant memory as long-term plans play out. For instance, many companies are taking a one-time hit right now due to ...
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Stick With Quality Companies in Tough Markets
When the stock market is rallying, it can be tough to find a stock to buck the trend. But when markets are skeptical of any economic growth, buying tried-and-true companies being sold off with the speculative names can be a winning strategy. That tends to mean investing in companies of quality. That can mean being in an industry with few competitors, or having a business model that can profit in any economic environment. Defense contractors are one such area for investors to ...
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For Consistent Profits, Follow the Big Money Trends
Even with the short-term fears hitting the economy right now, technology continues to develop at a rapid rate. And the implementation of new technologies takes years to play out, across multiple economic cycles. That means that thosewho invest in these big trends during a market downturn can earn excess returns as those trends continue to grow and play out over a period of months and years. There are many big trends today. But one that may have become overlooked is the rollout ...
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Pricing Power Continues to Point to Profitable Companies In Today’s Tough Environment
Every industry has a key metric that analysts are looking for. That could relate to gross profit margins, sales volume, or the spread between the cost of borrowing and the cost of lending. For the restaurant industry, sales are a key component. Higher-end chains may look at how many times a table turns over in the course of an evening, but for most players, that still translates to plain sales.Chipotle Mexican Grill (CMG) just reported that their sales have been unaffected ...
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Stick With Recession-Resistant Companies that Are Performing Well Now
Most stocks follow the overall market. When stocks are rising, even poorly-managed companies can go along for a rally. And when stocks are falling, even great companies can get sold off as well. Right now, only a handful of companies are performing well in today’s markets. Some of those are commodity plays, others are companies capable of growing no matter what the overall economy does. One such company is theCoca-Cola Company (KO). The beverage giant has some issues with supply chain issues, ...
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Stay Focused on Industry Leaders that Can Pass on Inflation
A company can either pass on inflation to its customers, or it can’t. If a company offers a product or services with inelastic demand, chances are that company won’t feel the worst of the multi-decade-high inflation rates right now. Companies can pass on inflation through a variety of ways. One is shrinkflation, where it simply lowers its content size and keeps the price the same. Or a company may benefit from higher prices because they simply collect a percentage of assets ...
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In Rough Markets, Consider This Overlooked Niche Financial Space
When it comes to the financial sector of the market, most traders look at big banks, credit card companies, and even insurance firms. But there are other parts of the sector that could benefit traders who buy while stocks are out of favor. One such area is in the asset management space. Companies that cater to providing funds and access to financial markets for individuals and other companies alike tend to trade relatively cheaply to the overall market. That could soon change, ...
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Keep Investing in Companies That Can Beat Inflation’s Bite
Some companies are able to pass on price increases to consumers easily. Others are not, and often have to absorb the costs. A consumer goods company can likely raise prices just over the rate of inflation most of the time, and not lose too much business. Companies like a utility or telecom, which may have to wait for approval to raise prices, on the other hand, may not be so lucky. As investors continue to remain defensive right now, it’s clear that ...
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