Stocks To Buy

While the overall market has its ups and downs, individual stocks can have more extreme moves. When a company has an extreme rally higher, its shares may be more susceptible to a pullback. The reverse is true when a company has been falling relative to peers. This concept is known as reversion to the mean. And it’s a sign that investors might be able to find buying opportunities in beaten-down stocks. Or traders can find overpriced stocks to target for a ...
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Years of ultra-low interest rates made it easy for companies to issue debt at a low cost. As a bonus, companies could even deduct their interest payments for tax purposes. Today, with interest rates rising, it makes less sense for companies to take on debt. They would need a project with a high prospective return to justify the costs. So companies paying down debt rather than looking to add more or refinance at today’s relatively high rates may offer solid returns. One ...
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While traders are often looking for a quick trade, many so-called investors are often looking for a stock that can move higher quickly. By focusing instead on companies that can deliver steady, long-term growth, however, they may fare better than getting on the wrong side of a growth story that goes bad. These long-term plays can often by found by being household names, which may indicate a strong brand. Or they may be dividend payers. Often, they’re both. One household name that ...
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While earnings are the most important part of earnings season, they’re simply a yardstick that considers different accounting measures across different sectors. A different measure, cash flow, can give a sense as to a company’s ability to start and grow a dividend, buy back shares, or otherwise reward shareholders. That cash flow may not always pass down to earnings. But for a poor investment, it’s often true that earnings will look higher than cash flow indicates. With a slowing economy and slow ...
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A company can have a great product. Or a great marketing team. But if management isn’t good… the company will falter. Even a manager who knows to step aside for the team is better than an executive who makes the wrong decisions and ignores what the staff has to say. This can translate into great stock returns… or poor ones. So all said and done, company management is a key factor, even though it doesn’t show up on the balance sheet. Investing ...
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Earnings season can create a tremendous amount of short-term noise. Companies tend to focus on 90-day sprints, rather than the long run, to keep Wall Street happy. But even with that short-term focus, a company can be working towards long-term goals and get hung up in the short run. That’s especially true when a company plays to long-term trends but hasn’t seen the cycle turn favorable for those trends yet. In the tech space, chipmaker Advanced Micro Devices (AMD) took a hit ...
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The stock market is an index of a number of companies. And it’s largely weighted by market cap. That index can change all the time, and for any number of reasons. One reason may involve the bankruptcy of an index member company. That’s the case with the S&P 500. First Republic Bank is no more, having been seized by regulators and having its deposits sold off. But it’s the S&P 500, not the S&P 499. The index needs a new member. Traders ...
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During a gold rush, most prospectors won’t find much, if any, gold. The real winners are those who supply prospectors with tools that they need, such as picks and shovels. Today, these suppliers don’t even need to provide a physical tool. And they can profit from selling a service with a recurring revenue. That’s where cloud service companies come into play. Spending is slowing, even as it’s grown 19 percent over the past year. Pick and shovel plays in this market are ...
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