Stocks are hot again, but as in 2000, not all of them are reaping the benefits.
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Bears focus their pressure on the stocks that led the post-September rally, signaling that the market correction is far from over.
Over the last few weeks, a curious stalemate had developed in the stock market. The bears, encouraged by soaring oil prices, political turmoil in the Middle East and Africa, and fresh worries over European debt problem, have come out of hibernation in a big way for the first time since the seven-month market uptrend started last September. They've viciously defended the 2,800 level on the Nasdaq Composite.
The bulls continue to believe that the Fed's easy money will win the day and literally paper over the world's problems with cheap dollars. They've defended the Nasdaq's 50-day moving average.
But on Thursday, the stalemate was broken as the bears eviscerated stocks in leading sector groups like semiconductors, materials and energy. The rotation out of cyclical, high-beta sectors suggests the bulls are now in full retreat. And that means there is more downside movement yet to come.
There's more growth left in this Chinese firm than you'd think.
Fool analyst Jim Mueller is back with another stock for his my Messed-Up Expectations (MUE) portfolio. His idea this time comes from a company that's been able to keep its head above water even in the raging rapids of the credit crisis.
Rex Moore, Motley Fool Top Stocks Editor
If you like gadgets, then you probably like Nam Tai Electronics (NTE), or at least have used its products. It's a Chinese maker of components used in putting together cell phones, notebook computers, digital cameras, and other electronic gadgets. While it doesn't sell directly to consumers, it is affected by the success of those that do.
As you might imagine, it was hit pretty hard by the last recession, with revenue dropping 20% and 34% in 2008 and 2009, respectively, while net income fell 56% and 95% for those two years. Even in the depth of the recession, however, it managed to eke out a profit, something that its two major competitors, Jabil Circuit (JBL) and Flextronics International (FLEX), can't say.
After ending an exclusive deal to supply coffee to Kraft's Tassimo machines, Starbucks partners with Green Mountain.
The company is finally offering its coffee in the single-serve K-cups used by the Keurig machines from Green Mountain Coffee Roasters (GMCR). Investors were ecstatic at the news, sending Green Mountain shares up more than 30% Thursday to $57.09. Starbucks shares rose nearly 8% to $37.23.
For now, it looks like Starbucks has taken the sensible route. Some observers had speculated that the company would debut its own line of single-serve brewers, eating into the market now dominated by Green Mountain.
But instead of opening that can of worms, Starbucks chose to partner with Green Mountain. The Starbucks-branded K-cups should be out this fall.
These companies are expanding at rates not yet reflected in their shares.
By James Dlugosch, Stockpickr
There are many ways to make money in the stock market. Some investors prefer to buy stocks and hold for the long term. Others like to trade stocks for short-term profits.
Whatever your preference, investing or trading, you need to pick stocks that can be bought or traded for a profit. The many methods at your disposal in finding opportunities include value, growth, technical analysis or some hybrid style of investing.
It has been my experience that the hybrid approach generates the biggest bang for the buck. Specifically, I like to find stocks that are growing faster than the market currently values shares.
Over the past decade or more, I have used this growth-at-a-reasonable-price approach to generate big gains for my stock picks. It may sound simplistic, but when a stock is growing its earnings at a rate of, say, 20%, yet trades for only 10 times forward earnings, the result is fairly easy to predict: The stock price will go up.
Chinese growth is slowing, European countries are struggling to emerge from debt, and expensive gasoline could damage the US economy. If oil doesn't sink soon, we could be in for trouble.
Binary situations make for some tough investing, and this binary situation -- oil going higher, oil going lower -- may be one of the tougher predicaments this bull market has faced.
That's because, despite the incredible resilience of the restaurants and retailers that I wrote about Wednesday, the creaks that come from higher oil prices are setting in. They just aren't settling in the places we thought they would. And as long as oil prices stay elevated, the stakes will keep being raised.
First, the gospel has become, in the past 48 hours, that China has been hit hard by a government-mandated slowdown that is now being exacerbated by the cost of oil. The trade numbers last night -- the $7.3 billion trade deficit -- gave us concrete evidence that China's economy is already being hurt by oil. The numbers were surprisingly weak. The inputs from China reverberate from steel and copper and coal imports -- the entire universe of resource companies is being pummeled -- to the auto and tech markets.
Nearly half of all e-book purchases were made on an iPad, and 17% of tablet owners abandoned their Kindles.
Since its release, the iPad has been the standard by which competing gadgets are measured. Of course, that was as much due to a lack of competition as it was because of fanatic early adopters. Apple (AAPL) did, after all, single-handedly create the product category for tablet computers.
But now other manufacturers are coming out with flashy tablets, and Apple hopes the release of its iPad 2 last week will maintain its current dominance in the category.
A new survey shows that it will -- and remains a runaway favorite. But that's not all that shocking. More importantly, the survey indicates Apple may strike a nearly fatal blow to one of its top competitors, the Kindle.
Berkshire Hathaway's $26.5 billion purchase of Burlington Northern looks like it's already paying off.
Buffett's Berkshire Hathaway (BRK.A) took $2.25 billion in dividends from the railroad in less than 13 months, Bloomberg reports. If that seems like a lot, that's because it is: The payout is triple what the railroad previously paid before it was acquired.
That Oracle of Omaha is a cagey one. Berkshire had $38.2 billion in cash at the end of December, and the dividends from Burlington Northern will add to that cash position, Bloomberg reports.
Berkshire bought Burlington Northern for $26.5 billion -- a move Buffett called the "highlight of 2010" in his annual letter to shareholders last month. At the time he bought the railroad, Buffett described the move as an "all-in wager" on the future of the U.S. economy.
Google's mobile platform rockets to the top, grabbing 31.2% of the smart-phone market.
Google's share of the U.S. market is up to 31.2%, comScore reports. That's a 7.7% gain from last fall. No other platform comes close to this kind of growth.
Research In Motion (RIMM), maker of BlackBerry phones, saw its market share drop 5.4% to 30.4%. And Apple (AAPL), for all the hype surrounding its iPhones, gained only 0.1% to 24.7%. Microsoft (MSFT) was barely a contender, with an 8% share, and Palm had a 3.2% share. (Microsoft owns and publishes MSN Money.)
The market in general saw 8% growth, with nearly 66 million Americans owning a smart phone by the end of January. This is the first time Google has captured the top spot, and at this rate, Android will dominate for a long time.
Wireless carriers won't subsidize Apple's newest gadget.
As Apple fanfolks eagerly await Friday's launch of the iPad 2, Rick Munarriz is wondering why he'll have to pay so much more for the 3G model.
Rex Moore, Motley Fool Top Stocks Editor
Every Apple (AAPL) fan knows that the new iPad comes out on Friday, with improved specs at the same price point at the original. AT&T (T) and Verizon Wireless -- a joint venture of Verizon (VZ) and Vodafone (VOD) -- will both offer units at all three storage capacities that connect to each company's 3G network. So why are we still paying $130 more for the 3G models than we do for those strictly limited to Wi-Fi access?
I understand that the 3G chips aren't cheap. I'm merely asking why AT&T or Verizon aren't offering subsidized iPads if buyers agree to contractually shackle themselves to two years of service.
Prosecutors start making their case against a billionaire hedge fund founder accused of profiting from secret information.
The case against Raj Rajaratnam promises huge fireworks. Whistleblowers will reveal themselves, secretly taped conversations will be played, and even Goldman Sachs (GS) head Lloyd Blankfein is expected on the witness stand.
A mountain of evidence will help prosecutors lay out a case against the 53-year-old Rajaratnam, a Sri Lankan-born American who founded the Galleon Group hedge fund. He became one of the richest people in America, with a net worth in 2009 of $1.3 billion.
How'd he get so rich? He claims it was simply pride and hard work -- and I'm sure that's partly true. But he also had a huge network of business buddies, prosecutors say, who would regularly call him with little tidbits of information that Rajaratnam would use to buy and sell stocks.
The launch of the new model Friday could spur a huge inventory pileup.
By Scott Moritz, TheStreet
Based on industry production estimates, 81 million tablets are scheduled to be manufactured this year, JPMorgan analyst Mark Moskowitz wrote in a research note Wednesday. That number is nearly twice the 47.9 million tablet sales estimate Moskowitz has for 2011.
Assuming tablet makers recognize they may have overestimated the opportunity and prudently reduce production plans by 20%, that would still create a surplus of 17.2 million devices -- or a 35.9% oversupply -- of tablets this year, according to Moskowitz.
This small-cap fund aims to profit from an improvement in citizens' quality of life.
By Don Dion, TheStreet
As the nation aims to further strengthen and stabilize its economic muscle, investors have a chance to follow the efforts using exchange-traded funds.
Starting late last week, Chinese lawmakers convened in Beijing to discuss the nation's future. Unveiling the 12th five-year plan, China's leaders indicated that a dramatic shift is in the works that will play a major role in shaping China's role as an economic superpower.
If you jump into the stock now, you'll be at the mercy of the naysayer news flow.
The answer is elusive: You have to let the stock tell you what to do. You have to let the stock tell you when it is prepared to be owned. Judging by what happened Tuesday, we aren't there yet.
That's because NFLX got killed, just killed, off of a one-page note by Goldman Sachs (GS) saying that Facebook might be streaming some movies on Facebook pages. Golly gee! There you go! Six hundred million Facebook users vs. 20 million Netflix subscribers. Let's just call it game over!
That's how Netflix stock acted.
Now, at any given minute, any company in the Web universe can say it is going to compete against Netflix. Think about it. If you can stream movies on a Wii or a Playstation, then why shouldn't Nintendo or Sony (SNE) announce tomorrow that it is the Netflix killer?
LAN gets another green light in a proposed deal that would create the largest airline in Latin America.
EnerNOC can help investors get more from energy.
Fool analyst Alyce Lomax is managing a portfolio designed to reap both financial and social dividends. Given that purpose, companies that help conserve precious resources and keep the lights on more efficiently are perfect buy ideas.
Rex Moore, Motley Fool Top Stocks Editor
This month, I'm buying EnerNOC (ENOC) for my Rising Star portfolio. This stock that may be a new Foolish favorite: Both our Motley Fool Rule Breakers and Motley Fool Hidden Gems services have singled it out, and last week, fellow Fool Dan Dzombak recently purchased shares for his own Rising Star portfolio.
For my portfolio's purpose, EnerNOC's biggest strength is its power to make our world a little greener by incentivizing energy savings. Still, despite this halo, purchasing EnerNOC includes very real risks.
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Forget the gloom-and-doomers. Here's what will drive the ascent in the new year.
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[BRIEFING.COM] At midday, the S&P 500 trades lower by 0.2%, looking to avoid its fourth day of losses.
Stocks began the session in the red as cautious action in Europe once again contributed to early weakness. In addition, bonds and risk assets were pressured by a better-than-expected ADP Employment report, which indicated employment in the nonfarm private business sector rose by 215K in November (160K Briefing.com consensus). The report increased expectations for a strong nonfarm ... More
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