There are some picks in this sector that have excellent valuations and strong earnings growth.
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Groupon has risen quickly from obscurity -- and its downfall could be just as fast.
By Paul Larson, Morningstar StockInvestor
While Groupon (GRPN) has quickly made a name for itself, this recent IPO appears ripe for selling. Even though the stock fell after the IPO, it still looks richly valued. Caveat emptor!
Heavy spending and rapid expansion has helped Groupon establish a market for "daily deals" and email promotions for local businesses. With a database of more than 115 million email subscribers, Groupon has built a large audience to market deep discounts (called "Groupons") offered by local merchants.
BP is downgraded to 'hold,' and Costco is initiated with 'market perform.'
Wednesday's noteworthy upgrades include:
Better times lie ahead for the burger chain.
When Wendy's (WEN) CEO Emil Brolick was hired last year, the burger chain was in the midst of an identity crisis. That's no longer the case.
The company made famous in folksy commercials featuring its late founder Dave Thomas has moved into the lucrative fast casual market with premium offerings such as the W burger. Brolick is also sprucing up the chain's locations and stressing the importance of good service. Though he took the job only in November, he is already seeing results.
A breakup of the drugmaker into separate operating entities should unlock shareholder value.
By Gregory Dorsey, Leeb's Income Performance Letter
In addition to quantifiable metrics such as reasonable valuations, solid growth prospects and a strong balance sheet, one of the less tangible characteristics we look for is a history of maximizing shareholder value.
It adds a measure of safety that can protect investors if the market hits a rough patch. Such is the case with Abbott Labs (ABT). Abbott announced last fall that it was splitting itself in two, a move it expects to finalize toward the end of this year. Indeed, with this stock investors are getting 'two for the price of one' as the company.
It's certainly profitable, but unresolved spill liabilities still keep it risky.
By Aaron Levitt
What a difference just a year and half makes. It's been roughly 19 months since BP's (BP) Deepwater Horizon rig disaster. The resulting explosion killed 11 workers and created one of the worst oil spills in recent history. Since then, it's been a long, hard climb for the integrated oil major.
However, BP's Tuesday earnings report points to improved results and a potential turnaround. But with legal liabilities from the Gulf of Mexico spill still hanging over it, the question remains: Is BP a buy?
Investors can find safety not just in gold and Treasury bonds, but also in some of the market's large cap stocks.
Over the past few years, a number of macroeconomic events -- ranging from the 2008 financial crisis to the Arab Spring uprisings in the Middle East to Europe's debt problems -- have led investors to load up on assets that offer (or at least are perceived to offer) safety. Since the start of 2009, gold prices have just about doubled, and since mid-2009, yields on 10-year Treasury bonds have been just about cut in half.
But what's interesting is that many of the stocks that should be considered safest -- big, high-quality blue chips -- haven't been getting much love from investors. Over the past three years, the Vanguard Mega Cap 300 Index ETF (MGC) is up 59%; the Vanguard Total Stock Market ETF (VTI) meanwhile is up 68%, and the Vanguard Small Cap ETF (VB) is up more than 100%.
Experts say why they like stocks in the mattress, information database and gaming sectors.
Mattresses, information databases and gaming? The Zacks panel of experts takes them on, offering stock picks in each sector in the following video post.
A technical breakout bodes well for this cloud-computing play.
Rackspace Hosting (RAX), which provides Internet hosting and cloud-computing services, is our latest featured breakout stock.
Rackspace serves some 130,000 business customers and manages more than 66,000 servers, 2.1 million email accounts, and 417,000 cloud-hosting domains. It offers its products under the Fanatical Support brand and sells services to businesses in more than 120 countries. Rackspace has annual revenue of $957 million.
Apple's upcoming new tablet will be a potent weapon that can slow Amazon's newest Kindle.
Although Amazon's Kindle Fire fell short of the iPad in customer satisfaction in a recent market survey by ChangeWave Research, it scored higher than other non-Apple tablets, such as Research In Motion's (RIMM) PlayBook. Surveyed users said the most attractive feature was its low price of $199 -- less than half that of an entry-level iPad 2.
This screen for free cash flow to equity isolates stocks with both high yields and secure dividends.
The best tool I have found to determine what a company really has left after expenses for shareholder dividends is a little known metric called free cash flow to equity (FCFE).
FCFE strips out all capital expenditures and adds back net borrowings that can be used to pay dividends. Using FCFE in the denominator of the payout ratio instead of more traditional earnings measures can help separate the safer dividend plays from the more aggressive ones.
Rising wages hurt Chinese restaurant margins, but customers have more money to spend as well.
The market isn't rigged, but sometimes it's easy to see how Wall Street gets a bad name.
I don't think so. You can buy plenty of terrific companies doing fabulous things, whether it be Apple (AAPL) with its amazing products or Kinder Morgan Energy (KMP) with its bountiful dividends or Chipotle Mexican Grill (CMG) with its dazzling growth. They aren't mug's games.
These stocks have posted big gains this year, but all are trading at levels where chasing them is especially risky.
By Tom Aspray, MoneyShow.com
Even the renewed concerns over Greece's debt negotiations were shrugged off by the stock market on Monday, as the major averages closed well off the day's lows. Nevertheless, I still think this is no time to be buying aggressively or to be complacent.
A poor entry price, in my estimation, is the key ingredient in most losing trades. Therefore, the three steps in my stock selection process are: 1) determining an entry level, 2) finding a proper stop level, and 3) figuring the approximate percentage risk if my stop were to be hit.
It's all about rarity of shares.
By Dan Caplinger
I never thought that one of my guilty pleasures would give me investing insight. But something I learned watching a home shopping channel showed me why buying into initial public offerings makes less sense than ever right now.
I'll share that insight later in this article. But first, I want to give some perspective on where the IPO market stands right now.
The S&P 500 Index is up 7% so far in 2012. Can this rally last?
Yeah, yeah, we're just weeks into the new year. And experts far and wide have predicted dire things for the market. But so far, things are looking good.
Bespoke Investment Group, which loves to crunch all kinds of market numbers, has been watching the number of days in which the market closed down at least 1%. That hasn't happened yet this year.
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The Ukraine crisis festers and other fresh concerns boil to the surface, knocking down markets and giving volatility some life.
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[BRIEFING.COM] The stock market ended the Thursday session on a modestly lower note, but a late-morning rebound lifted the indices off their lows. The S&P 500 shed 0.2% with seven sectors ending in the red.
This morning, European equities and U.S. futures slumped around 6:00 ET after Ukraine's President Petro Poroshenko was quoted as saying Russian forces have invaded an area southeast of Donetsk. The news pressured the markets, but a brief uptick took place after a correction to ... More
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