Top Stocks

By Jake Lynch, TheStreet

 

Luxury retailers may seem like the worst investments, given the prevalence of tightwad consumers, but the opposite is true for some companies.

 

Last week's "Best in Class" feature made the bullish case for jewelry seller Tiffany & Co. (TIF). The same for leather-ware seller Coach (COH) follows. The investment theses are comparable: Emerging-market demand, specifically in Asia, will offset developed-nation stagnancy this year.

 

Although America's economic dominance is weakening, its cultural hegemony is squarely intact. American luxury brands have cache in emerging markets, confirmed by Coach's latest commentary.

 

I've dived into history and the economy a lot lately in my recent columns and blog posts (with examinations of last week's big 3%+ up day as well as a look at the growth rate of the leading economic index or LEI). The takeaway: History suggests now is the time to be optimistic. In particular, there are some striking resemblances between the current situation and the 1962 summer stock market rebound.

 

Then, like now, the stock market dipped below its 50-day and 200-day moving averages and then posted a big 3%+ up move. Also, the LEI's 12-month growth rate remained in positive territory -- brushing off concern of a double-dip recession (the economy was recovering from the 1960-61 recession). Stocks went on to gain more than 32% over the next 12 months.

 

I'm not the only one looking at 1962 for clues to what lies ahead.

 

Marc Bell, owner of Penthouse magazine and FriendFinder Networks, made his promised bid for Playboy Enterprises on Thursday, offering to pay $210 million for the struggling bunny brand.

Bell's bid is effectively $25 million more than Playboy founder Hugh Hefner's offer for the company, which would take it private

• Related:Bell's Letter to Playboy's Board

In making the offer, Bell and Boca, Raton, Fla.-based FriendFinder announced that they have retained Imperial Capital LLC as a financial adviser. (On Monday, Bell told TheWrap he would not need the help of a financial backer because FriendFinder generates enough cash on its own.)

 

By Joe Mont, TheStreet

 

For people stressed out because they might not have enough money saved for retirement, a study released this week by the Employee Benefit Research Institute will be of little comfort.

 

The study, based on an analysis of 24 million participants in 401k plans, is touted as the first time a national retirement model has projected when different groups, based on age and income, are likely to exhaust their retirement savings. The conclusion: "Dramatically high percentages of Americans -- even in the upper-income categories -- are likely to run short of money after 10 or 20 years of retirement."

 

Nearly half of "early" baby boomers -- those on the verge of retirement, ages 56 to 62 -- are at risk of not having sufficient income to pay for basic post-retirement expenditures and medical expenses. The percentage drops for "late" boomers (ages 46 to 55) to 43.7%. Generation X (born 1965-74) has a 44.5% chance of running out of money based on savings projections.

 

 

By Robert Holmes, TheStreet

 

Some Dow ($INDU) stocks perform better than others after reporting second-quarter earnings results.

 

The following five Dow components have notched the biggest gains in the day after posting quarterly numbers in July and August over the past five years. History can be a guide, but nothing is a sure bet.

 

Shares of Alcoa (AA), typically the first Dow company to publish earnings every quarter, tend to fall after second-quarter results. The aluminum maker said Monday after the market closed that it swung to a second-quarter profit of 13 cents share, compared with a year-earlier loss of 47 cents a share.

 

 

By Jason Notte, TheStreet

 

Netflix (NFLX) forced the closure of rival Movie Gallery, caused Blockbuster to implode and prompted retailers to streamline their approach to video sales en route to big-budget growth. Those were just the first items in the queue.

 

Netflix is getting five-star reviews from investors and catching the eye of larger competitors such as Time Warner Cable (TWC) and Comcast (CMCSA) based on how it handled last year's tough economic climate: Sitting it down and showing it movies from the comfort of its Blu-ray players, game consoles and smart phones.

 

While disc-based competitors struggled, with Movie Gallery declaring bankruptcy and liquidating its assets and Blockbuster closing nearly 1,000 stores and having its stock delisted from the NYSE as it struggled with debt, Netflix expanded its instant-streaming offerings and boosted the number of subscribers.

 

By Nancy Zambell, Editor of Buried Treasures Under $10

 

It’s becoming a bit of a broken record, but the refrain "another challenging month" does apply to the current market

environment. 

There were a host of factors influencing stocks and keeping values down in June.  However, with careful selection we can use the current volatility to make money. You see, there are plenty of fundamentally strong yet undervalued companies that the mainstream investment community hasn’t picked up.

 

Which stocks am I referring to?  The following are my current top three undervalued stock buys.

 

By Jim Cramer, TheStreet

 

Will they all follow Range Resources (RRC)?

 

In this already long, hot summer, the biggest bust of all commodities, and all things financial, is natural-gas futures. They can't get out of their own way. Of course, most of that is due to the glut that producers are generating as they hit pay dirt in various shales, bringing new gas on stream.

 

But the fuel and natural-gas companies have not helped the cause. They have become targets of environmentalists over fracking, the method of blasting with water sand and chemicals that breaks up the shale and allows the natural gas to be unleashed.

 

Sales of server chips were up 170% in the second quarter of 2010 from the second quarter of 2009, Intel (INTC) announced when the company reported earnings Tuesday night.

When I last updated this stock back in April, after the company announced first-quarter earnings and an increase in gross margins to 63.4%, I wrote: "The company had been projecting gross margins of 58% to 64%. The increase in gross margins is the key piece of news in this report. 

"To get margins up to that level, the product mix at Intel has had to shift toward a higher proportion of sales from more profitable server chips. Industry watchers have recently forecast a two-year cycle of big increases in server purchases as corporate customers upgrade their equipment. Intel seems to be signaling that it's going to ride that trend to higher margins for more than just the next quarter."

 

Apple (AAPL), would you just give out free bumpers and make this all go away?

The company's ongoing reception problems with its new iPhone 4 can, in many cases, be solved by putting a $30 bumper case on the device. But as Consumer Reports and Information Week note, the user shouldn't have to pay to fix an Apple problem.

• Looking for a better broker?

From a financial standpoint, it's clearly in Apple's best interest to give a free bumper to any iPhone 4 owner who wants one. Giving cases to 3 million people would cost $45 million, according to one analyst.

 

China can't get enough fried chicken and pepperoni pizza.

And that's great news for Yum Brands (YUM), the company that owns KFC, Pizza Hut and Taco Bell. The U.S. economy may be in the doldrums, but in China, a new KFC opens almost every day, CNNMoney reports.

American fast food has gone global, and the welcome has been better than executives could have hoped for. Yum Brands has the ambitious goal of opening 20,000 fast-food restaurants in China, writes Ben Rooney. 

Shares of Wal-Mart (WMT) -- like many of the items on its shelves -- are dirt cheap.

The stock is in the $50 range right now, having just rebounded from a low of around $48. And while that may not sound too cheap, consider that the stock is trading at a mere 11.4 times expected earnings for the next year.

• Attention, stock shoppers: Find a better broker

Compare that to Costco (COST), which is at a 17.4 forward P/E.  Amazon's (AMZN) is 31.2. Target's (TGT) P/E is in the same ballpark as Wal-Mart's.

 

By Jim Cramer, TheStreet

 

How could the Street be so wrong about Intel (INTC)? How did people not see the demand? How did people not recognize what a gift it was to get this one with a 3% yield?

 

I understand. We have had several great quarters from Intel, and they have led to blips up that then gave up the ghost almost immediately. Maybe the tech bear market knows no bounds and we are simply going to see the same thing happen again. Every time Intel reports a great quarter, everyone says it is the last good quarter and sells it. Could happen again.

 

But I am a believer. I do not believe that high-quality, terrific stocks with earnings momentum, great product cycles, picture-perfect balance sheets and unbelievably good managements that are delivering amazing gross margins and sales should forever trade at big discounts to the average stock.

 

A recent survey lends some hard proof to the trend that many consumers and investors have already noticed: The BlackBerry is dying.

Why? Because the iPhone is killing it -- and because the Google Android operating system is driving strong sales for HTC and other manufacturers.

 

According to a survey conducted by ChangeWave Research at the end of June (just before the Apple iPhone 4 release), Research in Motion (RIMM) and its BlackBerry line of products is barely hanging on to its No. 1 spot in smart-phone market share, and a wave of big demand for the Apple Inc. (AAPL) iPhone looks like it will soon knock RIM from its perch. Read full details of the survey here.

 

Live by the rumor, die by the rumor.  

Maybe they ought to engrave that above the entrance to the Shanghai stock exchange. 

Monday, the Shanghai Composite Index climbed 0.8% to the highest level since June 28 after newspaper reports, essentially unsourced rumors, said that banks had resumed making mortgages on third homes in China's biggest cities. A prohibition on third-home mortgages had been a conspicuous part of Beijing's efforts to slow real-estate speculation.