Stocks are any equity securities traded on a stock exchange, the value of which fluctuates due to the supply and demand for such securities. Stocks are often grouped in a specific sector and can be representative of the broader marketplace.
There’s good resilience to this market. On most days, the NASDAQ Composite is still beating both the S&P 500 and Dow Jones Industrial Average comparatively, which is bullish. Lots of stocks are pushing new highs and many seem to be breaking out of their previous near-term trends.
NIKE, Inc. (NKE) is a large-cap, dividend-paying company that I view as attractive for long-term investors.
The stock has been in consolidation, trading range-bound since the beginning of the year but is finally breaking out and pushing through the $80.00-per-share level.
This position went up tremendously last year and has been due for a break. The company has experienced solid revenue and earnings growth over the last several quarters.
The stock’s reacceleration looks meaningful, and I suspect the position is in for a new uptrend.
The other company that I feel is a good example of the kind of stock that could make for a great holding in any long-term equity market portfolio is The Walt Disney Company (DIS). (See “Why This Is Still My Favorite Entertainment Stock.”)
I’m not surprised this position is still ticking higher. But it has been moving up very consistently since October of 2011.
The stock just broke the $90.00-per-share level. This time two years ago, the company was trading for $30.00 a share, which is incredible capital appreciation for such a mature large-cap enterprise.
Institutional investors are still buying earnings reliability, and I think this trend will hold right through 2015.
Both NIKE and Disney offer earnings reliability and the fact of the matter is that it’s difficult for any company to generate double-digit growth…. Read More
So long as transportation stocks are ticking higher, the stock market is much less susceptible to a price retrenchment.
The Dow Jones Transportation Average just blew past 8,500, recently hitting a new record-high after taking a well-deserved break around mid-July and August.
Airline stocks led the index’s recent price strength. Some examples: JetBlue Airways Corporation (JBLU) was $8.00 a share in May, now it’s pushing $13.00. Meanwhile, Southwest Airlines Co. (LUV) was $20.00 a share at the beginning of the year, recently hitting a price of more than $33.00 for a new all-time record-high.
But it isn’t just airline stocks that are doing well on the Dow Jones Transportation Average; railroad stocks and trucking companies are pushing through to new highs, too, and earnings estimates for a lot of these companies are increasing, especially for 2015.
It may seem like an old-school concept, but strength in transportation stocks is still a leading indicator for the broader market. Price strength in these stocks often shows up at the beginning of a new business cycle.
Union Pacific Corporation (UNP) is one of my favorite railroad stocks for investors and it’s a great benchmark for determining your investment strategy, even for those not interested in the company. Monitoring this stock is a great way to gain market and economic intelligence.
This position still has good potential for further capital gains and earnings forecasts have been going up across the board—including estimates for the company’s third and fourth quarters, all of 2014, and all of 2015.
The stock’s been in a well-deserved price consolidation since May, but it recently broke out of this trend … Read More
Countless stocks are pushing new highs and a lot of them are still blue chips. The Dow Jones Industrial Average is lagging the other indices this year, but this is not unusual.
The fact that many blue chips are still slogging higher is further indication of a bull market, despite all the shocks, risks, and the fact that stocks haven’t experienced a real correction for a number of years now.
PepsiCo, Inc. (PEP) had a great second quarter (for such a mature brand). The company increased its quarterly dividend once again and Wall Street earnings estimates for this year and next have been going up across the board.
What large corporations and well-known business brands say about their operating conditions is as useful as any other kind of information or opinion regarding the equity market. Stocks get overvalued and undervalued, but the best investing information I’ve found is what corporations actually report about their businesses, regardless of whether a company meets, beats, or comes in below consensus.
What Caterpillar Inc. (CAT) says about its global heavy equipment sales is material information, even if you aren’t interested in buying the stock. The same goes for Intel Corporation (INTC), The Boeing Company (BA), Visa Inc. (V), and The Walt Disney Company (DIS).
Second-quarter earnings season came in better than expected, and while many blue chips reiterated their existing guidance, I suspect it’s a simple strategy to make it easier to beat the Street by keeping expectations modest.
It could easily be another great year for stocks with a fundamental backdrop that is still so favorable to equities. And this includes the reality … Read More
As incredible as it may be, Chipotle Mexican Grill, Inc. (CMG) recently spiked above $600.00 a share and is now closing in on $700.00. This position could no doubt benefit from a share split.
The stock is trading with a forward price-to-earnings (P/E) ratio of approximately 40, and the company’s earnings estimates for this fiscal year and next continue to tick higher.
A more aggressive portfolio of stocks is typically well served by exposure to the restaurant sector. Many chains are consistently good earners, but you can’t get too attached to any positions; consumer tastes change and competition is fierce.
Restaurant stocks also experience waves of enthusiasm on the part of investors and because of this, you can actually find value among established brands.
Darden Restaurants, Inc. (DRI) is the owner of the “Olive Garden” and “LongHorn Steakhouse” chains. The company recently sold “Red Lobster” for $2.1 billion in cash, using $1.0 billion to pay down its debt with the rest to be spent on share repurchases.
This stock hasn’t done much over the last couple of years due to operational problems, but it now boasts a dividend yield of just less than five percent and is not expensively priced.
Value among restaurant stocks can also be found with Cracker Barrel Old Country Store, Inc. (CBRL).
This position has been flat since February, and its dividend yield has now crept above the four-percent level.
The company should soon report its financial results for its fiscal fourth quarter of 2014. In its third fiscal quarter (ended May 2, 2014), Cracker Barrel’s revenues grew 0.5% over the comparable quarter to $643 million. … Read More
One of the problems with pure-play biotechnology stocks is that they are 100% risk-capital securities in which the probability of success is entirely beyond your control.
But healthcare and related industry investments are very much worthwhile in an equity market portfolio for the simple reason that they can be so profitable.
One company that serves the healthcare industry, but isn’t a pure-play drug discovery enterprise, is Bio-Reference Laboratories, Inc. (BRLI). Based in Elmwood Park, New Jersey, this stock is an interesting way to play the sector.
Bio-Reference is the third-largest diagnostic laboratory in the U.S. The company’s customers are physicians, hospitals, long-term care facilities, and government institutions. It has laboratory testing facilities in nine states and provided 7.8 million laboratory test requisitions in 2013, which continue to grow at a double-digit rate.
The company’s latest quarter set a new record in total revenues. Sales grew a solid 20% to $222 million on a 16% increase in patient count and a three-percent increase in revenue per patient.
Quarterly earnings came in at $15.3 million, or $0.55 per diluted share, compared to $14.7 million, or $0.53 per diluted share, in the same quarter last year.
Company management said its earnings per share for the upcoming fiscal quarter should grow approximately 15% above the most recent quarter.
Over the last 10 years, Bio-Reference has really found its stride as an enterprise and the stock is finally breaking out of a two-year price consolidation.
The company is now involved in genetic testing and believes that this will be a growth business going forward.
The stock jumped after the company’s recent earnings results and is … Read More
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