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10 Best Tech Stocks to Buy for 2024

2024-05-01T22:05:00.000-07:00

Technology stocks have led the stock market to new all-time highs in 2024. In fact, the Technology Select Sector SPDR ETF (ticker: XLK) has significantly outperformed the S&P 500's total return in the past 12 months. For more than a decade, brief periods of tech sector underperformance have consistently been long-term buying opportunities, and that trend seems likely to continue for the foreseeable future.

Inflation and elevated interest rates remain headwinds for tech earnings in the near term, however, making stock selection critical. Here are 10 of the best tech stocks to buy today, according to CFRA analysts: Microsoft Corp. (MSFT)

Microsoft is the world's largest software company that is best known for Windows, Office and Azure cloud services. Analyst Angelo Zino says Microsoft's artificial intelligence technology creates huge opportunities for the company in the next decade, and AI is his biggest reason for investors to own the stock. In addition, he says Microsoft's cloud versions of Office, Dynamics and Teams are gaining traction, and its Azure infrastructure cloud services business is booming. Zino says Microsoft's Activision Blizzard acquisition will also unlock new opportunities in its gaming business. CFRA has a "strong buy" rating and $455 price target for MSFT stock, which closed at $425.52 on April 5.

10 Best Tech Stocks to Buy for 2024:Apple Inc. (AAPL)

Apple produces the iPhone, iPad, Apple Watch, Mac computers and other personal computing devices. In addition, its services segment includes its App Store, Apple Music, iCloud and licensing businesses. Zino says Apple has an impressive ecosystem, improving profitability, high customer retention rates and a growing global addressable market. He says Apple deserves a premium valuation thanks to its stable free cash flow, its aggressive capital return strategy and its management team's long-term track record of stellar execution. He anticipates further upside in average selling prices for Apple devices. CFRA has a "buy" rating and $210 price target for AAPL stock, which closed at $169.58 on April 5.

10 Best Tech Stocks to Buy for 2024:Nvidia Corp. (NVDA)

Nvidia designs and sells high-end graphics and video processing chips used for desktop and gaming personal computers, workstations, and other advanced computing servers and AI engines. Not only is Nvidia the best-performing stock on this list in 2024, its 12-month gain of 227.4% makes it the second-best performer in the entire S&P 500 after Super Micro Computer Inc. (SMCI). Zino says Nvidia's cutting-edge pipeline coupled with unprecedented cloud infrastructure investment suggests the stock price still has significant upside even after its incredible run. He says Nvidia is a must-own AI technology investment. CFRA has a "buy" rating and $1,000 price target for NVDA stock, which closed at $880.08 on April 5.

10 Best Tech Stocks to Buy for 2024:Broadcom Inc. (AVGO)

Broadcom is a diversified global analog semiconductor supplier. Zino says Broadcom is well positioned to capitalize on the AI infrastructure investment boom thanks to its networking and switcher business, its application-specific integrated circuit (ASIC) products and its potential for cost synergies following its acquisition of VMware. He says extensions of Broadcom's Apple chip supply deals and additional opportunities tied to the AI investment cycle give Broadcom better financial visibility and demand potential today than at any other time in its history. Zino projects 40% revenue growth in fiscal 2024. CFRA has a "buy" rating and $1,600 price target for AVGO stock, which closed at $1,339.43 on April 5.

10 Best Tech Stocks to Buy for 2024: Salesforce Inc. (CRM)

Salesforce is the world's largest provider of cloud-based customer relationship management (CRM) software. While Salesforce's impressive revenue growth may finally be starting to slow, Zino says the company's profitability is improving, its valuation is attractive and it continues to gain CRM market share. He says Salesforce's product portfolio is by far the most comprehensive in the industry following years of strategic acquisitions. Zino says Salesforce is successfully balancing cost growth and revenue growth, and AI initiatives could help propel the stock to the next level. CFRA has a "strong buy" rating and $330 price target for CRM stock, which closed at $301.91 on April 5.

10 Best Tech Stocks to Buy for 2024:Advanced Micro Devices Inc. (AMD)

Shares of microprocessor and graphics semiconductor stock Advanced Micro Devices are up a whopping 4,030% over the past decade, but Zino says there's more upside ahead as the introduction of AMD's next-generation EPYC processors improves its central processing unit data center server business. In addition, he is optimistic about AMD's graphics processing unit products and anticipates the company will continue to improve its balance sheet. Zino says the personal computer market will rebound and high-margin product launches will likely boost AMD's overall margins in 2024. CFRA has a "buy" rating and $200 price target for AMD stock, which closed at $170.42 on April 5.

10 Best Tech Stocks to Buy for 2024:Adobe Inc. (ADBE)

Adobe produces creative content software and other applications used for marketing and e-commerce. Adobe shares are down 18.7% this year through April 5, but Zino says the weakness is a buying opportunity for long-term investors. He says Adobe shares trade at an attractive valuation relative to its growth prospectus, and the company has significant opportunities to use AI technology to further monetize its products and customers. He says integrating AI Assistant into Acrobat and Reader and ramping the company's Firefly generative machine learning model could help boost Adobe's stock. CFRA has a "buy" rating and $630 price target for ADBE stock, which closed at $485.12 on April 5.

10 Best Tech Stocks to Buy for 2024:Accenture PLC (ACN)

Accenture is a global information technology services firm that specializes in consulting and outsourcing. Analyst Brooks Idlet says long-term investors should overlook Accenture's expensive valuation and focus on its growth profile and strong business fundamentals. Idlet says Accenture's diverse client relationships, peer-leading earnings growth and impressive balance sheet will help the stock outperform even in a difficult macroeconomic environment. He says the company's exposure to secular growth trends, strong relationships with software vendors and ability to attract top-tier talent demonstrate its underlying business momentum. CFRA has a "buy" rating and $387 price target for ACN stock, which closed at $333 on April 5.

10 Best Tech Stocks to Buy for 2024:Intuit Inc. (INTU)

Intuit produces accounting and management, tax preparation and personal finance software. Analyst Janice Quek says Intuit has executed well in a difficult macroeconomic environment, and she sees several ways the company could maintain double-digit revenue growth in the medium term. Quek says Intuit has already embedded its Intuit Assist generative AI technology into its products, and the new offerings are compelling to users and could help support both customer retention rates and premium product upgrades in the long term. Quek projects 11.8% revenue growth in fiscal 2024. CFRA has a "buy" rating and $715 price target for INTU stock, which closed at $635.74 on April 5.

10 Best Tech Stocks to Buy for 2024:International Business Machines Corp. (IBM)

IBM is a global technology company that provides enterprise software, infrastructure and services. IBM has a 3.5% dividend yield, the highest on this list and a rarity among tech stocks. Idlet says IBM's consulting business and its impressive portfolio of tech offerings that address key secular growth trends such as cloud migration and AI technology make the stock an excellent investment. While IBM has a lackluster and inconsistent history of execution, Idlet says he is optimistic the company can reestablish a reputation for reliable fundamentals moving forward. CFRA has a "buy" rating and $216 price target for IBM stock, which closed at $189.14 on April 5.

10 Best Growth Stocks to Buy for 2024

2024-05-01T03:05:00.000-07:00

After strong performance in 2023, U.S. gross domestic product growth started to cool in the fourth quarter and only grew by 1.6% in the first quarter. Economists expect growth to stay flat in coming quarters, and while predictions for a U.S. recession have mellowed, a downturn isn't off the table yet. It may become difficult for investors to find reliable growth stocks to buy if interest rates remain at 23-year highs for an extended period. Nevertheless, growth stocks outperformed value stocks in 2023, and many investors expect that trend to continue in 2024 if the Federal Reserve pivots to rate cuts.

10 Best Growth Stocks to Buy for 2024:Nvidia Corp. (NVDA)

High-end semiconductor maker Nvidia has been one of the most spectacular growth stories in the entire stock market in the past 15 years. Nvidia's growth numbers have wowed Wall Street, especially for a company of Nvidia's size. Nvidia's revenue grew 265% year over year in the fourth quarter, while its net income skyrocketed by 768%. Analyst Angelo Zino says unprecedented artificial intelligence and cloud computing demand will continue to support strong growth numbers for Nvidia. He projects 80% revenue growth in fiscal 2025 and 20% growth in 2026. CFRA has a "buy" rating and $1,000 price target for NVDA stock, which closed at $826.32 on April 25.

10 Best Growth Stocks to Buy for 2024:Alphabet Inc. (GOOG, GOOGL)

Alphabet is one of the world's largest online search and advertising companies and is the parent company of Google and YouTube. In the first quarter, Alphabet reported 15% revenue growth, which included 28% Google Cloud revenue growth. Zino says Alphabet has tremendous free cash flow potential, and he is bullish on the company's AI technology potential. He projects 12% revenue growth in 2024 and 10% growth in 2025. He says the company will integrate additional AI tools into its enterprise products, cloud services, search and YouTube businesses. CFRA has a "buy" rating and $175 price target for GOOGL stock, which closed at $156 on April 25.

10 Best Growth Stocks to Buy for 2024:Meta Platforms Inc. (META)

Meta Platforms is a market leader in social media and online advertising and is the owner of Facebook, Instagram and other platforms. Meta regained its growth groove in 2023, and reported 27% year-over-year revenue growth in the first quarter of 2024. Zino says Meta's margin trajectory is improving and the stock is attractively valued given its many growth opportunities. He says the company's cost-cutting efforts coupled with an improving digital ad spending environment will continue to drive earnings growth. He projects 18% revenue growth in 2024. CFRA has a "buy" rating and $540 price target for META stock, which closed at $441.38 on April 25.

10 Best Growth Stocks to Buy for 2024:JPMorgan Chase & Co. (JPM)

JPMorgan Chase is one of the world's largest banks and financial services companies with roughly $3.7 trillion in assets. In 2023, JPMorgan acquired First Republic Bank after it failed during the regional banking crisis and was seized by the Federal Deposit Insurance Corp. JPMorgan reported double-digit revenue growth in each of the past five quarters. Analyst Kenneth Leon says JPMorgan is gaining market share in multiple core businesses, and he projects a rebound in investment banking in the second half of 2024. CFRA has a "buy" rating and $215 price target for JPM stock, which closed at $193.37 on April 25.

10 Best Growth Stocks to Buy for 2024:Tesla Inc. (TSLA)

Tesla is the leading U.S. electric vehicle manufacturer. Tesla's year-over-year revenue fell by 9% in the first quarter, and automotive segment revenue dropped 13%. Analyst Garrett Nelson says production from Tesla's factories in Texas and Germany and the first wave of Cybertruck deliveries have set the table for Tesla's growth to rebound in 2024 and beyond. In addition, Nelson says first production of the company's Next Gen platform in 2025 could be an additional growth driver. He projects 10% revenue growth in 2024. CFRA has a "buy" rating and $210 price target for TSLA stock, which closed at $170.18 on April 25.

10 Best Growth Stocks to Buy for 2024:Mastercard Inc. (MA)

Mastercard is one of the world's largest credit card and payments providers. In the fourth quarter, Mastercard reported 13% revenue growth, 11% net income growth and 10% gross dollar volume growth. Analyst Alexander Yokum says Mastercard will continue to gain market share in coming years as the global transition to a cashless economy continues. Yokum says payment volume growth will significantly outpace consumer spending growth in the coming years, which should help Mastercard outperform. He projects 13% revenue growth in 2024 and 12% growth in 2025. CFRA has a "buy" rating and $550 price target for MA stock, which closed at $462.11 on April 25.

10 Best Growth Stocks to Buy for 2024:Salesforce Inc. (CRM)

Salesforce is the world's largest provider of cloud-based customer relationship management software. In addition to its organic growth, Salesforce has grown via a string of acquisitions in recent years, including its 2020 buyout of Slack. Salesforce reported 11% revenue growth and 1,575% net income growth in the fourth quarter. Zino says Salesforce shares are attractively valued given the company's comprehensive portfolio of products, market share gains and earnings growth opportunities. He projects about 9% annual revenue growth through at least fiscal 2027. CFRA has a "strong buy" rating and $330 price target for CRM stock, which closed at $273.14 on April 25.

10 Best Growth Stocks to Buy for 2024:Advanced Micro Devices Inc. (AMD)

Shares of microprocessor and graphics semiconductor stock Advanced Micro Devices are up a whopping 3,445% over the past decade, and AMD reported 10% revenue growth and a 3,076% net income growth in the fourth quarter. Even after the stock's big run, Zino says the growth outlook for AMD's central processing unit data center servers and AMD's opportunities to further improve its balance sheet suggest the stock still may have significant upside remaining. He projects 16% revenue growth in 2024 and 20% growth in 2025. CFRA has a "buy" rating and $200 price target for AMD stock, which closed at $153.76 on April 25.

10 Best Growth Stocks to Buy for 2024:Intuit Inc. (INTU)

Intuit produces accounting and management, tax preparation and personal finance software. In the fiscal second quarter, Intuit reported 11% revenue growth, 110% net income growth and 18% revenue growth in its small business and self-employed group business. Analyst Janice Quek says Intuit has executed well in a challenging macroeconomic environment. In addition, Quek says catalysts such as Live Full Service for Turbo Tax, Intuit Assist and other new AI features will help the company maintain double-digit sales growth. She projects 11.8% revenue growth in fiscal 2024. CFRA has a "buy" rating and $715 price target for INTU stock, which closed at $626.39 on April 25.

10 Best Growth Stocks to Buy for 2024:Applied Materials Inc. (AMAT)

Applied Materials is the world's largest wafer fabrication equipment supplier for the semiconductor industry. In the first quarter, Applied Materials reported flat revenue growth but 18% net income growth. Analyst Brooks Idlet says Applied Materials' leadership positions in multiple critical semiconductor production businesses position the company to generate solid growth numbers in coming years. Idlet says demand from foundry/logic technology transitions will support etch and deposition tools sales growth. He projects revenue growth will accelerate from 2% in fiscal 2024 to 7% in 2025. CFRA has a "buy" rating and $233 price target for AMAT stock, which closed at $197.50 on April 25.

6 Hot Growth Stocks To Buy Right Now in 2024

2024-04-24T08:15:00.000-07:00

In this article, we discuss the 6 hot growth stocks to buy now. If you want to read about some more growth stocks that are active in the market, go directly to the 6 Hot Growth Stocks To Buy Right Now.

As 2024 moves forward, the outlook for both the stock and bond markets undergoes regular fluctuations, influenced by various factors such as economic data releases, Federal Reserve communications, and changes in interest rate forecasts. As an example, the Federal Reserve hiked its benchmark interest rate 11 times from March 2022 to July 2023 amid resurgent inflation, reaching its highest level in more than two decades. This uptick in borrowing costs has contributed to alleviating inflationary pressures, with recent data showing consumer prices increasing by only 3.1% from January 2023, marking a decline from the peak of 9.1% in June 2022 and edging closer to the Fed's 2% target.

Surprisingly, progress against inflation has been notable without inflicting significant economic hardship, with unemployment remaining below 4% for 24 consecutive months. Moreover, employers have consistently added an average of 244,000 jobs per month over the past year, with December and January seeing over 300,000 new jobs each. This combination of subdued inflation and GDP growth has fostered optimism that perhaps the Fed can achieve a rare "soft landing."

On the other hand, the current year has an array of growth opportunities spanning different sectors within the capital markets. Leading the forefront is the technology sector, with artificial intelligence (AI) spearheading innovation. Its swift advancements and widespread integration across various industries render it an appealing option for investors pursuing growth and transformative prospects. As an illustration to this point, venture capital investments in generative AI and AI-related startups surged to nearly $50 billion the past year alone, with notable startups such as OpenAI, Anthropic, and Inflection commanding substantial portions of these investments.

Following suit is the healthcare sector, securing the second spot, as it progresses alongside developments in medical technologies and a growing emphasis on personalized medicine. The increasing demand for GLP-1, a medication class utilized in managing type 2 diabetes (T2D), is a key factor driving this trend. According to research by J.P. Morgan, the GLP-1 category is projected to surpass $100 billion by 2030, with growth attributed equally to its use in treating both diabetes and obesity.

When it comes to stock selection for substantial returns in such times, focusing on growth stocks is a popular strategy. Growth stocks are characterized by higher share prices relative to their earnings per share, reflecting expectations of significant future growth. One metric commonly used to identify growth stocks is the price-to-earnings ratio (P/E ratio). This ratio compares the current share price to the earnings per share, indicating the premium that the market is willing to pay for a stock's earnings potential.

Some of the notable companies included in our list of hot growth stocks to buy are Salesforce, Inc. (NYSE:CRM) and Advanced Micro Devices, Inc. (NASDAQ:AMD), as well as industry giants like NVIDIA Corporation (NASDAQ:NVDA) and Uber Technologies, Inc. (NYSE:UBER), among others listed below.

6 Hot Growth Stocks To Buy Right Now

A close-up of a stock market ticker displaying the company's stocks.

Our Methodology

In this piece, we utilized stock screeners to identify stocks meeting specific criteria as of March 28. Our selection criteria included stocks with an average 3-month volume surpassing 3 million and a P/E ratio exceeding 50. Additionally, we incorporated a quarterly revenue growth rate of over 10% as another parameter for our list. Lastly, we provided insights into the number of hedge funds invested in each stock, shedding light on growth stocks favored by hedge funds.

Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years . That’s why we pay very close attention to this often-ignored indicator.

Hot Growth Stocks To Buy Right Now in 2024——1. Palantir Technologies Inc. (NYSE:PLTR)

P/E Ratio: 254.82
Avg Volume: 70.81 million
rterly Revenue Growth: 19.61%
Number of Hedge Fund Holders: 44

Palantir Technologies Inc. (NYSE:PLTR) operates as a software company specializing in data fusion platforms, facilitating both machine-assisted and human-driven data analysis. Its product platform includes Palantir Gotham, Palantir Apollo, and Palantir Foundry.

Following encouraging financial results in the fourth quarter, Palantir Technologies Inc. (NYSE:PLTR) witnessed a 19% surge in its stock. Revenue increased by 20% to $608 million, driven by robust demand for its Artificial Intelligence Platform (AIP) among commercial customers, although growth in the government segment remained subdued. Additionally, GAAP net income tripled to $93 million as Palantir focused on cost control measures.

According to Insider Monkey's analysis of 933 hedge fund portfolios for the December quarter of 2023, 44 had stakes in Palantir Technologies Inc. (NYSE:PLTR). D. E. Shaw emerged as the largest investor, owning 20.75 million shares valued at $356.39 million.

Much like Salesforce, Inc. (NYSE:CRM), Advanced Micro Devices, Inc. (NASDAQ:AMD), NVIDIA Corporation (NASDAQ:NVDA) and Uber Technologies, Inc. (NYSE:UBER), Palantir Technologies Inc. (NYSE:PLTR) is one of the best trending growth stocks.

Hot Growth Stocks To Buy Right Now in 2024——2. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)

P/E Ratio: 883.17
Avg Volume: 3.94 million
Quarterly Revenue Growth: 32.63%
Number of Hedge Fund Holders: 62

CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is a cybersecurity technology company headquartered in Austin, Texas, USA. Specializing in cloud workload and endpoint security, threat intelligence, and cyberattack response services, it plays a crucial role in safeguarding digital assets.

On March 14, analysts at Cantor Fitzgerald maintained an Overweight rating and set a price target of $400 for CrowdStrike Holdings, Inc. (NASDAQ:CRWD).

In the fourth quarter of 2023, 62 out of the 933 hedge funds tracked by Insider Monkey had investments in CrowdStrike Holdings, Inc. (NASDAQ:CRWD). The largest hedge fund investor in the company is Jim Simons’s Renaissance Technologies, with holdings valued at $450 million.

TimesSquare Capital U.S. Mid Cap Growth Strategy stated the following regarding CrowdStrike Holdings, Inc. (NASDAQ:CRWD) in its fourth quarter 2023 investor letter:

“Across the Information Technology universe, we seek companies possessing differentiated capabilities, products, and services. CrowdStrike Holdings, Inc. (NASDAQ:CRWD) provides cloud-delivered protection across endpoints and cloud workloads. Their stock rallied 53% on the heels of solid fiscal third quarter results, with net new annualized recurring revenues accelerating sequentially.”

Hot Growth Stocks To Buy Right Now in 2024——3. Shopify Inc. (NYSE:SHOP)

P/E Ratio: 857.44
Avg Volume: 9.86 million
Quarterly Revenue Growth: 23.58%
Number of Hedge Fund Holders: 68

Shopify Inc. (NYSE:SHOP) stands as a premier provider of internet infrastructure for commerce, offering a suite of tools that empower businesses to establish, expand, market, and oversee retail operations across various scales. Serving millions of businesses in 175 countries, Shopify Inc. (NYSE:SHOP) plays a pivotal role in bolstering a diverse array of enterprises.

As of December 2023, Insider Monkey's analysis of 933 hedge fund portfolios revealed that 68 of them held shares of Shopify Inc. (NYSE:SHOP). Notably, the largest shareholder among them was Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke, and John Campbell, with shares valued at $1.6 billion.

Artisan Mid Cap Fund stated the following regarding Shopify Inc. (NYSE:SHOP) in its fourth quarter 2023 investor letter:

“Among our top contributors were Chipotle, DexCom and Shopify Inc. (NYSE:SHOP). We got a chance to initiate a position in Shopify during the 2022 growth stock selloff, with the view that this is a leading e-commerce franchise that will continue to benefit from key secular tailwinds. Like many market participants, we were concerned about the company’s capital-intensive fulfillment investments in the face of a slowing e-commerce market and welcomed the news that it decided to exit the logistics business in favor of a capital-light partnership model. This change in strategy significantly narrows the downside range of outcomes, and allows us to focus on what it does so well: develop great e-commerce software solutions for brands of all sizes. We have been encouraged by Shopify’s subsequent pace of innovative new product enhancements, which include the use of AI assistants to help brands run their businesses.”

Hot Growth Stocks To Buy Right Now in 2024——4. Block Inc (NYSE:SQ)

P/E Ratio: 14582.76
Avg Volume: 10.80 million
Quarterly Revenue Growth: 24.13%
Number of Hedge Fund Holders: 75

Block Inc. (NYSE:SQ), originally named Square Inc., is an American public company founded in 2009 by Jack Dorsey and Jim McKelvey. It operates across various sectors within the financial technology industry. With nearly 4 million merchants and 51 million users as of 2023, Block's service network has experienced substantial growth.

The surge in Block Inc. (NYSE:SQ) shares followed the release of its Q4 results and strong 2024 EBITDA guidance. In the fourth quarter, Block Inc. (NYSE:SQ) reported a net income of 2 cents per share, a significant improvement compared to the loss of 93 cents per share in the year-ago period.

In the fourth quarter of 2023, 75 out of the 933 hedge funds tracked by Insider Monkey held stakes in Block Inc. (NYSE:SQ), marking a notable increase from 60 hedge funds in the previous quarter.

Hot Growth Stocks To Buy Right Now in 2024——5. Merck & Co., Inc. (NYSE:MRK)

P/E Ratio: 998.11
Avg Volume: 8.69 million
Quarterly Revenue Growth: 13.82%
Number of Hedge Fund Holders: 98

Merck & Co., Inc. (NYSE:MRK), a renowned American multinational pharmaceutical company headquartered in Rahway, New Jersey, has a rich history dating back to the Merck Group, founded in Germany in 1668. As the American arm of this esteemed group, the company operates as Merck Sharp & Dohme or MSD outside the United States and Canada, maintaining a leading position in the pharmaceutical industry. Its focus areas include the development of medicines, vaccines, biologic therapies, and animal health products.

With a track record of consistent dividend growth spanning 11 consecutive years, Merck & Co., Inc. (NYSE:MRK) currently offers a quarterly dividend of $0.77 per share, translating to a dividend yield of 2.33% as of March 28.

In the fourth quarter of 2023, 98 out of the 933 hedge funds tracked by Insider Monkey held shares of Merck & Co., Inc. (NYSE:MRK). Among them, Ken Fisher’s Fisher Asset Management emerged as the company’s largest investor, with holdings valued at $1.4 billion.

Hot Growth Stocks To Buy Right Now in 2024——6. Eli Lilly and Company (NYSE:LLY)

P/E Ratio: 136.85
Avg Volume: 3.20 million
Quarterly Revenue Growth: 28.10%
Number of Hedge Fund Holders: 102

Founded in 1876, Eli Lilly and Company (NYSE:LLY) is a renowned American pharmaceutical company based in Indianapolis, Indiana. Named after its founder, Colonel Eli Lilly, a pharmaceutical chemist and Civil War veteran, the company has a global presence, operating in 18 other countries.

Eli Lilly and Company (NYSE:LLY) currently pays out a quarterly dividend of $1.30 per share and has demonstrated consistent dividend growth over the past decade. Furthermore, the company has a notable track record of uninterrupted dividend payments to its shareholders for 138 years. As of March 16, the stock offers a dividend yield of 0.69%.

As of the end of December 2023, 102 out of the 933 hedge funds profiled by Insider Monkey had purchased and held shares of the company. Among these, Ken Fisher’s Fisher Asset Management held the largest stake in Eli Lilly and Company (NYSE:LLY), valued at $2.6 billion.

Similar to Salesforce, Inc. (NYSE:CRM), Advanced Micro Devices, Inc. (NASDAQ:AMD), NVIDIA Corporation (NASDAQ:NVDA) and Uber Technologies, Inc. (NYSE:UBER), Eli Lilly and Company (NYSE:LLY) is a hot growth stock to invest in.

6 Surprising Stocks to Buy Now in 2024

2024-04-18T06:56:00.000-07:00

We typically suggest that the best stocks to buy are undervalued shares of companies with fundamental advantages that should allow them to effectively compete for decades.

Economic moats can strengthen or weaken over time as individual companies and sometimes entire industries evolve; as a result, we’ll upgrade or downgrade a company’s economic moat rating. But a moat rating change on a company isn’t a buy or sell rating for its stock. The stocks of companies that have undergone moat rating changes can still be overvalued or undervalued, depending on where their stocks are trading relative to our fair value estimates.

Recently downgraded the economic moat ratings on six companies whose stocks look undervalued today. We’d consider these stocks to buy at current prices. Do we think these are six high-quality companies? Nope. Should these six stocks be core holdings in an investment portfolio? Probably not. Are these six stocks cheap? Absolutely. In fact, we think these six surprising stocks are attractive investment opportunities specifically for risk-tolerant investors with long time horizons.

6 Surprising Stocks to Buy Now in 2024

Recently downgraded the economic moat ratings of these companies, yet their stocks look undervalued—and attractive when adjusted for uncertainty—as of April 15, 2024.

1. AMC Networks AMCX

2. Compass Minerals International CMP

3. Fox FOX

4. Nordstrom JWN

5. Paramount Global PARA

6. Warner Bros. Discovery WBD

Here’s a little bit about each stock from the analyst who covers the company, along with some key metrics. All data is as of April 15, 2024.

6 Surprising Stocks to Buy Now in 2024 — AMC Networks

Rating for Stocks: 4 stars
Economic Moat Rating: None
Uncertainty Rating: Very High
Stock Style Box: Small Value
Industry: Entertainment

AMC Networks stock looks cheap, trading 32% below our $15 fair value estimate. We recently downgraded this small company’s economic moat rating to none from narrow: We don’t think AMC nor its peers who have relied heavily on traditional pay TV can be nearly as profitable in a media industry built on streaming, explains senior analyst Matthew Dolgin. And as our Very High Uncertainty Rating suggests, the disruption of the traditional pay-TV industry combined with the company’s relatively small size make predicting future cash flows tough. That said, we expect the decline in traditional TV to stabilize and for results at AMC Networks to improve greatly. We think the stock has been overly punished, adds Dolgin: It was among the worst-performing stocks of first-quarter 2024.

AMC Networks is deploying an “all of the above” strategy, and we think that gives the firm its best chance in a difficult environment. AMC is a small player that we expect will be challenged to independently find its place with consumers who are overwhelmed with numerous different streaming services, most of which have broader and deeper content than what AMC can provide. It also must continue to find and create attractive programming, which should be increasingly difficult in an industry that now has more and much larger competitors.

“All of the above” means that AMC is open to monetizing its content in multiple ways, some of which would be much riskier for peers. AMC continues to find its place in the traditional pay-TV bundle, but it generates proportionately less of its revenue on that bundle than many peers. Affiliate revenue from pay-TV distributors made up one third of the firm’s US revenue in 2023, and we estimate AMC received only about $1 per subscriber per month, on average. AMC sells its streaming services—most notably AMC+—to retail subscribers and bundles it at wholesale prices with other services. Streaming subscription revenue was nearly as much as affiliate revenue in 2023. AMC has also placed content on other streaming platforms, receiving licensing revenue or a share of associated revenue from the other streaming platforms, and it has created content to sell to third parties.

We think holding on to the linear affiliate revenue stream is critical for AMC, but we believe the relatively minuscule amount of revenue that AMC receives per pay-TV subscriber is an opportunity to make itself even more valuable. As affiliate agreements come up for renewal over the next few years, AMC is open to including AMC+ for pay-TV subscribers. Given the low amount the pay-TV distributors are paying AMC, we believe they would find this offer attractive. Even if AMC couldn’t extract additional fees from the distributors, much higher distribution for its streaming services would open new advertising opportunities.

6 Surprising Stocks to Buy Now in 2024 — Compass Minerals International

Rating for Stocks: 4 stars
Economic Moat Rating: Narrow
Uncertainty Rating: Very High
Stock Style Box: Small Growth
Industry: Other Industrials Metals & Mining

Compass Minerals was also among the worst-performing stocks of first-quarter 2024. We downgraded our economic moat rating on this small company to narrow from wide in April: While we still believe Compass’ salt business possesses a wide economic moat, we think the company’s other activities—its plant nutrition business and its failed investments in lithium and wildfire retardants—will weigh on its future returns on invested capital, explains strategist Seth Goldstein. Still, we think Compass Minerals stock looks cheap, trading 45% below our fair value estimate of $25.

Compass Minerals has an enviable portfolio of cost-advantaged assets. Its Goderich rock salt mine in Ontario benefits from unique geology, and with access to a deep-water port, it can deliver deicing salt to customers at a lower cost than competitors. Additionally, the company controls one of only three naturally occurring brine sources that produces the specialty fertilizer sulfate of potash, or SOP. These operations at the Great Salt Lake in Utah can produce SOP at a lower cost than marginal-cost producers that convert standard potash.

The majority of Compass’ salt sales are to highway deicing customers. Sales volumes are determined during the winter months and strongly linked to the number of snow days per season. As such, weather has a big impact on Compass’ year-to-year results. The deicing salt business also exposes Compass to climate change risk. One effect of climate change is increased snowfall volatility from year to year, which affects Compass’ annual results. However, winter weather has shown mean reversion tendencies over longer periods.

Pricing for deicing salt is linked to winter weather as well. However, prices have historically been relatively stable compared with other commodities. Deicing salt has a low value/weight ratio, creating regional markets, and transportation costs make up a significant portion of total costs to the customer. With mines close to waterways like the Great Lakes and the Mississippi River, Compass has a transportation cost advantage over its competitors.

Compass also produces SOP, which is used for high-value crops that are sensitive to the chloride in standard potash (muriate of potash). While marginal producers use MOP and sulfuric acid to produce SOP, Compass makes most of its SOP directly from salt brine at a lower cost.

6 Surprising Stocks to Buy Now in 2024 — Fox

Rating for Stocks: 4 stars
Economic Moat Rating: None
Uncertainty Rating: High
Stock Style Box: Mid Value
Industry: Entertainment

We think Fox has better near-term prospects than its stock price suggests, says ’s Dolgin, thanks to its major sports rights (including the National Football League for most of the next decade) and the top cable news network. Like AMC Networks, though, Fox is facing a new media industry in which it’s less likely to be nearly as profitable—and, as a result, we’ve downgraded our economic moat rating on the mid-cap company to none from narrow. Fox stock is a bargain: Shares are trading 35% below our $43 fair value estimate.

Fox’s strategy differs from its biggest traditional media peers, and its business has been far more resilient as a result. Although it has outperformed in the past few years, we think its dependence on the traditional pay-TV bundle for nearly all its revenue is problematic over the long term.

The two major areas where Fox differs from peers are: 1) its departure from entertainment production and, to a large extent, entertainment programming to focus on live news and sports; and 2) its decision not to operate a large-scale subscription-based streaming service.

Consumers are much more likely to watch sporting events and news programs in real time, and Fox has been able to grow advertising revenue while peers have floundered as linear viewership declines and television advertising dollars have waned. Also, the premier sports content to which Fox holds rights and Fox News’ popularity with cable viewers has given Fox bargaining power with pay-TV distributors. Despite ongoing cord-cutting, Fox’s revenue from pay-TV subscribers has continued to grow, as Fox has negotiated higher affiliate fees. Fox receives more than $8 per domestic pay-TV subscriber per month from pay-TV providers and affiliated local networks.

Problems for Fox will arise if pay-TV subscribers perpetually decline and the pay-TV bundle eventually crumbles. We assume Fox will license all its programming to streamers, but we doubt this avenue will make up for its current affiliate revenue. As long as its streaming partners have fewer subscribers than the current number of pay-TV subscribers, Fox would have to extract higher fees per subscriber than it does now from pay-TV customers, a tall order for streaming services that have other significant content costs to contend with. We expect a similar challenge with the streaming sports joint venture that Fox is creating with Warner Bros. Discovery and Disney, and a preemptive move toward streaming licensing risks accelerating the demise of the traditional bundle. Ultimately, we believe the pay-TV bundle is best for consumers and companies like Fox, but unless that bundle can be repurposed for the streaming age, we expect Fox will face long-term challenges.

6 Surprising Stocks to Buy Now in 2024 — Nordstrom

Rating for Stocks: 5 stars
Economic Moat Rating: None
Uncertainty Rating: Very High
Stock Style Box: Small Value
Industry: Department Stores

We recently downgraded the economic moat rating on this small company to none from narrow. Although Nordstrom operates the largest US high-end department store by sales and lays claim to one of the larger off-price concepts in the market (Nordstrom Rack), market forces have worked against the company’s results, and we don’t expect that trend to reverse course, explains senior analyst David Swartz. We think significant spending will be required to generate even modest sales growth, he adds. Although uncertainty around the future of the business is very high, Nordstrom stock looks like a bargain as it trades 54% below our $38.50 fair value estimate.

Nordstrom has a loyal customer base built on differentiated fashion products, quality brands, and first-rate service. While we used to think that these strengths provided a competitive advantage based on a brand intangible asset, we no longer believe that it does. Realistically, Nordstrom’s recovery from the pandemic has been rocky, and the US apparel retail market has only become more competitive.

Nordstrom has 93 full-price stores, nearly all of them in desirable Class A malls (sales per square foot above $500) or major urban centers. While this store base may provide an advantage over department stores in lower-tier malls, the productivity of Nordstrom’s full-price stores has been declining all the same. The firm has invested heavily in e-commerce (36% of 2023 sales) to adapt, but digital sales seem to have come at the expense of store sales.

Nordstrom also has a presence in discount retail with Rack (about 260 stores) that could make up for some of the full-price weakness. Indeed, 19 Rack stores opened in 2023, and another 22 or so openings are expected in 2024. Rack, however, has underperformed peer discount stores of late, suggesting that it does not provide a competitive edge to Nordstrom.

Nordstrom unveiled a new strategic plan, Closer to You, in early 2021 that emphasizes e-commerce, growth in key cities (through local and other initiatives), and a broader off-price offering. Among the merchandising changes, Nordstrom intends to increase its private-label sales (to 20% of sales from about 10% now) and greatly expand the number of items offered through partnerships (to 30% from about 5% now). The firm set medium-term targets of annual revenue of $16 billion-$18 billion, operating margins above 6%, annual operating cash flow of more than $1 billion, and returns on invested capital in the low teens. Nordstrom’s recent struggles to manage through industry turmoil and exit from Canada have put these goals in doubt, but we forecast it will return to low teens adjusted ROICs (including goodwill) by 2026. However, we anticipate operating margins will top out at just over 6% in the long run due to intense competition.

6 Surprising Stocks to Buy Now in 2024 — Paramount Global

Rating for Stocks: 4 stars
Economic Moat Rating: None
Uncertainty Rating: Very High
Stock Style Box: Small Value
Industry: Entertainment

Paramount Global is a cheap stock to buy, trading 45% below our fair value estimate of $20. We downgraded this small company’s economic moat rating to none from narrow; it’s another name facing very high uncertainty as streaming services take hold in the entertainment industry. We believe the firm’s Paramount+ service is benefiting from the addition of live programming, integration with Showtime, and an openness to bundling, including with Walmart+, says ’s Dolgin.

Like peers, Paramount has been in a period of transition and facing significant uncertainty about how and whether the traditional linear television business will coexist or evolve in a media environment dominated by streaming services. Based on its current state, we think the company has the right strategy for streaming and advantages related to distribution and content ownership that will enable it to successfully manage the industry’s evolution.

Management has seemingly realized that there are too many streaming services with good content for consumers to be regular subscribers to all. It has therefore blurred the line between linear and streaming and moved to focus on one platform for all its best content, consolidating Showtime and Paramount+ and including local CBS programming to potentially improve customer stickiness. Sporting events on local CBS stations, including football and March Madness tournament games, are included with Paramount+. The firm discontinued the Showtime linear network, so the previous linear Showtime subscribers now have access to Paramount+. The firm is also open to partnerships and bundles, whether paired with other subscription services like Walmart+ or with pay-TV distributors. We think this will result in the widest possible exposure—and therefore monetization—of Paramount’s attractive content.

Throughout the company’s financial struggles amid the industry transition over the past few years, there has been no diminution in quality or popularity of the firm’s content. CBS continues to garner the largest audiences of all television networks and holds NFL and March Madness rights into the 2030s. Paramount Pictures and CBS Studios remain among the most prolific creators of film and television programming. We expect content creation will continue to drive licensing revenue, and the content that Paramount keeps for its own distribution outlets will remain valuable for consumers as the firm becomes agnostic to whether they’re receiving access through traditional television or streaming services. Still, we expect a more subdued business that won’t be able to increase profits nearly as much as in the past.

6 Surprising Stocks to Buy Now in 2024 — Warner Bros. Discovery

Rating for Stocks: 5 stars
Economic Moat Rating: None
Uncertainty Rating: Very High
Stock Style Box: Mid Value
Industry: Entertainment

The final name on our list of surprising stocks to buy, Warner Bros. Discovery is trading a remarkable 58% below our $20 fair value estimate. In fact, the stock is among our analysts’ favorite 33 undervalued stocks for second-quarter 2024. As with other media names, we downgraded Warner’s economic moat rating to none from narrow, given the uncertainty surrounding the industry shift to streaming and new competition. ’s Dolgin expects Warner to survive, in part because of its topnotch production studios that create popular films and episodic television content.

Warner Bros. Discovery faces significant uncertainty surrounding its evolution in a media landscape defined by cord-cutting and many streaming choices. Ultimately, we think Warner’s scale, distribution channels, production studios, and content portfolio will make it one of the survivors.

Like several peers whose businesses were built for traditional linear television, Warner has faced financial pressure as it tries to figure out how to compete in a world where consumers have preferred streaming to traditional television. Warner’s networks business has declined amid a continually shrinking pay-TV subscriber base, while at the same time the firm faced heightened costs to build a streaming platform, attract subscribers, and populate its platforms with a robust content library. We expect these previously bifurcated segments to start working in harmony.

Warner’s streaming business is now profitable and more mature, and we think the firm has the right strategy to navigate a convergence between traditional and new media. Its streaming assets are now confined exclusively to Max and Discovery+. Max is the home for nearly all Warner Bros. on-demand entertainment content, but it has also become an outlet for live news and sports. CNN Max, which features live programming and includes some high-profile linear CNN simulcasts, is now included in all Max subscriptions. The sports add-on package includes NBA, MLB, NHL, and NCAA March Madness games to which TNT and TBS have rights.

Whether through streaming, linear, or licensing, we expect first-rate Warner content to continue to reach consumers. The firm’s production studios remain top-tier in terms of highest-grossing films each year and popular episodic television content. Warner may have to fine-tune the traditional balance and timing for things like film exclusivity in theaters versus availability at home, or which television shows and films to license versus keeping in-house. But having a menu of distribution options and attractive content behind it should be deciding factors behind the firm’s future success. Still, we expect a more subdued business that won’t be able to grow profits nearly as much as in the past.

What Is an Economic Moat?

The companies with economic moats have significant advantages that allow them to successfully fend off competitors for a decade or longer. Companies can carve out their economic moats in a variety of different ways—by having high switching costs, through strong brand identities, or by possessing economies of scale, to name just a few.

Resilience in Adversity: Investing in March 2024's Best Stocks

2024-03-24T07:43:00.000-07:00

The tumultuous landscape of the stock market has been a constant companion for investors in recent years, with volatility becoming a defining feature. Amidst the persistent uncertainty surrounding interest rates and economic trajectories, investors find themselves at a crossroads, pondering the strategic acquisition of stocks in such an unpredictable environment.

In such times, the quest for stability becomes paramount. Investors seek refuge in companies that offer a semblance of certainty, not just in terms of cash flows but also in their fundamental resilience. Enter Morningstar's esteemed compilation, the Best Companies to Own list, a beacon of hope amidst the market's stormy seas. These companies, adorned with significant competitive advantages, epitomize the essence of stability. With predictable cash flows and astute management at the helm, they stand as pillars of reliability in an otherwise uncertain world.

However, the allure of the best companies doesn't always translate into the best stocks to buy. The price one pays for ownership holds equal significance in the grand scheme of investment decisions. Hence, our focus now shifts to unearth the hidden gems among these stalwarts—the 10 most undervalued stocks of the present moment.

Enter the stage of opportunity: the 10 Best Stocks to Buy Now—March 2024. Within this curated selection lie the promising prospects of:

Yum China

Roche Holding

Imperial Brands

British American Tobacco

Polaris

Pfizer

Campbell Soup

Anheuser-Busch InBev

Estee Lauder

Comcast

Delving deeper into the rationale behind our affection for each entity at their current valuations, we uncover a tapestry of insights and metrics curated by Morningstar. These nuggets of wisdom, gathered from the depths of market analysis, shed light on the untapped potential and hidden value residing within each stock.

Take, for instance, Yum China, a titan in the realm of restaurants, boasting a stock undervalued by a staggering 45%. As senior analyst Ivan Su eloquently puts it, the market's myopia fails to grasp the vast opportunities awaiting Yum China in the burgeoning Chinese fast-food industry. With a backdrop of societal shifts and consumer trends, the stage is set for Yum China to ascend the throne of fast-food dominance.

Similarly, Roche Holding emerges as a beacon of promise in the pharmaceutical landscape, armed with a diverse portfolio and a visionary approach to healthcare. Despite external pressures, Roche's innovative pipeline and steadfast focus on biologics pave the way for sustained growth, as envisioned by strategist Karen Andersen.

As we traverse the landscape of undervalued stocks, each company narrates a tale of resilience and potential, waiting to be unearthed by discerning investors. With meticulous analysis and unwavering conviction, we present these stocks as beacons of opportunity in a sea of uncertainty, beckoning investors to embark on a journey of discovery and prosperity.

Best Stocks To Buy March 2024

2024-03-19T07:31:00.000-07:00

Exploring the Top 13 Major Stocks to Buy in 2024

In this article, we delve into the top 13 major stocks worthy of consideration for investment opportunities right now. If you're seeking to bypass the latest stock market news and recent trends, feel free to jump straight to our list of the 5 Best Major Stocks to Buy Right Now.

As we venture into 2024, the stock market landscape remains consistent. Investors kick-started the year by closely monitoring the Federal Reserve, a typical practice aimed at setting expectations for the remainder of the year. With the Fed aggressively raising interest rates to counter inflation, the focus now shifts to when rates might start decreasing. Ironically, the economy presents the biggest challenge in compelling the Fed to act promptly.

Higher interest rates translate to increased business costs and restricted consumer access to capital. Consequently, firms face hurdles in achieving revenue and earnings growth, ultimately stalling economic expansion. Nonetheless, buoyed by the robust performance of the American economy compared to its counterparts, the Fed retains flexibility in maintaining higher rates, thereby tempering the Wall Street's enthusiasm accustomed to easy money post the 2008 Great Recession and the recent COVID-19 pandemic.

Despite the prevailing high interest rates, the stock market continues to dazzle. Major indexes like the NASDAQ Composite and the S&P 500 defy expectations, soaring to new heights despite the downward pressure exerted by high interest rates on stock valuations. The S&P 500 notably achieved a historic milestone in February 2024, breaching the 5,000-point mark for the first time in history. This remarkable feat marks a stark contrast to the widespread recession fears that dominated discussions towards the end of 2022.

In a reminiscent fashion to 2023, where the NASDAQ 100 witnessed record highs fueled by major players like NVIDIA Corporation (NASDAQ:NVDA), 2024's record-setting index levels are propelled by similar industry giants. The onset of the year ushered in the pivotal earnings season, with heavyweights like Meta Platforms, Inc. (NASDAQ:META), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG) spearheading advancements in artificial intelligence (A.I.). A.I. emerged as the predominant theme in the stock market last year, with mega stock earnings calls providing insights into management strategies, future plans, and data analytics scrutinized by investors seeking clarity on the A.I. hype.

The impressive stock performance in 2024 reflects investors' confidence, with Alphabet, Meta, Microsoft, and NVIDIA's shares registering year-to-date gains of 7.64%, 35%, 13%, and 49.7%, respectively. This underscores the potential of major stocks to deliver substantial returns, aligning with market and economic contexts favorably.

Before delving into the top major stocks worth considering, a significant development worth noting in 2024 is Meta's announcement of a 50 cent dividend, marking its transition into stable, dividend-paying territory. Traditionally recognized as a high-growth technology firm, Meta's shift from negative profits to dividend payouts signals stability and investor confidence in its growth trajectory.

So, which major stocks are hedge funds eyeing? Notable picks include Meta Platforms, Inc. (NASDAQ:META), Amazon.com, Inc. (NASDAQ:AMZN), and Microsoft Corporation (NASDAQ:MSFT).

Methodology

To compile our list of the best major stocks, we identified common top constituents of the S&P 500 index and the NASDAQ 100 index, ranking them based on the number of hedge funds holding their shares as of Q4 2023. The top-ranking stocks were then selected as the best major stocks to consider.

We leveraged hedge fund sentiment to guide our selection process, given the outperformance of hedge funds' top 10 consensus stock picks compared to the S&P 500 Index over the last decade. This indicator warrants careful attention, given its track record of success.

Top 13 Major Stocks to Buy Right Now

Intuit Inc. (NASDAQ:INTU)
- Number of Q4 2023 Hedge Fund Shareholders: 75
- Intuit Inc. is a technology company empowering small businesses to manage their daily financial operations efficiently. Despite a sluggish financial environment, Intuit has consistently exceeded analyst EPS estimates in its latest quarters, earning a Strong Buy rating on average. As of December 2023, 86 out of 933 hedge funds surveyed held stakes in the firm, with Ken Fisher's Fisher Asset Management leading the pack with a $1.9 billion stake.
Tesla, Inc. (NASDAQ:TSLA)
- Number of Q4 2023 Hedge Fund Shareholders: 82
- Tesla, Inc. is a renowned electric vehicle manufacturer headquartered in Texas. Despite facing controversies in 2024, including CEO Elon Musk's call for reincorporation outside Delaware, Tesla remains a prominent investment choice. By the end of Q4 2023, 81 hedge funds owned Tesla shares, with Phillippe Laffont's Coatue Management holding the largest stake worth $1 billion.
Booking Holdings Inc. (NASDAQ:BKNG)
- Number

10 Best Stocks to Invest in right now

2014-03-01T01:00:00.000-08:00

How come we feel so bad when we've got it so good? Even after a 12% gain in the S&P 500 index this year, uncertainty about the fiscal cliff, increased taxes, and still-high unemployment continue to wear down investors. Year to date, domestic equity funds have seen $110 billion in net outflows.

The new year could bring more of the same if economic uncertainty fails to lift, making the key question for investors not which way the market is headed in 2013, but which stocks are going to go up.

For the third year in a row, Barron's is taking a crack at that question, with our 10 Favorite Stocks for 2013, including blue-chips like Apple (ticker: AAPL), JPMorgan Chase (JPM), Royal Dutch Shell (RDSA), and Novartis (NVS), and smaller companies like Barnes & Noble (BKS) and disk-drive maker Western Digital (WDC), which appear sharply undervalued.

Many of this year's picks have been the subject of bullish articles in Barron'sduring the past year. Apple was featured in a recent cover story, while BlackRock(BLK), Barnes & Noble, and Viacom(VIAB) were profiled in recent months.

We're coming off a good year. Our 10 stocks for 2012 outpaced the market by four percentage points, gaining an average of 17% (see accompanying table). The two big winners were disk-drive maker Seagate Technology (STX) and cable operatorComcast (CMCSA), both up more than 60%. The worst performer was

10 Best Stocks to Invest in right now- Freeport-McMoRan Copper & Gold (FCX), which declined 22%, with nearly all of that drop coming last week amid negative investor reaction to its deal to buy two energy companies for $9 billion.

No matter which way the market goes, well-run companies should be able to deliver higher revenue and profits, even in a tough environment. All of our new favorites could produce 15% to 20% total returns (including dividends) next year. Here's a closer look:

10 Best Stocks to Invest in right now - APPLE is still going strong, even as the company's shares have traded down 23%, to around $540, from a September peak of $705. None of the recent investor concerns -- lower margins, supply constraints, management changes, iPad competition, and the iPhone 5 map fiasco -- are major. It's true that Apple's earnings growth has slowed to a 23% rate from more than 100% a year ago, but that's understandable, given the company's $156 billion in annual sales.

Veteran UBS tech analyst Steve Milunovich recently wrote that it's a "good time" to add to positions in Apple before year end, with the stock trading near its lowest price/earnings ratio in five years after two disappointing quarters. He carries a price target of $780. Apple trades for only 11 times projected profit of $49 a share in its current fiscal year, ending in September 2013. Strip out Apple's huge cash holding of $128 a share, and the effective P/E is just eight.

Even after implementing a dividend -- now providing a 1.9% yield -- and a modest buyback program, Apple should build cash at a rate of $40 billion annually. There's room for a higher dividend and a more aggressive share-repurchase program in 2013. Both could play well with investors.

10 Best Stocks to Invest in right now - BARNES & NOBLE'S bookstore division dominates the field, and the company's Nook e-reader unit is holding its own againstAmazon.com (AMZN) and Apple. These achievements aren't reflected in Barnes & Noble's depressed stock price, which is flat this year at around $14. The stores now control almost two-thirds of the country's retail shelf space for books and are expected to generate more than $300 million of pretax cash flow in the fiscal year ending in April. The stores could be worth the entire current stock price -- Barnes & Noble has an equity value of just $880 million.

The Nook division is losing money, but that reflects a market-share grab, as Barnes & Noble seeks to get its e-readers into the hands of as many consumers as possible and then sell them profitable digital content, including books and magazine subscriptions.Microsoft (MSFT) likes Nook, having invested $300 million this year for a 17.6% stake in the division. That implies that Barnes & Noble's 82.4% of Nook is worth $1.4 billion, or $24 a share. While this calculation likely overstates Nook's value, the division probably is worth a good deal more than its implied price of zero. One fan is media magnate John Malone, whose Liberty Media (LMCA) owns about $200 million of Barnes & Noble convertible preferred stock.

10 Best Stocks to Invest in right now - BLACKROCK received a big vote of confidence this fall when director James Grosfeld purchased nearly 500,000 shares of the investment manager in the open market for $94 million, one of the largest insider purchases in the past decade. Grosfeld, a former CEO of Pulte Homes, wouldn't comment, but he clearly sees value in BlackRock shares, which have lagged behind those of its peers this year.

BlackRock, at $193, is valued at 13 times projected 2013 profit of $15 a share, a slight discount to its rivals; it yields 3.1%. BlackRock is the No. 1 investment manager, overseeing $3.7 trillion in assets. Its iShares is the leading provider of exchange-traded funds, with half of the market.

The three main concerns about BlackRock are that it's too big to grow, that competitive pressure in ETFs from Vanguard will push down fees, and that longtime CEO Larry Fink, viewed as one of his industry's best executives, might leave for the top job at the U.S. Treasury Department. (See Feature "Madame Treasury Secretary?".)

Bulls such as Morgan Stanley analyst Matthew Kelley see double-digit earnings growth next year, driven by iShares. Fink has dismissed talk that he wants to succeed soon-to-retire Treasury Secretary Timothy Geithner. "I'm not leaving this job," Fink said last week. "I will be at BlackRock as long as my board wants me here."

10 Best Stocks to Invest in right now - GENERAL DYNAMICS is best known as a defense contractor, but unlike its peers, it has a valuable nondefense business that isn't reflected in its share price. Gulfstream, a leading maker of corporate jets, produces almost 30% of General Dynamics' profits, and that percentage should rise in the next few years, with deliveries of Gulfstream's new top-of-the-line plane, the G650, which sells for $60 million and can fly nonstop from New York to Tokyo.

10 Best Stocks to Invest in right now - General Dynamics, at around $67, looks inexpensive, trading under 10 times projected 2013 profits of $7.32 a share. Gulfstream is expected to generate more than $2 a share of that. Put a P/E multiple of 14 on that contribution, and the private-jet business could be worth $30 per General Dynamics share. This suggests that the defense business -- including tanks, other armored vehicles, and nuclear submarines -- is valued at just seven times forward earnings. Defense contractors face tighter Pentagon appropriations, but the industry probably will avoid draconian reductions in spending, assuming Congress and the president reach a budget deal.

Barclays analyst Carter Copeland argues that General Dynamics could be the only major defense contractor to show higher operating profits through 2015. Incoming CEO Phebe Novakovic, who takes the top job on Jan. 1, could be a positive catalyst. What could be in store? A higher dividend, more aggressive share buybacks, or even a Gulfstream spinoff. The company has rejected the spinoff idea, but some investors think Novakovic might reconsider. Copeland's price target: $87.

3 Best Bargain Stocks for 2014

2014-02-28T04:00:00.000-08:00

With stocks having their best year since the mid-1990s, you might think that there's few stocks left that are truly a bargain.

Valuations trended higher throughout 2013 even as earnings rose. The S&P 500 is trading with a forward P/E of 16 which isn't exactly "cheap."

But even in a hot market, there are always stocks that are left behind. Some are ignored by investors because there is business trouble brewing at that particular company so they stay away. Others are in an out of favor industry or sector.

No matter the reason, a new year is always a good time to poke around in the bargain bin looking for deals. You might have to sort through a bunch of companies that aren't pretty to find the gems, but they are there.

What's a Bargain?

According to Dictonary.com, "bargain" is defined as: "an advantageous purchase, especially one acquired at less than the usual cost."

To be a "stock bargain", I looked for stocks trading with a forward P/E (that's looking at future earnings) under the average of the S&P 500, which would be stocks with P/Es under 16.

If it has a cheap price-to-sales ratio or price-to-book ratio, even better. I consider "cheap" to be a P/S under 1.0 and a P/B under 3.0.

I also only looked at Zacks Rank #1 (Strong Buy) stocks. Because, after all, why not buy companies where earnings estimates are rising into 2014? We want to own companies that are growing their earnings.

The 3 Best Bargains for 2014

1. Packaging Corporation
2. Tower International
3. Pacific Drilling

3 Best Bargain Stocks for 2014 1. Packaging Corporation of America (PKG - Snapshot Report)

Packaging Corporation makes container board and other packaging products. The container board market hit a rough patch this fall as inventories rose, volumes flattened and prices looked ready to decline in November and December. The fourth quarter of the year is the seasonally slow period but this year was expected to be more difficult than normal.

However, November demand rebounded from October's decline. The container board companies also remained disciplined as inventories fell, a good sign heading into 2014. The analysts now believe that by maintaining production levels , the container board companies are keeping inventories under control. With inventories lean, that means they have pricing power.

After fears gripped the market in the fall that price declines were coming, prices remained flat in November and are expected to remain flat again in December.

Where's the bargain?

Forward P/E = 14.9
Earnings expected to grow 37% in 2014
Zacks Rank #1 (Strong Buy)

3 Best Bargain Stocks for 2014 2. Tower International, Inc. (TOWR - Snapshot Report)

Tower is a Michigan-based auto parts manufacturer. It makes the frames and other chassis structures as well as welded assemblies for small and large cars, crossovers, pickups and SUVs for auto companies around the globe.

The auto sector both in North America and globally, has seen sales move higher the last few years. Analysts expect more of that in 2014. Yet investors haven't shown Tower much love. Shares have been flat since the summer but are dirt cheap.

Where's the bargain?

Forward P/E = 7.7
P/S = 0.2
Earnings expected to grow 24% in 2014
Zacks Rank #1 (Strong Buy)

3 Best Bargain Stocks for 2014 3. Pacific Drilling S.A. (PACD - Snapshot Report)

Pacific Drilling is a Luxembourg headquartered ultra-deepwater drilling services provider. It operates 8 ultra-deepwater drillships. Analysts consider it to be one of the most technologically advanced of the drillers which is highly prized by the international oil companies.

The analysts expect demand for its rigs to remain strong into the future as the offshore drilling cycle has only recently revved up.

Energy has been ignored by investors. Because of that, some of the best bargains in the stock market are found in that sector.

Where's the bargain?

Forward P/E = 14
P/B = 1.1
Earnings expected to grow 101% in 2014
Zacks Rank #1 (Strong Buy)

Bargains DO Exist

When the stock market is red hot, don't get discouraged. There are ALWAYS stocks that are on sale. You just have to know where to look to find the bargains.

Want More of Our Best Recommendations?

Zacks' Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Then each week he hand-selects the most compelling trades and serves them up to you in a new program calledZacks Confidential.

Best Stocks To Invest In 2014

2014-02-27T02:30:00.000-08:00

Best Stocks To Invest In 2014: Best muni bond fund bets

Even if the most dire predictions about the current muni bond market come true, and we see $100 billion or more in defaults, that’s still a drop in the a multi-trillion dollar bucket.

True, fiscal coffers are percolating a thin gruel of anemic revenue. Also true, bond insurers that used to provide a safety net for most munis are basically gone thanks to 2008’s maelstrom.

Also true; most muni bonds skew toward the longer-end of the more interest rate sensitive duration spectrum (a function of being tied to long- term infrastructure projects).

But, muni bonds are backed by the ability to raise taxes; no small feature. Much of the risk of owning muni bonds that are weakest is ruled out by investing in muni bond funds where manager track records are strongest.

And, finally, one can address the interest-rate sensitivity issue by investing in a diversified, duration flexible muni bond fund or focusing on shorter duration muni bond funds.

The best way to pursue the upside is through a diversified basket of actively managed munis.

The shorter duration Fidelity Intermediate Muni Bond Fund (FLTMX) is one choice for taxable accounts.

I also like Fidelity Tax-Free Bond (FTABX) paired with a non-muni bond option that offers rubies in the current emerging market rubble, Fidelity New Markets Income (FNMIX).

Best Stocks To Invest In 2014: Rhodes: Trader calls for correction

Given the market's current overbought condition, traders believe it is wise to raise some cash. We agree. We also sense that there is a change in the air regarding the rise in commodity prices.

We've looked for at least a 20% correction in commodities sometime this year. Certainly “now” seems to be at least an interim top to be sure.

Perhaps the catalyst for this decline stems from Goldman Sachs commodity strategist Jeffrey Curriehas, who has now decided to close his profitable long commodities trade -- long a basket of crude oil, copper, cotton, soybeans and platinum or the “CCCP trade as it has become known.

Also, he is exiting long copper and platinum positions because he believes the risk-reward no longer favors a bullish stance.

However, we’ll go on to note that he believes that on a 12-month horizon – the “CCCP trade” continues to show upside potential; but the near term risk-reward no longer favors being long the trade.

Meanwhile, the S&P has clear resistance at 1340 and the NASDAQ 100 at 2360; if those levels are taken out to the upside, then we’ll assume that another leg higher is underway.

However, recent weakness suggests a correction is underway towards more established support levels at 1250 and 2189.

But let us note right away, that if the NASDAQ 100 does manage to test 2189 – it will have broken key neckline support of a larger bearish “head & shoulders” topping pattern. Thereby targeting 2000-to-2050…which would be a rough - 10% to -15% correction.

Best Stocks To Invest In 2014: Media buys: CVC & CMCSK

The rough-and-tumble media group gained new investor respect in late 2010 and two of them now offer solid buying opportunities following the market correction.

Cablevision Systems (CVC), the fifth largest U.S. cable TV provider, plans to spin off its Rainbow Media business—possibly unlock- ing added shareholder value.

It is also strong in high-speed data and voice services for small and medium-sized businesses.

With its price softening a bit last week, but with prospects for earnings of $2.50 per share in 2012 and $3-plus in 2013 still intact, our 12-month price target from today’s 34 is around 45.

Top Dog in the media group is Comcast (CMCSK). The company with 40 million video subscribers in 39 states, 17 million Internet subscribers and over 8 million phone subscribers.

In January it took control of NBC Universal (from GE) just as the advertising market began showing renewed strength.

But according to Zacks, the two analysts tracking CMCSK are projecting 17% earnings growth and a 31 price target. Our target for CMCSK from today’s 23-plus is 35. The recently raised dividend provides a 2% yield.

Best Stocks To Invest In 2014: MIND C.T.I. Ltd. (MNDO)

Israel stands above all other nations when it comes to the high-tech industry, and one of my favorite emerging stocks in this sector is MIND C.T.I. Ltd. (MNDO); this is a microcap Israeli tech stock with a high-yield dividend over 9 percent.

With over ten years in the technology sector, MIND has quickly evolved into a leading global provider of real-time, product-based mediation, billing and customer care solutions for voice, data, video and content services.

With a market cap of $61.8 million, little MNDO doesn’t show up on many traders’ radar screens - especially because it’s thinly traded, averaging just over 136,700 shares traded daily.

That makes it exactly the type of small cap stock that we should keep an eye on and think about buying when the opportunity arises. We want to get into these types of companies before they receive significant analyst coverage.

In MNDO’s case, there are other strengths besides just a lack of coverage. The company’s income statement looks particularly strong. Total revenues for 2010 were close to $20 million, an increase of 14 percent year over year.

Growth in revenues helped to increase operating income from $2.2 million in 2009 to $4.8 million, or 25 percent of revenues, in 2010. Net income was $44.9 million or $0.26 per share.

The balance sheet also looks strong with a total cash position of $20.5 million at the end of 2010. The company boasts profit margins of 24.4 percent and return on equity of 20.8 percent. Moreover, MNDO continues to grow its customer base at a rapid pace.

The company recently took a major step towards catching institutional attention with the announcement that they have joined forces with Israel’s first mobile operator, Pelephone communication. Pelephone has over 2.8 million subscribers.

For the investor who wants the potential for outsized capital gains in small cap stocks that pay big dividends, MNDO is worth further research.

Best Stocks To Invest In 2014: Stillwater Mining (SWC)

Stillwater Mining (SWC) is the largest producer of platinum group metals (PGMs) in North America and the only significant producer in the US.

In 2010, the company produced a total of 485,000 ounces of PGMs including 374,000 ounces of palladium and 111,000 ounces of platinum from its Stillwater and East Boulder mines in southern Montana.

Palladium prices were at depressed levels for much of the period between 2002 and 2008, and Stillwater wasn’t in a position to expand operations or make money.

But with palladium prices now well over USD700 per ounce, the miner is once again solidly profitable.

Stillwater’s expansion projects are slated to push the company’s total output up by 40 percent over the next 4 years to roughly 700,000 ounces of PGMs per year.

And roughly three-quarters of that output will be palladium, the PGM with the strongest near-term growth prospects and tightest supply-demand conditions.

Stillwater trades at just 13 times projected 2011 earnings and should be able to grow profits by 20 to 30 percent over the next few years as it brings new production on-stream to take advantage of rising palladium prices.

Stillwater Mining, a new addition to the Metals and Mining Portfolio, rates a buy under 24.50.

Best Stocks To Invest In 2014: Global X FTSE Norway 30 (NORW)

If you are looking for an investment safe haven, Norway shuld be high on your list; while much of Europe is mired in fiscal turmoil, Norway -- which is not a memeber of the EU -- seems to have matters well in hand.

It is the world's seventh largest oil exporter and, unlike most countries in the world, actually carries a budget surplus that is estimated to be about 10% of GDP this year.
The common approach to national budgeting in much of the world seems to be spending money as long as it can be borrowed.

But Norway's budget conservatism and half-trillion dollar wealth fund means it has an extremely low default risk. In real market-cost terms, the cost of insuring against Norwegian default is the lowest in the world.

Also in Norway's favor is that its inflation and unemployment are low and its currency, the krone, is strong.

The Global X FTSE Norway ETF (NORW) is realtively new, having been trading since September 2010. The fund attempts to emulate the FTSE Norway index, a market capitalization-weighted index designed to reflect board-boased equity performance of the country.

The top three sector weightings are energy (40.5%), financial services (22%) and basic materials (10%). The annual expense ratio is 0.50%.

Best Stocks To Invest In 2014: Best Stocks To Invest In 2012: T. Price U.S. Large-Cap Core (TRULX)

T. Price U.S. Large-Cap Core (TRULX) has been managed since its inception in mid-2009 by Jeff Rottinghaus; the fund currently has less than $30 million in assets.

Rottinghaus seeks to fill the portfolio with 50 to 55 large-cap stocks rated highest by Price’s extensive cadre of equity analysts, who tend to be divided by sector and industry.

The criteria to favor one stock over another differ among various sectors: in technology, Rottinghaus says, the firm’s analysts tend to prefer companies going through very favorable cycles for new products and services. In the consumer staples area, on the other hand, valuation plays a greater role.

In general, however, the analysts favor modestly priced, high-quality companies that are gaining market share in growing industries.

For cyclical stocks, they look for companies beaten down due to a cyclical trough but likely to benefit mightily once the cycle turns, thanks to limited competition, engendered by high barriers to entry by competitors.

For all their picks, they spend a lot of time attempting to ascertain management quality.

In general, Rottinghaus favors GARP companies (growth at a reasonable price) while also devoting some of the fund’s assets to more highly valued companies thought to have excellent prospects.

Like most other equity funds at Price, U.S. Large Cap Core has a bias toward quality as indicated by low debt, high barriers to entry and strong return on capital. Rottinghaus hopes this would cushion the fund in a bear market.

Top 10 Biotech Stocks to buy 2014

2014-02-26T00:00:00.000-08:00

If you’re looking for a stock that could double over the next 12 months, your best bet is biotechnology. Using the Google (GOOG) screener, I found that 51 stocks with a market capitalization greater than $50 million had returned one-year gains of at least 100%. But what’s even more interesting is that biotechnology stocks account for 18 or 35% of the 51 stocks trading with at least a 100% gain over the last year. The top 5 gainers in the market, over the last year, are biotech stocks, and 9 of the top 20 were biotech. Therefore, it’s safe to say that if you’re looking for a stock with quick upside potential, biotechnology should be the first place you look. However, it can be difficult to identify the stocks that have this level of upside potential, which is what this article will attempt to identify.
This article is actually a two part series that will look at 10 stocks in the biotechnology industry that present the most upside potential from its current position. The stocks on this list are numbered from 10-1, with #1 having the most potential based on a number of possible factors, which include: clinical trials, low valuations, and even the likelihood for being acquired. The goal is to find the absolute most undervalued biotech stocks in the market that could very well return gains of more than 100% over the next 52 weeks.

Top 10 Biotech Stocks 2014: Bristol-Myers Squibb Company (BMY)

Bristol-Myers Squibb Company, a global biopharmaceutical company, discovers, develops, and delivers innovative medicines that help patients prevail over serious diseases. The company focuses on areas of serious unmet medical needs, such as cardiovascular disease, mental illness, cancer, HIV/AIDS, hepatitis B and C, rheumatoid arthritis, type 2 diabetes, solid organ transplantation, and Alzheimer’s disease. Its principal products include PLAVIX for protection against fatal or non-fatal heart attack or stroke; AVAPRO/AVALIDE for the treatment of hypertension and diabetic nephropathy; ABILIFY, an agent for adult patients with schizophrenia, bipolar mania disorder, and depressive disorder; and REYATAZ for the treatment of HIV. The company?s principal products also comprise SUSTIVA for the treatment of HIV; BARACLUDE, an inhibitor of hepatitis B virus; ERBITUX to target and block the epidermal growth factor receptor; SPRYCEL for treatment of chronic myeloid leukemia in adults; IXEMPRA to treat breast cancer; ORENCIA to severe rheumatoid arthritis in adults; and ONGLYZA for the treatment of type 2 diabetes. Its products under Phase III clinical trials include ELIQUIS to prevent and treat venous thromboembolic disorders and stroke prevention in atrial fibrillation; NULOJIX to prevent solid organ transplant rejection; Brivanib to block the VEGF and the FGF receptors; Dapagliflozin to treat diabetes; YERVOY to treat metastatic melanoma; and Necitumumab for anticancer treatment. The company sells its products to wholesalers, distributors, retailers, hospitals, clinics, government agencies, and pharmacies. It has strategic alliances with sanofi-aventis; Pfizer, Inc.; AstraZeneca PLC; Otsuka Pharmaceutical Co., Ltd.; Eli Lilly and Company; and Gilead Sciences, Inc. The company was formerly known as Bristol-Myers Company and changed its name to Bristol-Myers Squibb Company in 1989. Bristol-Myers Squibb Company was founded in 1887 and is headquartered in New York, New York.
Advisors’ Opinion:

By Tom Hutchinson At 2014-9-20Bristol Myers Squibb (NYSE: BMY) markets drugs worldwide and is one of the largest pharmaceutical companies in the world. The company sells at a higher price-to-earnings (P/E) ratio (14) than most Big Pharma companies (the industry average is 13), but still lower than the overall market (15.4). Bristol also pays a solid 5.2% dividend yield, compared with 2.1% for the overall market and 4.5% for the pharmaceutical industry.
Like most major drug companies, Bristol faces costly patent expirations. Blockbuster drugs Plavix (cholesterol) and Abilify (anti psychotic drug), which account for nearly half of net sales, will lose patents in 2011 and 2012. Also, most of Bristol’s sales are generated in the United States, meaning the company will be negatively affected by the new health-care reform bill, which requires discounts on drugs for patients using Medicaid. However, these problems are already reflected in the stock price and the company has solid prospects going forward.
Bristol Meyers has sold off most of its noncore businesses and is focusing exclusively on drugs. The company has cut $2.5 billion in operation expenses in the past few years as well, and has more than $5 billion in cash that it can use for acquisitions. It also has a robust pipeline of cancer drugs with a strong track record of FDA approval. The stock has an excellent chance to impress going forward, and the dividend is well supported with a 61% payout ratio.

Top 10 Biotech Stocks 2014: Merck & Company Inc. (MRK)

Merck & Co., Inc. provides various health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products. The company?s Pharmaceutical segment provides human health pharmaceutical products, such as therapeutic and preventive agents for the treatment of human disorders in the areas of bone, respiratory, immunology, dermatology, cardiovascular, diabetes and obesity, infectious diseases, neurosciences and ophthalmology, oncology, vaccines, and women’s health and endocrine. This segment also offers human health vaccines, such as preventive pediatric, adolescent, and adult vaccines. Its Animal Health segment discovers, develops, manufactures, and markets animal health products. This segment offers antibiotics, anti-inflammatory products, vaccines, products for the treatment of fertility disorders, and parasiticides for cattle, swine, horses, poultry, dogs, cats, salmons, and fish. The Consumer Care segment develops, manufactures, and markets over-the-counter, foot care, and sun care products. Its over-the-counter product line includes non-drowsy antihistamines; treatment for occasional constipation; decongestant-free cold/flu medicine for people with high blood pressure; nasal decongestant spray; and treatment for frequent heartburn. This segment?s foot care products comprise topical antifungal, and foot and sneaker odor/wetness products; and sun care products include sun care lotions, sprays and dry oils; and sunburn relief products. The company serves drug wholesalers and retailers, hospitals, government agencies, physicians, physician distributors, veterinarians, animal producers, and managed health care providers, as well as food chain and mass merchandiser outlets in the United States and Canada. Merck & Co., Inc. was founded in 1891 and is headquartered in Whitehouse Station, New Jersey.
Advisors’ Opinion:

By Chuck At 2014-12-5MRK has been surprisingly volatile in 2011 as many investors question the leadership of new CEO Kenneth Frazier.Additionally, Merck has a number of patents set to expire soon.Regardless, with a yield of 5.1%, dividend investors will want to snap this stock up. Merck also boasts stronger quarterly revenue growth than competitors like Bayer (BAYRY.PK), GlaxoSmithKline (GSK), and Pfizer (PFE). While price to earnings ratio (33.77) and price/earnings to growth ratio (1.84) are somewhat high, the best companies simply trade at a premium. Note that this was also the case with Intel above. In fact, like Intel, Merck has also had all of the past 4 quarters’ net cash inflows. As far as general pharmaceutical news goes, the industry may have taken a blow due to the recent striking down of Obama’s universal healthcare plan. Regardless, the fate of that law will probably be decided in the Supreme Court, so the fight is not over yet. Look for news regarding the constitutionality of mandated healthcare to definitely affect MRK stock but perhaps not as much as future company-specific events. Speaking of company-specific events, the lawsuit against Merck surrounding its Vioxx drug and possible fraud of investors continues to rage on.
By Smart Money At 2013-9-15Forward P/E: 7.8.

Five-year average forward P/E: 13.7.
Discount to five-year average: 46%.
The market’s shift away from defensive stocks in sectors like pharmaceuticals and the Obama administration’s proposed health care reforms are just a couple of issues weighing on Merck (MRK, news, msgs). Shares in the Whitehouse Station, N.J., company are also being hobbled by company-specific problems, such as disappointing sales of asthma treatment Singulair, its best-selling drug, as well as increased competition, patent expirations and a pipeline of drugs with poor prospects for Food and Drug Administration approval.
Fortunately for Merck investors, the company’s pending acquisition of Schering-Plough (SGP, news, msgs) should go a long way toward easing many of these problems, especially Merck’s poor drug pipeline and its ability to remain competitive, says Morningstar analyst Damien Conover. “Merck greatly improved its long-term outlook by agreeing to acquire Schering-Plough,” the analyst says.
By McWillams At 2011-8-28Merck & Co. Inc. (NYSE: MRK : 31.91, 0.05) reported net income of $2.02 billion, or 65 cents per share in its fiscal 2011 second quarter, compared to net income of $752 million or 24 cents a year ago. Analysts had estimated earnings of 95 cents per share for the firm. The company’s revenue rose 7 percent to $12.15 billion, better than analysts’ forecast of $11.82 billion. Shares closed Thursday’s trading at $34.93.

Top 10 Biotech Stocks 2014: Johnson & Johnson (JNJ)

Johnson & Johnson engages in the research and development, manufacture, and sale of various products in the health care field worldwide. The company operates in three segments: Consumer, Pharmaceutical, and Medical Devices and Diagnostics. The Consumer segment provides products used in baby care, skin care, oral care, wound care, and women?s health care fields, as well as nutritional, over-the-counter pharmaceutical products, and wellness and prevention platforms under the brands of JOHNSON?S, AVEENO, CLEAN & CLEAR, JOHNSON?S Adult, NEUTROGENA, RoC, LUBRIDERM, DABAO, LISTERINE, REACH, BAND-AID, CAREFREE, STAYFREE, SPLENDA, TYLENOL, SUDAFED, ZYRTEC, MOTRIN IB, and PEPCID AC. The Pharmaceutical segment offers products in various therapeutic areas, such as anti-infective, antipsychotic, contraceptive, dermatology, gastrointestinal, hematology, immunology, neurology, oncology, pain management, and virology. Its principal products include REMICADE for the treatment of immune mediated inflammatory diseases; STELARA for the treatment of moderate to severe plaque psoriasis; SIMPONI, a treatment for adults with moderate to severe rheumatoid arthritis, psoriatic arthritis, and ankylosing spondylitis; VELCADE for the treatment of multiple myeloma; PREZISTA and INTELENCE for treating HIV/AIDS patients; NUCYNTA for moderate to severe acute pain; INVEGA SUSTENNAtm for the acute and maintenance treatment of schizophrenia in adults; RISPERDAL CONSTA for the management of bipolar I disorder and schizophrenia; and PROCRIT to stimulate red blood cell production. The Medical Devices and Diagnostics segment primarily offers circulatory disease management products; orthopaedic joint reconstruction, spinal care, and sports medicine products; surgical care, aesthetics, and women?s health products; blood glucose monitoring and insulin delivery products; professional diagnostic products; and disposable contact lenses. The company was founded in 1886 and is based in New Brunswick, New Jersey.
Advisors’ Opinion:

By Glenn At 2012-1-11Johnson &Johnson (JNJ, $64). Health care giant has “geographic and product diversity” and is positioned to profit via consumer, pharmaceutical and medical device businesses.
By Michael At 2012-1-11I really like JNJ. They are the largest health care company in the world, in an industry that is ever growing. They have extremely strong brands for consumer products all around the world. They also have a strong business on the medical technology end as well. As the world grays with increasing numbers of the elderly, a massive and emerging middle class in the emerging markets and just the nature of the health care industry in general, I think JNJ is very well positioned to take advantage of significant growth over the next decade. They are also lending money to European banks. That means they have a lot of cash.
By ETF Authority At 2011-11-21I have viewed Johnson & Johnson as the perfect dividend stock ever since I started investing in dividend stocks. As such, I have an above-average position in it. The recent product recalls and the lack of immediate action on behalf of executives are a potential issue for the company, although I doubt it will lead to JNJ’s demise. The company should be able to turn around, and those that entered at current levels likely will generate strong returns in the future.
By Smith At 2011-10-28Johnson & Johnson (JNJ) engages in the research and development, manufacture, and sale of various products in the health care field worldwide. The company operates in three segments: Consumer, Pharmaceutical, and Medical Devices and Diagnostics. The company has consistently raised distributions for 48 years in a row and yields 3.50%. The company is attractively valued at the moment at 12.80 times earnings.
By James K. Glassman At 2011-10-21The Motley Fool Web site recently warned against buying several stocks owned by Warren Buffett, legendary chairman of Berkshire Hathaway (BRK-A). Among those that the Fool panned were Coca-Cola (KO) and the Washington Post (WPO). I’m actually a fan of both, but an even better choice among Buffett’s holdings is Johnson & Johnson (JNJ), which the Fool admitted was a “great opportunity.” After J&J was hammered in 2010, mainly because of production problems, Buffett raised his position by nearly three-fourths. J&J is a sound company with a terrific brand in sectors (drugs and consumer products) that are steady in hard times, and its stock yields 3.3%.
By Jim Cramer At 2011-9-7Unless William Weldon steps down as chief executive officer after his multiple mistakes at the helm of this once great company, we are going to see a high $50s stock at best, with a yield of 4% that will not be attractive. I am convinced that the FDA will come down hard on the company because of its multiple recalls and 2011 will be the year that the tarnished brand will start tarnishing earnings. I am going to say $58 for a target, although Weldon’s exit could take the stock to $66. I bet they don’t do the right thing, though. They haven’t yet. Why would we expect anything different. A down stock for an up year.

Top 10 Biotech Stocks 2014: ARIAD Pharmaceuticals Inc. (ARIA)

ARIAD Pharmaceuticals, Inc., a biopharmaceutical company, focuses on the discovery, development, and commercialization of small-molecule drugs for the treatment of cancer. The company?s lead cancer product, ridaforolimus is being studied in multiple clinical trials in patients with various types of cancers, including metastatic sarcomas, breast cancer, endometrial cancer, prostate cancer, and non-small cell lung cancer. Its product pipeline also includes ponatinib, a pan BCR-ABL inhibitor in phase 2 clinical trial for applications in various hematological cancers and solid tumors; and AP26113, an anaplastic lymphoma kinase inhibitor in preclinical studies for the treatment of various cancers, including non-small cell lung cancer, lymphoma, and neuroblastoma. In addition, the company focuses on a drug discovery program centered on small-molecule therapies that are molecularly targeted to cell-signaling pathways implicated in cancer. Further, it licenses its ARGENT cell-signaling regulation technologies to pharmaceutical and biotechnology companies to develop and commercialize therapeutic products, and to conduct drug discovery research. The company has collaboration and license agreements with Merck & Co., Inc. for the development, manufacture, and commercialization of ridaforolimus; and license agreements with Medinol Ltd. and ICON Medical Corp. to develop and commercialize stents and other medical devices to deliver ridaforolimus to prevent restenosis of injured vessels. ARIAD Pharmaceuticals, Inc. was founded in 1991 and is based in Cambridge, Massachusetts.

Top 10 Biotech Stocks 2014: ArQule Inc. (ARQL)

ArQule, Inc., a clinical-stage biotechnology company, engages in the research and development of cancer therapeutics directed toward molecular targets and biological processes. Its lead product ARQ 197 is non-adenosine triphosphate competitive inhibitor of the c-Met receptor tyrosine kinase, which is being evaluated as monotherapy and in combination therapy in a Phase II clinical development program that includes trials in non-small cell lung cancer, c-Met-associated soft tissue sarcomas, pancreatic adenocarcinoma, hepatocellular carcinoma, germ cell tumors, and colorectal cancer. The company is also developing ARQ 621, a Phase I program focused on inhibition of the Eg5 kinesin spindle protein. Its clinical stage products include ARQ 501, ARQ 761, and ARQ 171, which are designed to kill cancer cells selectively while sparing normal cells through the direct activation of DNA damage response/checkpoint pathways. In addition, the company involves in pre-clinical development of B-RAF and AKIP Kinase inhibitors. The company has collaborations with Kyowa Hakko Kirin Co., Ltd. and Daiichi Sankyo Co., Ltd. ArQule, Inc. was founded in 1993 and is headquartered in Woburn, Massachusetts.

Top 10 Biotech Stocks 2014: Cell Therapeutics Inc. (CTIC)

Cell Therapeutics, Inc., a biopharmaceutical company, engages in the development, acquisition, and commercialization of drugs for the treatment of cancer. The company is developing Pixuvri, a novel anthracycline derivative for the treatment of non-Hodgkin?s lymphoma, as well as for various other hematologic malignancies and solid tumors; OPAXIO, a Phase III clinical trial product for the treatment of ovarian, brain, esophageal, and non-small cell lung cancer; and Brostallicin, a phase II trial for the treatment of metastatic triple-negative breast cancer. It is also developing Bisplatinates, a platinum-based chemotherapy drug to treat various kinds of cancers. The company has collaboration and licensing agreements with PG-TXL Company, L.P.; Gynecologic Oncology Group; Nerviano Medical Sciences; Cephalon; and Novartis. Cell Therapeutics, Inc. was founded in 1991 and is based in Seattle, Washington.

Top 10 Biotech Stocks 2014: Exelixis Inc. (EXEL)

Exelixis, Inc., a biotechnology company, develops small molecule therapies for the treatment of cancer. It focuses on developing Cabozantinib, an inhibitor of tumor growth, metastasis, and angiogenesis that target MET, VEGFR2, and RET, which are key kinases involved in the development and progression of various cancers. The cabozantinib is in Phase III clinical trial for the treatment for medullary thyroid cancer. The company also engages in various clinical programs for cabozantinib focused on the treatment of metastatic castration-resistant prostate cancer, ovarian cancer, breast cancer, renal cell carcinoma, non-small cell lung cancer, hepatocellular cancer, and melanoma. In addition, Exelixis, Inc. involves in developing a portfolio of other novel compounds to address serious unmet medical needs through collaborations with various pharmaceutical and biotechnology companies, including Bristol-Myers Squibb Company, sanofi-aventis, Genentech, Inc., Boehringer Ingelheim GmbH, and GlaxoSmithKline and Daiichi Sankyo Company Limited. Its products under development through collaborations include XL475, XL281, XL139, and XL413 inhibitors; ROR antagonists; therapies targeted against LXR, a nuclear hormone receptor implicated in various cardiovascular and metabolic disorders; XL147, XL765, and isoform-selective PI3K inhibitors; XL518, a small-molecule inhibitor of MEK; sphingosine-1-phosphate type 1 receptor; XL880 inhibitor; and therapies targeted against the mineralocorticoid receptor, a nuclear hormone receptor implicated in various cardiovascular and metabolic diseases. The company was formerly known as Exelixis Pharmaceuticals, Inc. and changed its name to Exelixis, Inc. in February 2000. Exelixis, Inc. was founded in 1994 and is headquartered in South San Francisco, California.
Advisors’ Opinion:

By Stephen At 2011-8-29This drug-development company will go before the FDA later this year and throughout 2012 and 2013 with a series of new drug applications. Exelixis’ drug cabozantinib, code-named XL1-84, has shown a great deal of promise with a range of metastasizing tumors. The drug is being tested in the treatment of several types of cancers, hence the multiple filings with the federal regulator.
But a much closer catalyst exists: at the annual American Society of Clinical Oncology meeting, to be held in early June, Elexilis will present data from the phase II trial of cabozantinib. If history is any guide, then the interim testing results will be well-received by shareholders.
During the second half of 2011, the drug will go deeper into the clinical testing trials. Each time that happens, the company will provide effectiveness data on the performance of the prior round of testing. Results from a phase III study of metastasized thyroid cancers are expected to be concluded in a few months, while phase III studies for the treatment of prostate cancer are expected to begin later this year. Every one of these instances could be a catalyst to take shares higher.
As a final catalyst, Exelixis has allegedly been having discussions with potential buyers, according to Bloomberg, though waiting on such a transaction before making a move also represents risk. Investors bid up shares of Savient Pharma (Nasdaq: SVNT) after the company put itself up for sale. Hopes for a quick profit were dashed when the company couldn’t find any suitors and shares lost almost half of their value in just one day.

Top 10 Biotech Stocks 2014: Incyte Corporation (INCY)

Incyte Corporation focuses on the discovery and development of proprietary small molecule drugs for hematologic and oncology indications, and inflammatory and autoimmune diseases. Its product pipe line includes INCB18424, which is in Phase III clinical trial for myelofibrosis; Phase III trial for polycythemia vera; Phase III trial for essential thrombocythemia; Phase I/II trial to treat solid tumors/other hematologic malignancies; and Phase IIb trail for the treatment of psoriasis. The company?s portfolio also includes INCB28050, a Phase IIb clinical trial product for rheumatoid arthritis; INCB28060, a Phase I/II product for solid tumors; INCB7839, a Phase II product for breast cancer; and INCB24360, a Phase I/II product for solid tumors. It has a collaborative research and license agreements with Novartis International Pharmaceutical Ltd.; Eli Lilly and Company; and Pfizer Inc. The company was founded in 1991 and is headquartered in Wilmington, Delaware.

Top 10 Biotech Stocks 2014: Medivation Inc. (MDVN)

Medivation, Inc., a biopharmaceutical company, focuses on the development of small molecule drugs for the treatment of castration-resistant prostate cancer, Alzheimer?s disease, and Huntington disease. The company?s product candidates under clinical development include MDV3100, which is in Phase 3 development for the treatment of castration-resistant prostate cancer; and dimebon, which is in Phase 3 clinical trial for the treatment of Alzheimer?s disease and Huntington disease. It has collaboration agreements with Pfizer Inc. to develop and commercialize dimebon; and Astellas Pharma Inc. to develop and commercialize MDV3100. The company was founded in 2003 and is based in San Francisco, California.

Top 10 Biotech Stocks 2014: Nektar Therapeutics (NKTR)

Nektar Therapeutics, a clinical-stage biopharmaceutical company, engages in developing a pipeline of drug candidates that utilize its PEGylation and polymer conjugate technology platforms. The company?s product pipeline consists of drug candidates across various therapeutic areas, including oncology, pain, anti-infectives, anti-viral, and immunology. Its research and development activities involve small molecule drugs, peptides, and other potential biologic drug candidates. The company?s proprietary drug candidates in clinical development comprise NKTR-118, a peripheral opioid antagonist, which has completed Phase II clinical trail for the treatment of opioid-induced constipation; BAY41-6551 that has completed Phase II clinical trail to treat gram-negative pneumonias; NKTR-102, a topoisomerase I inhibitor-polymer conjugate, which is in Phase II clinical trail for multiple cancer indications, including breast, ovarian, and colorectal; and NKTR-105 that is in Phase I clinical trail to treat solid tumors. Its preclinical products consists of NKTR-119 (Opioid/NKTR-118 combinations) for the treatment of pain; NKTR-181 (abuse deterrent, tamper-resistant opioid) to treat pain; NKTR-194 (non-scheduled opioid) for the treatment of mild to moderate pain; NKTR-171 (tricyclic antidepressant) to treat neuropathic pain; and NKTR-140 (protease inhibitor candidate) to treat HIV. The company has collaboration with Bayer Healthcare LLC to develop BAY41-6551 (NKTR-061, Amikacin Inhale), which is an inhaled solution of amikacin, an aminoglycoside antibiotic; and a license agreement with AstraZeneca AB for the development and commercialization of Oral NKTR-118 and NKTR-119. In addition, Nektar Therapeutics has various license, manufacturing, and supply agreements for its technology with biotechnology and pharmaceutical companies, such as Affymax, Amgen, Baxter, Roche, Merck, Pfizer, and UCB Pharma. The company was founded in 1990 and is headquartered in San Francisco, California.

Top 10 Biotech Stocks 2014: Neoprobe Corporation (NEOP)

Neoprobe Corporation, a biomedical company, engages in the development and commercialization of precision diagnostics that enhance patient care and improve patient benefit. The company is developing and commercializing targeted agents aimed at the identification of occult (undetected) disease. Neoprobe?s two lead radiopharmaceutical agent plaatforms, Lymphoseek and RIGScan are intended to help surgeons better identify and treat certain types of cancer. Lymphoseek is a diagnostic imaging agent intended for radiolabeling and administration in radiodetection and visualization of the lymphatic system draining the region of injection for delineation of the lymphatic tissue; and RIGScan is an intraoperative biologic targeting agent consisting of a radiolabeled murine monoclonal antibody. The company has a biopharmaceutical development and supply agreement with Laureate Biopharmaceutical Services, Inc. to support the initial evaluation of the viability of the CC49 master working cell bank, as well as the initial steps in re-validating the commercial production process for the biologic agent used in RIGScan CR. The company was founded in 1983 and is based in Dublin, Ohio.
Advisors’ Opinion:

By Putnam At 2011-10-20Neoprobe Corporation Common St (AMEX:NEOP): This equity had 12,374,458 shares sold short as of Aug 31st, as compared to 11,847,479 on Aug 15th, which represents a change of 526,979 shares, or 4.4%. Days to cover for this company is 17 and average daily trading volume is 745,501.

8 Tech Penny Stocks to invest in 2014

2014-02-25T21:47:00.000-08:00

what to invest in 2012, now we will show you as follow:

8 Tech Penny Stocks to Buy Now

Technology stocks have been on a tear lately, with the tech-heavy Nasdaq outperforming the Dow Jones Industrial Average 17% to 13% across the last six months. But it’s worth noting that many small-cap tech stocks have done much better than that, while blue chips like Microsoft (NASDAQ: MSFT), Cisco (NASDAQ: CSCO) and Google (NASDAQ: GOOG) have all underperformed.

You can see the power of the tech sector best in small, agile penny stocks that are surging recently. I of course don’t mean penny stock in a literal sense – as a rule, any micro-cap pink sheet or OTC investment that goes for only a few cents a share is a massive gamble. By “penny stock” I mean ultra low-priced companies, but ones that are larger than $100 million in market capitalization.

To help you share in the tech penny stock surge, consider these 8 investments and their recent gains:

Sirius XM Radio Inc: Year-to-date, stock of Sirius XM Radio Inc. (NASDAQ: SIRI) is up +13%. Sirius offers satellite radio content on music, sports and news in the United States for a subscription fee. In the last 12 months, SIRI has gained an impressive +112%, compared to much smaller gains by the broader markets.

ICO Global Communications: Mobile satellite service operator ICO Global Communications (NASDAQ: ICOG) has posted an impressive stock gain of +132% in the last 12 months. More recently, this penny stock is up +44% in the last 30 days alone. If bought at the right time, ICOG can be great for your portfolio, as it jumped +40% in one day in March. ICO Global is an example of how explosive tech penny stocks can be.

* Related Article: 10 Best Stocks for 2014

8×8 Inc: Known for its telecommunication services, 8×8 Inc. (NASDAQ: EGHT) has gained +19% year-to-date. Looking in the longer term, EGHT is up +86% in the last year. This quarter, analysts are predicting EGHT will posted EPS of four cents, up from two cents last year. But percentage-wise, that’s a 50% increase! This shows how just a small jump in earnings can really mean big things for a penny stock in the tech sector.

EMCORE Corp: Offering a wide range of semiconductor products, EMCORE Corp. (NASDAQ: EMKR) has experience a jump in stock price of +119% since the beginning of 2011. This stock has also jumped +73% since the beginning of February, and posted a quarterly revenue growth of +23% in its last income statement. This penny stock has a 52-week range of 71 cents to $3.25 – but just touched its high a month ago before the March contraction. There’s no reason EMKR stock can’t get back to those levels very soon.

* Related Articles: Dividend Stocks to Buy

Dot Hill Systems Corp: Provider of storage systems and enterprise server software, Dot Hill Systems Corp. (NASDAQ: HILL) is another penny stock worth keeping an eye on. Year-to-date, this tech stock has gained +70%, compared to a gain of just +7% for the Dow Jones. In the last 12 months, this stock has soared +101% as well.

Identive Group Inc: Focusing on identification-based technologies, Identive Group Inc. (NASDAQ: INVE) has watched its stock gain +7% year-to-date and +47% in the last 12 months. Shareholders of INVE can also point to the company’s quarterly revenue growth, which was reported as +111%, in its last income statement.

RAE Systems Inc: Known for providing wireless sensor networks that enable its customers worldwide to identify safety and security threats in real-time, RAE Systems Inc. (AMEX: RAE) has the potential to grow your portfolio in a hurry. Over the last year, this penny stock is up +115%. In September, RAE stock jumped +42% in just three days, showing the penny stock’s short term potential. Buy this penny stock as it trades just below its 52-week high of $1.88.

Mad Catz Interactive Inc: Known for its video game accessories, Mad Catz Interactive Inc. (AMEX: MCZ) has been the highest performing stock on this list. In the last year, MCZ is up an incredible +381%. The success has continued as of late, as this penny stock has gained +115%, year-to-date. A quarterly revenue growth of +91% and a quarterly earnings growth of +73%, only add to this stock’s impressive resume.

9 Top Stocks to Buy in 2014

2014-02-18T22:45:00.003-08:00

As a new year approaches, we decided to ask some of our top analysts for their favorite stock idea for 2014. Here are nine companies that look compelling right now.

9 Top Stocks to Buy in 2014: It's hard to find a positive word about IBM (NYSE: IBM) nowadays. Year-over-year revenues have shrunk for six consecutive quarters, it's losing valuable government "cloud" contracts to upstarts like Amazon Web Services, and it seems a lock to win the raspberry for "worst-performing Dow stock of the year award" for 2013.

And yet, the valuation has been punished severely for these sins and arguably more. IBM is still on track to generate in the neighborhood of $16 billion or $17 billion in free cash flow in 2013. That cash will be deployed into its ever-growing dividend (raised 19% annually over the past decade), and into its aggressive share repurchase plan that has reduced share count by 37% over that same decade. And the company still carries the tacit imprimatur of Warren Buffett, who has branded IBM as one of Berkshire Hathaway's "Big Four" investments.

Something of a contrarian "Dog of the Dow" pick, IBM currently sells for barely 10 times next year's expected earnings, well below the multiple on the average stock in the S&P 500. I expect this year's loser to be next year's winner as the company's cash deployment ratchets up the share price. A multiple expansion to, say, 12 times earnings would be gravy -- holiday gravy, if you will.

9 Top Stocks to Buy in 2014: With the calendar turning to 2014, one stock worth considering is e-commerce giant eBay (NASDAQ: EBAY  ) . I've never been one to watch the market movements and attempt to make judgments on a company from those. But the reality is that eBay has been essentially flat over the last year, while the NASDAQ is up almost 40%, and I think that is largely unjustified.

eBay has continued to deliver strong results, and the most recent quarter was no exception. Through the first nine months of the year, its operating income had risen 16.5% relative to the first nine months of last year. Not to mention its payments business (PayPal) continues to watch its revenues grow by more than 18% year over year, and eBay's total quarterly revenue growth has consistently stood at 14%.

So the company is continuing to deliver impressive growth and results, but its price doesn't reflect that. Consider that its trailing price to earnings ratio currently stands at 25.5, which is almost identical to Costco and below the 29 held by Google. I understand that's not exactly a fair comparison, but eBay seemingly still has quite a potential growth runway ahead of it.

The last thing I will note is that many people think eBay is simply a place where people bid on products, but excluding autos, 75% of its transactions were made at a fixed price. Amazon is the clear leader in the rapidly expanding e-commerce space, but eBay has a commanding position in the No. 2 spot.

9 Top Stocks to Buy in 2014: The Fed might slowly be taking away the punch bowl, but that shouldn't taper the prospect that 2014 will be the year that the housing market finally hits its stride. In fact, The Fed's tapering move just might be what jump-starts the still sluggish housing market. That's why I think homebuilders should do well in 2014, with PulteGroup (NYSE: PHM  ) being the stock I'd buy for 2014 and beyond.

The housing market is currently pretty low on inventory, which is one reason home prices have trended higher. That trend will only continue as we see the end to historically low mortgage rates. Buyers need to move fast in order to lock in these low rates.

Where PulteGroup fits into the equation is that its multi-brand strategy has it well-positioned to really deliver as housing recovers. For example, its Centex brand focuses on first-time buyers. These buyers have been cautious to get into the market, but seeing an end to historically low mortgage rates will likely convince many that the time to buy is in 2014. At the same time rising home prices nationwide are freeing up many current homeowners to sell in order to move up into a nicer home. The Pulte Home brand caters to move-up buyers, while the Del Webb brand focuses on those in the active adult marketplace that are now in a better position to retire and enjoy life.

Bottom line, PulteGroup's multi-brand strategy, when combined with its renewed focus on creating shareholder value, has it well-positioned to deliver exceptional returns in 2014.

9 Top Stocks to Buy in 2014: If there's one stock I'd consider buying for 2014, that stock would be Kinder Morgan (NYSE: KMI  ) . As the largest natural gas transporter and storage operator in North America, Kinder Morgan is well-positioned to profit from increasing demand for natural gas. Between coal power plant shutdowns, an aging fleet of nuclear power plants, and the inherent inefficiency and unreliability of many renewable energy sources, natural gas is the most logical candidate for new power generators.

In addition to the electric generating capabilities, natural gas is generally the cheapest and most common means to heat homes. It's also gaining significant traction as a transportation fuel, especially among fuel-hungry trucks. Regardless of how and where it's used, natural gas needs to get from the shale fields and other sources to where it's needed, when it's needed. That's where Kinder Morgan shines.

The business case is clear, and the investment case is strong enough that I own shares of Kinder Morgan in the real-money Inflation-Protected Income Growth portfolio. Take a business model at the center of the energy economy, and add a reasonable valuation, a covered and growing dividend, and a balance sheet without too much leverage, and the result is a company whose stock is worth buying for 2014.

9 Top Stocks to Buy in 2014: Liberty Global (NASDAQ: LBTYA  ) is the largest cable company in Europe. It is heavily laden with debt, generates GAAP losses, pays no dividend, and is exposed to Europe's economic woes. For those reasons, you might not be interested at first glance. But, if you dig a bit deeper, the company actually looks very attractive. It's got great leadership following a proven strategy, and it's adding new subscribers and revenue per subscriber.

John Malone, the famous "cable cowboy," is Liberty Global's chairman, and the company is following the same playbook that Malone used to build Tele-Communications into the largest cable provider in the United States, before it was sold to AT&T in 1999. Liberty Global is using cheap debt to acquire smaller cable systems. While it doesn't generate GAAP earnings, the company does generate healthy amounts of free cash flow -- over $3 billion in the past year. Malone is using that cash to upgrade its cable system and aggressively repurchase Liberty Global shares, both of which should generate long-term value for shareholders. Using this same basic strategy, Malone generated more than 30% compound annual returns for Tele-Communications shareholders.

And, despite the economic gloominess in Europe, Liberty Global's business is doing well. Liberty Global is on pace to add 1 million new subscribers this year. Its current customers are buying more services -- 40% of subscribers now pay for a "triple-play" package, up from 30% a year ago. This has driven a 29% increase in revenue per customer.

9 Top Stocks to Buy in 2014: Despite nearly doubling the gains of the S&P 500 this year, there are several upcoming catalysts for Momenta Pharmaceuticals (NASDAQ: MNTA  ) that could lead to even bigger gains for investors in 2014. The company's competitive advantage rests in its ability to analyze, characterize, and design complex molecules -- which speeds development time and reduces costs. The MIT rollout proved its novel approach to drug development in 2010 with the approval of its first product, a generic version of Enoxaparin Sodium Injection, which pushed operating margins to 63% on revenue of $283 million in 2011! Unfortunately, competing generics have since eroded the edge for the company's only product.

Momenta will swing back into profits next year if it can market its second product, a generic version of Teva's Copaxone. Investors were originally waiting for the last Copaxone patent to expire in September 2015, but a summer decision by the Court of Appeals may have expedited the Food and Drug Administration's review date to May 2014. While Teva intends to go to the Supreme Court with an appeal and Momenta isn't the only company with a generic drug ready, simply becoming profitable or even breakeven would smooth out the ride on the road to disruption for investors. I think it's likely generic versions will get the green light next year, which makes Momenta -- with $250 million in cash and an impressive and relatively undervalued pipeline -- a long-term buy-and-hold company at today's prices.

9 Top Stocks to Buy in 2014: My one stock for 2014 is Universal Display (NASDAQ: OLED  ) . The company makes organic light-emitting diodes (OLEDs), used to light the displays of consumer electronic devices. Much of the company's history has been devoted to R&D, providing the behind-the-scenes technology for Samsung's Galaxy smartphones in exchange for semi-annual royalty payments.

But UDC is finally seeing the light at the end of the tunnel. Commercial material sales have begun to meaningfully contribute to the top line – increasing 176% year-over-year and 11% sequentially during the 3^rd quarter. The company reported a solid profit, even without the royalty (which gets paid in 2Q and 4Q). Universal Display is breaking into the market in multiple ways – partnering with the lighting division of Philips, providing materials for a new Samsung OLED television, and is even rumored to be in an upcoming "iWatch" from Apple! OLED is definitely one to keep an eye on in 2014.

9 Top Stocks to Buy in 2014: I'm offering up the latest addition to the real-money portfolio I manage for The Motley Fool, Lindsay (NYSE: LNN  ) . It sells mechanized irrigation systems to farmers. You've probably seen these while driving through or past croplands -- big, wheeled piping systems spraying water onto crops.

Irrigating this way is more efficient than gravity irrigation (flowing water across fields), resulting in higher crop yields while using less water (1/3 – 1/2 less). Over the past decade, mechanized irrigation in the U.S. has grown from 35% to 46% penetration, while gravity irrigation has fallen from 50% to 39%.

The opportunity comes from continued penetration gains domestically and international growth. Worldwide, 90% of cropland under irrigation uses gravity irrigation. Thanks to a growing population, farmers will need to produce more food; and thanks to limited water supplies, they'll need to do it while using less water. Replacing gravity irrigation with mechanized irrigation is a big step in that direction.

In addition, Lindsay is developing and selling "smart" systems that use feedback from sensors to distribute irrigation to where it's needed. This makes irrigation even more efficient.

An investment in Lindsay plays into three big, global trends: the two mentioned above (growing population and limited water) and more droughts. With four severe droughts in the last eight years here in the U.S., farmers "don't want Mother Nature to control our destiny anymore."

9 Top Stocks to Buy in 2014: 2013 proved a record year for Tesla Motors (NASDAQ: TSLA  ) , with the stock soaring more than 300% year-to-date. However, 2014 holds even more promise for the electric-car maker. Tesla continues to see strong demand for its Model S cars and is ramping up production to meet that demand. In fact, Tesla CEO Elon Musk says the company is on track to hit an annualized rate of deliveries that exceeds 40,000 cars per year by late 2014. Global demand for Tesla's cars is also accelerating at a rapid clip.

While European sales are already strong, Tesla is just getting started in China and other parts of Asia. The EV maker began taking Model S reservations in China last quarter, and plans to begin deliveries there during the first quarter of 2014. As the world's largest market by sales of premium sedans, China is an exciting piece of the puzzle for Tesla going forward.

Another important catalyst for Tesla is the ongoing expansion of its supercharger network. There are now 34 supercharger stations in the United States, and six so far in Europe. Tesla is now on track to have stations covering 80% of the U.S. population and parts of Canada as soon as next year. Moreover, Tesla plans to cover 100% of the population of Germany, the Netherlands, Switzerland, Belgium, Austria, Denmark, and Luxembourg with superchargers by the end of 2014. This is a significant part of the company's value proposition and it should help drive Model S sales in the year ahead. With these catalysts and more on the horizon, Tesla is a stock I want to own in 2014 and many years to follow.

Of the 165 stocks in the Supernova universe, Motley Fool co-founder David Gardner is on a mission to find just ONE: Between now and Jan. 30, 2014, you're invited to "hit the road" with the Supernova team to find the ONE STOCK most deserving of a large, real-money investment to kick off 2014!

5 Top Stock Picks to Start the Summer in 2014

2014-02-18T22:44:00.000-08:00

Our list of stocks to buy for this month all pack a punch in three different ways.
First, following my prediction that retail stocks would be the place to be for 2012, June’s best stocks are those whose bread-and-butter is the American consumer.
In addition, investors are increasingly favoring companies engaged in aggressive stock buyback programs, so I’ve included a few of our biggest share repurchase players in this list.
Finally, with first-quarter earnings under our belt, this list of stocks represents some of the biggest winners from the past earnings season.
In the current narrow market, the following five stocks represent some of the best buying opportunities out there.

5 Top Stock Picks to Start the Summer in 2014 1) Alexion Pharmaceuticals

Alexion Pharmaceuticals (NASDAQ:ALXN). Ever since I first highlighted ALXN in October, this stock has been on a steady climb, gaining nearly 40%.
Sales of Alexion’s blood disorder drug Soliris continue to gain, helping to fuel strong first-quarter operating results. Profits boomed 69% to $45.5 million, or 45 cents per share, and net sales jumped 47% to $244.7 million. Better yet, Alexion was able to beat the Street earnings view by 15%.
Looking ahead, management remains bullish; it has raised its 2012 sales guidance to between $1.07 billion and $1.09 billion and its earnings guidance to a range of $1.65 and $1.75 per share. This also tops analyst estimates of earnings of $1.74 per share on $1.07 billion in sales.

5 Top Stock Picks to Start the Summer in 2014 2) Dollar Tree

Dollar Tree (NASDAQ:DLTR) has been on a great run since October, gaining more than 30%. But there’s plenty of upside left to this stock considering its $1.5 billion buyback program and its most recent earnings announcement.
The company recently reported record first-quarter sales and earnings. Earnings jumped 16% to $116.1 million, or $1.00 per share. Over the same period, net sales increased 11% to $1.72 billion. Although the company’s second-quarter guidance just missed analyst expectations, I’m encouraged that Dollar Tree raised its full-year guidance.

5 Top Stock Picks to Start the Summer in 2014 3) O’Reilly Automotive

O’Reilly (NASDAQ:ORLY) may have started out as a mom-and-pop auto parts business, but with a $500 million share repurchase program currently under its belt, this company has clearly grown into a major force in the Auto Parts industry.
This company recently announced stunning first-quarter operating results. To start, compared with Q1 2011, net income jumped 44% to $147.5 million, or $1.14 per share. Adjusted earnings weighed in at $1.14 per share, which topped the $1.04 consensus by 10%. Over the same time frame, sales rose 11% to $1.53 billion, beating analyst estimates by 3%.
Looking ahead to the second quarter, the company expects earnings to weigh in between $1.13 and $1.17 per share, while the Street sees $1.17 in earnings per share. The company also raised its 2012 earnings guidance to $4.47 to 4.57 per share, compared with the Street view of $4.51 per share.
5 Top Stock Picks to Start the Summer in 2014 4) Ross Stores
Ross (NASDAQ:ROST) is a bargain apparel and home fashion chain that is known for letting its customers “Dress for Less.” And, as shoppers continue to be judicious with their spending, this business model is clearly paying off.
Thanks to robust sales growth across many of its markets, the company reported a 21% year-over-year jump in profits. Over the same period, total sales jumped 14% to $2.36 billion. Looking forward, the company plans to more-than double its store count and buy back $450 million of its stock in 2012.
I fully expect Ross to continue to show relative strength into the summer months.

5 Top Stock Picks to Start the Summer in 2014 5) Verisk Analytics

Verisk (NASDAQ:VRSK) is a newcomer to our list that I added in April, and it’s already posted a tidy little gain.
One reason that this is such an exciting company is that it recently expanded its business operations to include crime-related risk management. Thanks to a series of product launches and acquisitions, Verisk now has national crime databases at its disposal — opening Verisk up to new clients and increasing its attractiveness with existing customers. Plus, it should be accretive to next quarter’s earnings.
In the most recent quarter, Verisk posted 11% sales growth and 13% earnings growth; the company also topped the consensus earnings estimate by 2%. Verisk is also in the middle of an aggressive stock buyback program; the company plans on repurchasing an additional $267.9 million of its own shares.

Best Stocks To Invest In 2014

2014-02-18T20:00:00.000-08:00

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4 Top Dividend Funds to Invest in 2014

2014-02-18T18:33:00.004-08:00

With the grueling stock market fall, investors are certainly looking for defensive investments. The good news is that there are many high-quality companies — such as AT&T (NYSE:T), Pfizer (NYSE:PFE) and Coca-Cola (NYSE:KO) — that are paying juicy dividends. In many cases, the yields are higher than 30-year Treasury bonds.
And yes, one effective way to invest in dividend-paying stocks is to buy a mutual. So here’s a look at some top offerings:

4 Top Dividend Funds to Invest in 2014 - Hartford Dividend & Growth A Fund

The Hartford Dividend & Growth A Fund (MUTF:IHGIX), which has $6.2 billion in assets, is primarily focused on mega-companies. Top holdings include AT&T, Exxon Mobil (NYSE:XOM), Chevron (NYSE:CVX), IBM (NYSE:IBM) and Wells Fargo (NYSE:WFC). What’s more, the overall yield is 1.29%.
Because of the focus on quality and stability, the fund’s portfolio manager, Edward Bousa, has been able to deal quite effectively with market volatility.

4 Top Dividend Funds to Invest in 2014 -

Franklin Rising Dividends A Fund

Founded in 1947, Franklin Resources (NYSE:BEN) has built a powerhouse in mutual funds. Then again, it has been able to post solid long-term returns for its investors.
One of the standouts is the Franklin Rising Dividends A Fund (MUTF:FRDPX), which got its start in 1987. In fact, the fund’s portfolio manager, William Lippman, still is at the helm.
Basically, the strategy is to focus on companies that have consistently increased their dividends. And yes, there must be a compelling case that the strength will continue for the long haul. In other words, the portfolio has many companies that generate large amounts of cash flows and have low debt levels.

Invesco Diversified Dividend Y Fund

Meggan Walsh, who manages the Invesco Diversified Dividend Y Fund (MUTF:LCEYX), looks for investments that have growth ramps yet are selling at discounted valuations. Actually, in light of the recent market plunge, these opportunities are certainly easier to find.
Keep in mind that dividends are not the only requirement. For example, Walsh looks for companies that also have aggressive share buyback programs. Some of the top holdings include SunTrust Banks (NYSE:STI), Kimberly-Clark (NYSE:KMB) and Johnson Controls (NYSE:JCI).
The fund also has a healthy dividend payout, coming to about 2.13%.

4 Top Dividend Funds to Invest in 2014 -

Vanguard Dividend Growth Fund

The Vanguard Dividend Growth Fund (MUTF:VDIGX) invests primarily in large companies that have strong track records of paying dividends. This certainly helps to provide downside protection.
As should be expected, the expense ratio is at a low 0.34%, which helps to boost returns. Consider that the overall dividend yield is 1.99%.
The fund also avoids aggressive trading. That is, the turnover is only 17% per year.
Tom Taulli is the author of various books, including “All About Commodities” and “All About Short Selling.” You can find him at Twitter account @ttaulli. He does not own a position in any of the stocks named here.
More about the best and top stocks in

Best Stocks to Buy

4 Top Dividend Funds to Invest in 2012

2012-06-24T01:00:00.000-07:00

4 Top Dividend Funds to Invest in 2012 - Hartford Dividend & Growth A Fund

4 Top Dividend Funds to Invest in 2012 -

Franklin Rising Dividends A Fund

Invesco Diversified Dividend Y Fund

4 Top Dividend Funds to Invest in 2012 -

Vanguard Dividend Growth Fund

Best Stocks to Buy

5 Top Stock Picks to Start the Summer in 2013

2012-06-23T00:00:00.000-07:00

5 Top Stock Picks to Start the Summer in 2013 1) Alexion Pharmaceuticals

5 Top Stock Picks to Start the Summer in 2013 2) Dollar Tree

5 Top Stock Picks to Start the Summer in 2013 3) O’Reilly Automotive

O’Reilly (NASDAQ:ORLY) may have started out as a mom-and-pop auto parts business, but with a $500 million share repurchase program currently under its belt, this company has clearly grown into a major force in the Auto Parts industry.
This company recently announced stunning first-quarter operating results. To start, compared with Q1 2011, net income jumped 44% to $147.5 million, or $1.14 per share. Adjusted earnings weighed in at $1.14 per share, which topped the $1.04 consensus by 10%. Over the same time frame, sales rose 11% to $1.53 billion, beating analyst estimates by 3%.
Looking ahead to the second quarter, the company expects earnings to weigh in between $1.13 and $1.17 per share, while the Street sees $1.17 in earnings per share. The company also raised its 2012 earnings guidance to $4.47 to 4.57 per share, compared with the Street view of $4.51 per share.
5 Top Stock Picks to Start the Summer in 2013 4) Ross Stores
Ross (NASDAQ:ROST) is a bargain apparel and home fashion chain that is known for letting its customers “Dress for Less.” And, as shoppers continue to be judicious with their spending, this business model is clearly paying off.
Thanks to robust sales growth across many of its markets, the company reported a 21% year-over-year jump in profits. Over the same period, total sales jumped 14% to $2.36 billion. Looking forward, the company plans to more-than double its store count and buy back $450 million of its stock in 2012.
I fully expect Ross to continue to show relative strength into the summer months.

5 Top Stock Picks to Start the Summer in 2013 5) Verisk Analytics

Top 8 Companies to Invest in 2012 that Increasing Dividends

2012-06-21T10:00:00.000-07:00

Volatility in the equity markets is back, as stocks continue their quick reactions to the myriad news events and developments coming out of Europe. Sharp selloffs and big price spikes occurred throughout the week, much to the delight of swing traders.
For investors, and particularly for income investors, the week also saw some very big names boosting their payouts to shareholders, including several large retail and industrial firms. Eight companies made it onto our Companies Increasing Dividends list this week. Here they are:

Top 10 Dow Dividend Stocks

As the largest owner of life science real estate, Top 8 Companies to Invest in 2012 that Increasing Dividends - Alexandria Real Estate Equities (NYSE:ARE) collects big rents from its tenants. This week, the REIT returned some of that rent to shareholders in the form of a 4% increase in its quarterly dividend to 51 cents per share. The new payout will be made on July 16 to shareholders of record as of June 29. The new dividend yield, based on the June 12 closing price of $69.36 (the day the dividend was announced), is 2.94%.
Convenience market operator Casey’s General Stores (NASDAQ:CASY) stocked shareholder shelves with a 10% higher quarterly payout to 16.5 cents per share. The dividend increase came despite quarterly earnings that missed Wall Street estimates. The new dividend is payable Aug. 15 to shareholders of record as of Aug. 1. The new dividend yield, based on the June 12 closing price of $59.91, is 1.1%.
Iconic construction and mining equipment maker Top 8 Companies to Invest in 2012 that Increasing Dividends - Caterpillar (NYSE:CAT) dug into its fiscal mountain and unearthed a 13% higher dividend to 52 cents per share. The pumped up payload will be delivered on Aug. 20 to shareholders of record as of July 20. The new dividend yield, based on the June 13 closing price of $85.29, is 2.44%.
Medical device maker and Dependable Dividend Stock Top 8 Companies to Invest in 2012 that Increasing Dividends - C.R. Bard Inc. (NYSE:BCR) sells products for vascular, urology and oncology applications. This week, the company fashioned a fiscal device for shareholders that boosted its payout 5% to 20 cents per share. The new dividend is payable Aug. 3 to shareholders of record as of July 23. The new dividend yield, based on the June 13 closing price of $99.44, is 0.8%. C.R. Bard has been paying dividends every year since 1960.
Diversified energy provider Top 8 Companies to Invest in 2012 that Increasing Dividends - DTE Energy (NYSE:DTE) serves clients in the state of Michigan, and this week the Great Lakes-based company moved to add more fiscal water to shareholders’ ponds. The new dividend of 62 cents per share represents a 5.5% boost from the prior quarterly dividend. The new payout will be made Oct. 15 to shareholders of record as of Sept. 17. The new dividend yield, based on the June 14 closing price of $59.47, is 4.17%.
Industrial controls manufacturing giant Rockwell Automation (NYSE:ROK) turned up the dial on its quarterly dividend, lifting its payout 11% to 47 cents per share. The newly increased dividend is payable Sept. 10 to shareholders of record as of Aug. 13. The new dividend yield, based on the June 8 closing price of $69.87, is 2.69%. Separately, the company’s board approved the addition of $1 billion to its share repurchase program. This is in addition to the previous buyback authorization of $1 billion.
Cheap-chic retail behemoth Top 8 Companies to Invest in 2012 that Increasing Dividends - Target (NYSE:TGT) increased the price it pays to shareholders by 20% to 36 cents per share. The new dividend price tag will be marked up on Sept. 10 to shareholders of record as of Aug. 15. The new dividend yield, based on the June 13 closing price of $58.05, is 2.48%. This payout represents the 180th consecutive quarter the company has paid dividends since it went public in 1967, putting it squarely on our list of Dependable Dividend Stocks.
Industrial conglomerate Top 8 Companies to Invest in 2012 that Increasing Dividends - United Technologies (NYSE:UTX) is the parent company of jet engine maker Pratt & Whitney, Otis elevator, Sikorsky Aircraft and several other companies. This week, the diversified firm declared a new quarterly dividend of 53.5 cents per share, which represents an 11.5% increase over the prior payout. The new dividend will be delivered Sept. 10 to shareholders of record as of Aug. 17. The new dividend yield, based on the June 13 closing price of $73.54, is 2.91%.

3 Railroad Stocks To Invest That Keep Rolling in 2012

2012-06-19T06:49:00.000-07:00

Freight railroads are at a crossing. While the volume of freight rail’s core staples — coking coal, grain and scrap metal — is down significantly compared to last year, volume of “intermodal” freight — shipments that travel in containers or trailers and can be handled by rail, ship or truck — is on the rise.
And that growth is likely to help some publicly traded freight rail companies deliver healthy returns to shareholders.

Microsoft’s Big Win in the Government Cloud

It’s no secret that railroads have had to contend with some adversity so far this year: Total carload volume is down more than 3% compared to the same period last year. Cheap natural gas, regulatory pressure and a warmer-than-usual winter drove down coal volume, which accounts for more than 35% of all rail shipments. Grain exports are sluggish due to the mild drought in the nation’s heartland and rising international production.
But intermodal volume is 4% higher today than it was a year ago. And if you remove coal and grain from the equation, freight rail volume rose by nearly 8% in the first quarter of this year, according to the Association of American Railroads (AAR).
Intermodal is becoming an increasingly attractive option for shippers because of tight trucking capacity. Railroads can transport a ton of freight more than 480 miles on a single gallon of diesel, making them more efficient than other transport modes.
As a result, overall freight rail revenue rose by more than 15% in 2011, and rails also gained market share from truckers — especially in intermodal, according to a Council of Supply Chain Management Professionals report released this week.
For investors, the best railroad stocks are those that are well prepared to take advantage of growing intermodal traffic. Here are three freight railroads that are poised to keep on rolling:

3 Railroad Stocks To Invest That Keep Rolling in 2012 - CSX

CSX (NYSE:CSX) would have taken a huge hit on its first-quarter earnings released in April because coal volume dropped 14%. Instead, intermodal shipments soared, accounting for 37% of total volume in the first quarter. That made all the difference: CSX earnings beat analysts’ estimates as first-quarter profits rose 14%, to 43 cents a share, on revenue of nearly $3 billion versus expectations of 35 cents a share.
CSX is trading near $22, around 25% above its 52-week low last October. With a market cap of nearly $23 billion, CSX has a price-to-earnings growth (PEG) ratio of 0.8, indicating the stock may be undervalued, and a fairly low forward P/E of around 11. It also has a current dividend yield of 2.6%.
Bottom Line: CSX has a lot going for it in intermodal. It has been cashing in on increased conversion of highway intermodal shipments to rail. Growth in its UMAX interline container program and new international volume bode well.
Buy CSX with a price target of $27.

3 Railroad Stocks To Invest That Keep Rolling in 2012 -

Norfolk Southern

Norfolk Southern’s (NYSE:NSC) domestic intermodal operations helped offset weakness in coal shipments. First-quarter intermodal revenue rose 9%, reflecting a volume increase of 5%. NSC beat the Street on both the top and bottom lines: Earnings rose 26% in the first quarter to $1.23 a share; revenue grew 6% to $2.8 billion.
NSC is trading around $68, about 18% above its 52-week low last October. With a market cap of about $22 billion, NSC has a PEG ratio of 0.8, indicating the stock could be undervalued, and a forward P/E a little over 10, which is at the low end of the freight rail sector. It also has a current dividend yield of nearly 2.8%.
Bottom Line: The company’s intermodal terminal in Franklin County, Pa., is scheduled to open later this year, and the intermodal facility in Birmingham, Ala., that began construction last year are big bets on that business.
I like NSC at a price target of $85.

3 Railroad Stocks To Invest That Keep Rolling in 2012 -

Union Pacific

Union Pacific (NYSE:UNP) expanded its intermodal revenue by 15% in the first quarter, reflecting a small increase in volume and higher revenue per container. It’s also using innovations in technology such as smartphone apps to make gate reservations at intermodal facilities. In April, Union Pacific reported a 35% increase in first-quarter earnings to $1.79 a share, on revenue that rose 14% to $5.1 billion, beating analysts’ estimates on the top and bottom lines.
UNP is trading around $113, nearly 46% above its 52-week low last October. With a market cap of nearly $54 billion, UNP is the largest freight railroad in the U.S. by that measure. It has a PEG ratio of 1, indicating the stock is fairly valued, and a forward P/E a little over 12, which is the midrange for the freight rail sector. It also has a current dividend yield of 2.1%.

Top 10 Dow Dividend Stocks to Invest in 2012

2012-06-17T06:44:00.001-07:00

The eurozone debt crisisstill is in focus, investors remain jittery and the stock market has given up nearly all of its gains made this year.
That all adds up to a “risk-off” environment where many investors are turning to stable stocks with big brands, bulletproof balance sheets and reliable income generation via quarterly dividends. This is especially true for retirement investors who are equally concerned with capital preservation as they are with tapping into a rally — if and when one ever transpires.
When you are thinking in terms of retirement decades down the road, dividends can add up in a hurry. Consider this: If you buy a stock with a 4% dividend, you will double your money in about 18 years even if the stock goes nowhere. That’s peace of mind that many long-term investors thirst for right now.
So if you’re looking for the biggest brands with the biggest-yielding stocks, here’s a list of the top 10 dividend stocks in the Dow Jones Industrial Average to help you out:

Top 10 Dow Dividend Stocks to Invest in 2012 #10: DuPont

Current Dividend Yield: 3.5%
Performance So Far in 2012: +8%
E.I. du Pont de Nemours & Company (NYSE:DD), or simply DuPont, is a chemicals giant made famous by products including Tyvek house wrap, Teflon non-stick coatings and stretchy Lycra synthetic fabric.
DuPont isn’t quite as sexy as a Silicon Valley tech shop but clearly is an innovator with a long history of great product creation. DD stock lagged the market in 2011 with an 8% decline, but has topped the Dow’s 3.5% gains considerably with its 8% returns so far in 2012.
Revenue is up year-over-year for the 10th consecutive quarter after strong earnings in April, and DuPont’s EPS have gone from $1.92 for fiscal 2009 to an impressive $3.68 in fiscal 2011 — almost double — and are forecast to jump another 15% in fiscal 2012.
Dividend investors in it for the long term know the staying power of DuPont. The company has paid dividends for more than 100 years and is a stable industrial giant that isn’t going anywhere. At the end of April after DuPont’s earnings, it added another 2 cents to its quarterly payday, too, proving this industrial company is not just preserving dividends — but improving them.

Top 10 Dow Dividend Stocks to Invest in 2012 #9: General Electric

Current Dividend Yield: 3.5%
Performance So Far in 2012: +10%
General Electric (NYSE:GE) might forever be tarnished in the minds of some dividend investors after slashing its payout by two-thirds during the financial crisis. While the quarterly dividend remains about half of what it was — at just 17 cents vs. 31 before the market meltdown — the recent history is worth noting.
Consider that in April 2011, GE paid 14 cents each quarter. By the summer it was paying 15 cents, and by January 2012 it was up to 17 cents a quarter. Now we just received news that General Electric’s finance arm received the green light to share some of its wealth with shareholders, too. Specifically, regulators signed off on a special dividend from GE Capital along with permission for the group to resume paying regular dividends later this year.
GE admittedly has its troubles. We saw rather lackluster General Electric earnings in February, but a stronger showing in April as GE reported its fiscal first-quarter earnings. With 40% of its revenue coming from GE Aviation, it’s hard for the company to break out without big airplane orders or defense contracts.
But dividend investors should be encouraged by the GE Capital dividend news. With a current 3.5% yield, this stock is steadily climbing back into the ranks of Wall Street’s best income stocks. A nice market-beating gain since Jan. 1 also is a plus.

Top 10 Dow Dividend Stocks to Invest in 2012

#8: JPMorgan Chase

Current Dividend Yield: 3.5%
Performance So Far in 2012: +4%
JPMorgan Chase (NYSE:JPM) has been making a lot of headlines lately, and for all the wrong reasons. May’s disastrous $2 billion JPM trading loss has resulted in golden-child banker Jamie Dimon receiving a summons to Capitol Hill to take a whipping from Congress and supporters of the Volcker Rule.
But the stock still is hanging tough, boasts a great yield and is the largest American bank by assets.
On the dividend side, JPM was granted Federal Reserve permission to raise its dividend in March, even as competitors like Citigroup (NYSE:C) and Bank of America (NYSE:BAC) have failed to improve their payouts beyond a nominal penny per quarter in dividends. You can bet that Ben Bernanke and others at the Fed wouldn’t have allowed JPM to boost its payout if it wasn’t sustainable. And on the profits side, JPM still is tracking earnings growth of over 20% this fiscal year even after the trading loss.
If you’re a long-term investor, you might want to take advantage of the recent turmoil in JPMorgan Chase to get into a nice dividend stock at a decent price.

Top 10 Dow Dividend Stocks to Invest in 2012

#7: Procter & Gamble

Current Dividend Yield: 3.6%
Performance So Far in 2012: -5%
Procter & Gamble (NYSE:PG) hasn’t been very pleasing to shareholders so far in 2012. Yes, the yield is nice — but the stock has been slumping, and at the end of April, P&G earnings showed a disappointing outlook for the rest of the year.
But Procter & Gamble CEO Bob McDonald is looking overseas to prop up the balance sheet amid rising commodity costs, frugal U.S. consumers and performance that lags rivals like Colgate-Palmolive (NYSE:CL). And let’s face it: Even though the consumer products giant is slightly down, it is hardly out. P&G is going nowhere thanks to brands like Gillette, Pampers and Duracell that provide reliable revenue across rough economic times — and thus reliable dividend payments, too.
Yes, PG stock hasn’t seen much growth, and that is a concern. But you can’t get more defensive than consumer staples, so dividend investors wary of a summer downturn might want to turn to Procter & Gamble if they are planning on staying fully invested in the stock market right now.

Top 10 Dow Dividend Stocks to Invest in 2012

#6 Chevron

Current Dividend Yield: 3.6%
Performance So Far in 2012: -4%
Worried about expensive gas? Don’t be. Crude oil has rolled back slightly from its 2012 high of around $111 a barrel — into the low $80s as of this writing — and is challenging lows not seen since October of last year.
So it’s no surprise that amid weaker prices and pretty flat demand, Chevron (NYSE:CVX) hasn’t done well lately. CVX stock actually is in the red in 2012 vs. gains for the broader market. Recent oil stock earnings show that refining continues to be a bit of a drag in the short term for Chevron and other oil majors.
But on the income side, Chevron has strength that is difficult to overlook. The company has paid dividends since 1912. It has increased its payouts twice in the last year, from 72 cents quarterly in March 2011 to 78 cents in June, then up again to 81 cents as of December 2011.
And while crude oil prices have rolled back, let’s not pretend we’re going to get back to $50 per barrel anytime soon, with geopolitical unrest in the Middle East and hungry emerging markets like China and Brazil increasing energy demand at an impressive clip despite risks of a broader economic slowdown. If you’re a dividend investor looking for a low-risk stock with a reliable revenue stream that ensures juicy payouts, Chevron certainly is worth looking into.

Top 10 Dow Dividend Stocks to Invest in 2012

#5: Johnson & Johnson

Current Dividend Yield: 3.7%
Performance So Far in 2012: Flat
Johnson & Johnson (NYSE:JNJ) has hit some headwinds in recent years over quality control, calling into question how well-run the company really is. But with a new Johnson & Johnson CEO at the helm, some are hoping that change is in the wind at JNJ. Product recalls have weighed heavily on the company, and consumers and investors alike need confidence for this health care giant to once again win their support.
One thing that never has been uncertain, however, is the dividend potential of Johnson & Johnson. JNJ has raised dividends for 49 years in a row. During the past decade, the company has managed to boost distributions by more than 12% per year — all while delivering a headline yield of about 3.7% right now.
And unlike some big pharma stocks that pay nice yields, the biggest dividend driver isn’t prescription drug offerings. While JNJ does offer some vaccines and medical products, consumer health offerings like Band-Aid and Tylenol provide its steadiest revenue stream.
Revenue admittedly has been a bit stagnant at J&J during the past few years; hence, the stock has seen some underperformance. But if you believe projections, Johnson & Johnson could see a stunning 48% jump in earnings per share for fiscal 2012 compared with fiscal 2011. Time will tell if management can hit those targets. But in the meantime, the dividend is a pretty nice hedge, even if the stock moves sideways.

Top 10 Dow Dividend Stocks to Invest in 2012

#4: Pfizer

Current Dividend Yield: 3.9%
Performance So Far in 2012: +4%
Pfizer (NYSE:PFE) outperformed the market nicely in 2011 with one of the best returns in the entire Dow Jones — 23% in gains, to be precise. While performance has cooled a bit and Pfizer was sitting on a loss earlier this year, the stock has come roaring back since February as defensive investments like health care return to favor. It’s now neck-and-neck with the broader Dow Jones Industrial Average.
Yes, long-term challenges at Pfizer are the same as the risks that persist across all of Big Pharma — looming patent expirations, challenges from generic medications and the frantic race to lock up patients in emerging markets. But the goose still is laying golden eggs for shareholders in the form of 22-cent quarterly disbursements, with dividend payments dating back to 1901.
Looking forward, the company has a decent research pipeline with some up-and-coming drugs that could rotate in to prop up revenues. Most importantly for dividend investors, the company has $29 billion in cash on the books. Even if revenue hits a hiccup across 2012 — as it did in fiscal 2011 when it slid from $67.8 billion to $67.4 billion — the cash is there to preserve this juicy dividend.

Top 10 Dow Dividend Stocks to Invest in 2012

#3: Merck

Current Dividend Yield: 4.3%
Performance So Far in 2012: +3%
Merck (NYSE:MRK) is very similar to Pfizer (NYSE:PFE) in many ways. It too faces patent expirations. It too is hoping its pipeline will step up to fill the void. And it too pays a huge dividend.
There obviously is no breakneck growth in pharmaceuticals, at least on a share appreciation basis. But the continued roll-in of the $41 billion Schering-Plough buyout from a few years ago surely will provide new opportunities for Merck. At the very least, it ensures the company won’t fade away.
And like its cohort Pfizer, MRK is sitting on a huge war chest. Some $13.5 billion in cash and $1.4 billion in short-term investments keeps this pick pretty safe when it comes to writing the checks.
Dividends have been paid at Merck since 1935, and last year the payout was increased about 10%, from 38 cents a quarter to 42 cents. You might not find massive share appreciation in this stock, but you certainly will find stability.

Top 10 Dow Dividend Stocks to Invest in 2012

#2: Verizon

Current Dividend Yield: 4.6%
Performance So Far in 2012: +9%
Verizon (NYSE:VZ) remains the leading wireless telecom provider in the U.S. by subscriptions and gets 50% of its revenue from wireless subscribers. The company also is one of the top high-speed Internet providers in America via its FiOS fiber optic network. As the world becomes increasingly wired, it’s more important than ever for companies like Verizon to be involved with the operations of businesses and the lives of regular Americans.
This provides a very stable revenue stream that accounts for huge dividends. Like many low-risk dividend stocks, this is a double-edged sword because there might not be any huge growth opportunities for the entrenched telecom. But strong cash flow generation and the lack of any real competition from anyone other than AT&T (NYSE:T) means this telecom stock is a stalwart that’s here to stay.
The telecom giant recently made waves with a decision to kill almost all voice plans and move to a “Share Everything” data model that will allow users to get up to 10 gadgets wired — including laptops, tablets and smartphones — on the same plan. The goal is to get more folks hooked up with more gadgets and using more data (which VZ can charge more for, of course).
And if this mobile move doesn’t move the stock? Well, you could do worse than a 4.6% annual return via dividends.

Top 10 Dow Dividend Stocks to Invest in 2012

#1: AT&T

Current Dividend Yield: 5%
Performance So Far in 2012: +18%
One of the biggest stories in 2011, as previously mentioned, was that AT&T (NYSE:T) tried to leapfrog rival Verizon (NYSE:VZ) in the wireless market via a buyout of T-Mobile. But regulators ran interference, and AT&T abandoned its bid. Don’t think that means the biggest dividend payer in the Dow Jones Industrial Average should be cut loose from your portfolio, though. With a dividend yield of about 5%, this is a heck of an income play.
The story is the same for AT&T as Verizon, where a strong balance sheet and its entrenched status are offset by the lack of growth and the highly regulated nature of the telecom sector (case in point: the squashed T-Mobile bid). AT&T delivered pretty strong first-quarter earnings, though, so it’s not like this company is completely stagnant.
Admittedly, these U.S. telecoms aren’t “growthy” and won’t deliver massive share appreciation. But if you’re looking for a big dividend payer that will keep throwing off cash for decades, AT&T might be your best bet in the whole Dow Jones Industrial Average.

5 Best Mutual Funds for the First Quarter

2012-06-11T03:30:00.000-07:00

For the first quarter, there were certainly enough reasons to dump stocks or mutual fund investments. Of course, the world saw revolutionary changes — with the removal of several long-time dictators in the Middle East as well as a war in Libya. Also, there was the massive earthquake and tsunami that resulted in a nuclear crisis in Japan. 401k investors had a lot to deal with.
Other problems? Well, oil prices surged and inflation started to perk-up. There were even continued debt issues in places like Portugal.
But such things were not problems as the S&P saw its best gains since 1998, with a 5.4% return. The Dow was up 6.4%. And many mutual funds performed in kind.
And yes, equity mutual funds were a good place to put your money. Some of the best categories included energy (+13.34%), small growth (+9.66%), health (8.34), natural resources (+8.30%) and even European stocks (+6.98 %).
So, let’s take a look at some of the mutual funds that were the best performers of the first quarter:

Fidelity Select Energy (FSENX)

For the quarter, crude oil futures spiked 17% to over $106 per barrel. No doubt, the Middle East turmoil has been a big driver. Consider that Libyan oil is light, sweet quality – which is tougher to refine.
A beneficiary of the price increase was the Fidelity Select Energy (MUTF: FSENX) mutual fund, which has $3 billion in assets. No doubt, the portfolio manager, John Dowd, has a good sense for value and timing. This was definitely the case on how he traded the shares of BP (NYSE: BP) during the Deepwater Horizon oil spill.
And as for the first quarter, Dowd had a standout performance. His fund posted a sizzling gain of 18.80%.

Oppenheimer Discovery (OPOCX)

As investors warm-up to risks, they are putting more money into small cap companies. After all, as the economy rebounds, they should be winners.
One of the quarter’s top small cap funds was Oppenheimer Discovery (MUTF: OPOCX). The mutual fund manager, Ron Zibelli, looks for growth opportunities but tries to minimize the risks. This includes investing in various industries as well as keeping a focus on lower valuations. The top market segments include industrials (17.02%), technology (31.49%), healthcare (14.40%) and consumer cyclicals (18.49%).
The performance for the first quarter? It was a hefty 15.32%.

T. Rowe Price Health Sciences (PRHSX)

Over the past couple years, healthcare stocks have been laggards. But with attractive valuations – as well as less concern about Obama-care – investors have been putting more money into the sector.
For example, the T. Rowe Price Health Sciences (MUTF: PRHSX) fund posted a 13.64% return in the quarter. Interestingly enough, the focus is mostly on smaller companies. The fact is that mega pharma companies are facing tough problems with patent expirations and a thin pipeline of new drugs.
The top five holdings of the T. Rowe Price fund are: Alexion Pharmaceuticals (NASDAQ: ALXN), Gilead Sciences (NASDAQ: GILD), Merck (NYSE: MRK), Celgene (NASDAQ: CELG) and Incyte (NASDAQ: INCY).

Ivy Global Natural Resources (IGNAX)

There seems to be no end to the commodities boom. Then again, there continues to be heavy demand from emerging economies like China and India.
A strong performer for the quarter is the Ivy Global Natural Resources (MUTF: IGNAX) fund, which has $7.1 billion in assets. The fund posted a 12.77% return.
In light of the growth in natural resources, it is not easy to find cheap companies. But Ivy Global’s portfolio manager, Fred Sturm, has been able to uncover good values. He also understands market cycles. Keep in mind that Sturm has managed the Ivy Global fund since 1997.

ING Euro STOXX 50 Index (IDJAX)

It seems that most of the news that comes from Europe is bad. There is even talk that the euro will eventually go away.
Despite all this, that there are still many opportunities. Just look at the ING Euro STOXX 50 Index (MUTF: IDJAX). In the quarter, the fund increased by 12.77%.
The fund is based on the Dow Jones Euro STOXX 50 Index and has a reasonable expense ratio of 0.90%. Top holdings include Total (NYSE: TOT), Siemens (NYSE: SI), Telefonica (NYSE: TEF), Banco Santander (NYSE: STD) and BASF (PINK: BASFY).

How to Find a Stock's Value Using the Dividend Discount Model: Introduction

2012-06-10T07:30:00.000-07:00

One of the most elusive questions in investing is, "What is the right price for this stock?"
There are a number of ways to calculate a stock's value, but one of the most elegant and relatively simple ways continues to be via the dividend discount model (DDM). By using the DDM, individual investors can estimate the price they should be willing to pay for a stock or determine whether a given stock is undervalued or overvalued.
The dividend discount model starts with the premise that that a stock's price should be equal to the sum of its current and future cash flows, after taking the "time value of money" into account.
Now, there are two different concepts in that sentence, and both of them are vital to your understanding of investing. Let's walk through each one, and then discuss how they are joined together in the DDM.
Estimating Current & Future Cash Flows
The cleanest and most clear-cut measure of cash flow is the dividend. Hopefully this makes sense to you, but if it doesn't, consider that the dividend is the mechanism companies use to pay their investors. People invest in companies with the intention of getting their money back and then some. Dividends are one of the main ways companies return money to investors. Dividends are paid out in cash, and therefore are the most straightforward estimate of the future cash you can expect to receive.
Even if a company does not pay a dividend right now, the price of its stock is calculated under the assumption that at some point in time the company will begin paying one. If there is no hope of ever getting money back, investors would have no reason to buy a stock. It would be worth nothing.
The Time Value of Money
Investing is a method of saving. Because you have extra money left over after paying your expenses, you can set it aside for future use. The whole point of investing is to turn a sum of today's money into a larger sum in the future.
Understanding the time value of money is of utmost importance to investing. Time value of money is a series of concepts that allows you to compare different options: Is it better to receive $24,000 today or $25,000 one year from today? If you understand the concept of present value, you can easily perform a calculation and come up with the right decision.
The time value of money is directly relevant to the dividend discount model because the DDM's main objective is to put future cash flows into today's dollars. To do so, we'll use present value calculations.
Using the DDM Formula
Now let's get to the DDM formula itself. The dividend discount model is based on a basic valuation model that is the foundation for many other investing techniques. This basic valuation principle, used far and wide, combines expected future cash flows and the time value of money into one easy-to-use formula:
Stock Price = the Sum of the Present Value of All Future Dividends
Or, more precisely,
Price = ∑ (D_t / (1 + r)^t)
where,
t = period
D_t = dividend during period t
r = required rate of return on the stock
If you don't understand the concept right now, it should get easier after looking at a couple of examples.
Buy-and-Hold
Let's look at the stock of hypothetical Company ABC. Stock ABC pays a $3 annual dividend. We decide that we must make 5% annually on this investment for it to be worth our while (this is known as the required rate of return, also known as the discount rate, or "r" in this tutorial). We're also planning on holding the stock for the very long term.
Luckily, when we talk about an infinite holding period and a constant dividend, the DDM simplifies to this formula:
Stock Price = D / r
So to calculate the price of Stock ABC, we plug in the numbers to get:
Stock Price = $3 / (0.05) = $60
This formula tells you that if you buy at $60, the $3 annual dividend will ensure you receive a 5% return on your investment. If Stock ABC is trading below $60 right now, it's a buy. If it's trading above $60, we should wait for the price to come down.Note that this model could be used for any asset that throws off a constant stream of cash flow. For example, assume you've found a commercial property, and the tenants just signed a lease to pay $100,000 per year for an unlimited term. If you want to make a 5% return on your investment, then the property is worth $100,000 / 0.05 = $2,000,000.
Calculating the value of a stock using the dividend discount model is easy if we assume the dividend will never change and we'll hold the stock forever. But in the real world, most investors expect companies to grow dividends. So let's look at another example.
Factoring in Dividend Growth
So what happens if Stock ABC has potential to grow its dividend? This isn't an unreasonable assumption at all. As long as a company can grow its earnings, it should be able to grow its dividend. Let's assume we think Company ABC can grow its dividend by 2% every year.
Adding this growth assumption gives us the "reduced form DDM" with the following formula:
Stock Price = D₁ / (r - g)
where,
D₁ = the dividend at year 1
g = the dividend growth rate
To calculate the dividend at year 1, all we need to do is multiply the current dividend ($3) by the dividend growth rate (2%): D₁ = $3 x (1 + 0.02) = $3.06. Now we can plug it into the formula with the rest of our assumptions:
Stock Price = $3.06 / (0.05 - 0.02) = $102
Note how much more valuable Stock ABC comes if it is able to realistically grow dividends by 2% per year ($102 vs. $60).
The calculation gets more and more complicated as you add other assumptions. For example, what if you only want to hold the stock for 1 year, 5 years or 10 years? What if the dividend growth rate is expected to change over time? What if the company doesn't pay a dividend yet? These more advanced scenarios will be addressed in future tutorials.
For now, let's look at the pros and cons of the DDM to get even more insight into how and why the model is used.
Model Advantages and Disadvantages
The main advantage of the dividend discount model is that it is relatively easy to use. There are only a few calculations involved. This model is a good starting point for valuing stocks, since it connects dividend payments and dividend growth to the stock price.
The dividend discount model works best for companies that are experiencing stable growth. There is a version of the model that can be used for companies transitioning from rapid growth to more moderate growth, but the calculations are much more complicated.
There are also some drawbacks to using the dividend discount model. A major shortcoming of the model is that it works best for a stock that already pays dividends. But almost two-thirds of publicly traded companies don't pay a dividend. Instead, these companies retain all of their earnings so they can grow. You can use the DDM for non-dividend paying companies, but you need to make some pretty tenuous assumptions about when they will start paying a dividend and how much they'll pay.
Another flaw of the dividend discount model (and any model, for that matter) is that it requires numerous assumptions to be made. Investors must guess a company's growth rate as well as the required rate of return. The model is only as good as its inputs. Even a slight miscalculation in any of these inputs can result in dramatically overvaluing or undervaluing a stock.
An odd weakness of the model is that it cannot value a company if that company is growing its dividend faster than the required rate of return. If the dividend is growing faster, the denominator in the dividend discount model becomes a negative value. For example, suppose Stock A pays a $3 dividend, has a 15% growth rate and has a required rate of return of only 10%. According to the dividend discount formula, the value of Stock A = ($3 x 1.15) /(0.10-0.15) = -$69. That's not terribly useful.
Despite these flaws, the dividend discount model remains a worthwhile analytical tool. It's simple to use and the model's basic premise -- that the value of a stock is equal to the sum of current and future dividend payments -- is sound. The dividend discount model is a good starting point for valuing a stock since the model encourages investors to think about the relationship between risk, returns and growth.

5 Top Bond Funds & ETF Bond Investments in 2013

2012-06-08T02:09:00.000-07:00

Investing in bond funds is usually not exciting. But then again, in today’s volatile world, investment in a bond ETF with reliable returns can be a comfort.
Bond investment can be a excellent way to stabilize your portfolio. Bond funds and ETFs during the 2008 financial crisis performed well. Keep in mind that during that tough year the Barclays Capital U.S. Aggregate Bond Index returned 5.24% to investors. During this time, the S&P 500 fell a staggering 37%.
However, the bond market has many flavors – and also risk levels. So here’s a look at some of the top:

Vanguard GNMA Bond Fund

The word “mortgage” can be scary to many investors. But the fact is that a mortgage can be good a investment – especially if the mortgage bond funds focus on good credit quality.
This is certainly the case with the Vanguard GNMA (MUTF: VFIIX) bond funds, which has $35.3 billion in assets. Much of the portfolio is in Ginnie Maes. And yes, these are backed by the U.S. government. There are also investments in Treasuries as well as positions in some Fannie Mae and Freddie Mac issues.
But there are still some risks. Perhaps the most significant is prepayments from the mortgages. This generally happens when rates fall. In other words, there will be a lower return on the portfolio.
The good news is that the Vanguard GNMA has been skillful in dealing with prepayment risk. At the same time, the fund’s low expense ratio – at 0.23% — gives returns a boost for this bond investment.

PIMCO Real Return (PRTNX)

A terrible enemy of bonds is inflation. Because bonds, bond funds and bond ETF investments generally provide a fixed amount of income, there will be less purchasing power from these cash flows when the value of the dollar falls. In light of the budget deficits and commodity surges, it is reasonable that there will be higher inflation over the long haul.
But there are various bond investments that adjust their value for inflation, such as Treasury Inflation Protected Securities. And one of the top mutual funds in the sector is the PIMCO Real Return (MUTF: PRTNX) fund, which has $18.9 billion in assets.
Interestingly enough, the fund has much flexibility. For example, it will use exotic investments like futures and forward contracts. There are even positions in other countries, with a big position in Brazil.
More about the best and top stocks in

Best Vanguard Mutual Funds for Your 401k

2012-06-06T01:00:00.000-07:00

When it comes to 401k investing, investors have a lot of options for retirement. But with 20 new funds on the table in 2010 (most have already launched, but a few have been temporarily delayed), free trading in Vanguard ETFs, and drastically reduced minimums for its lower-cost Admiral shares, Vanguard’s in the business to win over investors. And they’re going to keep picking off the competition, one-by-one, using their heft and low costs.
Yet, while all this will help Vanguard gather assets and reduce costs for you and me, the longer the list of funds gets, the more confusing it can be to pick the winners from the losers.
To make matters worse, the major drawback of investing for retirement in a 401(k) is that your options are limited to the funds your plan administrators make available. Typically, they choose middle-of-the-road funds deemed safe enough to keep employees from losing their shirts — and the administrators from losing their jobs.

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So unless you use your 401k plan’s brokerage option, you aren’t likely to be able to invest in any Vanguard fund you like (and even the brokerage service may not have access to all Vanguard funds). In the case of Vanguard Precious Metals & Mining Fund (VGPMX), that’s a good thing. The fund is incredibly volatile, with a maximum cumulative loss of 69.8% in the most recent bear market versus 50.9% for Vanguard Total Stock Market (VTSMX) and 51.0% for Vanguard 500 Index (VFINX). So much for gold funds being a safe haven.
On the other hand, you also aren’t likely to have access to some funds that you probably should have an allocation to, such as the Vanguard Emerging Markets Index Fund (VEIEX), which I highly recommend for 401(k) investors (not for all of your money, of course, but a 5% portion).
In fact, I believe that as the global economy continues healing, having an allocation to emerging markets will become a virtual requirement for investors with long-range objectives, like retirement. That’s why I’d suggest you ask your plan administrator to add this fund to the mix of choices your company includes in its 401k plan. (I’m also doubtful your 401(k) gives you access to Vanguard’s terrific Health Care fund, which in itself offers access to the growing demand for medical products and services in the emerging world.)
Here are several other Vanguard funds I’d like to see in your 401k portfolio. Use them if they’re available to you. But if they’re not, try requesting them. You might need to enlist your colleagues to convince your benefits department to add them. But remember, it’s your retirement that’s at stake. Your 401k plan should be serving you, not covering them.

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PRIMECAP is #1

As a retirement savings vehicle, a 401(k) is inherently geared toward the long term. But when planning for retirement, you don’t just want to save your money, you want it to grow. Consider that even at a retirement age of 60 to 65, you could live another 30 years or more. Invest too conservatively, and you could outlive your money. To prevent this, my first choice for your 401(k) is a trio of Vanguard funds run by the redoubtable team at PRIMECAP Management: PRIMECAP (VPMCX), PRIMECAP Core (VPCCX) and Capital Opportunity (VHCOX).
Unfortunately, there’s a hitch: All three funds are now closed to new investors outside of established 401(k) plans. However, they may be available to you. If so, consider yourself lucky, and don’t hesitate to give a big slug of money to this group of managers who take a value-oriented eye to buying growth stocks. Their funds are the largest single component of my retirement and nonretirement accounts, as well as those of my wife and kids.

Balancing risk and return since 1929

If the PRIMECAP funds are closed to you, Vanguard Wellington (VWELX) is an excellent choice for the core around which you build the rest of your 401(k) portfolio. Since its inception in July 1929, it has held out the promise of strong relative returns in good and bad markets by focusing on one very important investment discipline: Diversification.
As a balanced fund, approximately 60% to 70% of Wellington’s assets are in high-quality blue-chip stocks, and 30% to 40% are in top-notch investment-grade government and corporate bonds. You can easily get the entire bond exposure you need in your 401(k) portfolio from this fund. The fund also has the flexibility to invest as much as 20% of its equity assets in foreign securities, an important part of a diversified portfolio.

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What I like most about Wellington is its excellent management team. Wellington manager Ed Bousa took the lead management position at Wellington in 2003 with nary a change in the fund’s strong and consistent gait, and very minor changes in the portfolio, which is precisely what I had expected, as he had worked with former manager Ernst Von Metzsch for so long.
Bonus: By investing through your 401(k), you can avoid the hefty $10,000 minimum initial investment required to get into Wellington on your own. If you decide to follow this strategy, I’d suggest putting about 40% of your money in Wellington.
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Growthing Small Caps Stocks For 2012

2012-06-05T02:07:00.000-07:00

Early-stage companies spend many years planning for the day when everything clicks. For a number of them, 2012 could be the year when all their hard work pays off. So I decided to look at companies set to see sales rise more than 200% next year.
Most of the companies in the table below each already sport market values of more than $400 million, so they're no mere wallflowers. Clearly, they already hold great promise for some investors. If they can actually deliver on the strong growth expected of them, shares may surge.

Stay away from these stocks...
Of course, you should take some of these forecasts with a grain of salt. Alimera Sciences (Nasdaq: ALIM) has a promising device (an insertable tube that delivers steroids directly into the eye for those suffering from diabetes-related blindness), but the Food and Drug Administration (FDA) has been dragging its feet on approval.

Some think the company's product, Illuvien, may never get the green light and those lofty sales forecasts will never come to fruition. Still others think Illuvien will be approved and see annual sales approach $300 million in coming years. If that happens, shares would likely double or triple from today's levels.
Growthing Small Caps Stocks For 2012: Tesla Motors (Nasdaq: TSLA)
In a similar vein, Tesla Motors (Nasdaq: TSLA) will have to sell a lot of cars in 2012 to meet expectations of scorching sales growth. Yet competition in the electric car market is getting awfully crowded. Privately-held Fisker Automotive is aiming directly for Tesla at the high end of the market with a new model to be released this month, and firms such as Porsche, BMW and Mercedes-Benz are ramping up electric offerings in coming years as well. I'm in the camp that feels Tesla will be unable to sell enough cars to become profitable.
And legal wrangling may impede sales growth in 2011 for SIGA Technologies (Nasdaq: SIGA), which as I recently noted, may be forced to share a large government contract with Pharmathene (NYSE: PIP).
Consider these stocks instead...
Yet a pair of companies in the health field clearly have the makings of robust growth in 2012 -- and beyond.
Little-known Pacific Biosciences (Nasdaq: PACB) has developed a technology platform that can rapidly sequence strands of DNA at a lower cost than rivals. That was the promise held by rival Illumina (Nasdaq: ILMN), which is now worth more than $8 billion, more than eight times the value placed on Pacific Biosciences. To be sure, Illumina spent the first half of the past decade falling short of sales forecasts before sales finally took off in recent years. So there's still a chance Pacific Biosciences struggles to meet aggressive growth expectations in the near-term.
Pacific Biosciences has secured pre-orders for $24 million worth of equipment and has a decent shot of hitting 2011 sales forecasts of $38 million. But to meet the 2012 sales forecast of $139 million, the sales force needs to start moving at a more rapid clip. Longer-term, annual sales could exceed $500 million (rival Illumina had $666 million in sales last year), at which point, per-share profits could exceed $3 or $4 and shares would be twice as high as they are now. When that happens, though, is an open question.
Growthing Small Caps Stocks For 2012: Savient Pharma (Nasdaq: SVNT)
In a similar vein, Savient Pharma (Nasdaq: SVNT) may be looking at a very large market opportunity with its gout drug, Krystexxa, which helps alleviate gout-related pain and inflammation in patients who don't respond to other forms of treatment. Savient would have preferred to be acquired. When the company announced in late October that no takers were found, shares quickly plunged from $21 to $12 and now sit around $10.
Yet it's too soon to write Savient off. The company's team of 60 sales people just started selling Krystexxa at the end of February, and investors will start to more clearly see the drug's demand in coming quarters.
The real promise for Savient lays in the nature of gout. Cases of the arthritic condition have been rising quickly, particularly among U.S. males, likely due to a corresponding increase in the current spikes in diabetes and obesity in America. Once a patient starts suffering from gout, the disease can wield painful, but short-lived episodes. However, gout attacks have a tendency to become more frequent and painful with time and it is considered to be an irreversible condition once it reaches later stages.
Savient's Krystexxa has proven more effective in treating extreme gout pain than any other drug on the market, leading analysts at Global Hunter Securities to predict annual sales may eventually exceed $500 million. (As a note of caution, there are other promising gout treatments undergoing clinical testing, and if they reach the market, Krystexxa's potential opportunity would shrink.)
Savient is unlikely to be profitable before 2013, so patience will be required. Then again, the company still may end up in the hands of a suitor long before then and deliver big share price gains in the process.