A Complicated Relationship

Many people talk about how interest rates can affect bond prices. However, rates can also affect stock prices. Here's a quick summary of the reasons behind that relationship Interest Expense: Interest rates represent an expense for any company that uses credit. As interest rates rise so do the costs of borrowing. All else equal, … Continue reading A Complicated Relationship →

Defense in The Crosshairs

US defense spending continues to be a target of government budget cuts on Capitol Hill. While this clearly impacts US defense companies, industry leaders may do better than expected. Home of the brave and their weapons The US spends more on defense than any other country. According to SIPRI, the US was responsible for roughly … Continue reading Defense in The Crosshairs →

Is it Time to Go Solar?

SolarCity is up by more than 535% since its IPO. Since the company is still reporting losses, it's easy to think that its stock is expensive. However, there are some unique challenges to understanding what SolarCity is worth. Here are two issues to consider when trying to value the stock. Reported earnings versus reality In 2008, … Continue reading Is it Time to Go Solar? →

On Valuation

For many investors, realizing the importance of valuation, looking beyond price, is a key epiphany. Valuation is very important, but can also be tricky. For example, consider how many people have forsaken stocks like LinkedIn and Tesla due to their Price to Earnings multiples (high for LNKD and "does not compute" for TSLA). Yes, current … Continue reading On Valuation →

All About Dividends

When it comes to stock investing, conventional thinking dictates that returns are all about capital appreciation. However, for many investors, price appreciation may not be the main driver of total return at all. In fact, dividends can constitute a larger portion of total returns than many people may realize. Dividends Overlooked According to Loomis Sayles, … Continue reading All About Dividends →

Russia Looks Rich & Cheap

In the previous post, I made the long-term case for commodities. In this post, we'll consider an indirect way to get exposure to them. It's common knowledge that emerging market economies tend to be correlated with commodity prices. That's because emerging markets are often dependent on the export of natural resources, making them "banana republics," … Continue reading Russia Looks Rich & Cheap →

Ring The Register

Back in August, I made my case for Helmerich & Payne (HP) at $45. When it hit $54 dollars in November I recommended taking some profits. On Friday, HP closed at $61, exceeding my fair value estimate of $59 per share. I still like Helmerich & Payne as a company, but at $61 it's time to finish taking your profits. From $45 that's … Continue reading Ring The Register →

Don’t Hog HP

Back in September, I made my case for the "other HP," Helmerich & Payne. Since then, HP has advanced from $46 to over $52. I still like the company, and I think the stock will advance further long term. That being said, this is not a bad gain for a few week's time, and it's reason enough to start ringing the … Continue reading Don’t Hog HP →

The Other HP

Most people probably think of Hewlett-Packard when they hear "HP." This is almost certainly the case for investors who have followed Hewlett-Packard's struggles. However, I'm not writing about that HP, I'm writing about another HP that many people have never heard of. Helmerich & Payne (HP) is a $4.9 billion oil and gas company based in the US. It provides contract drilling … Continue reading The Other HP →

Second Guessing

In fifth grade, I remember the "cool kids" at my school wore Guess jeans and a lot of hairspray (I wasn't one of them). While hair spray has lost its popularity, Guess? Inc. has grown into a $2.4 billion dollar company that sells apparel in 90 countries around the world. Last week, Guess reported earnings that missed analyst expectations and its stock price fell by more than 21%. The negative … Continue reading Second Guessing →

Fast Money

The first quarter was full throttle "risk-on" for U.S. equity markets. The S&P 500 came out of the gates screeching and clocked more than 10% for the quarter. This rally seems to have rekindled animal spirits, and now the strength of the U.S. economic recovery is the toast of the town. From a macroeconomic perspective, a continued expansion would imply further equity market strength. … Continue reading Fast Money →

Selling Covered Calls

A guest post by Christian Amsberry. You may have heard the terms “selling covered calls” or "covered call writing." This strategy allows someone who owns stock to sell someone else the right to buy the stock at a predetermined price on or before a predetermined date. This right to buy is commonly known as a … Continue reading Selling Covered Calls →