Two companies report earnings that surpass Wall Street estimates by 10 percent. Shares of the first company jump, but those of the second are unchanged. Why?
A trio of retailers has lately spent massive sums on a single investment: their own stock. Stock repurchases are one of two ways companies return the cash they earn to investors. Dividends are the other. The long historical record for stocks ...
Investors are rational agents, economists like to say. In other words, for the most part, we're not nuts. If IBM trades at $190 a share, Uncle Hank isn't going to offer his lot at $150 -- and if he does, it's time to talk to Aunt Lily about ...
Many investors use the price-to-earnings ratio to tell whether stocks are cheap. It shows how many dollars a buyer must pay for each $1 in yearly earnings the company produces. There are other such measures that show how much investors must ...
Cisco stock has been a poor performer since the dot-com stock bubble of more than a decade ago. But it's up 14% since last March, when the maker of networking equipment announced it would start paying quarterly dividends.
On Wall Street, "sell" recommendations are exceedingly rare. Perhaps for that reason, they tend to be worth following. Among companies with the most sell recommendations is Eastman Kodak, which the Wall Street Journal reports this week is ...
Boring stocks are basking in popularity. The utilities and consumer staples sectors within the S&P 500 index are 12% and 22% more expensive, respectively, than the broader index based on 2011 earnings forecasts.
By 2030, around 20 percent of the U.S. population will be 65 and older, up from 13 percent today, reckons the Census Bureau. There's a gloomy theory on how that will affect stocks. As boomers earned and saved in the 1980s and 1990s, the ...
U.S. stocks have rallied fiercely since Thanksgiving, but the S&P 500 index is still 8% below its 2011 high, reached in May. The stocks listed below have done better. On Monday, they all hit new highs for the year.
Large numbers are difficult to conceptualize. The Wall Street Journal reported Monday that Facebook is targeting a spring initial public offering that would value the company at $100 billion. Is that a lot or a little for a website with ...
Netflix and Hewlett-Packard are dissimilar companies that have met a common fate: a spectacular loss of popularity on Wall Street. The causes of these declines are more alike than different.
Investors already had two good reasons to lighten up on U.S. Treasury bonds. This week they got another. The first reason is a puny payoff. The 10-year Treasury note recently yielded less than 2%, or less than one-third of what it has paid, ...
If your stocks are plunging, your income is stagnant, and your spouse just lost his or her job, economists have "good" news. According to their definition of prosperity, the current period may not qualify as a recession. Hosanna!
Small-company stocks look expensive as a group, and their performance has underwhelmed this year. But that's no reason to ignore all of them, because many small-company stocks are bargains.
Upside earnings "surprises" aren't all that surprising nowadays. The percentage of U.S. companies that beat Wall Street projections come reporting time jumped from 49% in the late 1980s to 76% in 2000, and it has stayed high since.
Large U.S. companies are nearly halfway through earnings-reporting season, and predictably, the news is mostly good. Despite some high-profile forecast misses from Apple and Amazon, only 21% of companies have done worse than projected. ...
Lowe's announcement Monday that it will close 20 underperforming stores sent its shares 1.5% higher by midday, bucking a broad market selloff. For retailers, judicious store closings can reduce long-term expenses and improve profit margins. ...
Income investors have scant choices as the moment. The 10-year Treasury bond pays just 2.1%, and safe corporate and municipal bonds are similarly stingy. U.S. stocks have dividend yields averaging just over 2%--but they've frightened buyers ...
Cheap stocks are suddenly abundant. The S&P Composite 1500 index of large, midsize and small U.S. companies has lost 12% in three months. More than 300 of its members now have price-to-earnings ratios in single digits, suggesting a ...
There are fewer than 100 shopping days until Christmas, but with Europe flirting with a financial crisis and America at risk for a second recession, few investors are thinking about retail stocks.
For bargain hunters, U.S. stocks offer a mixed message. The S&P 500 index trades at 12 times forecast 2011 earnings, a slight discount to its historic price. Companies in sectors with sturdy demand sell for modest premiums--big food ...
As economic growth slows worldwide, stock investors are competing fiercely for shares of companies with the best earnings growth prospects. But that has made shares of such companies expensive. A better approach might be to target firms ...
Military suppliers have gotten clobbered. Among S&P 500 members, aerospace and defense firms have lost 22% of their value in six months, versus 16% for the broader index. These companies were cheap to begin with relative to their ...
Nominal stock prices shouldn't matter. If Groucho Tech and Harpo Corp are identical companies, it should make no difference to investors that Groucho has 10 million shares outstanding priced at $4.50 apiece, and Harpo has one million ...
Wall Street projects handsome increases to both profits and dividends for large U.S. companies in coming years. Investors should view the profit forecast with suspicion, but the dividend outlook seems believable. Below are listed some ...
I'm waiting for Smurfler and Who-jitsu to file for initial public offerings. Prices for recent IPOs with more recognizable names are high enough to signal a bubble like the one that popped in 2000. All that's missing are a string ...
For investors brave enough to buy while the market's falling, below are a handful of stock ideas. The Dow Jones Industrial Average dropped 7% during the five trading days through Thursday. These shares lost at least that much, and they ...
If there must be a financial bubble in something, maybe real estate isn't so bad. When the tulip bubble popped in 1637, traders were left with nothing but fragrant, mocking bulbs and lists of unenforceable contracts. When U.S. real ...
Anyone can call a stock cheap on a gut feeling. To screen for stocks that are cheap based on evidence, however, it's useful to compare their prices to some measure of underlying value that isn't altered by investor fervor. Common ...
History's most prosperous nation is nearing default on its debt, not because it can't afford to pay, but because a handful of top policy makers can't agree on how to cut spending and whether to raise revenues. Here's ...
U.S. companies have rarely been more prosperous. That's not cause for investors to celebrate, however. Two of history's most reliable indicators say earnings are so good that they're about to turn bad. Here are the details ...
If the Dow Jones Industrial Average's 151-point drop Monday seemed less than shocking, it's because fully one-quarter of trading days this year have produced triple-digit moves in the average. Below are listed the sort of ...
The value of U.S. mergers and acquisitions jumped 39% during the first five months of this year, according to PricewaterhouseCoopers. Companies are sitting on $1.1 trillion in cash, which suggests the second half of the year will see plenty ...
Big Tech is stuffed with cash and trading at a significant discount to the broad market. That's a sign of investor pessimism, and earnings for the group might indeed be due for a dip, but a handful of companies are too cheap to ignore. ...
Not all growing retail chains are healthy. To see what I mean, head to the nearest Circuit City, Linens n' Things or Chi-Chi's. If you have trouble finding them, it's because all three have closed most or all of their stores. ...
Food stocks make sense right now. U.S. unemployment is up, house prices are down, European debt looks shaky and growth has slowed a bit in China and Brazil. When the economy looks shaky, food-makers can be counted on to deliver stable ...
Greed is said to push stock prices higher, but if anything, the doubling of U.S. shares during the two years ended March suggests buyers aren't greedy enough. They're settling for the mere hope of fast gains while making only ...
The government Accountability Office runs two sets of numbers when forecasting the nation's long-term financial health: "baseline" and "alternative." Right now they might as well be called bad and worse. ...
Ten billion dollars is an almost unfathomable sum. Invested in humble Treasury bonds yielding 4% it will gush more than $1 million per day of income. Worldwide, 81 people have amassed such a fortune, one-third of them Americans, according ...
Here's a challenge: Think of a stock whose price has fallen since the stock market bottomed in March 2009. The S&P 500 has roughly doubled since then, so these are shares that have missed out on a stunning rally.
Wall Street analysts should work backwards. The price targets they assign to stocks -- "United Snorkle, currently $35 a share, should hit $42 in 18 months" -- are based on projections of how sales, margins, cash flow and more will ...
Earnings for U.S. companies are forecast to hit a record high this year. So it should be little trouble to find companies that generate a respectable amount of cash relative to their purchase price, and that pay a fair portion of that cash ...
Treasury inflation-protected securities offer meager interest: 0.9% on 10-year issues, versus 3.2% on standard bonds of the same duration. The tradeoff, of course, is that the principal is adjusted for the rate of inflation, keeping ...
The S&P index of large American companies recently traded at 14 times forecast 2011 earnings. That suggests that, even though the index has quickly doubled since hitting its recessionary low point in March 2009, shares seem priced in ...
Stock buyers can profit from the power of negative thinking. Investors' tendency to assume the worst about uncertain events can make some of the most prosperous firms too cheap to ignore, particularly those with big dividends and ...
There's at least a kernel of contrarian thinking behind most stock trades. Any convinced buyer takes the shares of a seller who is just as convinced. True contrarian investors, however, go rummaging through deeply unloved shares for ...
On Monday, investors who worry about a sharp worsening of America's fiscal condition got a quick glimpse at how such a downturn might affect their portfolio holdings.
Companies whose shares trade on Wall Street report their winnings to the public each quarter -- not once, but twice. Stock investors tend to obsess over one measure, earnings. Bankers tend to watch another, free cash flow. Stock investors ...
America's birth rate is falling. Its incomes are stagnant. Even its illegal immigration has slowed. Companies that want to grow their sales in this economy had better be able to steal customers from rivals.
The three stocks below are up 20-fold. On its own, that's no big deal. Stocks tend to increase in value over time, so historically, securing a 20-fold return has merely been a matter of buying decent stocks and waiting, say, 35 years. ...
Plenty of companies have stock market values that are smaller than their yearly sales. Nearly one-third of the large, midsize and small companies that make up the S&P Composite 1500 index trade that cheaply. However, most of these are ...
Four things bode well for the stocks listed below. First, they all traded at low prices relative to their earnings, a good (but not infallible) sign of handsome returns to come. Second, each company recently reported earnings that easily ...
Upon learning last week that Cisco was killing Flip, the pocket video camera it acquired for $590 million when it bought start-up Pure Digital in May 2009, my first thought was "Brewster's Millions." In the 1985 film, Richard ...
Analysts stink at picking stocks, you might have heard, but that's only part true. Long-term studies have indeed shown that the "buy" recommendations attached to stocks are poor predictors of long-term returns. (Over short ...
Fed refugees, or savers seeking to escape punishingly low interest rates by buying shares, had better choose carefully. Since December 2008, America's Federal Reserve has kept core short-term interest rates near zero while spending ...
Assets aren't the same as wealth. The cash-poor consumer who finances a posh car has an impressive new asset but also a big new debt. With companies, sudden asset growth is a bad sign for investors, for two reasons. First, corporate ...
Insider trading is more common than most investors know and regulators admit. Back in 1974, a paper published in the Journal of Financial Economics showed shares of the average takeover target beat the market by 14% over seven months prior ...
Among the small, midsized and large companies in the S&P Composite 1500 index, "buy" recommendations by Wall Street analysts outnumber "sell" recommendations 8 to 1. It's not because analysts are naturally ...
Midsize U.S. companies remain tops in stock performance. So far this year the S&P MidCap 400 index has returned 6.8%, about two percentage points more than the SmallCap 600 index and the large-company 500 index. Over the prior five ...
Dozens of books published during the past four years promise to show readers how to survive and even prosper during an "economic collapse," "financial Armageddon" or "dollar meltdown." Many tout gold, as though ...
"If you're thinking about buying a bond right now, I want to refer you to a mental institution," says Ridgeland, S.C., money manager Tom Cameron. His point: America's debt is so large that inflation is inevitable, so ...
Happy workers tend to generate big returns for shareholders, according to a growing trickle of statistical evidence. Firms that earn top scores on one survey of employee satisfaction have more than doubled the broad market's return ...
If there's a case to be made for investing in Japanese stocks it has little to do with sympathy, the recent earthquake or the relationship between prices and earnings. Compassion is better expressed with a call to the Red Cross than to ...
Like big hair and Rubik's cubes, dividends were everywhere in the 1980s but are scarcer today. Fully 94% of the large American companies that make up the S&P 500 index made payments to shareholders in 1980. Today just ...
Value investors buy cheap, unpopular shares and wait. Growth investors buy market darlings and get fast results or move on. Below are listed three companies that might appeal to the frugality of the first group of investors and the ...
The soaring price of oil threatens to squeeze family budgets and corporate profits alike. But a handful of companies and their shareholders stand to cash in.
The companies below are stuffed with cash. That's a sign of their past success, but it doesn't necessarily make them good investments today. If anything, it makes them less attractive.
The town of Maiden, North Carolina is an hour's drive northwest of Charlotte. It has 3,300 residents, three churches and a median house price of $108,000. And sometime this spring, it will also have a working data center the size of ...
Emerging markets investors might want to look beyond China, India and Brazil to another top performer. This country ranks third in the world in exports. Last year, the dollar amount of goods sold outside its borders jumped 17% while the ...

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