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Mondays Vital Data: Apple, Micron and General Electric

U.S. stock futures are headed lower this morning, as Wall Street digests the possibility of more interest rate hikes in 2018. On Friday, Cleveland Fed President Loretta Mester hinted to Reuters at the possibility of four rate hikes this year. On Saturday, San Francisco Fed President John Williams backed the current pace of three hikes due to economic lift from the tax plan.

More from the Fed will arrive today. Atlanta Fed President Raphael Bostic is due to speak at the Rotary Club of Atlanta this afternoon. Additionally, Boston Fed President Eric Rosengren will participate in a panel to discuss whether Fed should stick to a 2% inflation target.

While futures were headed higher early this morning, they have since reversed course. At last check, Dow Jones Industrial Average futures are down 0.06%, S&P 500 futures are off 0.15% and Nasdaq-100 futures have fallen 0.13%.

Turning to the options pits, Friday’s volume remained brisk. Overall, about 20.5 million calls and 16.4 million puts changed hands. The CBOE single-session equity put/call volume ratio rose to 0.58. The 10-day moving average held at 0.56.

Taking a closer look at Friday’s options activity, Apple Inc. (NASDAQ:AAPL) attracted heavy call volume heading into what proved to be a rather rough weekend for the company. Meanwhile, Micron Technology, Inc. (NASDAQ:MU) options received a sentiment boost after a bullish note on memory chip demand from Keybank. Finally, General Electric Company (NYSE:GE), last year’s ultimate dog of the Dow, has emerged as one of 2018’s top 10 favorites.

Monday’s Vital Options Data: Apple Inc (AAPL), Micron Technology, Inc. (MU) and General Electric Company (GE)investorplace.com/wp-content/uploads/2018/01/01-08-2017-Top-Ten-Options-300×138.png 300w, investorplace.com/wp-content/uploads/2018/01/01-08-2017-Top-Ten-Options-65×30.png 65w, investorplace.com/wp-content/uploads/2018/01/01-08-2017-Top-Ten-Options-200×92.png 200w, investorplace.com/wp-content/uploads/2018/01/01-08-2017-Top-Ten-Options-400×184.png 400w, investorplace.com/wp-content/uploads/2018/01/01-08-2017-Top-Ten-Options-116×53.png 116w, investorplace.com/wp-content/uploads/2018/01/01-08-2017-Top-Ten-Options-100×46.png 100w,https://investorplace.com/wp-content/uploads/2018/01/01-08-2017-Top-Ten-Options-109×50.png 109w, investorplace.com/wp-content/uploads/2018/01/01-08-2017-Top-Ten-Options-78×36.png 78w, investorplace.com/wp-content/uploads/2018/01/01-08-2017-Top-Ten-Options-170×78.png 170w” sizes=”(max-width: 547px) 100vw, 547px” />

Apple Inc (AAPL)

Apple stock options were extremely call heavy on Friday. Volume topped out at 543,000 contracts, with calls snapping up an above average 69% of the day’s take. The net effect was to drive AAPL’s January 2018 put/call open interest ratio lower from a reading near 1.16 to today’s perch at 1.12.

Sentiment was up after the company said that it would quickly patch any semiconductor vulnerabilities. Chip stocks were hit hard after revelations of exploits affecting Intel Corporation (NASDAQ:INTC) and Advanced Micro Devices, Inc. (NASDAQ:AMD) processors.

Today, however, could be a different story. Apple was hit with fresh concerns over worker conditions in China following the suicide of a Foxconn worker at an iPhone production plant this weekend. Additionally, investors are calling for Apple to investigate the potential harm of iPhone and tablet-like devices on children.

AAPL stock is down fractionally in pre-market trading.

Micron Technology, Inc. (MU)

Micron stock remained volatile on Friday, despite a bullish research note from analysts at Keybanc. According to Keybanc, news in the DRAM and NAND markets is “neutral to good.” Specifically, DRAM supply is tight and should help support prices, while NAND is headed for “oversupply.” However, NAND oversupply should work its way out of the system later this year, returning pricing power to Micron.

Options traders appeared to take profits following the recent run higher, however. Volume on Friday rose to 305,000 contracts, with calls accounting for 65% of the day’s take.

The resulting January 2018 put/call OI ratio rose to 0.65 from last week’s reading of 0.62. The activity hints that options traders may be taking profits after MU rallied more than 11% last week.

General Electric Company (GE)

After finishing 2017 as the worst performing member of the Dow Jones Industrial Average, GE stock has emerged as one of the potential top performers of 2018. General Electric has made the top 10 list of several notable top-ranked stock newsletters, including George Putnam’s, The Turnaround Letter.

GE stock is already up more than 6% in 2018, enjoying a solid first week for the year. Options traders have also taken up the bullish call. Volume on Friday rose to 272,000 contracts, or more than 1.5 times GE’s daily average. Calls gobbled up 72% of the day’s take.

Short-term options traders have grown heavily bullish on GE stock heading into the first expiration of 2018. Specifically, the January put/call OI ratio has fallen to a reading of 0.43, with calls more than doubling puts among front-month options.

Finally, there could be more gains to come. GE closed above its 50-day moving average on Friday and could be set to challenge resistance at $19 this week. A breakout above resistance at $19 could be a significant short-term boon for GE bulls.

As of this writing, Joseph Hargett was long General Electric Company (GE) stock.

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Corning: Gorilla Glass Is Great But A Small Part Of Revenue

The Discipline of Market Leaders by Michael Treacy and Fred Wiersema holds that successful companies must focus their expertise in one of three areas (1) Operational Excellence, (2) Product Leadership, or (3) Customer Intimacy. Naturally a company doesn’t forgo the other two, but the thesis is it must focus on and master one to be a successful leader. Corning’s (NYSE:GLW) focus is definitely Product Leadership. This article acknowledges its commitment to long-term innovation and will discuss shorter-term financial impacts.

Corning Gorilla Glass: One of Many Glass-Related Products

Corning, Inc.’s Gorilla Glass has been included in over 5 billion devices such as smartphones, tablets, laptops and wearables like smartwatches designed and sold by over 40 different Original Equipment Manufacturers (OEMs). These include leading brands like Samsung (OTC:SSNLF), Acer, Sharp (OTCPK:SHCAY), Sony (NYSE:SNE) and many less-known brands. Apple (NASDAQ:AAPL) is not listed on the Corning website as an OEM using Gorilla Glass and little or no public information is available about its use. However, Corning has recently received $200M from Apple’s new manufacturing investment fund.

While Gorilla Glass is a high-profile Corning product, it contributed less than 9% of total 2016 revenues of $9.390B (GAAP revenue).

Corning does business through five product segments which have different customers and different competitors (Gorilla Glass is in the Specialty Materials segment).

Source: Corning 2017 Proxy Statement

Corning, with revenue of close to $10B annually and a market cap of $28B, can be classified as a large cap company. It is 298th of 500 on the Fortune 500 list based on revenue. While it is an innovator in glass-related products, it is normally classified in the Industrial Sector and Electronics and Electrical Equipment Industry due to its diversification of glass-related products noted above.

Corning has produced world-class inventions and has a robust innovation program which will result in new products for the 21st century. A short summary of the premier innovation program is provided in a section below. The focus of this article is the short-term – the next one to two years.

Let’s start with a summary of competitors. From the 2016 Corning 10-K:

“Corning competes with many large and varied manufacturers, both domestic and foreign. Some of these competitors are larger than Corning, and some have broader product lines. Corning strives to maintain and improve its market position through technology and product innovation. For the future, Corning believes its competitive advantage lies in its commitment to research and development, its commitment to reliability of supply and product quality and technical specification of its products.”

I would classify Corning as having an R&D, innovation and product culture vs. a marketing culture (The Discipline of Market Leaders). This is all fine, but the top line in the income statement is revenue led by marketing.

With five diverse segments, the competitors range from small unique companies to large multinationals. Many of the competitors are based in Asia and are a holding of a larger parent company. A sample list of competitors follows.

Display Technologies competition includes large Asian LCD manufacturers:

Samsung Electronics/Samsung Display, Ltd. Sharp Corp. LG/LG Display, Ltd. (NYSE:LPL) Japan Display, Inc. (OTCPK:JPDYY) Nippon Electric Glass (OTC:NPPEY)

As an example, Nippon Electric Glass, known as NEG, is a $2.4B revenue company with 20% of the world’s LCD market share.

Optical Communications competitors are many and diverse. Ten cable making groups have 63% of the world market. The primary competing producers of the Optical Communications segment are CommScope (NASDAQ:COMM) and Prysmian Group (OTCPK:PRYMF), which is headquartered in Milan, Italy.

Gorilla Glass competitors include:

Asahi Glass of Japan (OTCPK:ASBRF) Schott AG of Germany Nippon Electric Glass

So what this means is that Corning has many competitors throughout the world which have an impact on the Sales, Marketing and Business Development organization structure and effectiveness. These costs are generally rolled up into the selling, general and administrative (SG&A) line in the income statement. Corning’s SG&A is 16% of revenue. SG&A normally includes sales, marketing, finance, HR, compliance, etc. The sales and marketing component is not specifically identified. SG&A/revenue varies widely depending upon the business and industry. It can range from 5% to 30%. Details of Corning’s Sales, Marketing and Business Development organization and approach are not publically available.

Business Segment Near-Term Growth Prospects

From Morningstar’s (Premium Membership Content):

“We think the company is well-positioned for growth in the optical fiber business, as carriers and data center operators seek to improve network capacity. However, heavy customer concentration along with stiff competition in the optical communications space has resulted in weaker profitability than in the display glass business. Beyond optical, we think Corning’s environmental technologies business stands to benefit from increasingly stringent emissions regulations in the U.S. and European markets, resulting in renewed demand for its filter products. Further, we are optimistic of the growth in Corning’s specialty materials segment as the company expands its leadership position in protective coverings via Gorilla Glass for smartphones and PCs while also extending its presence into adjacent markets such as wearables.”

An Argus Analyst report available to Fidelity Investments private clients notes that while Display Technologies is the largest segment, near-term growth is expected to come from Optical Communication – fiber optics and 5G utilization for smartphones and other connectivity. It also notes that Specialty Materials (Gorilla Glass) is showing signs of growth.

Recent Financials

Recent financial data has been mixed. Let’s start with the income statement and then look at the balance sheet.

Source: Argus

Overall growth rates have not been stellar and 2015 was a dip from 2014. A three-year revenue growth rate of 20% is 6-7% per year, mid-single digits – good, not great.

However, the last six quarters have resulted in the earnings beating the analyst consensus.

Source: Thomson Reuters

A one-month stock chart:

Source: Yahoo Finance

The balance sheet is generally good. Long-term debt is $4B (Sept. 30, 2016).

Cash and cash flow has been well regarded to cover dividend, dividend growth and stock buybacks (The current dividend yield is 1.9%).

Source: Jefferson Research

Corning updated its Strategic Plan (Framework) in June 2016:

“The Strategic and Capital Allocation Framework consists of two primary actions:

Return more than $12.5 billion to shareholders through share repurchases and increased dividends. As part of this plan, Corning intends to target an adjusted debt-to-EBITDA ratio of two times, and to reduce its global cash to approximately $2 billion. Invest approximately $10 billion in Corning’s focused portfolio. Over the four years, Corning will concentrate its RD&E investment, capital spending, and strategic M&A on a cohesive set of 3 core technologies, 4 manufacturing & engineering platforms, and 5 market-access platforms. Corning, already a leader in these areas, believes its focused-portfolio approach will allow it to generate substantial growth and returns for investors.”

80% of its focus is on the three core technologies, four manufacturing & engineering platforms, and five market-access platforms. This will have a positive impact on sales focus and cost effectiveness.

Weeks also stated that the company expects to increase dividends by 10%/year in 2018 and 2019.

Other financial data of note:

Stock buybacks have decreased outstanding shares by 29%. Dividend coverage of 3.8. Free cash flow of $980M is near the top of its industry. Gross margin (TTM) is at the 80% projectile of its industry – very good. Long-term debt/equity is at the 38% projectile of its industry. The revenue/employee of $235,000 is a respectable figure. Debt-to-equity ratio is 27%, indicating the debt is at an acceptable level. Interest coverage by earnings is 16x. Corning’s profitability recently improved as the current return on capital of 15.5% exceeds the 8.8% average return over the past three years (Source: EVA Dimensions).

Dividends have increased during the past six years.

So all in all 2016 resulted in a very good financial state.

But an unknown and worrisome activity is that in the last 90 days, insiders and officers have sold shares.

Source: Thomson Reuters

So why did they sell? Were they locking in profits from the stock price rise? Do they know something we don’t about future earnings? Did they use the money to buy Christmas gifts? It’s most interesting Wendell Weeks sold $7.8M worth. By the way he has serviced as the chairman, CEO and president (all three roles together) since 2007. He joined Corning in 1983.

Innovation

Corning is committed to growth through innovation and has a track record of 165 years. It typically invests more in R&D per revenue than its competitors.

Research and development costs totaled $637 million in 2016, about 7% of revenue. That’s a healthy portion. It will invest $10 billion in R&D, capital expenditure, and M&A through 2019. In addition to R&D, Corning has been in a focused acquisition mode.

The Innovation Model

There are 17 Global Labs in the US, Russia, China, India, France, Taiwan, Korea and Germany.

What it Takes for the Stock to Appreciate

Corning has little if any aftermarket service business like General Electric (NYSE:GE) which has a stream of revenue servicing jet engines after the sale. In Corning’s case, it is pretty much “one and done”.

However, Corning is fed by innovation. New products such as automotive windows and screens, architectural glass, and pharmaceutical packaging will fuel the growth. In the short term, earnings growth can be driven by a combination of the individual business segment growth (e.g. fiber optics), increase in market shares, product price appreciation and cost reduction. Demand for Gorilla Glass 5 and fiber should be a near-term benefit. Perhaps the Valor Pharmaceutical glass packaging will add revenue in the near term.

Conclusion

Corning has more upside potential than downside risk. It can be a long-term holding based upon the innovation thesis. In the short term, it can possibly obtain increased revenue. The CEO has promised dividend increases and stock buybacks. This is a buy, watch and hold story. The fourth-quarter 2017 earnings conference call and webcast is on January 30, 2018. Stay tuned.

Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in GLW over the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Top 10 Casino Stocks To Watch For 2018

Patriot One is a Canadian-based technology company that has developed an advanced concealed weapons detection system that delivers real-time warnings to keep potential attackers at bay and to keep the general public safe and secure. “Using radar and machine-learning algorithms that interpret the signal that comes back, every metallic object they’re carrying will resonate with a very distinct frequency and the system has been trained to register the signature of different types of weapons,” said Martin Cronin, CEO of Patriot One Technologies.

The cutting-edge technology created by Patriot One Technologies (OTCQB: PTOTF) (TSE: PAT.V) is available for use in airports, police stations and other government offices. It’s also available for use in stadiums, concert halls, night clubs and shopping malls. Anywhere that large numbers of people gather has the potential for installation of Patriot One’s system. Fortunately for any public or private entity that puts this concealed weapons detection system to work, there are no privacy law concerns “No image is retained. There are no privacy concerns whatsoever with respect to it. There’s no data that’s being retained, it’s simply detecting items on an individual,” said John Gillies, retired assistant director of CSIS, the Canadian Security Intelligence Service.
Westgate Las Vegas Resort & Casino has implemented a trial of Patriot One’s revolutionary concealed weapons detection technology in order to evaluate integration capabilities with existing in-house security systems.
Having long been an iconic landmark, Westgate Las Vegas Resort & Casino is comprised of nearly 3,000 hotel rooms, including 305 suites located on 64 acres with a 74,000-square foot casino and 200,000 square foot convention center. The casino property is owned by Florida-based Westgate Resorts, the largest privately held company in Central Florida. Today, Westgate Resorts encompasses 28 resorts with more than 13,500 villas across the United States.
Westgate’s Chief Operating Officer Mark Waltrip said, “With this partnership, we are pleased to be moving ahead and look forward to deploying the product on-site and to integrating it with our existing security infrastructure. Hopefully this is the first of many deployments across our locations around the United States.”

Top 10 Casino Stocks To Watch For 2018: STARWOOD PROPERTY TRUST, INC.(STWD)

Advisors’ Opinion:

  • [By WWW.MONEYSHOW.COM]

    Starwood Property Trust (STWD) is a finance REIT, which means it makes or owns real estate mortgages rather than owning commercial property. The bulk of Starwood Property’s business is to make and hold commercial property mortgages.

Top 10 Casino Stocks To Watch For 2018: 3M Company(MMM)

Advisors’ Opinion:

  • [By Dustin Blitchok]

    Morrison’s resignation came about one hour after 3M Co (NYSE: MMM) CEO Inge Thulin pulled the plug.

    In a Wednesday statement on his departure from what’s formally known as the Manufacturing Jobs Initiative, Thulin said the group “is no longer an effective vehicle” for the technology company to promote job growth in the U.S.

  • [By Ben Levisohn]

    Second, how will the Dow get to that big magic number? Well, the six biggest stock weightings in the DJIA are: Goldman Sachs (GS), 3M (MMM), International Business Machines (IBM), UnitedHealth Group (UNH), and Boeing (BA). What you will notice looking at a day like yesterday is that tech led the way sector wise. If the Dow is going to outperform, we need mega caps to outperform. We need those six stocks to outperform. So we need a day where financials and industrials outperform to get there. Given the trends in sector leadership, that is bound to happen…We are one Trump tweet talking about how yuuuuuuge Goldman Sachs is away from 20k.

  • [By Paul Ausick]

    3M Company (NYSE: MMM) traded up 0.91% at $201.53. The stock’s 52-week range is $163.85 to $214.57. Volume was about half the daily average of around 1.8 million shares. The company had no specific news Monday.

  • [By Shanthi Rexaline]

    Here is the list of the Dow components, which are scheduled to report this week:

    1. 3M Co
    Company: 3M Co (NYSE: MMM). Date of Reporting: Tuesday, before the market open. EPS Estimate vs. Year-ago EPS: $2.54 versus $2.08. Revenue Estimate: $7.86 billion versus $7.66 billion. Stock Gain/Loss (year to date): 18.12 percent.
    2. Caterpillar
    Company: Caterpillar Inc. (NYSE: CAT). Date of Reporting: Tuesday, before the market open. EPS Estimate vs. Year-ago EPS: $1.25 versus $1.09. Revenue Estimate: $10.93 billion versus $10.94 billion. Stock Gain/Loss (year to date): 16.10 percent.
    3. McDonald’s
    Company: McDonald’s Corporation (NYSE: MCD). Date of Reporting: Tuesday, before the market open. EPS Estimate vs. Year-ago EPS: $1.62 versus $1.45. Revenue Estimate: $5.96 billion versus $6.26 billion. Stock Gain/Loss (year to date): 25.35 percent.
    4. United Technologies
    Company: United Technologies Corporation (NYSE: UTX) Date of Reporting: Tuesday, before the market open. EPS Estimate vs. Year-ago EPS: $1.78 versus $1.82. Revenue Estimate: $15.24 billion versus $14.87 billion. Stock Gain/Loss (year to date): 12.47 percent.

    See also: 3 Reasons Alcoa Is No Longer The Curtain-Raising Event Of Earnings Season

  • [By Demitrios Kalogeropoulos]

    Investors looking for brighter prospects should consider two other blue-chip giants, 3M (NYSE:MMM) and Johnson & Johnson (NYSE:JNJ). Both are exposed to the consumer goods industry, but also get significant chunks of sales and profits from faster-growing segments.

  • [By Lisa Levin]

    3M Co (NYSE: MMM) agreed to sell substantially all of its communication markets division to Corning Incorporated (NYSE: GLW) for $900 million.

    Corning expects the deal adding $0.07 to $0.09 per share in FY19 earnings.

Top 10 Casino Stocks To Watch For 2018: ENI S.p.A.(E)

Advisors’ Opinion:

  • [By Dustin Parrett]

    Big Oil stocks are the seven “oil supermajors” that do everything from oil drilling to refining to retail sales. This is a list of the Big Oil companies:

    Big Oil CompanyShare PriceYTDMarket CapExxon Mobil Corp. (NYSE: XOM)$83.44-7.58%$353.13BChevron Co. (NYSE: CVX)$113.56-3.5%$217.62BConocoPhillips Co. (NYSE: COP)$48.21-3.78%$61.42BRoyal Dutch Shell Plc. (NYSE ADR: RDS.A)$52.35-3.82%$221.08BBP Plc. (NYSE ADR: BP)$34.12-8.71%$112.69BTotal SA (NYSE: TOT)$50.26-1.35%$124.6BEni SpA (NYSE: E)$31.51-2.3%$58.69B

    Despite being huge global oil companies, shares of Big Oil stocks are all in the red this year. Those losses have all happened even as the Dow is smashing record highs and trading up 6.4% year to date.

  • [By Paul Ausick]

    Reuters reported last week that the company is considering selling its 2,500 service stations in Italy for a tidy 500 million (about $538 million). The rumored buyer is private equity giant Apollo Global Management LLC (NYSE: APO), also rumored to be interested in buying 2,600 Italian service stations from a joint venture between Italy’s Eni SpA (NYSE: E) and Total SA (NYSE: TOT).

  • [By Dustin Parrett]

    Specifically, the oil supermajors are ExxonMobil Corp. (NYSE: XOM), BP Plc. (NYSE: BP), Chevron Corp. (NYSE: CVX), Royal Dutch Shell Plc. (NYSE ADR: RDS.A), Conoco Phillips (NYSE: COP), Eni SpA (NYSE ADR: E), and Total SA (NYSE ADR: TOT).

Top 10 Casino Stocks To Watch For 2018: MGT Capital Investments Inc(MGT)

Advisors’ Opinion:

  • [By Lisa Levin]

    MGT Capital Investments Inc. (NYSE: MGT) was down, falling around 24 percent to $2.47 as the company reported that it has received a subpoena from the Securities and Exchange Commission. MGT Capital said there is no indication that ‘the company is or will be the subject of any enforcement proceedings.’

  • [By Lisa Levin]

    MGT Capital Investments Inc. (NYSE: MGT) shares shot up 73 percent to $2.98 after John McAfee proposed to become Executive Chairman and CEO.

    Shares of Anacor Pharmaceuticals Inc (NASDAQ: ANAC) got a boost, shooting up 55 percent to $99.49 after the company agreed to be acquired by Pfizer Inc. (NYSE: PFE) for $99.25 per share.

Top 10 Casino Stocks To Watch For 2018: Legacy Reserves LP(LGCY)

Advisors’ Opinion:

  • [By Lisa Levin]

    Energy shares surged around 1.85 percent in trading on Monday. Top gainers in the sector included Legacy Reserves LP (NASDAQ: LGCY), Whiting Petroleum Corp (NYSE: WLL), and Atwood Oceanics, Inc. (NYSE: ATW).

  • [By Lisa Levin]

    On Wednesday, the energy sector proved to be a source of strength for the market. Leading the sector was strength from Willbros Group Inc (NYSE: WG) and Legacy Reserves LP (NASDAQ: LGCY).

  • [By Lisa Levin]

    On Friday, the energy sector proved to be a source of strength for the market. Leading the sector was strength from NGL Energy Partners LP (NYSE: NGL) and Legacy Reserves LP (NASDAQ: LGCY).

  • [By Lisa Levin]

    On Wednesday, the energy sector proved to be a source of strength for the market. Leading the sector was strength from Ocean Rig UDW Inc (NASDAQ: ORIG) and Legacy Reserves LP (NASDAQ: LGCY).

Top 10 Casino Stocks To Watch For 2018: Bank of Nova Scotia (The)(BNS)

Advisors’ Opinion:

  • [By Zacks]

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    To read this article on Zacks.com click here.

Top 10 Casino Stocks To Watch For 2018: The Herzfeld Caribbean Basin Fund, Inc.(CUBA)

Advisors’ Opinion:

  • [By WWW.MONEYSHOW.COM]

    This "Trump pick" is a snub to the President’s trade and diplomatic reversals of Obama’s wins regarding Cuba. We are buying back Herzfeld Caribbean Basin Fund (CUBA), following in the footsteps of its founder, Tom Herzfeld, and his son Erik.

Top 10 Casino Stocks To Watch For 2018: Apple Inc.(AAPL)

Advisors’ Opinion:

  • [By Ravi Bala]

    First things first, looking at the 2016 10K, I already see numerous innovative products and services released in September 2016. See the chart below as well as my categorizations from the company perspective. Now, the company will not tell you directly, but based on features, you should be able to make them out. (See also: 3 Reasons To Buy Apple Inc. (AAPL) Stock Now)

  • [By Sreekanth Anasa]

    NVIDIA made it to the Drucker Institute’s Management Top 250 ranking for the most effectively managed company. The company features at the 10 position in the rankings on most metrics which houses other tech giants like Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN). The effectiveness of the management can also be seen in the company’s financial results as well as the stock performance. The rankings are based on the core principles of Peter Drucker ( often applauded as the father of modern management) like customer satisfaction, employee engagement and development, innovation, social responsibility and financial strength. This is another indication that the fundamental story of NVIDIA has not changed and the recent sell-off could mostly be a case of rotation in the market and profit booking. NVIDIA’s long-term growth story still remains intact.

  • [By Paul Ausick]

    Apple Inc. (NASDAQ: AAPL) traded up 0.74% at $144.77. The stock’s 52-week range is $89.47 to $144.89, a new 52-week set this afternoon. Volume was about 35% below the daily average of around 27 million shares. The company said it will launch revamped versions of its desktop Mac Pro computer in 2018.

Top 10 Casino Stocks To Watch For 2018: Patterson Companies, Inc.(PDCO)

Advisors’ Opinion:

  • [By Paul Ausick]

    Patterson Companies Inc. (NASDAQ: PDCO) dropped about 7.9% Tuesday to post a new 52-week low of $32.07 after closing at $34.82 on Monday. The 52-week high is $48.30. Volume was around 5 million, more than three times the daily average of around 1.6 million. The distributor of dental and animal health care products missed earnings and revenues estimates this morning.

  • [By Chuck Saletta]

    Patterson Companies (NASDAQ:PDCO) has been around since 1877; it’s a strong player in human dental health services and a big distributor of animal-health-related products. With around 140 years of history behind it, Patterson knows how to survive times of war and economic turmoil, which should give you reason to believe it will be around for some time to come.

  • [By Keith Speights]

    The three top dividend stocks in the dentistry industry are Patterson Companies (NASDAQ:PDCO), Zimmer Biomet Holdings (NYSE:ZBH), and Danaher (NYSE:DHR). But two of these, Zimmer Biomet and Danaher, pay out only small dividends.

Top 10 Casino Stocks To Watch For 2018: Kohl’s Corporation(KSS)

Advisors’ Opinion:

  • [By Jeremy Bowman]

    It was a rough 2016 holiday season for brick-and-mortar retailers. Department store shares got thumped last week after Macy’s (NYSE:M) and Kohl’s (NYSE:KSS) both lowered their full-year earnings guidance and said their comparable-stores sales dropped. Those two stocks fell by double digits.

  • [By Ben Levisohn]

    Kohl’s (KSS) tumbled to the bottom of the S&P 500 today after offering earnings guidance that was well below analyst forecasts.

    Getty Images

    Kohl’sdropped 19% to $42.01 today, while the S&P 500 dipped 0.1% to 2,269.00.

    RBC’s Brian Tunick and Bilun Boyner worry that the bear case gas been revived:

    Kohl’s reported Holiday comps of -2%, below our model for -0.5%, as sales remained volatile through the quarter. Similar to early commentary by peers, stronger sales for Black Friday and the week before Christmas were offset by softness in early November and December. In line with Q3, the strongest categories were men’s, home, and footwear while accessories was most challenging.

    In addition to the sales downside,Kohl’s lowered its EPS guidance to $3.603.65 (from $3.804.00) to reflect lower than expected gross margins (we estimate were down 5060bps versus our prior model for up 40bp), which was mainly due to mix, timing of sales, and promotional environment as the company worked to exit the year with clean inventory positions (planning to end the year with inventories down mid-to-high SD)…

    AlthoughKohl’s still has a reasonable 1H’17 opportunity with easy gross margin compares, Under Armour (UA) launch, and potential for a new CFO, we believe disappointing Holiday sales and the guidance cut removed most of the market’s excitement around a return to momentum, reviving the secular bear case around department stores and Kohl’s. Maintaining Underperform and lowering price target to $42.

    Kohl’s market capitalization fell to $7.7 billion today from $9.2 billion yesterday. It reported net income of $673 million on sales of $19 billion in 2016.

  • [By Ben Levisohn]

    Under Armour’s (UAA) guidance last month was so bad that the stock lost a quarter of its value in just one day. Some analysts have stuck with the company, but many more have downgraded it. But that’s in the past. Now, Under Armour’s products are hitting the shelves at Kohl’s (KSS), and some have worried that it could dilute Under Armour’s brand. Kohl’s, meanwhile, has had troubles of its own–its stock is down 23% during the past three months–as investors have worried about the internet destroying retail as we know it. Which begs the question: Are you in trouble when you’re looking at Kohl’s as a savior?

  • [By Chris Lange]

    Kohls Corp. (NYSE: KSS) has faced an incredibly tough year so far, with its stock down nearly 25%, not to mention its facing the onslaught of e-commerce from sites like Amazon. Faced with the problem of adapt or die, Kohls is taking steps to change its format, but is it too late?

  • [By WWW.THESTREET.COM]

    The Bad

    Bonds behaved poorly. The 10 year and long bond rose by between 3-4 basis points in yield. I bought a trading position in iShares Barclays 20+ Yr Treas.Bond ETF (TLT) in front of a possible yearend pension rebalance. Big pharma stinks up the joint, again. Spec biotech is weakening again (Portola Pharmaceuticals PTLA, ACADIA Pharmaceuticals ACAD, etc.) Retail cant get out of its way. I am long JC Penney (JCP) and have trading positions in Kohl’s (KSS) and Macy’s (M) . (Nike (NKE) , Nordstrom (JWN) , Lowe’s (LOW) are downside features).

    The Ugly

  • [By Craig Jones]

    On CNBC's Fast Money Halftime Report, Jon Najarian spoke about bullish options activity in Kohl's Corporation (NYSE: KSS). He said traders were buying the May 42.5 calls and they were selling puts to finance the purchase. Najarian believes the stock is going to trade higher into the earnings and he decided to follow the trade. He is planning to hold the position for two to three weeks.

Mondays Vital Data: Apple, Micron and General Electric

U.S. stock futures are headed lower this morning, as Wall Street digests the possibility of more interest rate hikes in 2018. On Friday, Cleveland Fed President Loretta Mester hinted to Reuters at the possibility of four rate hikes this year. On Saturday, San Francisco Fed President John Williams backed the current pace of three hikes due to economic lift from the tax plan.

More from the Fed will arrive today. Atlanta Fed President Raphael Bostic is due to speak at the Rotary Club of Atlanta this afternoon. Additionally, Boston Fed President Eric Rosengren will participate in a panel to discuss whether Fed should stick to a 2% inflation target.

While futures were headed higher early this morning, they have since reversed course. At last check, Dow Jones Industrial Average futures are down 0.06%, S&P 500 futures are off 0.15% and Nasdaq-100 futures have fallen 0.13%.

Turning to the options pits, Friday’s volume remained brisk. Overall, about 20.5 million calls and 16.4 million puts changed hands. The CBOE single-session equity put/call volume ratio rose to 0.58. The 10-day moving average held at 0.56.

Taking a closer look at Friday’s options activity, Apple Inc. (NASDAQ:AAPL) attracted heavy call volume heading into what proved to be a rather rough weekend for the company. Meanwhile, Micron Technology, Inc. (NASDAQ:MU) options received a sentiment boost after a bullish note on memory chip demand from Keybank. Finally, General Electric Company (NYSE:GE), last year’s ultimate dog of the Dow, has emerged as one of 2018’s top 10 favorites.

Monday’s Vital Options Data: Apple Inc (AAPL), Micron Technology, Inc. (MU) and General Electric Company (GE)investorplace.com/wp-content/uploads/2018/01/01-08-2017-Top-Ten-Options-300×138.png 300w, investorplace.com/wp-content/uploads/2018/01/01-08-2017-Top-Ten-Options-65×30.png 65w, investorplace.com/wp-content/uploads/2018/01/01-08-2017-Top-Ten-Options-200×92.png 200w, investorplace.com/wp-content/uploads/2018/01/01-08-2017-Top-Ten-Options-400×184.png 400w, investorplace.com/wp-content/uploads/2018/01/01-08-2017-Top-Ten-Options-116×53.png 116w, investorplace.com/wp-content/uploads/2018/01/01-08-2017-Top-Ten-Options-100×46.png 100w,https://investorplace.com/wp-content/uploads/2018/01/01-08-2017-Top-Ten-Options-109×50.png 109w, investorplace.com/wp-content/uploads/2018/01/01-08-2017-Top-Ten-Options-78×36.png 78w, investorplace.com/wp-content/uploads/2018/01/01-08-2017-Top-Ten-Options-170×78.png 170w” sizes=”(max-width: 547px) 100vw, 547px” />

Apple Inc (AAPL)

Apple stock options were extremely call heavy on Friday. Volume topped out at 543,000 contracts, with calls snapping up an above average 69% of the day’s take. The net effect was to drive AAPL’s January 2018 put/call open interest ratio lower from a reading near 1.16 to today’s perch at 1.12.

Sentiment was up after the company said that it would quickly patch any semiconductor vulnerabilities. Chip stocks were hit hard after revelations of exploits affecting Intel Corporation (NASDAQ:INTC) and Advanced Micro Devices, Inc. (NASDAQ:AMD) processors.

Today, however, could be a different story. Apple was hit with fresh concerns over worker conditions in China following the suicide of a Foxconn worker at an iPhone production plant this weekend. Additionally, investors are calling for Apple to investigate the potential harm of iPhone and tablet-like devices on children.

AAPL stock is down fractionally in pre-market trading.

Micron Technology, Inc. (MU)

Micron stock remained volatile on Friday, despite a bullish research note from analysts at Keybanc. According to Keybanc, news in the DRAM and NAND markets is “neutral to good.” Specifically, DRAM supply is tight and should help support prices, while NAND is headed for “oversupply.” However, NAND oversupply should work its way out of the system later this year, returning pricing power to Micron.

Options traders appeared to take profits following the recent run higher, however. Volume on Friday rose to 305,000 contracts, with calls accounting for 65% of the day’s take.

The resulting January 2018 put/call OI ratio rose to 0.65 from last week’s reading of 0.62. The activity hints that options traders may be taking profits after MU rallied more than 11% last week.

General Electric Company (GE)

After finishing 2017 as the worst performing member of the Dow Jones Industrial Average, GE stock has emerged as one of the potential top performers of 2018. General Electric has made the top 10 list of several notable top-ranked stock newsletters, including George Putnam’s, The Turnaround Letter.

GE stock is already up more than 6% in 2018, enjoying a solid first week for the year. Options traders have also taken up the bullish call. Volume on Friday rose to 272,000 contracts, or more than 1.5 times GE’s daily average. Calls gobbled up 72% of the day’s take.

Short-term options traders have grown heavily bullish on GE stock heading into the first expiration of 2018. Specifically, the January put/call OI ratio has fallen to a reading of 0.43, with calls more than doubling puts among front-month options.

Finally, there could be more gains to come. GE closed above its 50-day moving average on Friday and could be set to challenge resistance at $19 this week. A breakout above resistance at $19 could be a significant short-term boon for GE bulls.

As of this writing, Joseph Hargett was long General Electric Company (GE) stock.

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Is Advanced Micro Devices, Inc. Stock a Screaming Buy Thanks to Intel?

Advanced Micro Devices, Inc. (NASDAQ:AMD) had a rather disappointing year in 2017. AMD stock fell more than 9% over those 12 months. Long-term investors shouldn’t be too deterred though, assuming they caught the near-300% rally in 2016. And after the down year, AMD stock taken off, already climbing almost 16% in the early days of 2018

Depending on how serious a flaw there is with Intel Corporation (NASDAQ:INTC), it could open a window for AMD and that would allow the recent momentum in AMD stock to continue. So what’s the skinny?

Essentially, there was a security flaw in Intel chips. The bugs, known as Meltdown and Spectre, effect everything from Apple Inc. (NASDAQ:AAPL) iPhones to Alphabet Inc (NASDAQ:GOOGL) and its Google Chrome browser. The issue also had an impact on Google Android devices, Microsoft Corporation (NASDAQ:MSFT) Windows and even the data center services for Amazon.com, Inc. (NASDAQ:AMZN).

For AMD’s part, the company said that there’s a “near zero risk” for its chips as a result of Intel’s security flaw. From an investment standpoint, shares of INTC have been falling while AMD has been rallying on the theory that, going forward, AMD chips will be the more attractive option.

Not a Zero Sum Industry

As much as I want that to be the case for AMD, I don’t know that it will be the end result. Although admittedly, this certainly doesn’t hurt Advanced Micro Devices stock. Patches are being put in place by MSFT, AMZN, GOOGL, AAPL and INTC. Many have already been put into action and the companies say customers remain safe at the moment despite the vulnerability, so long as they update their products. The concern for AMD stock is whether this news justifies a 16% rally in the stock.

Should it not impact INTC’s long-standing relationships or hurt sales, then there won’t be any real impact on AMD’s business. It’s even possible that it will push buyers away from INTC and over to Nvidia Corporation (NASDAQ:NVDA) rather than AMD. This isn’t a zero-sum industry, nor is this a zero-sum event.

We’ll see how it turns out.

Coming Soon: A Viable Business

We don’t know how much of an impact this INTC news will have on AMD stock. We don’t know if it will have any impact at all. But that doesn’t mean there isn’t reason to like Advanced Micro Devices stock nevertheless.

Granted, with shares now trading about a dime below $12, AMD was more attractive a month ago near $10. That has been the theme, though. Buy on sharp pullbacks and sell on rallies. Until AMD stock breaks out (more on that in a minute) we have to stick with the trading ranges we have.

But AMD stock is more than just a trading vehicle. For investors who can look beyond the next one to three months, there’s a really viable business here. The company remains well-positioned in key growth markets. Ranging from video games to graphic chips, vehicles and the cloud. While many view Nvidia as the top chip, AMD isn’t a bad alternative.

Besides, business is coming along as well. After years of losses, Advanced Micro is looking to turn a profit in 2017. While analysts forecast just 13 cents per share in earnings for fiscal year 2017, that’s up almost 200% year-over-year. They further expect 177% growth in 2018. Revenue growth of 23% in 2017 is forecast to slow to just 12.3% in 2018.

The positive here is that profitability is expanding much faster than revenue, meaning margins are moving in the right direction. If AMD can turn cash flow positive, I think shares can really start to gain some upside momentum. That should be the case as revenues churn higher and profitability explodes.

It helps that between the three — NVDA, AMD and INTC — Advanced has the lowest sales-based valuation.

Trading AMD Stock

chart of AMD stock priceinvestorplace.com/wp-content/uploads/2018/01/AMD-768×574.png 768w, investorplace.com/wp-content/uploads/2018/01/AMD-40×30.png 40w, investorplace.com/wp-content/uploads/2018/01/AMD-200×150.png 200w, investorplace.com/wp-content/uploads/2018/01/AMD-400×300.png 400w, investorplace.com/wp-content/uploads/2018/01/AMD-116×87.png 116w, investorplace.com/wp-content/uploads/2018/01/AMD-100×75.png 100w, investorplace.com/wp-content/uploads/2018/01/AMD-167×125.png 167w, investorplace.com/wp-content/uploads/2018/01/AMD-67×50.png 67w, investorplace.com/wp-content/uploads/2018/01/AMD-78×58.png 78w,https://investorplace.com/wp-content/uploads/2018/01/AMD-800×598.png 800w, investorplace.com/wp-content/uploads/2018/01/AMD-160×120.png 160w, investorplace.com/wp-content/uploads/2018/01/AMD.png 900w” sizes=”(max-width: 300px) 100vw, 300px” />
Click to Enlarge

Since we don’t know the full impact of INTC, AMD stock could have limited upside in the short term. The 200-day moving average near $12.40 is acting as resistance. Should it give way, $13 and above becomes the new target. But given the recent rally and current resistance, investors should be more prudent.

Either wait for a breakout and close over the 200-day moving average or look for a pullback down toward $11. I am hoping for the latter, as I’d like a lower cost basis on a longer-term position.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities.

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PayPal Valuation Stretched But Still Not At Peak

This December saw the first 10% drop in PayPal’s (NASDAQ: PYPL) stock in the last year or so. But is this a dip to be bought or are there more serious issues threatening the company’s growth?

A cyclical exit from tech companies, the company’s stock price climbing too high too fast and even Bitcoin’s potential to take over the world have been mentioned as reasons. Can these factors stop the company and cause a real correction or is it just some profit taking by investors who rely on P/E (which is indeed high) and are quite happy with an 80% jump in the last year?

The short answer is no.

There are simply no signs of slowing growth, quite the opposite. The latest management moves and the overall environment are not only favorable but actually improving for the company and its future guidance seems conservative to me. Here’s why.

Last month saw the company solve one of the issues that had caused concern among investors – its PayPal Credit unit. That unit has so far been a source of growth and is part of the larger puzzle that PayPal aims to become – a payment company that can not only handle every type of transaction that you’d want but also a one-stop shop for anything money related.

But there was a caveat: PayPal Credit is susceptible to downturns in the economy and any unreasonable exposure could turn into something between a nuisance and a disaster. The board was well aware of this and engineered a deal with Synchrony Financial (NYSE: SYF) worth $6.8 billion, with the latter acquiring the U.S. receivables portfolio together with a profit-sharing agreement.

Not as sexy as monetizing Venmo (we’ll get to them in a minute) or riding the huge mobile payments wave, but it’s a great old-fashioned corporate deal that ticks the boxes on what needed to be done. It not only limits risk but also frees up capital (to the tune of $1 billion annually) that can serve other purposes.

One of these other purposes is partnerships and expanding the network of merchants and companies that utilize PayPal. Two of the most recent ones also are targeting what I think is the most important metric – transactions per account (which stand at 32.3 per year as of Q2 in 2017).

The millennial investment app Acorns now allows users to use PayPal to transfer money both ways, as well as monitoring their portfolio and tracking their investments through PayPal. A partnership with a European “deposit marketplace” called Raisin also was announced and although both will not have an immediate effect on the bottom line, they are aimed at getting more of the bread and butter transactions that the company will rely on – set-and-forget payments or transactions completed with several taps in a single app.

Talking of single apps and ease of use, PayPal’s One Touch has allowed the company to tap in the shift to mobile payments that we see across society. As of November 8th, six million merchants utilize it (around a third of the total) and 70 of the total 218 million active accounts have registered with it.

Mobile payment volume was $40 billion in Q3, over 50% growth on a yearly basis with mobile payments making just over one-third of the total payment volume. The course is set and the means to take more of the projected share are in place.


Source: Statista

About Venmo. I don’t think it’s the game changer that many in the PayPal investment community think it is. It’s growing for sure but for me it is yet unproven and is the one point where Apple Pay (NASDAQ:AAPL), Samsung Pay (OTC:SSNLF) and potentially Square (NYSE: SQ) can actually land a punch. $9.4 billion in transaction volume last quarter and making it available in around two million U.S. retailers are signs of a growing business, but whether it will be used for retail purchases by its user base remains to be seen. I could be surprised on the upside in the coming 3-6 quarters. But as long as the company isn’t revealing the number of its users I won’t be holding my breath and including this in the factors that can contribute to sustained growth.

Another partnership announced recently requires far more attention than it’s getting. Baidu (NASDAQ:BIDU) announced recently that they will offer PayPal as an option to its users and this could be the gateway for the payment provider to establish a beachhead in a market that’s already focused on mobile payments.

Right now it seems like nothing more than said beachhead, as Baidu has a very small percentage of mobile transaction volume compared to its competition. But if PayPal is truly a superior product and if it allows Chinese consumers to buy imports more easily (which they have been doing – $60 billion in e-commerce payments for 2016) it should carve out a solid enough niche to create a steady and sizeable income stream within several years.

Not that all these developments are unnoticed by investors, or are unaccounted for in the company’s projections. But it looks as if they’re being understated due to caution and trying not to overreach.

Conclusion: A 21% increase in earnings and 20% for revenue is a solid enough forecast but I think we’ll see that these will be lower than what we actually get. User growth has been in the mid-teens and will probably remain thereabouts. But it is merchant growth where I think the network effect will surpass expectations in 2018 and directly impact the bottom line and the stock price. With these in mind I am placing my target for next year at $96.


Source: Tradingview

Risks do remain – a fumble of the Venmo play could hamper the company’s whole mobile payments concept and a security breach is always a possibility in today’s environment. But at this point in time there are no indicators that there is a confirmed threat to the optimism surrounding the company or its sector.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

About this article:ExpandAuthor payment: $35 + $0.01/page view. Authors of PRO articles receive a minimum guaranteed payment of $150-500.Tagged: Investing Ideas, Long Ideas, TechnologyWant to share your opinion on this article? Add a comment.Disagree with this article? Submit your own.To report a factual error in this article, click here

Hot Start to 2018 Pushes Markets Higher

U.S. equities pushed confidently higher on Tuesday, the first trading day of the new year, resulting in the best kickoff for the tech-heavy Nasdaq since 2013. Bitcoin was hot. Gold well bid. But bonds were slammed, pushing up yields, in a possible sign that inflation and economic growth expectations are rising and will put further pressure on the fixed-income market.

In the end, the Dow Jones Industrial Average gained 0.4%, the S&P 500 gained 0.8%, the Nasdaq Composite gained 1.5% and the Russell 2000 gained 0.9%. Treasury bonds declined, the dollar weakened again, gold gained 0.5% for its eighth consecutive gain and crude oil lost 0.1% after a run of strength.

Energy stocks led the way, in what could be possible sector rotation as crude oil tests above the $60-a-barrel threshold for the first time since 2015. Utilities were the laggards on yield pressure, falling 0.9%.

Netflix, Inc. (NASDAQ:NFLX) gained 4.8% after being upgraded by analysts at Macquarie noting changing consumer preferences to ad-free television and the impact of a second round of price increases. Citigroup analysts believe there is a 40% chance the company is acquired by Apple Inc. (NASDAQ:AAPL).

Nordstrom, Inc. (NYSE:JWN) gained 3.7% on an upgrade at JPMorgan on expected tailwinds from stock market gains and tax cut stimulus. On the downside, Sirius XM Holdings Inc. (NASDAQ:SIRI) lost 2.9% on a downgrade from JPMorgan on increased royalty costs.

On the economic front, the Market U.S. Manufacturing PMI came in slightly better than the flash reading, indicating the strong pace of factory activity in 11 months. Job growth was at the strongest since September 2014. And Eurozone activity increased to its best level since the survey began in June 1997.

Conclusion

With the books closed on 2017, the die has been cast: It was a record year, with stocks rising on a total return basis in each and every month for the first time in history.

For now, the consensus on Wall Street is that the uptrend will continue.

Goldman Sachs is looking for “rational exuberance” in 2018 on a combination of strong GDP growth, low and slowly rising interest rates, and profit growth driven by the recently passed GOP tax cut legislation. JPMorgan says investors should “Eat, drink, and be merry” in the new year on higher consumer spending and an even tighter labor market.

But others, including Societe Generale and Bank of America Merrill Lynch, are sounding the alarm. The former is looking for the S&P 500 to drop to 2,000 by the end of 2018, a loss of 26% in what would be a bear market decline.

The latter, courtesy of strategist Michael Hartnett, fears a 1987/1994/1998-style “flash crash” within the next three months caused by rising interest rates.

investorplace.com/wp-content/uploads/2018/01/midterm-election-300×175.jpg 300w, investorplace.com/wp-content/uploads/2018/01/midterm-election-51×30.jpg 51w, investorplace.com/wp-content/uploads/2018/01/midterm-election-200×117.jpg 200w, investorplace.com/wp-content/uploads/2018/01/midterm-election-400×234.jpg 400w, investorplace.com/wp-content/uploads/2018/01/midterm-election-116×68.jpg 116w, investorplace.com/wp-content/uploads/2018/01/midterm-election-100×58.jpg 100w, investorplace.com/wp-content/uploads/2018/01/midterm-election-86×50.jpg 86w, investorplace.com/wp-content/uploads/2018/01/midterm-election-78×46.jpg 78w,https://investorplace.com/wp-content/uploads/2018/01/midterm-election-170×99.jpg 170w” sizes=”(max-width: 500px) 100vw, 500px” />

Checking in with seasonality, the folks at the Almanac Trader note that January has had a volatile reputation since 2000, with 10 of the last 18 years featuring nasty declines starting with the 5.1% pullback that kicked off the dot-com collapse. January 2009 featured a 8.6% loss that was the worst January on record going back to 1930.

Mid-term election year performances were also tepid, as shown above. SentimenTrader notes that options traders are betting heavily on a spike in volatility in the coming weeks. And these folks tend to be right at extremes.  

Today’s Trading Landscape

To see a list of the companies reporting earnings today, click here.

For a list of this week’s economic reports due out, click here.

Anthony Mirhaydari is the founder of the Edge and Edge Pro investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.

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The Little-Known Stock That's Becoming A Powerhouse

It’s no secret that businesses want your e-mail. It’s the holy grail of marketing today — especially for every fly-by-night outfit advertising on social media. You see, if a business can get your e-mail, they can begin an almost scientific process of turning you into a paying customer.

They do this by offering some free report or trial offer. And once you take the bait and provide your e-mail, they enter your e-mail address into a sales funnel. Here, they automatically send you an e-mail every few days trying to get you to read or listen to a long sales letter.

This sales letter is an attempt to sell you a high-priced product or service. And the process couldn’t be easier. The business offers their product or service, and then at the end of the pitch, they offer a bunch of freebies to sweeten the deal.

You know the process. “Buy my $100 book and you’ll get five BONUS reports giving you secrets that only my customers know.” And believe it or not, this funnel system works.

In fact, research shows that once an e-mail address is entered into a sales funnel, it takes roughly 45 days to make that person a paying customer. Moreover, 42% of those people were actually convinced to purchase just on the desire to get the BONUS reports.

The funnel system works so well, I’m going to use it today to describe my favorite investing strategy — buying into a long-term mega-trend. This is the method I used to invest in Nvidia (Nasdaq: NVDA) back in 2014 at less than $20 a share. It’s the same method investors used to buy Microsoft (Nasdaq: MSFT) and Apple (Nasdaq: AAPL) decades ago, too.

And it’s the reason the South African company Naspers (OTC: NPSNY) is on my radar. The company is a global provider of internet and e-commerce, video-entertainment, and print media services. The company has a market cap of just under $120 billion.

But there is something the company’s market cap does not accurately portray. Naspers was an original investor in Chinese investment holding company Tencent Holdings (OTC: TCEHY) 15 years ago. Today, Tencent is worth roughly $500 billion.

And guess who still owns 34% of Tencent? That’s right, Naspers.

Naspers’ original $34 million investment is now worth nearly $170 billion, in what has to be one of the most profitable investments in history. And Naspers has no intention of selling its stake in Tencent anytime soon.

Why is this so important?

That’s easy. Naspers’ market value is $120 billion. But their stake in Tencent is worth nearly $170 billion. That means that Naspers is currently trading at a $50 billion discount to just its stake in Tencent alone.

In other words, even if Naspers’ other ventures were to do nothing from here, the company still has a stake in Tencent greater than the market cap of Naspers. This means that if the company were to be liquidated today at fire sale prices, Naspers investors still come out $50 billion ahead. Not a bad deal.

But wait, there’s more…

If you buy Naspers today, you’re getting shares valued at a discount to just one of Naspers’ holdings. That’s a deal worth $50 billion — more than worth the price of admission.

But let’s sweeten the deal. Not only will you get the company at a discount, but you get several BONUS companies, too.

You see, Naspers has an incredible global empire.

And the value of those companies is conservatively valued at between $30 and $40 billion. They include online-classified ad businesses, E-commerce businesses, food delivery, and video entertainment companies, as well.

In fact, Naspers has quietly become the global leader in online classified ads. The company leads its competitors in 35 markets and is the top-ranked provider in the United States, India, Indonesia, and Brazil.

Naspers also owns Flipkart, the leading e-commerce provider in the world’s second most populated country, India. Indian programmers designed Flipkart, which means the company understands its customers better than anyone else does. That’s why the company holds an incredible 57% market share in India, yet still expects to grow its business by 160% by 2022.

The Naspers umbrella also includes PayU, the Indian version of PayPal. PayU processes more than 1.2 million payments daily. This will grow exponentially in the next few years, as India will become the world’s third-largest economy by 2025.

Naspers owns MakeMyTrip, an online travel booking company, and redBus, India’s leading bus ticket provider. Naspers also owns food delivery companies Swiggy and iFood, and has a stake in Delivery Hero worth about $2 billion. Delivery Hero is the market leader in food delivery in 36 of the 42 countries in which it operates.

All told, even if these other companies do nothing for the next five years (which is almost impossible), Naspers is worth about $80 – $90 billion more than its market cap. In other words, by purchasing Naspers stock today at a 30% discount to Tencent’s value, you get all these other business for FREE, giving us a total deal worth roughly $200 billion.

But you have to act fast. This deal won’t last long at these prices. Operators are standing by…

Risks To Consider: Many of Naspers businesses are in developmental stages, meaning they are not yet producing revenue. Should another global financial crisis materialize, Naspers growth prospects would be severely hurt — despite the relative safety of its Tencent holdings.

Action To Take: Buy shares of Naspers up to $60 per share. Mitigate your risk by limiting your purchase to a maximum of 5% of your portfolio. Use a 25% trailing stop-loss to protect your capital. Naspers is a growth company, and as such is recommended only for investors with a time horizon of more than 5 years.

Editor’s Note: “Solar glass” that absorbs endless free energy from the sun… A “skin gun” that uses stem cells to heal burn victims in days. Plus 11 more investment predictions. Get tickers here, free.

Best Stocks To Own Right Now

eBay Inc. (NASDAQ: EBAY) released its most recent quarterly earnings report after the markets closed on Wednesday. The online auctioneer said that it had $0.49 in earnings per share (EPS) and $2.22 billion in revenue. There are consensus estimates from Thomson Reuters that called for $0.48 in EPS and $2.21 billion in revenue. The first-quarter from last year had $0.47 in EPS and $2.14 billion in revenue.

In the first quarter, eBay added two million active buyers across its platforms, for a total of 169 million global active buyers.

Underlying total eBay performance, the Marketplace platforms delivered $20.0 billion of GMV and $1.8 billion of revenue. Marketplace GMV was up 2% on an as-reported basis and 5% on a foreign exchange-neutral basis, driven by growth of active buyers, continued expansion of new user experiences and brand advertising.

Also, the company recently announced a strategic agreement with Flipkart. In exchange for an equity stake, eBay will make a $500 million cash investment in and sell its eBay.in business to Flipkart.

Best Stocks To Own Right Now: State Bank Financial Corporation.(STBZ)

Advisors’ Opinion:

  • [By Zacks]

    Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
     
    J P Morgan Chase & Co (NYSE: JPM): Free Stock Analysis Report
     
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    To read this article on Zacks.com click here.
     
    Zacks Investment Research

Best Stocks To Own Right Now: Take-Two Interactive Software, Inc.(TTWO)

Advisors’ Opinion:

  • [By John Ballard]

    Take-Two Interactive (NASDAQ:TTWO) has been on a roll in the last several years following extremely strong sales of Grand Theft Auto V. Even after a 300% gain over the last five years, the stock still trades for a reasonableforward price-to-earnings ratio of 24 times fiscal 2018 earnings estimates.Let’s review the important drivers for the video game company in the year ahead and beyond.

  • [By ]

    Take-Two Interactive Software (Nasdaq: TTWO) is one of the world’s largest video game publishers on consoles (Xbox and PlayStation), PCs, smartphones and tablets. The firm’s two most popular products are Grand Theft Auto and NBA 2K, but it also has other popular games such as Civilization, Borderlands and Bioshock.

  • [By John Ballard]

    But now we are starting to see game publishers step up with that commitment. Two important new leagues to watch are Activision Blizzard’s (NASDAQ:ATVI) Overwatch League and Take-Two Interactive Software’s (NASDAQ:TTWO)NBA 2K eLeague. Activision Blizzard will soon start selling teams for Overwatch League to prospective owners this year, and the NBA and Take-Two just announced the formation of its own professional e-sports league based on the best-selling NBA 2K franchise.

  • [By Lee Jackson]

    Take-Two Interactive Software Inc. (NASDAQ: TTWO) saw the CFO at the video gaming company shedding shares this past week. Lainie Goldstein sold 56,167 shares at prices that ranged from $49.27 to $50.01. The total for the sale was posted at $3 million. The stocktraded on Friday at $47.90, so a well-timed sale indeed.

  • [By Emily Stewart]

    Paulson purchased one million shares of Take-Two Interactive Software (TTWO) last quarter. As of the end of the period, the stake is worth $37.9 million.

    Take-Two Interactive is a developer, marketer and publisher of interactive entertainment for consumers around the globe. The company develops and publishes products through its two wholly owned labels: Rockstar Games and 2K. It has a $3.6 billion market cap and trades at a P/E of 165.16. 

  • [By Danny Vena]

    With that much revenue at stake, what are the best gaming stocks for investors in 2017? Several companies have exhibited impressive performance over the past several years, and that trend is likely to continue. Top choices in the space includeActivision Blizzard, Inc. (NASDAQ:ATVI), Electronic Arts Inc. (NASDAQ:EA), and Take-Two Interactive (NASDAQ:TTWO).

Best Stocks To Own Right Now: Apple Inc.(AAPL)

Advisors’ Opinion:

  • [By Daniel Sparks]

    Apple (NASDAQ:AAPL) stock has seen a roaring comeback recently, with shares soaring about 28% in the past three months and hitting new all-time highs. At the time of this writing, shares are trading at about $139, well above their price of approximately $110 three months ago and significantly higher than the low $90s they hit last summer.

  • [By Evan Niu, CFA]

    Just like last quarter, all anyone wanted to talk about on Qualcomm’s (NASDAQ:QCOM) earnings call last night was the mobile chip giant’s expanding legal battle with Apple (NASDAQ:AAPL). The situation even overshadowed relatively strong earnings, as Qualcomm topped consensus estimates by putting up revenue of $6 billion with adjusted earnings per share of $1.34. Management said that the automotive, networking, and Internet of Things (IoT) segments performed particularly well.

  • [By Paul Ausick]

    Apple Inc. (NASDAQ: AAPL) traded down 1.07% at $174.53. The stock’s 52-week range is $114.76 to $177.20. Volume was about 20% below the daily average of around 27.5 million. Nomura downgraded the stock from Buy to Neutral and cut the price target from $185 to $175. Brave outfit.

  • [By WWW.THESTREET.COM]

    There are now subscription-based video offerings for art films and horror, animation, comedy, competitive fishing, lots for children’s programming and every sport that rarely gets time on Disney’s (DIS) ESPN. Apple (AAPL) TV, Roku and Amazon Fire (AMZN) devices, among others, make toggling between streaming apps as easy as your internet connection can handle it. 

  • [By Ravi Bala]

    Getting back to Apple Inc. (NSDQ:AAPL), what do you do for earnings? Sit on your hands and avoid the risky play altogether. Wait until after the earnings to decide whether or not to buy options? (See also: Apple Inc. (AAPL) Stock Will Rise Above $135 In 2017)

  • [By Paul Ausick]

    Apple Inc. (NASDAQ: AAPL) traded up 0.93% at $131.51. The stock’s 52-week range is $89.47 to $132.09, a new 52-week high set Tuesday. Volume was about 10% above the daily average of around 31.6 million shares. The company had no specific news.

Your 2018 Resolution: Huge Gains Riding These Strong Trends

After overindulging during the holidays, most folks strive to get their lives back on track in January…

This year will be different! No more sweets. No booze. Instead of snacking on the couch and binge-watching my favorite shows, Ill hit the gym three days a week

Of course, there are plenty of companies ready to cash in on your dubious resolutions. Weight Watchers (NYSE:WTW) is hyping the season with a new publicity stunt featuring DJ Khaled. Hes a new spokesperson for Weight Watchers new freestyle program, the company announced yesterday…

Ill just have the salad.

The stock rallied more than 8% on the news, presumably because investors believe another celebrity endorsement will do wonders for WTW shares. After all, Oprah has made about $300 million from Weight Watchers stock after she hopped onboard with her endorsement in 2015, Business Insider notes. A famous hip-hop star like Khaled might just be what WTW needs to juice shares this year.

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Of course, Khaled could fail at his public bid to slim down (whether that hurts WTW remains to be seen). In fact, most of us scrap our New Years resolutions before they become a part of our routine. Its all too easy to cheat on a diet if you have a stressful day at work or skip going to the gym because you overslept and its only 5 degrees outside.

You know how most of these resolutions turn out. No one can find an open treadmill at the gym in January. But by February, the place is a ghost town.

With that in mind, nows not the best time to trade nutrition or gym stocks in hopes of a first-quarter pop. Yet the herd tried to play these names every year without fail. Theyre betting on the average, lazy American making permanent improvements instead of falling back into the same routine.

But heres the rub:

Strong trends usually persist.

Everyone expects major changes in the markets as we begin 2018. Stocks were up big in 2017. Therefore, some investors reason the market will drop this year. Using that logic, the strongest stocks on the market will be the ones that will endure the biggest drawdowns, right?

Not exactly.

The stock market doesnt care that our calendar has flipped to 2018. We dont have to look very far to find proof, either. As we begin the new trading week, the stocks that were the strongest performers of 2017 are already blasting higher.

Just look at semiconductors a group that spanked the major averages with 2017 returns nearing 40%. The VanEck Vectors Semiconductor ETF (NYSE:SMH) busted out of its December funk to trade higher by more than 2.6% yesterday.

Big tech names are also catching a bid. Facebook (NASDAQ:FB), Amazon.com (NASDAQ:AMZN) and Apple (NASDAQ:AAPL) each made significant one-day pushes toward their all-time highs. These high-fliers are all heading back to the buffet for seconds in 2018.

While seasonal stocks like Planet Fitness and Weight Watchers are getting all the media attention, the markets strongest stocks are stalking new all-time highs. Which would you rather own?

Sincerely,

Greg Guenthner
forThe Daily Reckoning