Tag Archives: MCD

10 Stocks That Could Surprise in 2018

The U.S. stock markets hit the jackpot in 2017, with all the major indexes up significantly — the S&P 500 gained 19% over the past year, the Dow Jones Industrial Average was up 25% and the tech-heavy Nasdaq was up an impressive 28% — making year-end assessments by investors a very happy occasion.

Amazingly, the U.S, markets ranked 39th out of 47 countries in 2017, making this past year a relative stinker compared to the rest of the world’s stocks.

Why the “down” year?

It’s possible that investors have figured out that U.S. stocks are overvalued relative to stocks in other countries. So, while U.S. markets underperformed on a comparable basis, it can always be worse, as Canada demonstrates.

In 2017, Canadian stocks gained just 6% on the year with energy companies providing a significant headwind to better performance. Here in the U.S., the major indexes are much less dependent on energy stocks, hence the higher returns.

Given the perception U.S. stocks are overvalued, how does one make money in 2018?

Buy several of these ten stocks that lost 20% or more in 2017.  My bet is that, like the Dogs of the Dow, they will surprise in 2018.

Stocks That Will Surprise in 2018: Under Armour (UAA) Stocks That Will Surprise in 2018: Under Armour (UAA)investorplace.com/wp-content/uploads/2017/02/uamsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2017/02/uamsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2017/02/uamsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2017/02/uamsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2017/02/uamsn-400×220.jpg 400w, investorplace.com/wp-content/uploads/2017/02/uamsn-116×64.jpg 116w, investorplace.com/wp-content/uploads/2017/02/uamsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2017/02/uamsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2017/02/uamsn-78×43.jpg 78w,https://investorplace.com/wp-content/uploads/2017/02/uamsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Shutterstock

It’s interesting that John Schnatter, the founder and former CEO of Papa John’s Int’l, Inc. (NASDAQ:PZZA), stepped down toward the end of 2017. Yet, Under Armour Inc (NYSE:UAA) CEO and founder Kevin Plank had no such plans despite delivering a lump of coal in shareholders’ stockings.

Plank deservedly is on a list of “Worst CEOs” of the past year with Under Armour’s stock losing half of its value.

In early February, I suggested that Plank should move aside, hiring a more experienced direct-to-consumer retail executive who understands how to sell in an omnichannel world.

A couple of months later I proposed that Under Armour and Lululemon Athletica Inc. (NASDAQ:LULU) should join forces to deliver a more balanced business regarding men’s and women’s customer bases.

Personally, I believe both of these ideas are both valid. Furthermore, I see Lululemon’s CEO, Laurent Potdevin, as the perfect person to lead the merged organization.

Regardless of whether these two things come to fruition, I believe Under Armour can bounce back in 2018. 

Stocks That Will Surprise in 2018: Newell Brands (NWL)

Stocks That Will Surprise in 2018: Newell Brands (NWL)investorplace.com/wp-content/uploads/2017/12/nwlmsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2017/12/nwlmsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2017/12/nwlmsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2017/12/nwlmsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2017/12/nwlmsn-400×220.jpg 400w, investorplace.com/wp-content/uploads/2017/12/nwlmsn-116×64.jpg 116w, investorplace.com/wp-content/uploads/2017/12/nwlmsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2017/12/nwlmsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2017/12/nwlmsn-78×43.jpg 78w,https://investorplace.com/wp-content/uploads/2017/12/nwlmsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />

Newell Brands Inc (NYSE:NWL) lost 29% in 2017 as it struggled to integrate the Jarden acquisition into its own business. This past year was the stock’s first significant annual loss since 2008 when it saw a drop of 59% due to the economic crisis.

Investors expected that the integration of Jarden would deliver sales growth and higher profits and neither of these has yet to materialize.

Its five-year restructuring process to save $1.3 billion by 2021 has saved $410 million through the end of Q2 2017. Although it’s going as planned, debt levels are still relatively high at $10.2 billion or 65% of its market cap. The company is on track to reduce its leverage ratio to 3.5 times or less by the end of 2019.

Newell has become home to a lot of brands that don’t have the scale to compete in a global world. Moving to four operating segments: Live, Learn, Work and Play, I see the company fine-tuning its focus in 2018 and beyond.

Newell stock hasn’t been this low since 2014. The transformation might be messy, but 2018 should see it turn the corner.

However, if you don’t have 2-3 years to wait for it to complete the restructuring, you’re best to look elsewhere.   

Stocks That Will Surprise in 2018: Mattel (MAT) Stocks That Will Surprise in 2018: Mattel (MAT)investorplace.com/wp-content/uploads/2017/02/matmsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2017/02/matmsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2017/02/matmsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2017/02/matmsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2017/02/matmsn-400×220.jpg 400w, investorplace.com/wp-content/uploads/2017/02/matmsn-116×64.jpg 116w, investorplace.com/wp-content/uploads/2017/02/matmsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2017/02/matmsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2017/02/matmsn-78×43.jpg 78w,https://investorplace.com/wp-content/uploads/2017/02/matmsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Shutterstock

The bankruptcy of Toys “R” Us in 2017 says all you need to know about Mattel, Inc.’s (NASDAQ:MAT) past year. Therefore, it probably doesn’t come as a surprise to most investors that Mattel stock lost 41% of its value in 2017 and now sits 67% below its five-year high of $48.48.

Mattel’s situation has deteriorated to the point that it suspended its dividend in October to save cash and keep the business on a stronger financial footing. It also intends to look to boost its gross margin by focusing on fewer product offerings while cutting staff to lower its operating expenses.

While it’s tempting to look to a Hasbro, Inc. (NASDAQ:HAS) buyout to save the day, it’s very likely that Mattel’s going to have to innovate its way out of the mess it currently finds itself.

None of its major segments are growing, unlike with Hasbro, which has weathered the Toys “R” Us storm far better than Mattel. That said, Mattel’s long-term debt is still only 34% of its market cap which isn’t outrageous for a company its size. 

Don’t get me wrong, buying Mattel is a speculative buy at this point. I would wait for the company to announce its Q4 2017 earnings at the end of January before considering a purchase because it’s entirely possible it will test single digits before bottoming.

With Barbie, Hot Wheels and Fisher-Price, it has got a reasonable shot at a turnaround. 

Stocks That Will Surprise in 2018: Chipotle (CMG) Stocks That Will Surprise in 2018: Chipotle (CMG)investorplace.com/wp-content/uploads/2016/04/cmgmsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2016/04/cmgmsn-73×40.jpg 73w, investorplace.com/wp-content/uploads/2016/04/cmgmsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2016/04/cmgmsn-250×137.jpg 250w, investorplace.com/wp-content/uploads/2016/04/cmgmsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2016/04/cmgmsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2016/04/cmgmsn-160×88.jpg 160w, investorplace.com/wp-content/uploads/2016/04/cmgmsn-65×36.jpg 65w, investorplace.com/wp-content/uploads/2016/04/cmgmsn-100×55.jpg 100w,https://investorplace.com/wp-content/uploads/2016/04/cmgmsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2016/04/cmgmsn-78×43.jpg 78w, investorplace.com/wp-content/uploads/2016/04/cmgmsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Mike Mozart Via Flickr

If it weren’t for bad luck, Chipotle Mexican Grill, Inc. (NYSE:CMG), would have no luck at all.

I can remember how some analysts and investors were chastising Chipotle for going overboard on food preparation procedures after its E.coli outbreak a couple of years ago. 2017’s revisit of food safety concerns put the brakes on any chance for a recovery of its stock price which lost 23% in the past year.

Kyle Woodley, a former InvestorPlace editor and very astute investor, recently picked CMG as his “Best stock for 2018” suggesting profits and revenues are growing far more than most investors realize, and while his pick is speculative given the company’s history, the upside seems higher than the downside at this point.

I have to give former CEO and co-founder Steve Ells credit for stepping down in November as Chipotle’s chief executive. It’s never easy to admit that you’re not the one to lead your baby back from the wilderness, but shareholders ought to be thankful that Ells could see that a leadership change was necessary.

Who Chipotle hires as the man or woman to lead the company is critical to bouncing back in 2018. I think the board will make a smart choice with Ells’ input and it will be off to the races.   

It would not surprise me if a former McDonald’s Corporation (NYSE:MCD) executive were at the top of the list.

Stocks That Will Surprise in 2018: Sally Beauty (SBH) Stocks That Will Surprise in 2018: Sally Beauty (SBH)investorplace.com/wp-content/uploads/2017/10/sbhmsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2017/10/sbhmsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2017/10/sbhmsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2017/10/sbhmsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2017/10/sbhmsn-400×220.jpg 400w, investorplace.com/wp-content/uploads/2017/10/sbhmsn-116×64.jpg 116w, investorplace.com/wp-content/uploads/2017/10/sbhmsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2017/10/sbhmsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2017/10/sbhmsn-78×43.jpg 78w,https://investorplace.com/wp-content/uploads/2017/10/sbhmsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Mainstream via Flickr (Modified)

At the end of November, I suggested that investors consider buying Sally Beauty Holdings, Inc. (NYSE:SBH) after dropping $3 in a month. Since then it’s up 18% and should the overall markets continue moving higher early in 2018, I expect SBH stock to do the same.

Sally Beauty’s stock lost 29% in 2017, the company’s third consecutive year of negative returns; it hadn’t had a breakout year since 2013 when it gained 28%. It is due.

Remember, Ulta Beauty Inc (NASDAQ:ULTA), one of specialty retail’s shining stars, also had a negative year in 2017. The coming year ought to be better for both companies.

While the jury is still out on whether the company can reignite sales, the lowering of the corporate tax rate from 35% to 21% should deliver about 36 cents per share in additional earnings.

The company’s biggest weakness has always been its level of debt — $1.8 billion or 75% of its market cap — so I’d look for some indication from SBH management that it is planning to deleverage its balance sheet.

If it does that, given its free cash flow generation, the sky’s the limit for its stock.

Stocks That Will Surprise in 2018: Bed Bath & Beyond (BBBY) Stocks That Will Surprise in 2018: Bed Bath & Beyond (BBBY)investorplace.com/wp-content/uploads/2017/04/bbbymsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2017/04/bbbymsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2017/04/bbbymsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2017/04/bbbymsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2017/04/bbbymsn-400×220.jpg 400w, investorplace.com/wp-content/uploads/2017/04/bbbymsn-116×64.jpg 116w, investorplace.com/wp-content/uploads/2017/04/bbbymsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2017/04/bbbymsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2017/04/bbbymsn-78×43.jpg 78w,https://investorplace.com/wp-content/uploads/2017/04/bbbymsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Mike Mozart via Flickr

It wasn’t a good year for Bed Bath & Beyond Inc. (NYSE:BBBY), down 44% in 2017. For that matter, it hasn’t been a good decade, losing 2% annually for long-time shareholders.

Eventually, the tide’s got to turn, doesn’t it?

Well, probably not if it keeps delivering woefully poor earnings results like Q3 2017. On December 20, it announced that sales were flat year over year at $3 billion, earnings per share were virtually halved from 85 cents a year earlier to 44 cents this year and comparable sales decreased marginally by 0.3%.

Despite the deterioration in its earnings, the company still generates significant free cash flow. It currently is valued at four times operating cash flow, its lowest level at any time in the past decade and less than half its industry peers.

Yes, the various banners it operates under have seen attrition in both gross and operating margins, yet it’s still expected to earn $3 per share in fiscal 2017.

At seven times earnings, there might not be a better value play than BBBY at the moment.

Stocks That Will Surprise in 2018: Tanger Factory Outlet Centers (SKT) Stocks That Will Surprise in 2018: Tanger Factory Outlet Centers (SKT)investorplace.com/wp-content/uploads/2017/03/sktmsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2017/03/sktmsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2017/03/sktmsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2017/03/sktmsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2017/03/sktmsn-400×220.jpg 400w, investorplace.com/wp-content/uploads/2017/03/sktmsn-116×64.jpg 116w, investorplace.com/wp-content/uploads/2017/03/sktmsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2017/03/sktmsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2017/03/sktmsn-78×43.jpg 78w,https://investorplace.com/wp-content/uploads/2017/03/sktmsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Shutterstock

Tanger Factory Outlet Centers Inc. (NYSE:SKT) is an owner of retail real estate focusing entirely on outlet centers. It owns 40 outlet centers in 22 states and another four in Canada. Together, these 44 outlet centers provide 15.3 million square feet for retailers to lease.

Interestingly, the company estimates that there are only 70 million square feet of quality outlet space in the U.S., suggesting Tanger has close to 20% of the country’s leasable outlet space.

That’s what Warren Buffett would call a wide-moat.

Conservatively financed, it has grown its enterprise value by 7.5% annually on a compounded basis since 2005. Also, it’s a prominent grower of its dividend, belonging to the S&P High Yield Dividend Aristocrat Index. In the past three years, it has grown its dividend by 12% annually.

Tanger is an income investor’s dream stock.

Since going public in 1993, it’s never had an occupancy rate lower than 96%, providing investors with considerable comfort that cash flow isn’t going to disappear overnight.

As CEO Steven Tanger likes to say:

“In good times people love a bargain, and in tough times, people need a bargain.”

That’s what makes its business model so strong.

Trading at levels not seen since 2011, I like SKT’s chances in 2018.

Stocks That Will Surprise in 2018: Acuity Brands (AYI) Stocks That Will Surprise in 2018: Acuity Brands (AYI)investorplace.com/wp-content/uploads/2017/08/ayimsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2017/08/ayimsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2017/08/ayimsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2017/08/ayimsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2017/08/ayimsn-400×220.jpg 400w, investorplace.com/wp-content/uploads/2017/08/ayimsn-116×64.jpg 116w, investorplace.com/wp-content/uploads/2017/08/ayimsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2017/08/ayimsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2017/08/ayimsn-78×43.jpg 78w,https://investorplace.com/wp-content/uploads/2017/08/ayimsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Shutterstock

I recommended Acuity Brands, Inc. (NYSE:AYI) stock on two occasions in 2017.

The first time was in August when I picked Acuity Brands and seven other stocks whose share prices added up to $2,000. Although Acuity is known for its lighting solutions, the company is making a big push into the Internet of Things and while it’s early in that expansion, I can see it being just as successful.

In fiscal 2017 (August 31 year-end), Acuity earned $7.43 per share, 12% higher than a year earlier. With very little debt and steady free cash flow, it has the financial flexibility to drive future growth.

At the end of November, I suggested investors buy its stock on the dip around $160. It has since climbed 10% and is poised to move higher in 2018 on strengthening margins.

Long-term, Acuity might be one of the best stocks to buy on a significant downturn in its stock price.

Stocks That Will Surprise in 2018: Boardwalk Pipeline Partners (BWP)

 

testinvestorplace.com/wp-content/uploads/2016/06/pipelinemsn-1-300×165.jpg 300w, investorplace.com/wp-content/uploads/2016/06/pipelinemsn-1-55×30.jpg 55w, investorplace.com/wp-content/uploads/2016/06/pipelinemsn-1-200×110.jpg 200w, investorplace.com/wp-content/uploads/2016/06/pipelinemsn-1-162×88.jpg 162w, investorplace.com/wp-content/uploads/2016/06/pipelinemsn-1-65×36.jpg 65w, investorplace.com/wp-content/uploads/2016/06/pipelinemsn-1-100×55.jpg 100w, investorplace.com/wp-content/uploads/2016/06/pipelinemsn-1-91×50.jpg 91w, investorplace.com/wp-content/uploads/2016/06/pipelinemsn-1-78×43.jpg 78w, investorplace.com/wp-content/uploads/2016/06/pipelinemsn-1-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Maciek Lulko (Modified)

Like a lot of oil-related businesses, Boardwalk Pipeline Partners, LP (NYSE:BWP) had a dreadful year, down 23%, erasing a significant portion of the gains it made in 2016.

The operator of natural gas pipelines and storage facilities — in 2016, it transported 2.3 trillion cubic feet of natural gas and liquids — has been on a roller coaster ride the past few years. If oil and gas prices don’t remain where they currently are, investors can expect continued volatility in its stock price.

However, lower corporate and personal income taxes could result in a more buoyant economy. When people and businesses are more confident, they spend more money. Often, that spending comes in the form of automobile travel, which could put upward pressure on oil prices due to increased demand.

For those who aren’t so sure that oil and gas prices can go any higher, you might want to invest in Loews Corporation (NYSE:L), a holding company run by the Tisch family, which own 51% of Boardwalk’s stock.

Over the past five years, Loews’ stock has significantly outperformed BWP — 4% annually vs. -9% — although neither did anywhere close to the S&P 500.

In June 2017, I suggested that Loews take BWP private. Perhaps it will happen in 2018.

Stocks That Will Surprise in 2018: General Electric (GE) Stocks That Will Surprise in 2018: General Electric (GE)investorplace.com/wp-content/uploads/2017/10/gemsn-300×150.jpg 300w, investorplace.com/wp-content/uploads/2017/10/gemsn-768×384.jpg 768w, investorplace.com/wp-content/uploads/2017/10/gemsn-60×30.jpg 60w, investorplace.com/wp-content/uploads/2017/10/gemsn-200×100.jpg 200w, investorplace.com/wp-content/uploads/2017/10/gemsn-400×200.jpg 400w, investorplace.com/wp-content/uploads/2017/10/gemsn-116×58.jpg 116w, investorplace.com/wp-content/uploads/2017/10/gemsn-100×50.jpg 100w, investorplace.com/wp-content/uploads/2017/10/gemsn-78×39.jpg 78w, investorplace.com/wp-content/uploads/2017/10/gemsn-800×400.jpg 800w,https://investorplace.com/wp-content/uploads/2017/10/gemsn-170×85.jpg 170w” sizes=”(max-width: 950px) 100vw, 950px” />Source: Shutterstock

This last one must be considered the “Hail Mary” of the bunch. I don’t like General Electric Company (NYSE:GE) as a business or a stock because it’s squandered so much shareholder goodwill over the past 20 years by being the worst kind of industrial conglomerate, one that’s afraid of taking chances and is stuck in some time warp.

CNBC Mad Money host Jim Cramer, someone I generally respect, recently apologized to his loyal viewers for continuing to recommend GE stock despite its ongoing slide.

Cramer feels like GE could get it together under new CEO John Flannery. Therefore, he’s still not recommending investors sell the stock. I’m not as convinced. I believe GE’s business could be permanently broken.

In August, I predicted that GE stock would remain in the $20s for the foreseeable future. Since then, GE’s stock has dropped almost 30% on news the company’s problems are bigger than first thought.

That said, any obvious signs of life from GE as we make our way through 2018, should be good for a 5%-10% boost in its share price, perhaps more.

At these prices, GE could very well surprise in 2018.

As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.

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Yum! Brands, Inc. Stock Will Continue to Deliver as India Stores Double

The last time I checked on with Yum! Brands, Inc. (NYSE:YUM), the company had cashed out its China investments through a spin-off called Yum! China Holdings Inc (NYSE:YUMC), and presumably focusing more on the U.S. market.

Yum! Brands, Inc. Is Transforming Into a High-Growth Company Againinvestorplace.com/wp-content/uploads/2017/12/yummsn-55×30.png 55w, investorplace.com/wp-content/uploads/2017/12/yummsn-200×110.png 200w, investorplace.com/wp-content/uploads/2017/12/yummsn-162×88.png 162w, investorplace.com/wp-content/uploads/2017/12/yummsn-400×220.png 400w, investorplace.com/wp-content/uploads/2017/12/yummsn-116×64.png 116w, investorplace.com/wp-content/uploads/2017/12/yummsn-100×55.png 100w, investorplace.com/wp-content/uploads/2017/12/yummsn-91×50.png 91w, investorplace.com/wp-content/uploads/2017/12/yummsn-78×43.png 78w, investorplace.com/wp-content/uploads/2017/12/yummsn-170×93.png170w, investorplace.com/wp-content/uploads/2017/12/yummsn.png 728w” sizes=”(max-width: 300px) 100vw, 300px” /> Source: Shutterstock

It’s been almost 14 months since that separation; how’s that going?

Earlier this month, Yum China was downgraded to sell by Zacks, as Yum! itself focuses on developing its three restaurant chains — Kentucky Fried Chicken, Pizza Hut, and Taco Bell – selling franchises and looking for efficiencies.

This is akin to the McDonald’s Corporation (NYSE:MCD) strategy under its CEO, Steve Easterbrook. Most costs, and risks, lie in running the restaurants, so find strong owners and make money. McDonald’s is up 41% this year.

So, YUM is now a great American company with minimal foreign exposure, right? Wrong.

On to India

Yum! has apparently decided that what India, the land of naan and paratha, needs more than anything else is pizza. Pizza Hut is operating in India through franchisees, and now plans to double its India store count to 700 over the next five years. 

This is a lower-risk strategy than building and owning stores. By using key corporate franchisees — Deyvani International and Sapphire Foods India — the company gets to keep the higher-profit position of franchisor while keeping ears to the ground about local tastes.

YUM stock is up 30% this year and the strategic shift is already showing up on the bottom line. For the quarter ending in September, Yum! earned $418 million, $1.18 per share, on revenue of $1.44 billion. Revenues are flat, but margins have skyrocketed, with almost 30 cents on every dollar hitting the net income line. Net margins have nearly doubled from a year ago.

CEO Greg Creel, an Australian, said he wants his franchisees to try different things, believing that with 44,000 stores “you can do something in one restaurant” that, if it works, can become something big for the parent. A lot of what Creel is trying is at Pizza Hut, which has been lagging the pizza group but is getting new investment in marketing and delivery.

Universally Loved

The reaction among analysts to the new strategy has been positive. None of the 25 analysts currently following the stock are advising it be sold.

InvestorPlace writers are absolutely effusive.

Luke Lango calls Yum! “a solid long-term holding with huge margin growth drivers.” James Brumley says it is “worth every penny” an investor puts into it after a third quarter earnings beat that sent the stock up 6%. Lawrence Meyers says “everyone needs” what the company is selling , although my own waistline would like fewer pizzas and fried foods.

The Bottom Line on YUM Stock

Yum! has chosen the road to high profit growth at minimal risk. That’s proving positive for YUM stock investors.

That road shows that franchising stores is more profitable than running them, so long as you control your franchisors enough to maintain quality.

Yum! found it had control problems in China, and decided to exit the market, but that does not mean it’s giving up on international opportunities, as its expansion in India proves. In fact, Yum! has about 9,000 restaurants outside the U.S.

With U.S. growth remaining slow, and more people falling into the lower and middle class rungs of society, fast food is the only food people are going to eat outside the home. Our family was in this situation for many years. There’s nothing wrong with it.

Nothing wrong with making money off it by buying YUM stock, either.

Dana Blankenhorn is a financial and technology journalist. He is the author of the historical mystery romance The Reluctant Detective Travels in Time, available now at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing, he did not hold a position in any of the aforementioned securities.

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Yum! Brands, Inc. Stock Will Continue to Deliver as India Stores Double

The last time I checked on with Yum! Brands, Inc. (NYSE:YUM), the company had cashed out its China investments through a spin-off called Yum! China Holdings Inc (NYSE:YUMC), and presumably focusing more on the U.S. market.

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It’s been almost 14 months since that separation; how’s that going?

Earlier this month, Yum China was downgraded to sell by Zacks, as Yum! itself focuses on developing its three restaurant chains — Kentucky Fried Chicken, Pizza Hut, and Taco Bell – selling franchises and looking for efficiencies.

This is akin to the McDonald’s Corporation (NYSE:MCD) strategy under its CEO, Steve Easterbrook. Most costs, and risks, lie in running the restaurants, so find strong owners and make money. McDonald’s is up 41% this year.

So, YUM is now a great American company with minimal foreign exposure, right? Wrong.

On to India

Yum! has apparently decided that what India, the land of naan and paratha, needs more than anything else is pizza. Pizza Hut is operating in India through franchisees, and now plans to double its India store count to 700 over the next five years. 

This is a lower-risk strategy than building and owning stores. By using key corporate franchisees — Deyvani International and Sapphire Foods India — the company gets to keep the higher-profit position of franchisor while keeping ears to the ground about local tastes.

YUM stock is up 30% this year and the strategic shift is already showing up on the bottom line. For the quarter ending in September, Yum! earned $418 million, $1.18 per share, on revenue of $1.44 billion. Revenues are flat, but margins have skyrocketed, with almost 30 cents on every dollar hitting the net income line. Net margins have nearly doubled from a year ago.

CEO Greg Creel, an Australian, said he wants his franchisees to try different things, believing that with 44,000 stores “you can do something in one restaurant” that, if it works, can become something big for the parent. A lot of what Creel is trying is at Pizza Hut, which has been lagging the pizza group but is getting new investment in marketing and delivery.

Universally Loved

The reaction among analysts to the new strategy has been positive. None of the 25 analysts currently following the stock are advising it be sold.

InvestorPlace writers are absolutely effusive.

Luke Lango calls Yum! “a solid long-term holding with huge margin growth drivers.” James Brumley says it is “worth every penny” an investor puts into it after a third quarter earnings beat that sent the stock up 6%. Lawrence Meyers says “everyone needs” what the company is selling , although my own waistline would like fewer pizzas and fried foods.

The Bottom Line on YUM Stock

Yum! has chosen the road to high profit growth at minimal risk. That’s proving positive for YUM stock investors.

That road shows that franchising stores is more profitable than running them, so long as you control your franchisors enough to maintain quality.

Yum! found it had control problems in China, and decided to exit the market, but that does not mean it’s giving up on international opportunities, as its expansion in India proves. In fact, Yum! has about 9,000 restaurants outside the U.S.

With U.S. growth remaining slow, and more people falling into the lower and middle class rungs of society, fast food is the only food people are going to eat outside the home. Our family was in this situation for many years. There’s nothing wrong with it.

Nothing wrong with making money off it by buying YUM stock, either.

Dana Blankenhorn is a financial and technology journalist. He is the author of the historical mystery romance The Reluctant Detective Travels in Time, available now at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing, he did not hold a position in any of the aforementioned securities.

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Boeing Still Best 2017 DJIA Stock

Boeing Co.’s (NYSE: BA) share price added about 2.1% this past week to keep a firm grip on its position as the best performing stock among the 30 that make up the Dow Jones Industrial Average (DJIA). Shares gained $5.50 last week to boost the year-to-date gain to more than 74%.

Of the three other stocks closest to Boeing’s yearly gain, Caterpillar Inc. (NYSE: CAT) rose by about 3% to a gain of nearly 53%, Apple Inc. (NASDAQ: AAPL) dropped more than 2% to close the week up about 48% for the year to date and McDonald’s Corp. (NYSE: MCD) tacked on 2.2% to bring its annual gain to 42%.

For the month of November, Boeing stock added about $13.00, a gain of 5%. The Dow’s big gainer last month was Wal-Mart Stores Inc. (NYSE: WMT), up nearly 11% after posting solid earnings and raising fourth-quarter and full-year guidance.

Boeing’s week was relatively quiet compared to the flurry of activity and big orders that flowed from the Dubai Air Show. As of November 28, Boeing reports that it has taken 662 net new orders in 2017. The 737 family accounts for 505 of those orders, and the 787 family chalks up 88 orders for the year to date.

The coming week could be another quiet one ahead of the company’s board of directors meeting on December 11. Analysts at Wells Fargo Securities have predicted that Boeing will announce a dividend increase of 10% to 15% following the meeting.

Boeing raised its dividend last December to its current level of $1.42 ($5.68 annualized). That was a 30% jump over the prior year’s rate, and it could be that Wells Fargo is being conservative about an increase for the coming year.

The dividend yield on Boeing stock at Friday’s closing price is 2.11%. Not exactly a stunning number, but when the share price appreciation is added in, the return to shareholders over the past 12 months is around 76%, not including share buybacks.

Cowen analyst Cai von Rumohr put a 12-month price target of $320 a share on Boeing for a potential upside of nearly 18%. Even if Boeing doesn’t boost its dividend, that’s still a 20% return on the stock in a year. Not bad.

Boeing stock closed at $271.38 on Friday, down nearly 2% on the day, in a 52-week range of $150.02 to $278.73. The high was posted Friday morning. The 12-month consensus price target is $285.21, some $4.17 higher than last week’s target. The low price target is $203 and the high is $350.

ALSO READ: General Electric Still 2017’s Worst DJIA Stock

Rumors Swirl That Elon Musk Created Bitcoin as Cryptocurrency Climbs Near $10,000

As Bitcoin prices climb closer to $10,000, investors are ramping up speculation on who exactly created the digital currency.

Now, there’s a new theory that Tesla Inc. (Nasdaq: TSLA) founder and CEO Elon Musk is the creator of Bitcoin.

Elon Muskmoneymorning.com/wp-content/blogs.dir/1/files/2017/11/miner-businessman-working-on-digital-tablet-75×50.jpg 75w” sizes=”(max-width: 300px) 100vw, 300px” title=”Elon Musk” />A former intern for Musks’ other company, SpaceX, believes the visionary CEO also made Bitcoin in his spare time, according to CryptoCoinNews.com.

The intern suggests Musk’s mastery of computer programming language and deep understanding of cryptography and economics could be evidence why he is the true creator.

While the debate rages on about who really created Bitcoin, we’re focusing on the massive price movements…

Bitcoin’s valuation of $160 billion has matched the market capitalization of General Electric Co. (NYSE: GE), a firm with nearly 300,000 employees and roughly $120 billion in annual revenue.

Below is a recap of the top cryptocurrency prices at 11:00 a.m. EST

Bitcoin: $9.615.21, +2.41% Ethereum: $475.20, +3.70% Bitcoin Cash: $1,646.71, +1.36% Ripple: $0.252, +0.85% Bitcoin Gold: $364.79, +6.39% Dash: $628.43, +6.39% Litecoin: $89.65, +4.73%

Now that we know all of today’s price movements, here’s what has been moving these cryptocurrencies…

Cryptocurrency Markets Today

On Monday, the market capitalization of the global cryptocurrency sector topped $300 billion.

Bitcoin’s market capitalization comprised 53.5% of the total crypto market capitalization.

Top performers from the largest 50 cryptocurrencies by market capitalization included Nxt (Up 40.46%), Cardano (up 21.93%), Veritaseum (up 20.65%), IOTA (up 19.98%), DigixDAO (up 18.13%), and Steem (up 15.12%).

The worst performers from the top 50 largest cryptocurrencies by market capitalization included Power Ledger (down -8.12%), Hshare (down -4.63%), Decred (down -3.95%), BitConnect (down -3.62%), and Bytecoin (down -3.62%).

Bitcoin Is Now Worth More Than The Walt Disney Company

The Bitcoin market capitalization hit $160.88 billion. At this level, Bitcoin is now worth more than blue-chip companies like International Business Machines Corp. (NYSE: IBM), McDonald’s Corp. (NYSE: MCD), and The Walt Disney Co. (NYSE: DIS).

Bitcoin is also ranked as the 30th-largest currency on earth, surpassing the likes of local currencies in Singapore and the United Arab Emirates.

Must See:CoinDesk’s Top 5 Analysts to Follow in the Cryptocurrency Market

In an interview with CNBC, Nuveen Asset Management’s Chief Equity Strategist, Bob Doll, said that Bitcoin has seen “an amazing run,” but he believes that the current price point “feels speculative.”

Ethereum Hovers Near All-Time High

The Ethereum price hit an all-time high over the weekend of $488. The rally coincided with calls from hedge fund manager and cryptocurrency enthusiast Mike Novogratz’s prediction that Ethereum would hit $500 by the end of the year.

On Thanksgiving, Ethereum topped $400 for just the second time ever. The rally has been fueled by increasing interest in the underlying blockchain.

Recently, Hewlett Packard Enterprise Co. (NYSE: HPE) demonstrated a blockchain-based application that uses Ethereum’s protocols to operate a Roomba vacuum cleaner.

Bitcoin Gold Becomes Fifth-Largest Cryptocurrency

Bitcoin Gold has retreated from its Nov. 24 record high of $413.74. Despite falling to just above $360, Bitcoin Gold maintains a market capitalization over $6.06 billion.

Bitcoin Gold experienced a surge in price earlier last week after exchanges Bithumb and Bitfinex both introduced BTG trading pairs to their cryptocurrency options.

Stocks Continue to Surge Thanks to Bitcoin Mining

Shares of NVIDIA Corp. (Nasdaq: NVDA) hovered near an all-time high Monday thanks to surging demand for Bitcoin mining equipment.

RBC Capital Markets analyst Mitch Steves predicted that Bitcoin’s surge would fuel another round of increased sales in graphics cards (GPUs).

“We are flagging this now, as the payback period has decreased materially which may lead to continued strength in GPU sales related to cryptocurrency mining,” Steves wrote in a research note.

Up Next: Never Miss a Cryptocurrency Opportunity Again

Did you know we have a free research service that finds the most profitable opportunities in cryptocurrencies today? It gives you real-time recommendations and price updates on only the best ways to make money now.

Here’s everything you need to know.

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