Jordan Wathen

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  • Can this old dog learn new tricks?

    By Jordan Wathen - August 6, 2013 | Tickers: MA, V, WU, XOOM

    Aging businesses tend to get complacent, especially when they have legacy monopoly power. Think airlines, phonebook publishers, and local newspapers. Before deregulation, the internet, and the rise of blogging, these three industries were some of the best in the world when it came to profitability.

    Technology is changing more than print media and business class flights. Entrenched money transfer services face new tech-savvy competitors who want a slice of a more »

  • Will Auto Finance Drive on to Bigger Profits?

    By Jordan Wathen - August 6, 2013 | Tickers: CACC, F

    One subset of the banking industry emerged from the financial crisis stronger than ever. In recent years, shares of specialty finance companies in the automotive space have been on a tear. One such company, Credit Acceptance Corp. (NASDAQ: CACC), is up nearly 500% in just the last five years.

    <img src="" />

    CACC data by YCharts

    How’s that for a multi-bagger?

    History is a poor predictor of future performance, so let’s more »

  • 1 REIT Penalizing Investors for a Higher Stock Price

    By Jordan Wathen - August 5, 2013 | Tickers: AMH, SBY

    It isn’t exactly rare for companies to go public before raking in the dough. Dot-coms do it all the time, listing on major exchanges with only a modest revenue stream in place. But it isn’t normal in the REIT space.

    Or is it?

    Just 8 months ago Silver Bay Realty Trust (NYSE: SBY) launched as a revenue-light, asset-heavy pure-play on single family homes. Now, American Homes 4 Rent more »

  • How Can This Card Company Compete?

    By Jordan Wathen - August 1, 2013 | Tickers: AXP, GDOT, WMT

    Mortgage banking may steal the headlines, but when it comes to growth stories in finance, it’s all about the unbanked -- people who don’t have a bank account. Traditional banking companies are turning to prepaid cards in an effort to grab new customers, and new fee income.

    Green Dot (NYSE: GDOT) was one of the first pre-paid debit card companies on the market, and now it’s one of more »

  • High Dividend Yields Come at a Price

    By Jordan Wathen - August 1, 2013 | Tickers: AINV, ARCC, CB | Editor's Choice

    We shouldn’t be surprised that high-yield stocks are popular in a low interest rate environment. When the best CDs offer little more than 1% for five-year maturities, 3% yielding blue chips look exemplary.

    Stocks yielding 10% or more look like the opportunity of a lifetime.

    But what are you giving up by chasing high-yield stocks? Are high-yield investors accepting too much risk just to get a taste of high more »

  • Small-Cap Tech Names Cheap After Earnings

    By Jordan Wathen - July 31, 2013 | Tickers: OUTR, STX

    Finding value in technology stocks isn’t easy. The industry is known for high multiples and very little forward visibility, which is why so many value investing legends like Warren Buffett or Seth Klarman typically avoid technology names.

    Sometimes Mr. Market delivers opportunity, however. These two small-cap tech stars deserve a bid, even after recent earnings disappointments.

    Investors dump hard drives

    In the fourth quarter, Seagate (NASDAQ: STX) beat on more »

  • Credit Card Companies Log an Excellent Quarter

    By Jordan Wathen - July 30, 2013 | Tickers: DFS, V

    When times are good, banking and financial services stocks are great investments.

    Two leading card companies just reported earnings and investors are impressed. Double-digit improvements in net income should keep these financial stocks headed higher.

    Discovering bigger profits

    Discover (NYSE: DFS) is a leading credit card company and closed-loop network operator. On Wednesday, it reported second-quarter earnings of $1.20 per share, beating a consensus estimate of $1.16, and more »

  • Zynga Is Toast Without Real Money Gaming

    By Jordan Wathen - July 29, 2013 | Tickers: FB, ZNGA

    Zynga’s (NASDAQ: ZNGA) change of heart may cost it its life. The company announced that it will no longer seek a real money gaming platform in the United States, choosing to focus on casual games to drive future performance.

    So what does this mean for Zynga?

    Why Zynga needs real money gaming

    I’ve been a critic of Zynga’s plans for real money gaming, but not because it more »

  • What's Behind the Meteoric Rise in Mobile Ads?

    By Jordan Wathen - July 28, 2013 | Tickers: FB, GOOG, YHOO

    When you buy a share of stock, you own a piece of a business. Smart investors take the time to understand what’s going on behind the scenes at the business level to understand the performance of the stock.

    Facebook’s (NASDAQ: FB) recent quarter was a blockbuster that sent shares up more than 30%. The company reported incredible improvements in mobile -- improvements that need some explaining.

    Behind Facebook’s more »

  • The War for TVs

    By Jordan Wathen - July 25, 2013 | Tickers: AAPL, GOOG, MSFT, NFLX

    The war for the TV is on. Everyone from Google (NASDAQ: GOOG) to Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT) want their slice of your TV time.

    Google just jumped ahead of the competition with a new product: Chromecast. The $35 device turns any HD TV into a light Smart TV capable of watching everything from YouTube videos to Netflix’s (NASDAQ: NFLX) streaming movies and digital content. Simply plug more »

  • Why This Company Will Lead in Mobile Payments

    By Jordan Wathen - July 22, 2013 | Tickers: AXP, DFS, EBAY, MA, OUTR

    The markets can punish even the best of companies.

    Last week eBay (NASDAQ: EBAY) reported earnings that missed on the top and bottom line. Net income came in at $822 million for the quarter, while revenue missed at just under $3.9 billion. Earlier this year, eBay laid out aggressive forecasts, seeking to enable some $300 billion in online commerce by 2015.

    The auction and payment company noted that its more »

  • How Much Do Mortgage Volumes Matter?

    By Jordan Wathen - July 22, 2013 | Tickers: JPM, WFC

    The housing market is central to an economic recovery.

    Some are worried that higher rates may slow the housing recovery, depress home prices, and ultimately threaten bank earnings as mortgage volumes slump. Let’s assess just how important mortgages are to the two largest mortgage originators.

    Wells Fargo

    The favorite bank of Berkshire’s Warren Buffett, Wells Fargo (NYSE: WFC) reported impressive earnings in the most recent quarter. The company more »

  • Bernanke’s Words Look Promising for mREITs

    By Jordan Wathen - July 19, 2013 | Tickers: AGNC, NLY

    As the world readies for a tapering of QE3, interest rates have adjusted for an eventual Fed exit. The 10-year US Treasury yield sits at 2.53%, up from 1.6% in May.

    <img alt="" src="" />

    10 Year Treasury Rate data by YCharts

    Long-dated maturities see the biggest change. Mortgage-backed securities took a beating on the Fed’s words of a taper, but yields have since come off their highs.

    Let’s examine more »

  • 3 Asset Managers Bankrolled by a Bull Market

    By Jordan Wathen - July 16, 2013 | Tickers: EV, FII, TROW

    Asset management is a highly-profitable business. The industry generates a profit on other people’s money, taking a percentage of managed funds as an advisory and administrative fee.

    In rising markets, asset managers can outperform. Rising asset prices mean higher fee revenue, since fees are assessed as a percentage of assets under management (AUM). Let’s look at three asset managers and assess their future and investment potential.

    T. Rowe more »

  • This Banking Behemoth Is Ready for Prime Time

    By Jordan Wathen - July 16, 2013 | Tickers: AXP, COF, DFS

    Ten years ago no one would have thought of Capital One (NYSE: COF) as a bank. It was a pure play on consumer credit with a focus on credit card lending. It had the backing of Wall Street, raising funds from the credit markets with debt issuances to make money available to its credit card customers.

    Fast forward 10 years and Capital One is a diversified operation spanning everything from more »

  • Did Google Just Kill Email Marketing?

    By Jordan Wathen - July 15, 2013 | Tickers: CTCT, GOOG, CRM

    A small, mostly unnoticed update to Google’s (NASDAQ: GOOG) Gmail service may have a lasting impact on email marketing.

    Google rolled out a fresh new design that divides your mailbox into three parts. A “primary” box, a “social’ inbox, and a tab for “promotions.”

    Here's the new view:

    <img alt="" src="" />

    Why it matters

    Online marketers know the value of an email address. Every business from retail to B2B collects customer more »

  • HARP 3.0 is the Bankers’ Saving Grace

    By Jordan Wathen - July 15, 2013 | Tickers: FNMA, FAF, FMCC

    Big banks are making a killing on refinance activity.

    Banks issue loans at one rate, then sell them to Fannie Mae (NASDAQOTCBB: FNMA) and Freddie Mac (NASDAQOTCBB: FMCC) at a lower interest rate. The spread between the two rates is an immediate profit for the banking system, at little or no risk to the bank.

    Refinance activity may slow as rates rise, putting a damper on lending profitability. One government more »

  • FedEx or UPS: A Rivalry Worthy of Your Attention

    By Jordan Wathen - July 15, 2013 | Tickers: AMZN, FDX, UPS

    Bill Ackman can’t stay out of the headlines. This week Reuters reported that the hedge fund manager may be raising a $1 billion fund to invest in FedEx (NYSE: FDX). While we can’t help but get excited about a big investment from a Wall Street titan, a big institutional investor isn't reason to make an investment. 

    Let's see what the two delivery giants have to offer more »

  • Amazon Reigns Victorious in Book Battle

    By Jordan Wathen - July 12, 2013 | Tickers: AMZN, AAPL, BKS, GOOG, MSFT

    The Department of Justice and 33 states claim a big legal victory, beating Apple (NASDAQ: AAPL) in a price fixing case for e-books.

    Apple sought to fix the price for e-books when it rolled out the iPad and its online bookstore. The company wanted a flat pricing model, one that would ensure Apple could compete with any distributor on price. That brought rising prices for consumers, as collusion removed the more »

  • Why I Like This Company's Expansion Plans

    By Jordan Wathen - July 12, 2013 | Tickers: JOSB, MW

    In a world where people leave the house in pajama pants and stained t-shirts, it's a bad time to be a tailor. It's a worse time to be a suit seller.

    Jos. A Bank (NASDAQ: JOSB) is fighting a decline in the suit and tie. Net earnings trends have turned negative, but a new plan may put its earnings growth back on track.

    Diagnosing a financial statement disease more »

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