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 »
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.
How’s that for a multi-bagger?
History is a poor predictor of future performance, so let’s more »
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?
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.
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 »
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
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’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
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 »
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 »
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 »
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.
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.
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 »
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 »
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 »
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:
Why it matters
Online marketers know the value of an email address. Every business from retail to B2B collects customer more »
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 »
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 »
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 »
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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