Monthly Archives: September 2017

These Three Fast-Growing Markets Need to Be on Your Radar Today

If you want to make big gains in the market, you need to invest in growth.   Just consider the gains you could have made during the U.S. consumer boom in the 1950s…   From 1950 to 2015, U.S. gross domestic product (GDP) per capita rose 690%, adjusted for inflation.   During that time, the S&P 500 soared 11,700% (not including reinvested dividends).   Over the course of this boom, a handful of individual stocks made many regular investors a fortune – and turned some into millionaires. For example…  

•   $1,000 invested in oil titan Standard Oil (Exxon) in 1950 would have become $2.4 million by 2016
•   $1,000 invested in tobacco giant Philip Morris (PM) in 1957 would have become $5.5 million by 2007
$1,000 invested in soda behemoth Coca-Cola (KO) in 1962 would have become $221,445 by 2016
•   $1,000 invested in fast-food icon McDonald's (MCD) in 1965 would have become $4.1 million by 2016

That's the power of investing in growth early on…   Right now, we're seeing massive growth in China's middle class.   But three other fast-growing markets likely aren't on your radar: Vietnam, Bangladesh, and India.   According to a recent report by professional-services firm PricewaterhouseCoopers (PwC), these three markets could be the fastest-growing economies through 2050 – averaging real economic growth of around 5% a year.   That might not sound like much. But consider that the U.S., the U.K., and Japan are all expected to grow less than 2% a year during the same period.  
Thanks to this growth, India is expected to be the second-largest economy in the world by 2050 – eclipsing the U.S. and only finishing behind China (which will inevitably see its growth rate decline from current levels). Vietnam is forecast to move from the 32nd-largest economy to the 20th-largest. And Bangladesh could move from the 31st-largest economy to the 23rd-largest.   Economic growth comes from two sources: population growth and efficiency growth. (Broadly speaking, economic growth is a function of the number of workers in an economy and their productivity.)   Shifting demographics drive economic growth. While population growth is falling in many major economies like China and Japan (reducing the labor pool and damaging productivity over the long term), it is forecast to rise in many other parts of the world. Countries in Southeast Asia in particular have good reason to be optimistic… And changing demographics in this region will likely boost economic growth over the next several decades.   For economies, productivity is often measured as the percent increase in GDP per hour worked. This can come from people working more efficiently – for example, through technological innovation. Higher productivity means a growing economy.   GDP in these countries will also grow thanks to their youthful and fast-growing working-age populations, as shown in the chart below. More young workers boost output.  
The easiest way to invest in each of these countries is through exchange-traded funds ("ETFs").   For Bangladesh, there's the db x-trackers MSCI Bangladesh IM Index UCITS Fund (XBAN on the London Stock Exchange). This fund tracks the performance of the MSCI Bangladesh Investable Market Total Return Net Index, which is designed to reflect the performance of a broad range of companies in Bangladesh.   For India, one ETF is the iShares MSCI India Fund (INDA). This fund tracks the MSCI India Index, which measures the performance of companies whose market capitalizations represent the top 85% of the Indian equities market.   In Vietnam, some ETFs badly underperform their benchmark index (known as tracking error). This is a particular problem there because the government (through state-owned enterprises) owns most of the shares in many publicly traded companies. This makes shares of those companies very illiquid (they don't trade much) and very volatile. And that makes it difficult for fund managers to accurately replicate the performance of the index.   If you do want to invest in a Vietnam ETF, one option is the VanEck Vectors Vietnam Fund (VNM). This fund tracks the performance of the MVIS Vietnam Index. Companies in this fund must be incorporated in Vietnam, generate half their income in Vietnam, or have half their assets in Vietnam. Another option in Vietnam is to invest in actively managed funds, like the AFC Vietnam Fund (AFCVIET), an open-ended fund that focuses on small- to medium-sized companies in the country.   Good investing,   Kim Iskyan
Editor's note: Most people will never experience the thrill of being the first to invest in a market. But with Kim's newest publication, International Capitalist, you can get in on high-upside opportunities in exciting markets around the world that could earn high triple-digit returns within months. This service is launching for the first time today… Click here to learn more.

Najarian Brothers See Unusual Options Activity In United Continental And UPS

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On CNBC's "Fast Money Halftime Report", Pete Najarian spoke about unusually high options activity in United Parcel Service, Inc. (NYSE: UPS). He said that options traders are buying the January 2020, 140 strike calls. Around 20,000 call options were traded in the first half of the session and traders were paying $3.20 for them. The trade breaks even at $143.20 or 21.12 percent above the current market price. Pete Najarian owns shares of UPS and he thinks the stock is going much higher.

Jon Najarian said that options traders were buying the November 62.50 calls in United Continental Holdings Inc (NYSE: UAL) and they were selling the out of the money puts to finance the purchase of calls. Jon Najarian followed the trade and he is planning to hold the position for two weeks to a month.

What Trump’s Tax Plan Will Do for Businesses, in 2 Charts

Most people know that U.S. President Donald Trump’s tax plan cuts corporate taxes to spur economic growth.

But how much the corporate tax rate will be cut is a much more complicated question.

The president has pushed for a corporate tax rate of 15%, which, on the surface, seems like a dramatic decrease from the current rate of 35%. This kind of cut would incentivize companies to return to the United States, which would create jobs and bolster the economy.

This move could do wonders for economic growth. Yet, some companies would end up paying more in taxes, even as their official tax rates were cut in half.

If that’s not confusing to you, it should be.

Here’s how the corporate tax really works and why many corporations won’t see much of a tax break at all…

Why Our Corporate Tax Rate Isn’t Actually 35%

Last week (Sep. 6), President Trump tweeted that the United States is the “highest taxed nation in the world.”

And he’s right:

Trump's tax plan

When you add the federal government’s 35% tax rate to state and local taxes, American companies bear the greatest tax rate in the world, at 38.9%.

But in reality, few companies pay that rate.

That’s because corporations exploit loopholes, deductions, and tax credits, resulting in a tax rate that is much lower than 38.9%. When you examine the actual tax rate that American companies pay (called the “effective tax rate”), we align much more closely with the rest of the world.

At 18.6%, our effective tax rate is only 3.6% away of Trump’s 15% goal and lower than Speaker of the House Paul Ryan’s goal of 22.5%.

And that’s why many companies may find themselves on the losing end of Trump’s tax plan…

How Trump’s Tax Plan Could Raise Taxes for Some Companies

Many companies don’t pay corporate taxes at all.

According to the Government Accountability Office (GAO), nearly 20% of large American companies that reported profits in 2012 didn’t pay any corporate income tax.

And according to a March 9 Institute on Taxation and Economic Policy (ITEP) report, one-hundred of the 258 corporations studied “paid zero or less in federal income taxes in at least one year from 2008 to 2015.”

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ITEP also reported that 18 of the companies paid no federal tax at all over that eight-year period. 48 of the companies had an effective tax rate of 10% or less.

And if President Trump gets his way, these companies’ tax-free days are over.

That’s because paying for massive tax cuts means eliminating many of the legal tax loopholes that these companies take advantage of. So although Trump’s 15% target is lower than the 18.6% effective tax rate, it’s a lot higher than the 0% and 10% rates that so many companies have enjoyed in recent years.

And that’s if Trump gets everything he wants.

Treasury Secretary Steven Mnuchin said on Tuesday (Sept. 12), “I don’t know if we’ll be able to achieve [15% corporate tax], given the budget issue,” according to The Hill.

And White House Press Secretary Sarah Sanders said, “the president is prepared to push for as low of a rate as we can get,” according to Reuters.

That doesn’t sound terribly promising.

If we get Speaker Ryan’s 22.5% tax rate instead, but still eliminate many of the tax deductions and credits that so many companies have used to lower their rates, we might even see an increase in the effective tax rate across the board.

An increase in the effective tax rate would not just be bad for American companies; it could be bad for the American people, as well.

As Money Morning Chief Investment Strategist Keith Fitz-Gerald says, “if you treat money punitively, it leaves.”

Just look at Inc. (Nasdaq: AMZN). After Seattle passed a 2.25% income tax on city residents making more than $250,000 a year, Amazon announced that it would be opening a second company headquarters somewhere else.

Companies will go where their money is treated best, which is why we at Money Morning focus on CEOs, not on politicians.

Regardless of how Trump’s tax plan eventually shakes out for American businesses, there’s no reason you can’t profit from the companies who know how to make money in any environment.

Take Amazon, for example. Keith says Amazon’s decision “is akin to a second ‘public offering,’ which means you’ve got a chance to tap into a move being made that sets the company up for another decade or more of outrageous profits for investors.”

If you’re looking to profit from this e-commerce giant, there are multiple ways to do so. You could accumulate shares of the $990 stock one-by-one, as you can afford them. Or, for a cheaper option, you can buy a 26(f) fund like the T. Rowe Price Blue Chip Growth (TRCBX), of which Amazon is a primary holding.

And that’s just one of ten “26(f) programs,” which give investors the opportunity to tap into huge monthly income – $2,000… $5,000… or more – every month for the rest of their lives. Click here to learn how it works…

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online stock broker

Costco (NASDAQ:COST) continues to squander an opportunity by operating as if the internet has not become a major factor in retail.

The company has proven resilient in the face of digital competitors led by Amazon (NASDAQ:AMZN). While other retailers are shuttering stores, losing sales, and generally fighting for survival, the warehouse chain has not had that problem.

Costco had a decent fiscal 2016, with comparable-store sales up 4% globally and 3% in the United States when the impact of falling gasoline prices is factored out. In addition, net income for the year was roughly the same as 2015, coming in at $2.35 billion, or $5.33 per diluted share, compared to $2.38 billion, or $5.37 per diluted share last year.

Those numbers dropped a little in the first quarter of 2017, which covers the period ending November 20. During Q1, comparable-store sales were up just 1% for the U.S., with the total company posting a 2% gain. Net income, however, came in a bit better, with the company reporting $545 million, or $1.24 per diluted share, compared to $480 million, or $1.09 per diluted share, in Q1 of fiscal 2017.

online stock broker: Leucadia National Corporation(LUK)

Advisors’ Opinion:

  • [By Dan Caplinger]

    Leucadia National (NYSE:LUK) is a difficult business for many investors to understand. The combination of the Jefferies Group financial services company, the National Beef meat processing and supply company, and plenty of other smaller investments present a challenge for those seeking to know the ins and outs of what affects Leucadia’s results. In general, though, conditions in the financial industry have been more volatile than the rest of the business, and Jefferies, therefore, plays a bigger role in how the overall company does.

  • [By Ben Levisohn]

    Then there were financial results released by Jefferies, a unit of Leucadia National (LUK). Its results are often seen as a harbinger for the big U.S. banks, and the results “appear mixed,” according to JMP analyst Devin Ryan. He explains:

  • [By Ben Levisohn]

    Lee offers 22 stocks that could benefit from the correlation trade: Western Digital (WDC), Xerox (XRX), First Solar, Ford Motor, Best Buy (BBY), PulteGroup (PHM), AutoNation (AN), Textron (TXT), Jacobs Engineering Group (JEC), Mosaic, BB&T (BBT), Fifth Third Bancorp (FITB),Loews (L), Regions Financial (RF), KeyCorp (KEY), Comerica (CMA), Leucadia National (LUK), Zions Bancorp (ZION), Valero Energy (VLO), Marathon Oil, Cardinal Health (CAH), and Pepco Holdings (POM).

  • [By Ben Levisohn]

    We delved into Kraft Heinz’s (KHC) earnings beat, and explained the impact of Leucadia National’s (LUK) investment in National Beef on its earnings.

  • [By Michael Hooper]

    When compared with similar companies, Berkshire Hathaway carries a premium over Markel (NYSE: MKL  ) , valued at 1.15 times book value and a 20 forward P/E ratio; and Leucadia National (NYSE: LUK  ) , valued at 1.10 times book value and a 7.16 trailing P/E.

online stock broker: Ohr Pharmaceuticals, Inc.(OHRP)

Advisors’ Opinion:

  • [By Lisa Levin]

    Shares of OHR Pharmaceutical Inc (NASDAQ: OHRP) were down 23 percent to $1.95 after the company reported a proposed public offering of common stock and warrants.

  • [By Lisa Levin]

    OHR Pharmaceutical Inc (NASDAQ: OHRP) was down, falling around 14 percent to $0.663. Ohr Pharma reported an offering common stock & warrants.


online stock broker: CTI BioPharma Corp.(CTIC)

Advisors’ Opinion:

  • [By Ashley Moore]

    Here is a list of the top 10 best small-cap stocks based on price gains per share so far in 2017:

    Company (Ticker)Price per Share% Change AquaBounty Technologies Inc. (Nasdaq: AQB)$14.338,646.99%Rennova Health Inc. (Nasdaq: RNVA)$3.133,333.73%China Gengsheng Minerals Inc. (OTCMKTS: CHGS)$0.021,718.18%Sunshine Heart Inc. (Nasdaq: SSH)$3.851,071.43%CTI BioPharma Corp. (Nasdaq: CTIC)$4.30991.76%Catalyst Biosciences Inc. (Nasdaq: CBIO)$6.22853.85%TearLab Corp. (Nasdaq: TEAR)$4.20707.85%Pulmatrix Inc. (Nasdaq: PULM)$3.86566.10%Real Goods Solar Inc. (Nasdaq: RGSE)$1.43498.75%Calithera Biosciences Inc. (Nasdaq: CALA)$11.70281.54%

online stock broker: Meredith Corporation(MDP)

Advisors’ Opinion:

  • [By Douglas A. McIntyre]

    Meredith Corp. (NYSE: MDP), the publishing, database and television station owner, has been described in several media reports as the most likely buyer of Time Inc. (NYSE: TIME). However, there are reports that the talks have stalled over valuation, which many experts believe will need to be above $20 a share to get the approval of Time’s board.

  • [By Jon C. Ogg]

    Meredith Corp. (NYSE: MDP) was maintained as Hold but the price target was raised to $65 (versus a $62.75 close) at Benchmark.

    Norfolk Southern Co. (NYSE: NSC) was downgraded to Underperform from Sector Perform at RBC Capital Markets.

Top 5 Bank Stocks For 2018

Executives at Deutsche Bank AG are contemplating dramatic options for the German lender, including selling all or part of a key business, a sign of growing pressure to speed up a flagging overhaul.

This weekend, senior executives are meeting to debate some of these options, according to people familiar with the plans. One has already been floated: a merger with Germany’s second-largest bank by market value, Commerzbank AG, the people said. Deutsche Bank and Commerzbank held preliminary discussions about a tie-up in August, before concluding last week it wasn’t viable.

Chief Executive John Cryan, who was named co-CEO in July 2015, has set out a long-term plan of shrinking Deutsche Bank and cutting costs. But the merger discussions and the weekend summit signify that the bank may not have the luxury of a drawn-out revamp. On Wednesday, Mr. Cryan found himself on stage at a financial conference in Frankfurt batting back speculation about a merger.

Top 5 B ank Stocks For 2018: McKesson Corporation(MCK)

Advisors’ Opinion:

  • [By Ben Levisohn]

    Clinton 15 stock basket (DBUSCLNT): UnitedHealth Group (UNH), Humana (HUM), McKesson (MCK), Aecom (ACM), Quanta Services (PWR), ExxonMobil (XOM), Alcoa (AA), NextEra Energy (NEE), Cree (CREE), First Solar (FSLR), Facebook (FB), Netflix (NFLX), Prudential Financial (PRU), Citigroup (C), Union Pacific (UNP).

  • [By Ben Levisohn]

    Leerink’s David Larsen and Matt Dellelo traces today’s big gain to Amerisource’s big drop following McKesson’s (MCK) earnings last week:

  • [By Lisa Levin]

    In trading on Friday, healthcare shares fell by 1.77 percent. Meanwhile, top losers in the sector included McKesson Corporation (NYSE: MCK), down 24 percent, and Novo Nordisk A/S (ADR) (NYSE: NVO), down 13 percent.

Top 5 Bank Stocks For 2018: NanoString Technologies, Inc.(NSTG)

Advisors’ Opinion:

  • [By Lisa Levin]

    NanoString Technologies Inc (NASDAQ: NSTG) was down, falling around 21 percent to $18.06 after the company issued weak revenue forecast for FY2016.

Top 5 Bank Stocks For 2018: Ascent Capital Group, Inc.(ASCMA)

Advisors’ Opinion:

  • [By Ian Wyatt, Publisher & Chief Investment Strategist, Wyatt Investment Research]

    Both of these stocks are overlooked, undervalued, and cash flow machines. The companies are Ascent Capital Group (ASCMA) and Covanta Holdings (CVA).

Top 5 Bank Stocks For 2018: Cemex S.A.B. de C.V.(CX)

Advisors’ Opinion:

  • [By Lisa Levin]

    The industries that are driving the market today are:

    Cement: This industry gained 3.4 percent by 2:30 pm. The top stock within the industry was Cemex SAB de CV (ADR) (NYSE: CX), which gained 4.7 percent. Cemex’s PEG ratio is 0.16. Computer Peripherals: This industry rose 2.6 percent by 2:30 pm ET. The top performer in this industry was Identiv Inc (NASDAQ: INVE), which gained 13.5 percent. Identiv shares have climbed 44.83 percent over the past 52 weeks, while the S&P 500 index has increased 8.61 percent in the same period. Internet Service Providers: The industry gained 2 percent by 2:30 pm. The top performer in this industry was TrueCar Inc (NASDAQ: TRUE) which gained 3.4 percent. TrueCar shares have jumped 60.90 percent over the past 52 weeks, while the S&P 500 index has increased 8.61 percent in the same period. Regional – Southwest Banks: This industry moved up 1.9 percent by 2:30 pm. The top performer in this industry was Veritex Holdings Inc (NASDAQ: VBTX), which rose 6.6 percent


    Cemex SAB de CV (CX) is very interesting at these levels as it seems the market is pricing in a stronger dollar (thereby reducing revenue) and thus lower growth.

Top 5 Bank Stocks For 2018: Ebix, Inc.(EBIX)

Advisors’ Opinion:

  • [By Peter Graham]

    Small cap insurance software stock Ebix Inc (NASDAQ: EBIX) reported Q1 2017 earnings before the market opened this morning. Q1 revenue rose 11% to $79.1 million and decreased 1% over Q4 2016 revenue of $80.0 million. The year over year revenue improvement reflected growth in the Companys Exchange, Risk Compliance, and Broker Solution channels. On a constant currency basis, Q1 revenue increased 10% to $78.5 millionwith theExchange channel continued to bethe Companyslargest -accounting for 67% of Q1 2017 revenues. Q1 2017 net income rose 19% to $26.4 million with the improvement principally reflected the benefit of higher revenues and operating income as compared to the same period last year.