Invest in Innovation

Daniel Cross - Contributor - Equities

There's been a huge global push for technological advancement for decades and it doesn't show any sign of slowing up. Beginning with Alan Turing, the creator of what became the modern computer to Bill Gates, the man who made the personal computer a ubiquitous household item, comes a new name: Elon Musk.

This innovator started off as co-founder of PayPal, an online payments system that's come to be accepted at virtually every online retailer. From that success, Musk has come to be associated with a number of technologically innovative companies like Tesla, SolarCity, and SpaceX.

Despite launching an electric car company -- something that had never had widespread success with other car manufacturers -- in an already saturated automotive market, Tesla has become the poster company for breakthrough technologies.

Electric car sales are exploding worldwide. From 2014 to 2015, the total number of electric cars on the road doubled and has now topped 1.3 million. Bloomberg New Energy Finance estimates that sales of electric vehicles will soar to 41 million by 2040 and make up around 35% of all light vehicle sales. While the US is currently in the lead with over 400,000 electric vehicles on the road according to the Centre for Solar Energy and Hydrogen Research Baden-Württemberg (ZSW), the rest of the world is blazing forward with more and more investment into sustainable technologies.

The Name Brand For Innovation

Tesla Motors (NASDAQ:TSLA) is a $26 billion electric auto manufacturer with vehicles on the road in over 30 countries. The company has a variety of vehicles available including a new crossover that has just been put into production. The company is a bit misleading however, although it does manufacture electric cars, the companies real value is its breakthrough lithium-ion battery technology.

Building on the company's battery technology, Tesla is constructing a gigafactory in Nevada that by 2020, will produce more lithium ion cells than the entire world's output in 2013. Battery life prior to Tesla was limiting for electric vehicles preventing them from gaining a foothold in the automotive industry, but new technologies have now expanded that range to more than 200 miles and is expected to increase in future years.

Despite Musk's penchant for innovation, Tesla's stock is one of the more heavily shorted with a short float of more than 30%. This makes the stock unusually volatile with a history of sharp ups and downs. Just take a look at its chart.

Notice the sudden dip and subsequent rise in February. While the 20-day moving average has fallen below the 50-day, it's beginning to mount a comeback – a possible bullish sign. Along with the positive MACD, this stock appears to have room to run.

Tesla isn't cash flow positive right now so it's difficult to place a hard value on it, but the company is expected to have positive earnings in the next 12 months. Over the past four quarters, Tesla has beaten estimates twice, but missed them twice as well.

As a volatile stock with volatile earnings, Tesla is a risky investment but comes with a high potential payoff. Based on next year's earnings and analyst price projections, this stock could be fairly valued at around $232 – a 15% gain.

Check back to see my next post!

Daniel Cross Contributor - Equities

Disclosure: This contributor does not own any stocks mentioned in this article. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from for their opinion.

This Healthcare Company Is In The Middle Of A Huge Turnaround

Daniel Cross - Contributor - Equities

Nothing excites investors more than a turnaround story. A company or stock that was down on its luck and has finally turned the corner is a feel-good play that's hard to ignore.

One company in the healthcare sector fits this definition perfectly. After soaring to new heights in the early 2000's, the company was racked by scandals and lawsuits nearly driving the company into bankruptcy. However, after a reorganization and a new outlook, the company has rebuilt its image and business into a successful company that's thriving today.

The healthcare industry is a growing field and a defensive one to be in considering how delicate the global economy is. One factor helping the industry along is an aging demographic. As of 2015, 14% of the US population was aged 65 or older. By 2020, that number is expected to rise to 22% thanks largely to the baby boomer generation who are heading into their retirement years. Continue reading "This Healthcare Company Is In The Middle Of A Huge Turnaround"

Ride The Prevailing Winds With This Utility Play

Daniel Cross - Contributor - Equities

Almost two months into 2016 and the stock market isn't sending investors much news to cheer about. The S&P 500 is down roughly 6% year-to-date and global economic concerns regarding a lack of growth and record low oil prices means that volatility is high and investors are skittish.

While high growth sectors like energy and industrials are suffering, defensive sectors finally have their moment to shine. But not all defensive sectors are performing as well as expected in the current environment. Consumer staples, generally a sector that does well when the broader averages are doing poorly, doesn't have much to offer investors. The Consumer Staples Select Sector SPDR ETF (PACF:XLP) is up marginally at only 1%. However, there's another defensive sector is enjoying the performance spotlight. Continue reading "Ride The Prevailing Winds With This Utility Play"

This Unlikely Stock Is Hitting On All Cylinders

Daniel Cross - Contributor - Equities

It's no secret – it's a tough market out there. Oil prices are at record lows, the US dollar remains stubbornly strong, and now the Fed has all but admitted that the economy is weaker than expected and we might need to start preparing for negative rates.

In this kind of environment, smaller companies can often slip through the volatility. They can ride the waves of uncertainty and ignore macroeconomic hardships that plague their larger competitors making the smaller one an unlikely winner. If that stock is an industry which is trending higher, that's even better.

One stock in the communications sector is slipping through the noise and could be a huge opportunity for investors. The communications sector is widely viewed as an industry undergoing a rising tide, which as most investors know means it lifts all ships within that industry. Continue reading "This Unlikely Stock Is Hitting On All Cylinders"

This High-End Retailer Is Beating The Odds

Daniel Cross - Contributor - Equities

If you've payed any attention to the markets so far this year, it comes as no surprise that we're teetering on the edge of a major bearish reversal after many years in a bull market. The broader indexes are all down for the year and volatility is on the rise. With all the negative action going on right now, a stock that's on its way up stands out.

Stocks that outperform when the major averages are under performing deserve a closer examination. In order to appreciate amidst the storm of bearish momentum, these companies are generally doing something very right.

One company is undergoing a radical transformation and it's stock price is already beginning to show it. Despite all the negative macroeconomic news, this high-end retailer is belting out upside earnings surprises and growing sales both domestically and internationally – including China. Continue reading "This High-End Retailer Is Beating The Odds"