This Health Care Play Could Help Protect Your Portfolio

Posted on by Daniel Cross

Daniel Cross - INO.com Contributor - Equities


The markets have been behaving badly over the past several weeks posting gains and losses of more than 100 basis points on several occasions. The indexes have shed about 3% just this week as investors scramble to find a sense of direction amidst a market where volatility reigns supreme. With so much uncertainty in stocks right now, it might be a good time to consider adding a defensive play to your portfolio.

As the economy continues to struggle, we could be headed towards a recession. It's a good time to reevaluate your holdings and think about adding something defensive into the mix. Certain sectors of the stock market tend to outperform when the overall economy contracts and picking up a solid, dividend paying health care stock could deliver the kind of defensive results your portfolio needs. Continue reading "This Health Care Play Could Help Protect Your Portfolio" →

Can Apple Pull A Rabbit Out Of A Hat?

Posted on by The INO.com Team

Today is Apple's big day to show off all its shiny new toys, the only difference this year is that Apple doesn't seem to have any new surprise rabbits (products) in the hat.

You have to ask yourself, has Apple Inc. (NASDAQ:AAPL) finally reached its zenith? As a longtime Apple fan and user of many of their products, I find that I am just not upgrading as fast as I once did. For example, I still carry an Apple 5S iPhone and not the new 6 or 6+ iPhone.

Research has shown that the smartphone market is leveling off and is not expected to grow as the market is saturated. The only growth area left in the phone market is the low-end, which is not an area that Apple will enter as it will cannibalize sales of its higher end iPhone. This is a huge concern for Apple, who derives two-thirds of its income from the iPhone. Logically if Apple has reached a saturation point in the smartphone market they cannot grow revenues. Then new revenues are going to have to come from a new whiz-bang product. In today's tech-driven world, that is going to be extremely difficult to do even for Apple. Continue reading "Can Apple Pull A Rabbit Out Of A Hat?" →

Navigating Volatile Markets Via Share Buyback Investing - Part 2

Posted on by Noah Kiedrowski

Noah Kiedrowski - INO.com Contributor - Biotech


Introduction

Share buybacks can serve as an effective way to drive shareholder value via returning capital to shareholders by repurchasing its own stock. Share buybacks are primarily driven by companies that strongly feel their shares are undervalued based on current fundamentals, future growth prospects and cash on hand. Taken together, executive boards approve share buyback programs based on these attributes in concert with undervaluation on the open market. Additionally, the company of interest feels a sense of bullishness and confidence on the future and sustainability of their business.

Theoretically, repurchasing and retiring shares satisfies many shareholder friendly objectives:

1) Reducing the number of shares tilts the supply and demand curve thereby removing shares will decrease supply and in turn increase demand and drive the share price higher

2) Earnings per share increase since earnings are now dividend over fewer shares

3) If share buybacks are coupled with a dividend, the dividend yield may increase if the aggregate quarterly payout amount remains unchanged thus; as a result the payout will be divided over fewer shares.

I'll be using The PowerShares Buyback Achievers ETF (PKW) as a proxy for this analysis. PKW focuses on U.S. companies that have reduced their shares outstanding by at least 5% in the previous year and weights these holdings by market capitalization, subject to a 5% cap within the ETF portfolio. PKW may present an opportunistic niche in which to invest and potentially capitalize on a cohort of companies that engage in aggressive buyback programs, particularly in these volatile markets. Continue reading "Navigating Volatile Markets Via Share Buyback Investing - Part 2" →

Copper Update: Crude Oil Signals To Cover Shorts

Posted on by Aibek Burabayev

Aibek Burabayev - INO.com Contributor - Metals


Last month, I published a post about the correlation of the World GDP and Copper prices. I also covered the close correlation of Crude Oil and Copper prices.

Chart 1 Crude Oil weekly: Sharp rebound

NYMEX Crude Oil
Chart courtesy of TradingView.com

As seen in the above weekly chart, Crude Oil bulls attacked the market without a declaration of war and caught sellers unaware. The price quickly grew more than $10 in just three days.

This severe price action on the weekly chart has formed a so-called Bullish Engulfing pattern. That's when the small red bearish candlestick is followed by a large green bullish candlestick that completely eclipses (engulfs) the previous week's candlestick. It means that bulls have taken control of the market and the price has gone lower (or is at the end of the decline). Continue reading "Copper Update: Crude Oil Signals To Cover Shorts" →

Summer's Over, But Is The Market?

Posted on by The INO.com Team

Summer's over but is the market, that's the burning question on every investors mind as they return from the long Labor Day weekend.

I expect that the volatility that we have seen in the last few weeks will begin to abate and settle down. That would be the normal course of action for this type of market. One of the first questions traders are going to ask themselves is this, is the Federal Reserve going to hike interest rates and if they are by how much?

Another item of interest to traders will be China, which in my opinion is not over with yet.

The last wild card in this bunch has to be the political scene that should be getting into high gear now that Labor Day has passed. The wildcard in the bunch, of course, is Donald Trump, who has defied every political pundits imagination and predictions. Whether you love him or hate him, Donald Trump is channeling the frustration level of the public with career politicians in general. If that were not enough we have Joe Biden is who is contemplating a run for the presidency of these United States. The political cycle this year should be both entertaining and dramatic much more so than previous years. Continue reading "Summer's Over, But Is The Market?" →