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The Beauty of Takeover Targets

2013-06-17T17:15:20Z

Exact Target (ET) was recently acquired by Salesforce.com for roughly $2.5 billion, adding up to $33.75 a share in cash--more than a 50% premium from ET's previous day's close price. But Saleforce.com wasn't the only company interested. Oracle Corp. and Microsoft also wanted to buy-out the company. This resulted in a very competitive bidding war, and ended up becoming the biggest online-marketing takeover since 2008.

I had actually held ET in my GameChangers service for about six months before the acquisition. Seeing that Exact Target had all the factors to be a takeover target, I kept a close eye on it. When the acquisition was announced, I jumped at the news and locked in a whopping 56% return.

I am always on the look-out for companies like Exact Target, because big acquisitions can mean big profits for the company's investors. And there have been many takeover targets in both my GameChangers and Breakout Stocks services.

In my Breakout Stocks services, I recommended Presidential Life (PLFE) and Animal Health International (AHII) that resulted in huge gains after their acquisitions were announced.

Presidential Life (PLFE) sells a variety of annuity and insurance products in the United States. Like many other annuity providers, Presidential Life was struggling with the low interest rates that were crimping revenue. But I knew that when rates began to move higher, annuities would be back in demand from the aging population. In the meantime, its main business remained profitable, which helped its tangible book value continue to grow.

We had only held PLFE for two months before it was acquired. Management agreed to be purchased by Bermuda-based Athene Annuity & Life Assurance Company for $14 a share in cash. PLFE popped 37% on the news, and we locked in an amazing 57% profit.

Animal Health International (AHII) was a great play on global growth since it was in the sweet spot of commodity inflation and agriculture. The company's customers were also benefiting from rising food prices and spending on the health of their animals.

After management agreed to be acquired by privately-held Lextron, another animal health and feed company, the shares jumped on the news. I alerted my subscribers to take advantage of the movement and we sold AHII to make a huge 69% return.

The same happened in my GameChangers service. Both Qualcomm (QCOM) and Telvent (TLVT) were bought out, and my GameChangers subscribers reaped the benefits.

Qualcomm (QCOM) is the preeminent chip maker for mobile phones in the world. The stock was once loved by the Street but was ignored as the company lost market share.

However, I believed that a turnaround had started with Qualcomm's introduction of its Snapdragon processor, which had all the makings of a game changer. It was a much more powerful processor than the one offered in the iPhone, and cell phone users were responding. I thought that this would give Qualcomm an opportunity to regain critical market share with its impressive new Snapdragon processor while at the same time lining up other products to replace any revenue they might lose from lower royalties in the future.

And I was right! QCOM was later acquired by Atheros, moving the stock up and allowing us to exit the position with a 62% return.

Telvent GIT (TLVT) is in the information business--collecting, monitoring and analyzing real-time data for companies in the agricultural, energy, transportation and environmental sectors. This information helps companies and governments manage their operations more efficiently, leading to not only lower operating costs but also creating new or improved revenue streams.

But after holding TLVT for less than a year, the company was acquired for $40 a share by Schneider Electric, an energy management company. Also agreeing to the transaction was Abengoa, a Spanish solar power company with a 40% stake in Telvent. I moved quickly, taking advantage of the acquisition and locked in fantastic profits of 61%.

I love a good acquisition, and while I don't spend my time looking for only takeover targets, I will absolutely jump on a stock if it has strong fundamentals. Sometimes, takeovers are simply a byproduct of finding companies with sound fundamentals.

Where Are You Investing?

2013-06-06T18:59:01Z

Quantitative easing (QE) has been the talk of the Street for months, but the market really went into a frenzy when Federal Reserve Chairman Ben Bernanke suggested that the central bank may begin to taper of QE if the economic data continues to show improvement.

With the end of QE being a very real possibility, the million dollar question is: Where should investors invest next?

In a panel discussion at the Las Vegas Money Show, Peter Schiff and I debate this very topic. He recommends putting money into foreign markets, while I believe that the U.S. markets are the way to go. To hear each of us make our case, watch the video here.

Cast Your Vote!

Buy, Sell, or Hold...CEOs?

2013-06-04T20:59:55Z

As investors, we buy, sell, and hold shares in companies all the time. Before selling or buying a stake in a company, savvy investors will research, research, and research some more. I know it may be hard to believe, but I love rolling up my sleeves and diving into this kind of research. If you know what to dig for and how to find it, there's a story in that sea of numbers and reports, and it's the story you want to uncover before you invest your hard-earned money.

Every company is different, so your research for one company may go down a different path than for another company, but there are basics like earnings, sales, growth catalysts, valuation, how the company treats shareholders, and much more. And there's one question I make sure to answer every time: How is the CEO affecting the company?

The Chief Executive Officers are the big bosses, and the buck always stops with them, whether they like it or not. If a company is in the right hands, it can soar. But if the wrong person is steering the ship, the company can just as easily crash and burn. So if I don't like the changes a CEO is making, I'm going to get out of that stock as fast as I can (and visa versa).

In my media appearances, we're sometimes asked whether to rate people or trends the same way we rate stocks: buy, hold or sell. So just for fun, here are five popular CEOs and how I would rate them right now. Let's take a look.

Elon Musk: Ever heard of Tesla (TLSA)? (My GameChangers subscribers made money on Tesla back in 2010, right after it went public.) This man is the success behind the company. Musk is the co-founder and is currently the head of product design at Tesla Motors. As you may very well know, Tesla has been extremely successful. In the year-to-date, shares have risen nearly 210%. Tesla Motor's success is very much because of its CEO. Musk resembles Steve Jobs and is, without a doubt, a genius. He is on the cutting edge of technology, innovation and style. If you want to be in on someone changing the world, Musk can do it. He sees where the puck is going. A strong buy.

Jaimie Dimon: He is the CEO of JP Morgan (JPM). I have no doubt that Dimon will move JPM to a higher level. He was smart in managing risk during 2008-2009. Dimon picked up Bear Stearns for nearly nothing and then was able to enjoy immunity against the risks associated with Bear Stearns. (The recent losses by the notorious trader, the Whale, shouldn't have happened, but Dimon's positive moves outweigh that). Dimon knows how to manage costs, compensate those that are talented professionals and keep expertise and institutional knowledge within the bank. Even if he leaves JPM, he will have a top #1 position at another global bank or as Treasury secretary. A strong buy.

Steve Cohen: This man is the founder of SAC Capital Advisors, a Stamford, Connecticut-based hedge fund focusing primarily on equity market strategies. Cohen created a silo contemporary hedge fund that knows how to be stealth and fast and make money. I see Cohen as a rare fund manager. I think one day he will have a private family fund with his own billions. A buy.

Michael Dell: This is the founder and CEO behind Dell Inc. (DELL). It would be an understatement to say that Dell has not done well. In the company's most recent earnings report, DELL posted a 79% decline in earnings, as rising tablet and smartphone demand caused traditional PC sales to slide further. Michael Dell's company is in serious trouble. Why? He missed the tablets, the last decade of opportunity that came with changes to the technology landscape and shareholders paid the price. This CEO is a sell.

Ron Johnson: The man who single-handedly brought down JC Penney (JCP). Johnson had all the tools given to him by the board of JCP so that he could transform the company. He was the Senior Vice President of Retail Operations at Apple Inc., where he rolled out the Apple Retail Stores and the Genius Bar. Before Apple, he was the vice president of merchandising for Target. Clearly, Johnson didn't understand or know his consumers at JCP and he underestimated the value of the employees that worked loyally at those stores. It is also important to note that the hubris of his spending while in the corner office really turns off Wall Street investors --- it is always better to err on the side of living more like other employees than walling oneself off with private jets and closed door offices. A strong sell.

To hear more about my thoughts on the CEOs, take a look at the video below.

The Tapering of QE and Where to Invest Next

2013-05-31T18:57:09Z

It's no secret that Wall Street is buzzing about one thing and one thing only right now: quantitative easing, or QE as it's known. The market was clearly shaken last week when Federal Reserve Chairman Ben Bernanke indicated in his Congressional testimony that the central bank may start to ease up on its economy-boosting stimulus program, provided that data continues to show improvement in the U.S. economy.

Of course, the release of the Fed's April meeting minutes later in the afternoon also showed a good deal of disagreement among Fed officials, so Mr. Bernanke may have been trying to be flexible in his approach. There are some who think the Fed was launching a "trial balloon" to see how the news would be received, and that they are not yet ready to scale back on the stimulus. However, I think that if we continue to see job gains in the range of 175,000 to 200,000 per month, we could see some tapering by the end of the summer.

Just the speculation about when QE might end has raised in interest rates. Stocks were weak Tuesday afternoon and Wednesday morning, when the yield on the 10-year Treasury bonds moved up to 2.17%. To give some perspective, the 10-year yield was as high as 3.75% as recently as February 2011, when we were in midst of QE2. So if the Fed does indeed cut back on QE3 in the near term, we may have just caught a glimpse of what could be a sharp rise in rates.

What does a rise in interest rates mean for investors? Turn on any financial news station and you'll hear analysts claiming that any rise in interest rates will be offset by gains in earnings from a stronger economy. While this is true to an extent, it's also somewhat simplistic.

A good part of the market is comprised of companies whose earnings are not especially economically sensitive, such as utilities, healthcare and consumer non-durables. After all, people still need electricity and healthcare whether the economy is good or bad. Many stocks in these groups have been considered safe havens due to their earnings stability and have therefore outperformed dramatically this year. In turn, they would be vulnerable to higher rates, given that any earnings boost from the improved economy would be minimal. In addition, the housing market could potentially suffer from an increase in interest rates, which would in turn hurt the results of many economically-sensitive companies.

We all know that QE cannot go on indefinitely and has to end sometime. With the market up around 16% this year largely on the strength of QE, we should expect to see some additional volatility as the idea of an end to the Fed's backing becomes a reality.

So where will I be investing? I will continue investing in game-changing companies that have strong growth catalysts and can continue to grow regardless of whether QE is still in place.

One company that I think will do well is Intercept Pharmaceuticals (ICPT). This company focuses on the development and commercialization of treatments for chronic liver disease. It's most advanced programs are focused on the development of modified bile acids that can regulate key aspects of liver functionality through receptors. Its leading product candidate, obeticholic acid (OCA), has been developed to treat primary biliary cirrhosis (PBC), which is a rare and chronic autoimmune liver disease that, if inadequately treated, may eventually lead to cirrhosis, liver failure and death. This stock moves on news of its drug trials, not the latest QE buzz, and it should continue to get a boost from any updates management reports.

How to Avoid Fraudulent Schemes in a Frothy Market

2013-05-30T14:29:56Z

Right now, we're in a very frothy market. The Street has hit high after high, and investors have been raking in the big bucks. But when I see markets like these, I get a little nervous. It's a great time to grow your wealth, but now is also the time when greedy "professionals" are going to come out of the woodwork and take advantage of the investors wanting guidance to make some extra income. They promise big returns and then take these poor victims for everything they've got.

I don't want you to fall into the same traps, so I've pulled together a list of the most common investment scams and the red flags you should look for in order to avoid them. Let's take a look.

Ponzi Scheme: This type of investment fraud is the most notorious. It is a fraudulent operation that pays investors from their own money or money paid by new clients. Bernie Madoff pulled off the biggest Ponzi scheme in history, defrauding his clients of almost $65 billion.
Pyramid Scheme: Current investors recruit new members, but the people at the top benefit far more than those at the bottom. Eventually, the money well goes dry and the scheme falls apart.
Advance Fee Fraud: An upfront fee (usually a large amount) that is required to have access to a "fantastic investment opportunity." But in reality, the investment doesn't exist.
The Pump and Dump: This scheme is as dirty as it sounds. A small group of investors buy a stock (usually with a small or illiquid share float that is easy to manipulate). The stock is then hyped to the moon to thousands of investors, which causes the price to spike. The group then sells their stock and leaves the duped investors holding the bag.
Prime Bank Scheme: Scam artists lead investors to believe that they can make high returns by participating in a secret trading regime, typically with the world's major banks. (This is how the retired police officer was defrauded).

Here are a few red flags that you should always look out for:

Guarantees: If someone guarantees that an investment will perform a certain way, ignore them. All investments carry at least some degree of risk.
Unregistered Products: If an unlicensed individual is selling unregistered securities--ranging from stocks, bonds, notes, hedge funds, oil or gas investments, or prime bank investments, don't give the person your money. Everything should be registered and licensed.
Overly Consistent Returns: Any investment that constantly moved up month after month, especially in a volatile market, is cause for concern.
Complex Strategies: Walk away from a person who credits a highly complex investing technique for unusual success and can't explain (in full detail) how their process worked. An investment professional should always be able to explain, step by step, how you were able to make a return on an investment.
Missing Documentation: If someone tries to sell you an investment without the proper documentation, it's a sign that the person could be selling unregistered securities. They should always be able to provide documentation. No papers? No deal.
Account Discrepancies: Yes, people can make genuine mistakes, resulting in an error. Or, this could be an indication of fraud. Always keep a close eye on your accounts. And if you ever notice even the smallest discrepancy in numbers, contact your adviser immediately.
A Pushy Salesman: If someone pressures you to decide on a stock sale or purchase, stay away. No investment professional should ever try to force a sale on you, and even if what they are pushing is not illegal, it is completely inappropriate.
VIP Access: When a person makes you feel privileged for receiving an invitation to join the "elite club." This is exactly what Madoff did. He would give only one out of three potential investors the opportunity to invest.

I will never tolerate dishonesty. The idea that someone's greed can cost another person their life's savings is unfathomable. But not everyone feels this way, which is why so many people end up defrauded. So to keep yourself out of harm's way, and to stay profitable, watch out for those red flags, and find an adviser you can trust with a good track record. You'll set yourself up to do better financially, and you'll be able to sleep better at night.

Are Women Better Investors then Men?

2013-05-17T16:21:52Z

There has been a "battle of the sexes" going on in the investing world for years, and I'm not about to turn it into a war by taking sides. With hedge funds, it's all about performance, and I can say that as a woman who has run hedge funds, I'm proud of the job I've done and the performance we've turned in.

This is why I found a Yahoo's Daily Ticker article called, "Female Hedge Fund Managers Ruled the Markets in 2012" very interesting. Apparently a study found that female managers outperformed males last year, as well as the global hedge fund index for the last five years. The article stated that women were better at this type of investment for two reasons: Women are more equipped to handle market volatility, and they also run smaller hedge funds, which allows them to better navigate the market.

I have always had a passion for the stock market, investing for as long as I can remember. Even back in high school, I was following the S&P 500 and the Dow Jones far more closely than my history classes. I worked part-time at an Army base during summers in order to earn money to invest. I continued to work even as I was a full-time student in college to keep the investment wheel spinning. Like I said, I love investing!

After years of working on Wall Street, I moved into managing hedge funds. I was the Chief Investment Officer (CIO) of a $5 billion global private equity fund, and the founder and CIO of the GreenTech 21st Fund, which I grew to $150 million.

By the age of 37, I made enough money to retire for the next 50 years. But, I love what I do far too much to quit. More than anything, I wanted to help individual investors grow their wealth using the very same strategies and techniques that had worked so well for me through the years. I've been blessed to do that with several investing services, but I also wanted to help individual investors employ the same sophistication, tactical flexibility and risk management used by professional hedge fund managers. After all, why should this type of investing be available only to the "elite" class? Everyone should have the opportunity to run their own hedge fund portfolio! So I decided to create a service that would allow individual investors to invest like a hedge fund, but without all the exorbitant fees and minimum required capital that accompany them.

And after some hard work, I began the Absolute Capital Return Portfolio a few months ago. The entire goal of the service is to pick the right blend of investments (stocks, bonds, ETFs, currency, etc.) that are properly allocated to profit regardless of the market conditions. And not to toot my own horn, but this service has done pretty well. After just three months, my portfolio has over a 4% return, which works out to 22.7% on an annualized basis. And that's while taking on less risk than the broader market and having hedges in place to protect us if the market gets choppier.

Are women more up to the task then men? I have no clue. I've known men and women who were brilliant investors, and I've known men and women who weren't so good, either. One of the beauties of investing is that it doesn't matter who's doing the investing, only that he or she makes the right decisions that grow your wealth every time. That's why I give my all every day to every person who joins my service, and that's one thing that will never change.

4 High Flyers You've Never Heard Of

2013-05-10T20:04:28Z

Have you ever heard the phrase, "the man behind the curtain?" I have, after seeing the movie several times over the years with my children. But what you might not know is how well that phrase can apply to investing.

You see, sometimes you find a store that you like, but it's not investable. Why? Because another company, a much bigger company, is the one that owns it and is pulling the strings - the man behind the curtain, if you will.

This was something I started to think about the last time I was in LensCrafters. It's a popular chain with tons of stores that do well, but did you know that this chain is actually owned by Luxottica Group Spa (LUX), the largest eyewear company in the world?

So I thought it would be fun to lift the curtain on four big companies that you may have never heard of but who impact many of our lives every day.

Luxottica Group Spa (LUX) is big. I mean really, really big. LUX is the world's largest eyewear company, and with six production facilities in Italy, two in China and one each in the United States and Brazil, chances are the glasses you are buying were made by Luxottica.

LUX has a market cap of over $24 billion (and would be considered a large-cap stock) with over 65,000 employees. Their brands include Ray-Ban, Oakley, Persol, Oliver Peoples, and Revo. Luxottica also produces eyewear under license for designer labels like Coach, Polo Ralph Lauren, Chanel, Prada, Tory Burch, Tiffany, DKNY and many other well-known high-end brands.

The company also sells eyewear through over 7,100 retail outlets around the world. These include Sunglass Hut International, Pearle Vision, LensCrafters, Sears Optical, Target Optical, among many others. LUX even provides eye care services with EyeMed Vision Care, the U.S.' second largest vision benefits company.

LUX reported strong results this past quarter. Revenues grew 4.2% and earnings jumped 21.8%. All global regions saw sales growth, with the company's emerging markets region leading the way with 17% gains. The stock has also done well, up 50% in the last 12 months.

Cal-Maine Foods (CALM) is the largest U.S.-based producer and marketer of fresh shell eggs. The company produces, grades, packages, markets, and distributes eggs in 29 states and under brand names Egg-Land's Best, Farmhouse, and 4-Grain brands.

CALM has a market cap of over $900 million and pays out a dividend yield of 2.9%. Sales growth the past five years has averaged 13.2% while earnings growth averaged 19.3%. Management believes that they can achieve long-term annual earnings growth of 10%. I'm interested in CALM's next earnings report due in early August, as the quarter it covers (March-May) will include the Easter season, which is one of the company's busiest.

Compass Minerals International (CMP) is a leader producer of various minerals including salt, sulfate of potash specialty fertilizer (SOP), and magnesium chloride. CMP produces and markets consumer deicing (39% of sales by applications) and water conditions products (16%), ingredients used in consumer and commercial food preparation (36%), and other mineral-based products used in consumer, agricultural, and industrial applications.

CMP had an excellent first quarter, with sales jumping 22% to $384 million driven by a 20% increase from the salt segment. The company also had improved cash flow from operations, up 33% from a year ago. Earnings increased 16% to $1.38 a share. I also liked that management increased the dividend by 10%, and the stock yields a solid 2.5%.

Parexel (PRXL) isn't the parent company of better-known brands, but it plays a significant role in bringing new drugs to market. Parexel is one of the leaders in the game-changing industry of clinical research organizations (CRO). CROs might sound boring, but they are actually an interesting concept. Pharmaceutical and biotech companies outsource to these CROs the research and clinical trials necessary to help get a new drug or medical device approved by the Food and Drug Administration (FDA). They offer the resources and knowledge to move a drug or device through the approval process so the manufacturer doesn't have to maintain a staff for these functions.

Parexel has a particular expertise in information technology, which has created high demand for its services. It is also one of the few top-tier providers with the necessary expertise and infrastructure to conduct large clinical trials around the world. PRXL's work may take place behind the curtain, but it is critical to the drug and medical device approval process.

In the most recent quarter, PRXL beat both earnings and revenue expectations. EPS increased 52% to $0.50 versus $0.33 a year ago, and revenues jumped 10.31% to $454.49 million. PRXL also has a new acquisition, the Heron Group, under its belt, which will bolster the company's commercialization capabilities.

Sometimes the big companies aren't the ones right in front of you that hear about on a daily basis, they are the ones hiding in the back, going about their business quietly but never missing a beat. You may have to do some serious digging, but the reward is often worth the effort.

3 Hot Biotechs to Keep on Your Radar

2013-05-08T14:19:53Z

I've always been fascinated by biotechnology, and some of my biggest winners have come investing in biotech stocks. I really like the idea of owning companies that are changing the game with their innovative technologies that can improve or save a person's life and make investors money along the way.

However, I'm not saying that you should invest in every biotech company that you come across. In fact, it's just the opposite. Biotech stocks are notoriously volatile, especially smaller ones. One FDA decision can make or break some of those companies, so it's important to follow the industry closely. That said, no amount of reform, regulation or red tape can permanently stifle the demand or innovation for breakthrough products that can help detect, treat and even cure some diseases, so it can be a very lucrative area to invest in.

The key to successfully investing in these biotechs is being able to sort the winners from the losers, which is something I just love doing. In fact, my research has recently put three hot biotechs on my radar that I'd like to share with you right now.

Regeneron (REGN) is one of my favorite biotechs and it's a great example of perseverance. The stock didn't do much for the first several years, but it has soared over 1100% in the last three-and-a-half years! The company has made its mark manufacturing drugs for a few medical conditions - especially those that impact the aging baby boomer population. REGN has active research and development (R&D) programs in many disease areas, including ophthalmology, inflammation, cancer and hypercholesterolemia.

REGN's blockbuster drug is called Eylea, and it is a breakthrough treatment to combat macular degeneration. This is an eye disease that results in a loss of vision in the center of the visual field, making it difficult (or even impossible) to read or see faces. However, the peripheral vision remains, allowing those inflicted to perform other activities of daily life. This is a slow, degenerative blindness that is the leading cause of blindness for people over the age of 65.

The stock has been doing phenomenally well lately, more than doubling in the past 12 months, so it is important to take the long-term approach, but I see more upside over time for this rising biotech star.

MEI Pharma (MEIP) is a small, development-stage biotech developing cancer treatments, specifically novel drug therapies for cancer suppression. The company is currently focused on three lead drug candidates, each of which is in the midst of clinical trials. Continued positive results from these studies could make MEIP worth more than $200 million, or just about double its current market cap.

Because MEIP is still in the development stage, it does not bring in revenues or produce earnings. In cases like this, clinical trial results and progress in drug development are more important to the stock's movement than its finances. Many in the industry and analysts covering oncology stocks believe that MEIP shows promise based on the results that have been released so far, and I am in full agreement. These promising results have rewarded investors with a nice 17% return in the stock so far this year, and I don't see things slowing down any time soon.

Intercept Pharmaceuticals (ICPT) focuses on the development and commercialization of treatments for chronic liver disease. Its most advanced programs are related to the development of modified bile acids that can regulate key aspects of liver functionality. Its leading product candidate, obeticholic acid (OCA), has been developed to treat primary biliary cirrhosis (PBC), which is a rare and chronic autoimmune liver disease that, if inadequately treated, may eventually lead to cirrhosis, liver failure and death.

There is a significant unmet need for an alternative PBC therapy, and ICPT believes OCA has the potential to fill this void with an easy-to-use and effective drug, and clinical trials are under way to demonstrate this. The game-changing aspect of OCA is that treating PBC is just one part of what appears to be a much bigger picture. There are many other potential applications for OCA, including possible use in treating a number of intestinal and kidney diseases, which is where the company's future potential lies.

We are all getting older and want to live longer and healthier, and these three companies might just be the ticket in helping us do just that. And of course, it would be nice to make some extra money along the way by investing in these innovative companies making significant breakthroughs that will help us enjoy those extra years.

If you want to hear more on my three picks, as well as other companies I am keeping a close eye on, take a few minutes to watch the video below (please note: my segment starts at the 5 minute mark).

4 Upcoming IPOs to Watch

2013-05-03T13:00:00Z

Initial public offerings - IPOs for short - are one of those investment opportunities that get people talking. After all, the idea of getting in on the ground floor of a hot new company as it becomes publicly traded is pretty exciting!

As I recently discussed with such a strong IPO market, I'm not just watching the companies that have recently gone public, I've also got my eye on companies that I think are not only on their way to an IPO, but also have the potential to be solid investments. Here are four game changing companies that I am watching right now that could well go public and present some interesting opportunities.

Square is a payments processor company that was co-founded by Jack Dorsey, the creator of the popular social networking site Twitter. Square passed the $6 billion annual transactions run-rate during the middle part of 2012, and has showed no signs of slowing. So far, Square has raised $341 million, with investors including Esther Dyson, Marissa Mayer, Richard Branson and MC Hammer.
Dropbox currently provides 200 million account holders with secure and user-friendly access to cloud storage, in the form of free and paid accounts. Dropbox has generated a lot of buzz by catering to the average person who needs to share and store things beyond the capacity of their physical storage. Management has decided to put more attention toward businesses, which they believe could additional growth.
Twitter is expected to bring in $950 million in ad revenue in 2014, according to eMarketer, as the company gains traction in mobile advertising. That's up from the firm's September forecast of $808 million in the period. The researcher predicts ad revenue of $1.3 billion by 2015. Twitter's mobile ad revenue has proven to be a strong catalyst for the company as well. For the current year, Twitter is expected to scoop up total ad revenue of $583 million, compared with a previous estimate of $545 million. And for mobile ad revenue, forecasts call for Twitter to earn $309 million, more than double $138 million in 2012.
Eventbrite is an event planning and ticketing platform. The company crossed $1.5 billion in gross sales and 100 million tickets sold. And the growth seems to be accelerating with $600 million of those sales and 36 million of those tickets completed in 2012 alone.

Each of these companies have strong growth catalysts and, if they do indeed go public, would generate a lot of interest on Wall Street. Whether that interest is ultimately positive or negative would depend on the pricing of the actual IPO. If a company is not realistic and overreaches on valuation, investors can expect a disappointing return. On the other hand, a realistic or undervalued IPO price could mean significant upside potential. There's a lot that needs to happen before we can make that determination, but it's still fun to keep an eye on potential IPO blockbusters like these.

Sell in May and Go Away...Think Again!

2013-05-01T12:00:00Z

You've probably heard the old adage: "Sell in May and go away." It's a nice little rhyme, and it does have a basis in the market's seasonal patterns. Historically, the stock market has typically been weaker from May to October than it has from November through April. Going back to 1950, the Dow is just about flat May to October but up over 7% on average from November to April.

We've certainly seen plenty of summer and fall selling over the last three years, and many investors are understandably gun shy, wondering if history will repeat itself this year. On the one hand, the market has had a fantastic run, up almost 25% since the lows of last summer, so you have to expect profit-taking at some point. But sell in May and go away? That's taking it a bit too far, especially this year.

There are two main reasons why I say this. First off, much of the selling the last three years was caused by the European debt crisis, and while Europe's debt problems haven't gone away, they are being better managed. That's not to say we won't see some volatility, and the market has gotten choppier as earnings season cranks up. Expectations are very low, and while the current season hasn't gotten off to a spectacular start, my feeling is that results have been not as bad as many feared, which lessens the likelihood of a steep drop.

Secondly, there is a chance that we could see all three major banks (The U.S. Federal Reserve, the Bank of Japan, and the European Central Bank) engage in quantitative easing at the same time (two of the three have already announced QE). Quantitative easing is arguably the single biggest factor behind the market's run to all-time highs, and the fact that the three major central banks of the world could have it going at the same time makes things very different from the last three Mays.

Having said that, there are a few industries I plan on staying away from in the coming weeks. Let's take a closer look.

Steer Clear of these 2 Investments

Stay Away from Gold. When the Federal Reserve started pumping massive amounts of money into the economy after the 2008 crisis, gold went on a tear as many investors feared the money pump would spark inflation. Gold doubled between 2009 and 2011, jumping from $900 to $1800. It is now around $1400, so a little more than 20% off its all-time highs, which the technicians will tell you puts it "officially" in a bear market.

I will be staying far away from gold, and for two very important reasons. First, inflation may be on the horizon, but it has kept its distance for more than four years of quantitative easing, and it does not appear to be imminent even now. Second, gold was in a bubble, and while that bubble is bursting, I don't think it's completely popped yet. There is an awful lot of unwinding that needs to be done, and that process is still unfolding.

Stay Away from the High-End Consumer Discretionary Sector. This includes retailers like Saks (SKS), Tiffany (TIF), and Abercrombie & Fitch (ANF). For Tiffany and Abercrombie specifically, there is the threat of macroeconomic exposure to a potentially exposed credit-extended middle class in China and Europe. These regions were doing their fair share of high end brand shopping and now, between the real-estate bubble still bursting in their respective countries and a plethora of new international competitors offering cheaper prices, these companies are quite vulnerable. Back here in the U.S., consumers are still trying to save money. Yes, the economy is recovering, but we've see some of the data soften recently, which has hurt consumer confidence.

Now, let's talk about what you should be buying in May, while Wall Street is looking the other way.

Stocks to Buy in May

First: Until confidence is back up, I expect people to find ways to buy more for less and choose less expensive alternatives like American Eagle Outfitters (AEO), Urban Outfitters (URBN) and The Gap (including the popular branded stores: Gap/Old Navy (GPS). Also, popular these days are family-oriented discount department stores such as Target (TGT) and Kohl's (KSS) that have improved their clothing lines by bringing in well-known name designers as well as pop culture icons who have attached their names to certain clothing lines.

Second: Believe it or not, I'm making a play in the energy sector. "Safe" stocks like McDonalds (MCD) and Pepsico (PEP) really aren't the best investments because those stocks are going to get hit harder when QE ends. For me, "safe" stocks that can survive a sharp correction will be the cyclical stocks that have lagged. As a group, cyclical stocks have underperformed due to concerns over the global economy, but the evidence right now - including the early spate of earnings reports - does not support the most bearish cases surrounding the world economy. Two stocks I like right now are Occidental Petroleum (OXY) and Huntsman Corporation (HUN).

The key for me going forward will be the U.S. economy. If the current soft patch ends, the market may drift higher, and earnings growth is already expected to accelerate in the second half of the year. And if the economy does strengthen, we will then be faced with the biggest question of all: What will happen when the Fed decides to cut back on quantitative easing? That's not imminent yet, but the time is getting closer, so it's a question to keep on your investing radar.

Until that time comes, I will be focusing on stocks with solid and predictable earnings growth, strong catalysts and exceptional long-term opportunities.

Can Money Still be Made in Retail?

2013-04-26T13:47:35Z

I absolutely love turnaround stocks, and I've had a lot of success investing in them through the years. These are the companies that have been beaten back, but are successfully reinventing themselves and gearing up for another great round. For retail stocks, it's often re-branding or changing its target demographic.

So what about JC Penney (JCP)? They've been all over the news recently and are clearly trying to right the ship, starting with the termination of Ron Johnson, the former Google (GOOG) executive who tried to implement a new business model but clearly failed.

The question is this: Does bringing back former CEO Mike Ullman put JC Penney on the road to a successful turnaround, or is it still a stock to be avoided? Put me in the "stay away" column. I think getting JCP back on track is a huge challenge that is sure to be a bumpy ride, one that I think is too risky to going along with. There's an awful lot JC Penney has to do to become an attractive investment again, which I talked about in the video below.

JCP may be in danger of going the way of the dinosaurs, but there are some retailers worth investing in right now. Let me share three that I think are attractive:

Macy's Inc. (M) has come a long, long way. Back in 2000, this company was written off for dead. But management turned the company around by lowering prices, producing quality products, and turning Macy's into a staple store for clothing and accessory needs. Macy's has been a solid company, delivering continued growth and strong profit margins, which has led to annual double-digit earnings growth. The company also pays a solid dividend yield of 1.8%. Macy's has come a long way, and I don't see this retailer slowing down anytime soon. To be honest, if JCP wants to succeed again, management would be smart to take a few notes from Macy's.

Ralph Lauren Corporation (RL) is a company I'm sure you're familiar with. They design, market and distribute premium lifestyle products in four categories: apparel, home, accessories and fragrances. The company has been around for more than 40 years and is one of the world's most widely recognized families of consumer brands. I expect the stock to go higher as RL continues to create products that are stylish and reasonably priced.

RL is also ripe for expansion in the global luxury apparel markets. Management's long-term goal is to increase the company's exposure to Europe and Asia to eventually make up two-thirds of its total sales business, compared to the 38% of sales the two made up in 2012. RL's e-commerce business also looks to be a strong catalyst, with analysts expecting the company to grow earnings at 14% over the next five years. The company's well-made clothing and an international expansion plans make Ralph Lauren a good company to invest in.

Ted Baker (TED. L) is an international company, and one that you might not have heard of. Let me say up front that it's only traded on the London Stock Exchange, but many brokerages allow investors to buy London stocks, so I wanted to at least mention this retailer that's on the up-and-up. I see Ted Baker as a multi-year growth opportunity. Because TED.L is only in 12 U.S. states, there's a fantastic opportunity for them to get into more of the U.S. high-end department stores. While many European retailers have struggled and collapsed under the failing European economy, Ted Baker has seen good demand at home and overseas. I wouldn't be surprised if it eventually becomes a household name for fashion here in the U.S. as well.

Given the economic struggles we've seen both globally and here at home in the U.S., investing in retail requires you to be very selective. JCP has a long way to go, too long for my liking. But Ralph Lauren, Macy's, and Ted Baker are all worth a look.

3 Red-Hot IPOs to Buy Now

2013-04-23T17:35:05Z

I'll be the first one to admit that I've been a pretty harsh cynic when it comes to IPOs. And if you know me, then you know I almost always avoid them; and for good reason, too.

The truth is that most individual investors don't get the chance to get in on the ground floor, and they often jump on after they see an IPO skyrocket right before it falls back to earth.

Having said that, every once in a while market conditions combine with the right companies coming public to provide some pretty interesting opportunities. The IPO market is certainly strong, with 82% of companies who came public in the first quarter above their IPO prices. That's up from 60% in the first quarter of last year and 42% in Q1 of 2011. And fortunately, there are some solid companies coming through the IPO pipeline. Here are three I especially like right now.

Red-Hot IPO #1: The first is Sea World (SEAS), which could easily be one of the five biggest offerings in the U.S. this year .This may come as a surprise, but SEAS is actually a smart stock to own during a slow moving economy. With job creation still sluggish and underemployment also a problem, consumers remain somewhat cautious with their hard-earned dollars. One area they are spending money in is "experiences," which is exactly what Sea World has to offer.

The company owns and operates 11 U.S. theme parks, including the popular SeaWorld®, Busch Gardens® and Sesame Place® brands that hosted more than 24 million guests in 2012. The big growth driver, besides a resurgence in domestic family vacation travel, is SeaWorld Parks & Entertainment's expansion into popular brands in media and entertainment platforms to connect people with nature and animals through movies, television and digital media. SeaWorld is also developing new lines of licensed consumer products.

I am also impressed with how financially strong Sea World is. Over the past three years since being bought out by Blackstone, the company's revenues have been on the up and up, jumping up 7% to $1.4 billion. Earnings soared to more than $77 million last year, up from $19 million in 2011.

Red-Hot IPO #2: Fairway Group Holdings Corp. (FWM) is a grocery-store chain focused in the greater New York area. What I love about this supermarket chain are the great prices and their focus on organic, fresh food. But at the same time, it has a bustling no-nonsense New York fresh fruit and vegetable stand feel to it rather than a new age fancy Whole Foods Boulder/Silicon Valley feel.

Still, I'm not buying just because I'm a New Yorker. I want to see a return on my investment! And it looks like Fairway will do just that. The company currently has 12 stores, but the plan is for this supermarket chain to expand nationally and open 300 stores. In their fiscal year that ended in April 2012, revenues rose 14 percent, to $555 million from the year earlier. In fact, from 2009 to 2012, Fairway increased annual sales by almost 66%. According to their regulatory filing, at the end of April, Fairway will report fourth-quarter total net sales of between $175 million and $178 million, up nicely from $150 million for the year earlier quarter.

FWM just went public last week, ringing the NASDAQ opening bell in celebration of its debut on Wednesday, April 17. The IPO shares were priced at $13, which was above the expected range of $10 to $12, and the stock opened for trading at $18, and it saw its shares surge close to 40%. If that holds, insiders will want to take profits when their restriction period ends and they're able to sell shares, typically after 180 days, which can often be a good time to buy.

Red-Hot IPO #3: One IPO that I am awaiting is a cloud computing company. ChannelAdvisor (soon to be ECOM) provides cloud-based e-commerce software that allows retailers and manufacturers to advertise and list products on Amazon, Google, eBay, Facebook and more. Their offerings include automation, analytics and optimization. Users can manage product listings, inventory availability, pricing optimization, search terms, data analytics--just to name a few.

ChannelAdvisor has proved itself worthy through its revenues, increasing from $36.7 million to $53.6 million from 2010 to 2012. And so far, the company, while still privately held, has raised $76 million from notable companies including eBay, New Enterprise Associates, and Kodiak Venture Partners. I will be paying close attention to the pricing of ChannelAdvisor and its first day of trading.

Before You Start Investing...

Although I like an unusually large number of current and potential IPOs right now, I almost never recommend that you buy a stock right after it starts trading. You see, IPOs are a glaring example of how the game is rigged against individual investors. When a hot new IPO comes to market, only insiders can get their hands on shares. The bank backing the IPO then hypes it to the moon, driving up investor demand.

Eager investors who were locked out from investing very often jump in and buy on the first day of trading, which sends the stock soaring. Those insiders then make a quick exit, pocketing their hefty gains. Demand frequently dries up and the stock price falls, leaving all those individual investors holding the bag.

Here's the thing: You don't need to gobble up shares the moment they start trading. If you know the rhythm of an IPO and take the time to research the company going public, you can first sort the blockbusters from the bombs, and then get in as the insiders sell their shares and before the next leg up. That's the smarter and less-risky want to play the relatively few IPOs that are worth investing in anyway.

Can This Surprisingly Simple Game Changer Really Do That?

2013-04-11T13:44:16Z

Not that long ago, if I had asked how you watch TV, you would have thought I was crazy. There wasn't any choice as to how. TV was TV.

But the game has changed when it comes to watching our favorite shows, and it is now a legitimate question. Stations still broadcast over the airwaves, though they use a digital signal now. You also have cable and DVRs to record content. Then there's the Internet, and iTunes, Amazon, Hulu, Netflix and others.

Now there's a little start-up company called Aereo that's trying to change the game again, and the way they're going about it is astonishingly simple.

One of the main reasons people subscribe to cable is to get live programming like sports events and local news. Most everything else is available digitally through other avenues for a lot less money, though you sometimes have to wait a day. Aereo has the brilliant idea to use antennas to pick up the local broadcast signal and then offer it to people online. They've designed antennas so small that they fit on the tip of your finger, and they place a bunch of these antennas in data centers, which allow them to send the programming over the Internet. Subscription plans range from $1 a day to a full year for $80 (which comes to less than $7 a month). A customer could combine that with plans like Hulu's and end up paying less than $20 a month for their TV content. You can see why the cable companies are shaking in their boots.

Aereo's ideas has scared the "bigwigs" so badly that they've put their fierce competition aside and joined together (we're talking rival networks like NBC, ABC, and FOX) to sue Aereo out of existence. They claimed that Aereo's service violated copyright laws, but Aereo countered that it was not stealing, only allowing consumers to use its antennas to access shows on public airwaves. And so far, the courts are agreeing with Aereo, knocking down several of the networks' lawsuits.

So what can we as investors learn from this "digital David and Goliath" story? A few important points come to mind:

Sometimes simple is better. I am all about game changing technology: self-driven cars, robotics, you name it! Having said that, sometimes the best ideas don't require a Ph.D. in rocket science. (We've all had those moments where we learn of a product and think, "Why didn't I think of that?") In Aereo's case, they saw a voice in providing live local programming over the Internet and came up with a simple, cost-effective way to do it by accessing shows already on the public airwaves.
Lawsuits don't always mean a loss. Aereo isn't a public company yet, so we couldn't invest even if we wanted to. And even though the company has been successful in court so far, I'm not yet willing to say it will inevitably prevail in the end. Still, lawsuits aren't a reason to automatically reject a possible investment. I've seen both sides in my years of investing: Lawsuits that hit stocks hard, and lawsuits that proved to be buying opportunities.

Two examples that come to mind are Tyco (TYC) and Bank of America (BAC). Both companies were slammed by lawsuits, and I bought both during the turmoil. You may remember TYC's huge scandal back in 2002 when it was found out that the CEO and his management team had stolen over $100 million dollars. Not surprisingly, lawsuits followed, and the picture was pretty bleak for a while. But a new CEO with a stellar reputation was brought in who not only righted the ship but grew Tyco's businesses, and I eventually doubled my money. Bank of America was hurt by the financial crisis and accused of fraud in 2010. But I really liked the stock in late 2011 when it was around $5.50, and today it's over $12. It is important to pay special attention to legal matters, but remember that they are just one of many factors to consider when evaluating a possible investment.

If the big companies are nervous, there may be something there. As you can see, the networks are nervous in this particular case. If they didn't think that Aereo stood a chance, they wouldn't be suing the company so aggressively. They know that if Aereo succeeds, their customers could trip over themselves cancelling cable to sign up for cheaper streaming services. And this can be a sign for other industries. When a small company is seen as a threat by the big guys, there just might be something worth looking into.

I'm a research fanatic. Call me crazy (you won't be the first!), but I love digging down into the nitty gritty of what makes a company tick. Many times it's a dead end; other times you find a diamond in the rough. Either way, it is important to do the work, to look at all aspects of a company and not immediately discount it because of lawsuits or because the idea seems too simple.

There is really only one deal breaker for me, and that's ethics. If I find myself distrusting management, I don't want my money invested in that company, and I'm sure you don't either.

The Energy Trend of the Future

2013-04-05T13:30:19Z

Have you ever wondered what life would be like without energy? It's one of those things you don't think twice about until you're without it. And thanks to the crazy weather we've had in New York over the last year, including widespread power outages, I've been able to experience it firsthand several times. Considering our reliance on everyday essentials like cars, phones and computers, it's a little scary to imagine a world without the energy to power these lifelines.

And now that modern energy applications are going global, the world needs to find more energy to keep up. Without new sources to rely on, natural gas has become a go-to solution. It's one of the most appealing of the traditional energy sources and I believe that it's going to open the door to a wealth of investment opportunities.

For one thing, natural gas is now the fuel of choice to generate electricity because it's so much cleaner than coal and doesn't have the safety stigma of nuclear power. Natural gas-fired electricity generation is expected to make up 80% of all additional capacity that is added between now and 2035.

As you would expect, alternative uses for natural gas are also being developed to take advantage of all this potential energy, especially in transportation. We won't see a bunch of natural gas passenger vehicles on the road anytime soon - the manufacturers aren't ready, and there is a lack of storage and distribution infrastructure - but there is tremendous potential in commercial vehicle fleets. One firm, Pike Research, estimates that the total number of natural gas vehicles worldwide will grow nearly 70% from 1.9 million units in 2010 to 3.2 million in 2016.

However, the way to get natural gas has become quite the controversial topic. The process is called hydraulic fracturing (or "fracking") and involves creating fractures in rocks and rock formations by injecting fluid into cracks to force them further open. Many folks have raised health and environmental concerns over the fluids used, and I am right there with them. For example, there appears to be some evidence that groundwater (drinking water) can become contaminated from the solutions used in fracking. Some scientists have also tried to link fracking as a contributing factor in some of the recent minor earthquakes in the United States.

These concerns are why I prefer to invest in companies that have found a way to make the fracking process safer, without the environmental or health hazards.

One of my favorite picks is Halliburton (HAL), which is one of the largest companies providing equipment and technology that makes fracking possible. It is an oil and gas exploration company that finds new fields and makes the most of their existing properties. But the best part is that HAL has created "green" technologies that could reduce or even eliminate some of the big controversies surrounding the fracking process.

One "green" innovation HAL created is the "CleanSuite" Technologies, through which the company is endeavoring to make fracking safer. Among the products is the CleanStim Formulation - the cocktail used in the fracking process. According to the company, it uses the same acids and enzymes present in fruits and vegetables, making it one of the most environmentally safe fracture solutions. Even environmental groups have given the company credit for its efforts to make the process safer and more environmentally friendly.

I truly believe that natural gas is the energy of the future, and now's the time to take advantage of the companies, like Halliburton, that are working to harvest natural gas in the safest way possible.

Are Drones Still in the Game?

2013-03-28T17:16:45Z

Earlier this week, I talked about finding profitable trends and which "buzz worthy" industry (like 3D Printing) you should stay away from. But today I want to talk to you about an industry I've been a fan of for a very long time, so much so that I invested in the sector over a year ago: Drones.

I was over the moon when I first heard about them. A technology that allows soldiers to fight for their country without being put in harm's way? Amazing! And I'll admit, any type of technology that increases the safety of those who put their lives on the line for us I'm going give a second look. What can I say? I'm the wife of a police officer, and I have great respect for those who protect and serve.

Drones are a massive new industry with almost limitless potential ahead. You probably already know about their role in the war on terror, but they can be used for so much more than combat.

A recent Associated Press article on drones found that "there's a recent clamor to fly them domestically to track the health of crops, fight wildfires in remote terrain, conduct search and rescue after a disaster and perform other chores considered 'too dirty, dull, or dangerous' for pilots." These are just a few examples of the versatility drones offer. Drones can even conduct scientific research in areas that are too dangerous for piloted air craft, like flying into a hurricane and transmitting back near- real-time data to a hurricane center.

And now, U.S. states are itching to get in on the ground floor- 37 states, to be exact. The AP reports that "the untapped civilian market - estimated to be worth billions - has created a face-off, with states perfecting their pitch - ample restricted airspace, industry connections, academic partners - not unlike what you might read in a tourism brochure."

As you can see, the drone industry is becoming more in demand, and those who get in early are going to reap the rewards. Just another game-changing trend for investors to keep on their radar!

The Next Big Thing?

2013-03-26T15:40:34Z

Profiting from game-changing trends is often like surfing a wave. If you've ever watched someone surf, you know that most of the time in the water is spent waiting, watching, alert, being "one with nature." Good surfers wait to spot the perfect wave. When it finally comes, they're able to catch it for a great ride.

Creating wealth is similar. It's all about spotting opportunity, being aware of what's happening in the world around you, and being vigilant to make sure the wave develops. At just the right time, a perceptive investor jumps on a developing trend like a great wave and surfs it all the way to the bank.

But, just because a swell looks to be building doesn't mean that you should jump on board. It could fizzle out altogether, or it could break the wrong way and become a safety hazard. Timing is critical, and if you don't pick the right moment, you could end up wiping out completely.

Such is the case with 3D Printing, which you've probably been hearing about. It's an incredibly hot topic right now. It's showing up everywhere; newspaper articles, videos, even some of my GameChanger subscribers have asked about it.

It is definitely one of those things that make you go, "Wow." If you're not familiar with it, 3D printers make a three-dimensional solid object from a digital model by laying successive materials in different shapes. In other words, it's like your own personal manufacturing plant.

You need new shoes? Print them! Want chocolate? Go ahead and print it out! It's a very interesting technology, and one that could prove to be a huge game changer someday. This type of printing would allow for the simplification of assembly lines. It would also allow more products to be manufactured at the same factory in less time, rather than being outsourced.

And believe it or not, scientists are trying to "print" living organisms as well. There was a story just recently about printing stem cells, which could one day end animal testing of potential new drugs and possibly even lead to printing organs on demand. As I said, wow, right?

It also sounds like a fortune waiting to be made for investors. That may well be true one day, but for now, I am not comfortable putting my money into 3D printing quite yet.

There are two main players right now: 3D System Corporations (DDD) and Stratasys, Ltd. (SSYS). After doing well last year, both stocks have come under considerable pressure recently, despite the strong overall market, and the companies have been targets of short-sellers. I believe investors are concerned that selling prices for the companies' hardware will continue to fall, which would cause growth to slow from its rapid pace. For example, DDD's sales grew 52% last year, but they are expected to slow to 31% growth this year and even further to 21% growth next year.

But you can be sure I'm watching this industry very closely. There is still a chance for expansion for both DDD and SSYS, and they also have stable material and services businesses to go along with the hardware business. I'm also looking for indirect winners, which could be some of the biggest. By that I mean companies that learn to utilize 3D printing most effectively, perhaps changing the game in their own businesses or industries and laying the foundation for explosive growth in the coming years.

These are exciting times, and companies that change the way we live and thrive will continue to do well. Sometimes, we as investors have to be patient to make sure we catch the right wave and ride it to big profits.

The Early Bird Does Catch the Worm

2013-03-21T17:06:43Z

When I look for investment opportunities, I am drawn to some of the world's most innovative companies - the ones revolutionizing the way we live and thrive. It's a "win-win" to invest in companies producing these game-changing breakthroughs because they not only improve our lives, but they deliver handsome profits for savvy investors who get in at the right time.

Back in January, I was asked which sector would do best under President Obama's second term. My answer was healthcare, because with the road to broader insurance being inevitable, and the potential for 30 million uninsured to be covered next year, the healthcare sector would take off.

Because of this trend, I knew that it was the perfect time to invest in biotech breakthroughs and healthcare stocks, which is why I put my money into Lannett (LCI), Vascular Solutions (VASC), and Cantel Medical Group (CMN). And because I got in early, I locked in profits in all three stocks.

Lannett (LCI) develops, makes, and sells generic drugs. The company operates in an industry poised to flourish under health care reform; it has regained strong operational momentum; a number of new products that should drive future growth await FDA approval; and the stock is a bargain. The election provided a nice tailwind for the company, which was already growing steadily. Because of all these factors, I locked in a 59% profit last month.

Vascular Solutions (VASC) is an innovator in the field of cardiovascular medical intervention devices, has a strong history of developing products that meet unmet needs, and stands to benefit from the growth of the entire industry. VASC is nearly 15 years old and has introduced 37 devices since its founding in 1997. What's interesting is that 16 of those devices (43%) were launched in 2009 or later, so you can see the company is hitting its stride. After the stock's strong run, I sold it for a 17% profit.

Cantel Medical Group (CMN) is a company dedicated to infection prevention and control. CMN might not be flashy, but they sure do know how to get the job done right. Their products address an important health need by helping hospitals and health care offices reduce the risk of infection. Because of the demand for CMN's products, business has boomed. I pocketed a quick 20% profits on this one!

I don't know if you missed out on these hidden gems (I hope you didn't!), but if so, I've got two more investment opportunities that you can take advantage of right now:

Intercept Pharmaceuticals (ICPT) focuses on the development and commercialization of treatments for chronic liver disease. It's most advanced programs are focused on the development of modified bile acids that can regulate key aspects of liver functionality through receptors. Its leading product candidate, obeticholic acid (OCA), has been developed to treat primary biliary cirrhosis (PBC), which is a rare and chronic autoimmune liver disease that, if inadequately treated, may eventually lead to cirrhosis, liver failure and death. ICPT is UP 10% so far this year, and I think the best is still yet to come.

MEI Pharma (MEIP) is a San Diego-based oncology pharmaceutical company that develops novel drug therapies for cancer suppression. The company is currently focused on three lead drug candidates, each of which is in the midst of clinical trials. Continued positive results from these studies could make MEIP worth more than $200 million - double its current market cap.

This is a typically small pharmaceutical research company with a market capitalization of only $90 million. Given the nature of MEI's business, its trial results and drug development are more important to the stock's movement than its financial background. Those in the industry and analysts covering oncology stocks have agreed that MEIP shows promise based on the results that have been released so far, and I am in full agreement. These promising results have rewarded investors with a nice 17% return so far this year, and I don't see things slowing down any time soon.

3 Cyber Warfare Stocks to Buy Now

2013-03-21T13:23:57Z

Criminal masterminds wreaking havoc from behind a computer screen, hacking into security systems, banks and the government systems through complex algorithms may still sound a little too futuristic to be true. Throw in Bruce Willis and a few "yippee ki-yays," and you've got yourself Live Free or Die Hard 2.0.

Unfortunately, this type of criminal activity is not only plausible, but happens every minute of every day in cyber space.

Cyber threats aren't just plots for movies anymore -- they're real. And both government and industry are now taking them very, very seriously. Cyber attacks have become so dangerous that they're now considered the top security threat facing the United States.

Just last week, JPMorgan Chase (JPM) was hit with a denial-of-service cyber-attack, a new tactic that threatens our major banks. In 2012, there were nearly 200 cyber attacks against the control systems of our critical infrastructure facilities, which includes our power plants, refineries, transportation systems and water treatment facilities. That was a nearly five-fold increase from the number of attacks carried out in 2010. And now, we're facing 102 successful attacks a week. No wonder President Obama recently met with technology and defense CEOs to discuss the situation.

You can see why governments and companies around the globe are spending billions of dollars in a frantic race to ward off an explosion of cyber attacks. The U.S. government has spent more than $600 billion on information technology over the last decade, and a huge -- and rapidly expanding -- portion of those billions are being dedicated to cyber defense. U.S. corporations have spent over $5 billion on cyber security, and that amount is sure to increase.

Throw in spending by foreign corporations and governments, and all told, the global cyber security market will be one of the fastest-growing markets on the planet, projected to reach $80 billion in the next five years.

Critical needs often fuel growth industries, and from an investing standpoint, that's what we're seeing here. So what should you do? Aside from updating your computer security system, consider investing in game-changing companies and technologies at the absolute forefront of the new cyber wars. Here are three that I like right now:

Symantec (SYMC) focuses on security software for computers, and most individuals are familiar with its well-known consumer brand, Norton, which includes a variety of products. However, about two-thirds of sales come from software for businesses and large organizations.

I also like the company's Global Intelligence Network, which monitors Internet threats, and the Internet Security Threat Report produced by the network. One of their newer applications, Nukona, helps lock down corporate data if employees' personal smartphones or tablets are not in compliance with the company's policies. Symantec also has offerings to secure data on mobile devices provided by the company to employees.

Fortinet (FTNT) is a leader in unified threat management appliances. FTNT's primary security platform is called FortiGate. The company's solutions are designed to integrate a broad range of security technologies including firewall, virtual private networking, antivirus, intrusion prevention, Web filtering, antispam, wireless controls and more.

As you would expect, the UTM market is growing. According to industry firm IDC, it increased more than 17% in 2010 to $2.1 billion. IDC expects the market to continue to grow about 13% annually, reaching nearly $4 billion by 2015.

Sourcefire (FIRE) develops "intrusion detection" hardware, software and cloud-based network security products and services for businesses and government agencies. These products and services are to help customers before, during and after an attack.

FIRE has a virtual arsenal of advanced technologies designed to thwart malware attacks. The company has developed a cutting-edge technology that uses cloud-based computing systems to look across millions of computing machines simultaneously to detect malware attacks in real time. It also offers "sandbox" technology to verify untested code or programs and assess their legitimacy, and FIRE recently introduced a next-generation firewall that enables them to lock down channels that malware moves around on. In 2012, Sourcefire was named the 11th-fastest-growing tech company in America by Forbes.

3 Technologies Changing the Biotech Game

2013-02-22T18:01:26Z

I don't know about you, but I still can't believe how far we've come in the biotech industry. Think about it: The epidemics that used to wipe out millions of people--like cholera and yellow fever--can now be avoided through vaccinations or treated with a tiny pill that packs a powerful punch. But the biotech industry hasn't slowed down in creating game-changing technology, it's picking up steam. And that's what I love about it. This is a sector that is always growing, creating innovative products, and most importantly--saving lives. So when I heard about three new game-changing innovations, I just had to tell you about them.

Self-Healing Materials. We get cuts and scrapes all the time. The treatment? A little Neosporin and a Band-Aid and your skin is as good as new in a few days' time. You spring a leak and your blood clots to stop it. It's one of the marvels of the human body, and now scientists are trying to replicate it. If non-living structural materials could heal themselves whenever cut or cracked, the possibilities would be endless.
Remote Sensing. Can you imagine going to the doctor and have your vitals taken without ever being touched? That's exactly what remote sensing is. And companies have already put products on the market with this tech built in. Take Nike, for example. Nike created the FuelBand, which is worn on your wrist and measures activity level. The band's activity targets also help you stay in shape as you meet each one. You no longer have to hope that the quick workout you got at the gym before work was enough for the day. The band will tell you. But remote sensing isn't just for sports; there are other sensors in the works. Sensors that can go so far as to allow cars to detect and reduce (and possibly eliminate altogether) vehicle collisions. Motor vehicle accidents are the leading cause of death for U.S. teens, and this technology could help lower that statistic.
Precise Drug Delivery through Nanoscale Engineering. Treating an illness reminds me of Goldilocks and the Three Bears, but instead of porridge, she's deciding between pill doses. If the dose is too high, you can face side effects and if it's too low, you won't feel better. The dosage has to be just right in order to fight off the illness and keep you from experiencing side effects. Because most medications are so different, you can't always follow the typical OTC regime of "take two if 12 or older." You find that it can take quite a few doctors' visits before you begin to feel better. And that's why this new tech is such a game changer. It allows drugs to be precisely delivered at the molecular level using nanoscale engineering to make the medication more effective while reducing side effects. You can get better, faster without multiple trips to the doctor.

Biotech has come so far, and yet we are still only in the beginning stages of life-changing discoveries. The days are not far away when you will walk into your doctor's office with your medical history and genetic profile on a disc (or maybe even your phone), and your doctor will prescribe a medication that is custom-made for your genome, maximizing effectiveness and minimizing side effects. In addition to the scientific advancements, the industry is just entering an era of well-publicized reform. With reform comes opportunity - for companies and smart investors.

Placing Bets on Casino Stocks

2013-02-21T20:13:17Z

"Winner, winner, chicken dinner!" An odd phrase, to be sure, but, boy, does it sound sweet to my ears. Now, I'm not a big gambling woman (although my profession may suggest otherwise!), but I sure do love to place bets. I just choose to bet on stocks instead of dice. But just because I don't spend a lot of my time in a casino doesn't mean that I wouldn't take a chance on one. Just the opposite! And I'm not the only one. Casinos are not only attracting a lot of visitors these days, but also a lot of investors.

Take a look at Macau Casinos, owned by Las Vegas Sands (LVS). The company's recent earnings report revealed record financial results for the Macau property, giving LVS a nice 6% pop following the announcement. Their competitors haven't done too shabby either. MGM Resorts International (MGM) and Wynn Resorts (WYNN) are expanding further into Asia to bring home big profits.

But am I investing in any of these companies? Nope! I've got my eye on a different "game" changer, one that is in a great position to benefit as gaming continues to grow, especially in foreign markets. Casino gambling is a global industry, but online gambling is also now seeing tremendous growth. According to industry consulting group HS Gambling Capital, global online gambling revenues increased an average of 23% each year since 2003, and was in excess of $36 billion in 2012. Some brick-and-mortar casino executives believe they can attract younger online gaming users by developing personalized experiences that can be accessed by laptop, smartphone or tablet. This opens up a whole new world of potential for the industry.

So let me introduce you to SHFL Entertainment (SHFL), a company with a product portfolio designed to make casinos more efficient while also enhancing the players' experience, and takes pride in anticipating the changing needs of the industry. The company consists of four main operating segments: utility, Electronic Gaming Machines (EGM), Proprietary Table Games (PTG), and Electronic Table Systems (ETS). The company's Electronic Gaming Machines in particular have done well in Asia. It includes online versions of the company's table games, social gaming, and mobile applications. The company has approximately 30 games in use on casino floors, many of which feature progressive features such as bonuses and side bets. SHFL derives revenues from this segment through licensing and royalty payments from casinos that use these games on their floors. EGM presents a significant opportunity for growth, especially in European markets where such gaming is legal.

Investments in casino companies are becoming more and more popular, and if you bet on the right company you could end up a winner. However, for my money, SHFL is the most attractive bet. With solid growth over the past five years, SHFL has tremendous growth potential and strong fundamentals to help lock in big profits.