EBITDA, or earnings before interest, taxes, depreciation and amortization, is a straight-forward measure (not a perfect measure, though) of a company’s cash operating profits. But, like seemingly all metrics published by company managements, it is usually adjusted for unusual items that may be non-recurring.
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Determining a company’s underlying value is difficult, and clearly more of an art than a science.
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Stop-losses, or more fully, stop-loss orders, are trading orders that are placed to execute a sale automatically if a stock falls below a specified trigger price. The idea is that these orders can prevent a small loss from becoming a large loss. It also...
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There’s no doubting the dominance achieved by mega-tech companies like Facebook, Amazon, Netflix, Google and the other members of the “FANGMAN” club (Microsoft, Apple and Nvidia). Over the past decade or two, these have created entirely new industries, grown to unprecedented size and shareholders...
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Being a contrarian investor often means buying stocks that are outside of the current zeitgeist. Many investors would look at a list of new buys in a contrarian’s portfolio and wonder just what, exactly, the contrarian was thinking. “Why don’t you just buy stocks...
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Each day brings something new. Some days every stock falls, other days they all surge, and some days, like Monday, undervalued stocks in the industrial, consumer and financial sectors jump (the Dow Jones Industrial Average gained 1%) while the Nasdaq slipped 2.4% - enormous...
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We’re watching market sentiment gyrate sharply between “the economic reopening will boost earnings” and “the economic reopening will boost inflation”. Both outcomes are likely.
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The stock market is clearly accelerating the “reopening” trade. Small cap and cyclical stocks as well as commodity prices are surging, interest rates continue to tick up (the 10-year Treasury yield is now 1.38%, up from 0.92% at year-end), and novel financial vehicles SPACs,...
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It gets a bad rap, but a reverse stock split can change the fortunes of a public company. Here are four reasons why more companies should do it.
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In an increasingly frothy market, it can pay to have a few undervalued micro-cap stocks in your portfolio. Here are three that I like.
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With the stock market regularly surging to record highs, it may seem like an unusual time to focus on valuation. After all, many stocks are remarkably expensive on traditional measures, and even somewhat lofty on non-traditional measures. But valuation still matters, especially if market...
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Last week, we outlined four ingredients of a market bubble that were usefully outlined in a recently published book1”and briefly described how it clearly appears that our stock market is in a bubble. These ingredients include easy trading of assets, cheap and easy rising...
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With the now-infamous Reddit trades unraveling, and the rebalancing done, the market is free to rebound.
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There has been a flurry of reverse stock splits of late. Are they good for investors? Traditionally no. But there are exceptions.
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Intel’s recently publicized struggles with its own chip production highlight the trajectory of this story. The company has been unable to successfully transition to leading-edge manufacturing technologies, and is seriously considering outsourcing to companies like Taiwan Semiconductor. Intel has long been the industry’s in...
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As value investors in a remarkably robust (exuberant) stock market, full valuation impels us to want to sell a stock. Such is the case with General Motors. On most conventional metrics, the stock is fairly priced. Through the courtesy of several friends, we’ve some...
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Most stocks on the Cabot Undervalued Stocks Advisor recommended list had strong performance this past week. Part of the strength was perhaps due to money managers’ general optimism that seems to brighten with turn of the calendar. With last year’s bonuses firmly in bag,...
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Sometimes the most appealing stocks are those that superficially seem to go against trends (leading to investors avoiding them) yet have either fundamental traits that sidestep these trends or have overly discounted valuations.
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With the turn of the calendar only a few days ahead, just about every investor is mapping out their market views for the coming year. Some do this formally, like Wall Street brokerage firms who publish their opinions on where the S&P 500 interest...
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The Cabot Undervalued Stocks Advisor has an investment horizon that is generally one to two years. As long as our companies are making fundamental progress, we’re comfortable with waiting for periods that easily extend past December 31st. However, the market doesn’t necessarily share that perspective. many...
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