8/26/2014

Facebook to display less "click-bait"

facebook clickbait Don't click on that "cutest thing ever" link! Facebook wants to discourage "click-bait" NEW YORK (CNNMoney) In a move that will have repercussions for a wide array of media companies, Facebook is changing its all-important algorithms to discourage what it calls "click-baiting headlines."

As a result, you'll probably see fewer stories on the Web that proclaim "You won't believe what happens in this video!" or promise that "This story will blow your mind."

These sorts of headlines have proliferated in the past couple of years because Internet publishers have found that they help boost page views and, consequently, revenues from advertising. But critics of the style -- and there are a lot of them -- say it's cheap and fundamentally unsatisfying to users.

Facebook (FB, Tech30) apparently agrees.

Facebook says "click-baiting" happens when "a publisher posts a link with a headline that encourages people to click to see more, without telling them much information about what they will see."

There is a whole ecosystem of bottom-feeder Web sites that specialize in these kinds of stories.

How BuzzFeed's moving beyond cat videos   How BuzzFeed's moving beyond cat videos

Facebook's algorithm currently rewards these links when they're posted onto the social networking site because the links "tend to get a lot of clicks."

But "when we asked people in an initial survey what type of content they preferred to see in their News Feeds, 80% of the time people preferred headlines that helped them decide if they wanted to read the full article before they had to click through," the Web site said in an announcement on Monday.

So "click-bait" is unsatisfying -- and it may also hurt Facebook's business model, which entails getting people to spend more time on Facebook.

"Over time, stories with "click-bait" headlines can drown out content from friends and pages that people really care about," making Facebook less useful, the announcement added.

Facebook said it would try to curtail the "click-bait" plague by showing "fewer of these types of stories."

The site said it would be careful not to ensnare other Internet publishers.

Facebook has become a crucial source of traffic for news and entertainment sites, so eve! ry perceived change to Facebook's algorithm is obsessively scrutinized.

And because Facebook has more than one billion monthly users, its choices and preferences ripple across the whole web.

Another change it announced on Monday will, in some cases, discourage publishers from attaching photos to their promotional posts -- so users will probably see somewhat fewer photos and more straight links in the future.

8/25/2014

Market Wrap-up for Aug. 22 – A Reminder to Remain Diversified

Navigating the ups and downs on Wall Street is no easy chore, even for seasoned market veterans. So why do so many investors, especially self-directed ones, strive to time the markets when there is a plethora of evidence that suggests the odds are clearly against them?

The simple answer is greed and laziness; that is to say, countless investors would prefer to pick and choose the securities that are poised to go up the most in a given year rather than roll up their sleeves, do some good old fashioned research, formulate a long-term strategy, and be patient [see also Market Timing the Best and Worst S&P 500 Trading Days].

After all, would you rather sit and wait on your diversified portfolio to steadily increase in value over the course of many years, or would you rather use your crystal ball to cherry pick the best performing assets each and every year?

Why Cherry Picking Assets is Less than Ideal

Don’t even bother answering the last question because the reality of the situation is that you don’t have a crystal ball (and neither does your financial advisor). Consider the table below (click to enlarge) compiled by the Novel Investor which showcases the annual returns since 2000 for a variety of major asset classes. More importantly, note the light gray box labeled “AA” in each year, which is representative of a well-balanced portfolio that is comprised of all the other assets that are listed:

assetclass

There are two important takeaways from this performance table. First and foremost, picking the best performing assets year after year is a difficult, if not altogether impossible chore. Sure, you may have gotten lucky with REITs three years in a row (2010-2012), but depending on when you started, your portfolio could still be recovering from the deep losses this asset class suffered in 2007 and 2008. The point here is that betting on last year’s winner rarely works out, especially for conservative investors who are counting on their portfolio to steadily grow over the long-haul [see also The Ten Commandments of Dividend Investing].

The second takeaway here is that for conservative investors, maintaining a diversified portfolio (the AA boxes) is often times the best approach to achieving success over the long haul. Notice how the diversified portfolio in the example above has managed to post positive returns in almost every single year; sure you might sometimes miss out on massive gains in a particular asset class, but overall, you are less vulnerable to losing a significant portion of your capital during times of uncertainty.

8/22/2014

How to Play the World̢۪s Economies

Print Friendly

Hedge your bets. If the International Monetary Fund gave investment advice, that might be its three-word recommendation.

Late last month the IMF predicted the Eurozone's contracting economy would grow at an anemic 1.5% next year. Meanwhile, it revised the U.S.'s growth downward by 1.1% percentage points to 1.7% for 2014, but said it would rise to 3% in 2015. Our own take: We're cautions about the U.S. recovery given retail sales stalled in July and wage growth has failed to surpass the inflation rate.

The Chinese economic engine, the world’s No. 2 economy, will expand 7.4% this year, according to the IMF. That's good news for the globe, but we're less optimistic than the IMF about China. Data from China shows financial activity slowed down in July: New lending declined 86% in July from June, the slowest rate of credit expansion since Lehman Brother's crashed in 2008, according to economists interviewed by the New York Times.

And July new home sales in China fell 17.9% from a year earlier and 28.2% from June. China's second quarter uptick is likely an "aberration" and the Chinese government's stimulus isn't enough to offset skittish banks from pulling back lending to "bigger, riskier borrowers," the Times reported. And if China should fail in its stimulus efforts that could mean an unexpected drag on global growth.

Chart A IWB

The only bright spot continues to be emerging markets. The IMF projects that annual growth will be 5% per year over the next five years. That's strong, but down from an average of 7% growth from 2003 to 2008. Of course it's tough to pick which developing region or country will be the next to take off economically.

Overall, the IMF expects the global economy will like! ly expand 3.4% this year, a cut of 0.3% percentage points from April’s estimate, but still an improvement from 3.2% in 2013. The lack of strong growth in developed countries, despite very low interest rates and other stimulus might mean "global growth could be weaker for longer," the IMF said in its report.

Investors can be forgiven for being weary of the uneven pace of the global recovery, and the volatile markets that go with them. The world's economic leaders seem like they're in the business of revising their forecasts downward, and coming up with new reasons why a recovery is always just around the corner.

We had just such uncertain situations in mind when we developed portfolios for Global Income Edge.  We hedge your bets for you by recommending companies with operations mainly based in stable developed countries, and with operations across a broad range of developing nations.

 In this, our first Income Without Borders, we look at two health care companies that span dozens of countries and have pricing power and demographic winds at their backs to continue to pay high dividends.

 Richard Stavros is Chief Investment Strategist of Global Income Edge

8/17/2014

Beat the S&P With 5 Stocks Everyone Else Hates

BALTIMORE (Stockpickr) -- There's a lot of hate bubbling over on Wall Street right now. According to Bloomberg data, U.S. total short interest is at the highest level it's been since the March 2009 market bottom. That means that, this summer, bets on a tumbling market are ramping up at a pace not seen since a major market extreme.

>>5 Breakout Stocks for a Market Near All-Time Highs

And could be a very good thing for longs right now.

The fact of the matter is, hate is a powerful emotion to hone in on in the markets because, more often than not, it's wrong. Don't take my word for it; the data bear it out as well.

Over the last decade, buying the most hated and heavily shorted large- and mid-cap stocks (the top two quartiles of all shortable stocks by market capitalization) would have beaten the S&P 500 by 9.28% each and every year.

When I say that investors "hate" a stock, I'm talking about its short interest. A stock with a high level of shorting indicates that there are a lot of people willing to bet on a decline in its share price – and not many willing to buy. Too much hate can spur a short squeeze, a buying frenzy that's triggered by short sellers who need to cover their losing bets.

>>5 Rocket Stocks to Buy for Summer Gains

One of the best indicators of just how high a short-squeezed stock could go is the short interest ratio, which estimates the number of days it would take for short-sellers to cover their positions. The higher the short ratio, the higher the potential profits when the shorts get squeezed.

Today, we'll replicate the most lucrative side of this strategy with a look at five big-name stocks that short sellers are piled into right now. These stocks could be prime candidates for a short squeeze in the months ahead.

AT&T

Telecom giant AT&T (T) tops off our hate list this week. With a short interest ratio of 10.18, it would take short sellers more than two weeks of buying pressure at current levels to cover their bets. More important, AT&T's short interest ratio is the highest it's been since September 2006. Much of that shorting comes from the pending DirecTV (DTV) deal, but that doesn't change the fact that shorts could get squeezed in 2014.

>>3 Tech Stocks Spiking on Big Volume

AT&T is the No. 2 wireless carrier in the U.S., with approximately 99 million cellular customers. Wireless may be AT&T's most profitable business, but its legacy wireline assets contribute a huge share of operations: The firm operates 28 million phone lines and has 17 million internet users. As AT&T packages more of those customers on higher-margin "triple-play" packages, AT&T should be able to find meaningful growth potential in the years ahead with lowered customer acquisition costs. Exposure to Europe (and soon Latin America through DTV) is another growth avenue for AT&T -- but one of the biggest valuation bumps comes from just how much top rival Verizon (VZ) paid to buy 45% of its wireless arm from business partner Vodafone (VOD) last year.

From a financial standpoint, AT&T is in solid shape. Shares currently trade for a P/E ratio of 10, and even though the telecom business is capital-intense, AT&T has a long track record of paying of a hefty dividend yield. Currently, that payout sits at 5% -- and dividends are like kryptonite for short sellers.

Waste Management

$20 billion trash stock Waste Management (WM) is another large-cap name that's high up on investors' hate lists this week. WM tips the scales as the largest waste services firm in the country, with approximately 270 landfills and nearly 300 transfer stations in its network. The firm also owns 22 waste-to-energy plants that are designed to turn the waste that WM literally gets paid to collect into renewable energy that the firm gets paid for again.

>>5 Stocks Set to Soar on Bullish Earnings

So calling WM the biggest "trash stock" is a compliment, not a jab.

Waste Management's garbage business has a reputation for being "recession-proof" -- and while that may be overstating the downside protection that the industry enjoys, it's true that waste services tend to be insulated from downside pressures. WM enjoys some big advantages because of its scale. For instance, it's able to negotiate large national corporate accounts that smaller rivals can't touch, and it can make more efficient bids because it's a fully integrated firm (it owns its own landfills and can spread costs across more operations).

Waste Management is another good example of a heavily shorted high-yield name whose dividend should be a factor in how long short sellers stay the course. Right now, the firm's short interest ratio sits at 10.32, which means that it would take more than two straight weeks of buying for shorts to exit their positions at current volume levels.

AutoZone

$17 billion auto parts retailer AutoZone (AZO) hasn't been the sort of name you'd want to be short in 2014. Since the calendar flipped to January, AutoZone has rallied 11.6%, nearly doubling the performance of the S&P 500. And with some stiff tailwinds pushing at its back, there's good reason to expect more outperformance in the second half of the year.

>>5 Stocks Ready for Breakouts

AutoZone is the top aftermarket car parts retailer in the country, with more than 4,700 stores spread across the U.S. AZO also operates 300 locations in Mexico and a few locations in Brazil. Here at home, the average age of cars on the road is higher than it's ever been -- 11.4 years -- and that means that cost-conscious consumers need to turn to aftermarket parts retailers such as AutoZone in larger numbers. That situation is magnified in AutoZone's Latin American markets, where an even older average fleet age increases the parts demand. The firm's big exposure to private label brands means that AZO earns net profit margins well into the double digits, an unthinkable level of profitability for most retailers.

Retail isn't AZO's only business, though. AutoZone also operates more than 3,000 commercial parts centers inside its retail stores, supplying professional car repair businesses with parts and its proprietary ALLDATA auto repair software. Right now, shorts are piling into AZO. The firm's short interest ratio is 10.08 and rising.

Kohl's

There's no two ways about it: Investors hate $10 billion department store chain Kohl's (KSS) right now. With a short interest ratio of 13.67, KSS isn't just the most-shorted large-cap name on our list this week -- it's also sporting the highest short interest in the company's history. As I write, approximately 25 million shares of KSS are short.

>>5 Toxic Stocks You Need to Sell in July

Kohl's is a big-box department store with more than 1,160 locations spread across the country. The firm's focus is value, offering middle-income consumers well-known brand names at moderate prices. But Kohl's does things a little differently than its similarly-positioned peers: for instance, it doesn't anchor its stores at shopping malls. And instead of courting deals from premium-priced brands, KSS has pursued exclusive celebrity and designed-backed labels for its stores, moves that have dramatically boosted KSS' margins and customer draw. Today, around half of Kohl's sales come from its own private-label brands.

Financially speaking, Kohl's balance sheet is in good shape. The firm currently carries just over $700 million in cash, offsetting a $4.8 billion total debt load. That's about 25% less balance sheet leverage than the industry average, and it helps the firm maintain a hefty 3% dividend payout. Look for Aug. 11 earnings as a potential short squeeze catalyst in KSS.

Rockwell Collins

Aerospace and defense firm Rockwell Collins (COL) rounds out our list of short-squeeze candidates this week. Even though COL has maintained a modest lead on the S&P 500 year-to-date, shorts are piling into the $10.7 billion firm as its share price tests new highs. Here's why shorts should be wary about this name.

Rockwell Collins is one of the leading avionics, flight control and navigation systems suppliers. The firm's equipment can be found on most modern commercial aircraft, as well as larger corporate transport jets (the fastest-growing category in fixed-wing general aviation for the last several years). Avionics is a tough business with huge switching costs. Between FAA approval and manufacturer integration costs, the chances of an aircraft manufacturing jumping to a rival product are hugely mitigated. Honeywell (HON) is the only avionics name that realistically competes with COL for its segment of the aviation market.

Historically, COL's sweet spot has been in regional jets, but important contracts on larger heavy transport aircraft could open up a big untapped market for Rockwell Collins, especially as airlines begin upgrading aging (and fuel-inefficient) models with newer planes. The combination of commercial and defense revenues gives COL attractive diversification from the cyclical nature of the aerospace sector. Right now, the firm's short interest ratio sits at 11.15; July 22 earnings could provide a short squeeze catalyst.

To see these short squeezes in action, check out this week's Short Squeezes portfolio on Stockpickr.

-- Written by Jonas Elmerraji in Baltimore.


RELATED LINKS:



>>5 Stocks Under $10 Triggering Breakout Trades



>>3 Huge Stocks on Traders' Radars



>>4 Stocks Rising on Unusual Volume

Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in the names mentioned.

Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to

TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.

Follow Jonas on Twitter @JonasElmerraji


8/07/2014

5 Dividend Stocks Delivering The Secret To Successful Investing

Many people spend their investing lives jumping from one investing strategy to another. It seems they are always looking for that hot combination that will produce instant wealth. Think about it. Most things that are instant, such as potatoes and coffee, aren't really that good. Quick and easy, yes, but not really good.

There are a number of ways to invest successfully. I have friends who are very successful value investors. Most of their returns are earned through capital appreciation. They spend a great deal of time pouring through 10-Ks and 10-Qs of companies off the beaten path. The potential returns are high, but so is the effort put in their craft. At the other extreme there are successful traders. They look at their charts to determine entry and exit points for the day's transactions. Little to no time is spent analyzing the underlying fundamentals of the company since it likely will only be held for a very short period of time. I would put investors in dividend growth stocks somewhere between these two, but much closer to the pure value investor. Like the value investors, our time-frame is long term. Although we carefully research potential companies, our emphasis leans more toward fundamental metrics needed to sustain annual dividend growth, with less emphasis on current value. There are successful investors in each of the above groups, and they share a common trait. This trait is found in most all successful people – it is their secret to success. Fortunately, this trait can be learned and mastered. The secret to successful investing is... discipline. A person that moves from one investment strategy to another lacks the discipline to be successful. Very few people are born with the raw intellect that allows them to just pick winning stocks out of the air. For the rest of us, we have to rely on our discipline to do what's necessary to identify stocks that will provide us with our best opportunity to succeed, and we have to remain focused on quality over the long-term. Our portfolios include stocks like:Emerson Electric Co. (EMR) | Yield: 2.5% Emerson Electric Co. designs and supplies product technology and delivers engineering services and solutions to a wide range of industrial, commercial and consumer markets around the world. The company has paid a cash dividend to shareholders every year since 1947 and has increased its dividend payments for 58 consecutive years.Genuine Parts Company (GPC) | Yield: 2.6% Genuine Parts Co is a leading wholesale distributor of automotive replacement parts, industrial parts and supplies and office products. The company has paid a cash dividend to shareholders every year since 1948 and has increased its dividend payments for 58 consecutive years.Johnson & Johnson (JNJ) | Yield: 2.7% Johnson & Johnson is a leader in the pharmaceutical, medical device and consumer products industries. The company has paid a cash dividend to shareholders every year since 1944 and has increased its dividend payments for 52 consecutive years.The Coca-Cola Company (KO) | Yield: 2.9% The Coca-Cola Company is the world's largest soft drink company, KO also has a sizable fruit juice business. The company has paid a cash dividend to shareholders every year since 1893 and has increased its dividend payments for 52 consecutive years.McDonald's Corporation (MCD) | Yield: 3.2% McDonald's Corporation is the largest fast-food restaurant company in the world, with about 35,000 restaurants in 119 countries. The company has paid a cash dividend to shareholders every year since 1976 and has increased its dividend payments for 37 consecutive years.The Procter & Gamble Company (PG) | Yield: 3.2% The Procter & Gamble Company is a leading consumer products company that markets household and personal care products in more than 180 countries. The company has paid a cash dividend to shareholders every year since 1891 and has increased its dividend payments for 56 consecutive years. Obviously, we must do our due diligence to determine an appropriate entry point for any stock purchased. It is important to remember that the process does not stop there. We must also monitor our holdings to ensure they remain solid investments that will provide us a rising income in the future.Full Disclosure: Long EMR, GPC, JNJ, KO, MCD, PG in my Dividend Growth Portfolio. See a list of all my dividend growth holdings here.Related Articles - 10 Dividend Stocks For The Ultimate In Deferred Gratification - 6 Healthcare Stocks With Growing Dividends Yielding In Excess of 2% - Why We Are Dividend Growth Investors - 6 Dividend Growth Stocks With Very Little Debt - What Determines A Dividend Stock's Yield

About the author:Dividends4LifeVisit Dividends4Life at: http://www.dividend-growth-stocks.com/
Currently 5.00/5

8/06/2014

Today’s Pre-Market Earnings: Diebold Inc, HollyFrontier Corp, Viacom, Inc., More (DBD, HFC, VIAB, More)

Before the opening bell on Wednesday, a number of big name, dividend paying companies announced their quarterly earnings. Below, we look at these earnings reports and break down the important points for investors.

Chesapeake Energy Misses EPS Estimates

Chesapeake Energy Corporation (CHK) reported Q2 earnings of $145 million, or 22 cents per share, down from $457 million, or 66 cents per share, a year ago. Excluding special items, earnings were $235 million, or 36 cents per share, down from $265 million, or 51 cents per share, last year. Revenue rose to $5.152 billion from $4.675 billion last year. On average, analysts expected to see adjusted earnings of 44 cents per share and $4.91 billion in revenue.

Diebold Swings to Q2 Profit; Beats EPS Estimates; Revenue Misses

Diebold Inc (DBD) posted Q2 net income of $41.6 million, or 64 cents per share, compared to a net loss of $105.0 million, or $1.65 per share, a year ago. Excluding special item, earnings were 47 cents per share, above analysts’ view of 39 cents per share. Revenue increased to $733.5 million from $707.1 million last year, but missed analysts’ estimate of $735.61 million. Looking ahead, DBD has raised its FY2014 EPS outlook to a range of $1.55 to $1.80 (from $1.30 to $1.55 per share). Analysts expect to see EPS of $1.77.

See Also: Behind Diebold: The Most Consistent Dividend Payer Ever (DBD)

HollyFrontier Misses E

8/02/2014

How to Spend Less and Still Feed Your Family Well

Family shopping together in grocery store Ariel Skelley/Getty ImagesYou can keep your fridge stocked even when cutting back on your grocery store trips. If you've gone to the grocery store lately, you've probably noticed that prices are steadily going up. Whether you're single or feeding a family, the cost of food can really add up. Prices from beef to staples like milk are all increasing so it can be difficult to shelter yourself from the rise in cost. Recent studies indicate that some families of four can expect to spend nearly $1,200 a month on food if they're not careful. It is also important to point out that this number doesn't include costs for dining out, just simply shopping at the grocery store. If that number sounds too high to you and you're looking for ways to lower your grocery bill, these tips should help. Shop less often: One easy way to spend less on groceries is to shop less often. If you go shopping once every week, try extending it to once every nine or 10 days. Averaged out over a month, this would cut out one major trip to the store per month and thus help you spend less. While it might seem difficult at first, it is possible to reduce your trips to the grocery store and still keep your pantry full. Beyond spending less, the act of shopping less frequently also has two other major benefits -- it forces you to eat more of the food in your home and it helps you greatly reduce food waste. These two things together will help you stretch your groceries and thus lower your spending. Shop around a meal plan: As simple as it might sound, shopping with a meal plan can help you lower your grocery bill. You can make this meal plan to fit your needs, whether it be weekly, bi-weekly or monthly. Having a meal plan will not only allow you to bring more discipline to your grocery shopping but it also has the benefit of giving you flexibility in when you have your meals. If you use your meal plan strategically, you can use it to shop around sales and coupons in order to maximize your savings. If you have not given thought to a meal plan, try using one for a few weeks and you should see it help you lower costs in the long run. Think about value: It is a common misconception that you can't eat healthily on a budget. That is an understandable belief but is largely a myth. When you take a look at your grocery spending, consider the kind of items you are spending money on. Are you stocking up on empty calories like soda and snacks? Some of that is OK, but taken to an extreme it will add up. The often overlooked side effect of spending on empty calories is that they will not fill you for very long. Items that are higher in protein, as well as some fruits and vegetables, will generally keep you satisfied and thus cause you to spend less in the long run. While those items that are considered empty calories might seem cheaper in the short run, they generally are more expensive in the long run as you will end up buying more as well as possibly deal with poorer health. That can lead to more visits to doctors and other costly health care costs. Be flexible: Few people enjoy eating leftovers, but they can do wonders to helping you lower your grocery costs. In fact, you can even include leftover nights within your meal plan once or twice a week. You can make this work even better if you make meals that complement each other when you pair them together later in the week. Having leftover nights also has the dual benefit of infusing a little more creativity into your meals, especially if you feel like you're having some of the same things time and again. If leftover nights aren't desirable, then at the very least use your leftovers as a way to supplement the lunches you take to work. Lowering your grocery costs, especially in a growing family, can be a challenge. However, with a little planning and commitment, it is possible to save money and not spend an arm and a leg at the grocery store. .