  |
Judging from this company's returns, it must have some of the happiest shareholders on Earth. Since it opened its main attraction in 1971, its stock is up a stunning 126 to 1. A mere $5,000 investment would now be worth $630,000.
And now we think it's happening all over again. Get the details here…
| | | 8/20/2014 By Jim Fink 
The year is 1954.
On Wall Street, the Dow Jones Industrial Average finally surpasses its 1929 peak.
In the entertainment world, Elvis Presley records his first single at Sun Studio in Memphis. And The Tonight Show, hosted by Steve Allen, makes its broadcast debut on NBC.
Meanwhile in Anaheim, California, Walt Disney breaks ground on his new Disneyland resort.
The idea behind the project was simple.
During the 1940s, Walt liked to take his two young daughters to carnivals, but he always ended up sitting on the bench while they rode the merry-go-round and had all the fun. So he wanted to build a new kind of theme park where kids and parents could have a good time together.
Disneyland has been a model for every amusement park since—drawing hundreds of millions of visitors. It's every bit as popular today as it was when it opened in 1955.
After Disneyland's success, Walt Disney World was built on 28,000 acres near Orlando, Florida, in 1971.
It was a blockbuster. Disney World is now the world's top vacation destination. Investors who recognized the resort's potential got rich. And I mean really rich!
Turning $5,000 Into $630,000—With One Swing of the Bat
Today, the Walt Disney Company is a $144-billion entertainment colossus with an array of vacation, movie and music businesses. Mickey Mouse is as well known around the world as Coca-Cola.
Judging from Disney's returns, it must have some of the happiest shareholders on Earth. Since it opened Disney World in 1971, the company's stock is up a stunning 126-to-1. A mere $5,000 investment would now be worth an incredible $630,000.
And now it's happening all over again…
A Florida-based company is now in the second phase of an impressive plan to build the next generation of destination-based entertainment.
The similarities to the Disney story are striking.
Both firms were started by driven entrepreneurs who benefited immensely from their stock's success.
Each CEO created products that appealed to young people at first but that could reach a wider audience. Their companies developed world-famous brands and generated huge publicity.
Am I suggesting you buy Disney stock now? Absolutely not. That opportunity is over. There's no way a company as big and dominant as Disney can keep posting 100-to-1 returns.
But this next one has plenty of upside left.
How do I know?
Because a series of events in Florida is starting to look like…
1971 All Over Again
A new "Walt Disney World 2.0" is going up in Daytona Beach, Florida, near the world's most famous beach.
Besides rides and shows, it includes 1.1 million square feet of world-class shopping, dining and other entertainment, all just steps from the legendary Daytona International Speedway.
It also has 2,500 movie theater seats, 660 hotel rooms and 1,350 residences.
So why is this so interesting for investors?
Because it's like a repeat of what happened in 1971, when Disney World opened and developed into a year-round destination for millions of families from around the world.
As I said, since it opened Disney World in 1971, Disney stock has shot up 126 to 1, turning $10,000 into $1,260,000. This stock has just as much potential, and it could happen a lot faster.
Here's the best news for you: We've prepared a new special report on this under-the-radar stock. It contains key financial details and our full rationale for buying it ASAP.
In a moment, I'll show you how to get your copy absolutely free.
But first, let me tell you why this company meets all the strict benchmarks I set for the growth rockets I regularly uncover for readers of my Roadrunner Stocks advisory.
5 Reasons Why This Stock Could Triple—Then Gap Even Higher
Make no mistake: This opportunity could change your financial future. And the financial futures of your children. And your grandchildren.
I know that's a bold statement to make. Here are 5 reasons why I believe it's true: - Massive Competitive Advantages—Our secret pick already operates 12 of America's most popular entertainment venues and has created what Warren Buffett calls an economic moat. Its existing parks can handle more than one million visitors at a time. No one else in its industry comes close.
- Powerful Alliances—Our pick enjoys lucrative marketing relationships with Bank of America, Coca-Cola, Coors Light, Ford, Goodyear, Sprint, Toyota and UPS.
- Founders at the Helm—This business is owned and run by the family that founded it. They have been successful for more than six decades and have become billionaires in the process. There's nothing I like better in a stock than having a talented management team with skin in the game.
- Monopoly—The best type of business to own is a monopoly. Too bad they're illegal. Of course, there is one huge exception: sports organizations. The NFL, NBA and Major League Baseball have all been essentially granted monopolies over their sports.
You can't buy a sports team unless you're a gazillionaire, but this stock gives you a side door into the next best thing. - The Stock Is Undervalued—You'd think a business with monopoly power would be expensive. But right now it's trading just above book value. By evaluating takeovers of similar businesses in the past 10 years, we estimate that it's currently 30% undervalued.
That means you get 30% more shares for the same money you'll be able to once this pricing discrepancy disappears. It's a springboard to greater profits—even before factoring in future profits from its new Florida operation. When you add everything up, it's like the perfect storm. I'm convinced you can jump on this opportunity and pocket enormous profits in the next 24 months.
So without further ado, let me show you…
How to Buy Your Ticket Now
I reveal everything you need to profit from this extraordinary stock in my just-released special report, "The Next Disney: Another Epic Stock Success in the Making."
It's yours free just for trying out my Roadrunner Stocks advisory, where I use the proven strategies of Warren Buffett and Peter Lynch to uncover tomorrow's high-flying small cap stocks today.
Here are just a few winners my readers have profited from recently: - U.S. Physical Therapy has climbed 41% since I recommended it on April 26, 2013.
- FutureFuel has shot up 48.1% since I pounded the table on it in a research report back on March 28, 2013.
- United Therapeutics has rocketed 77.8% since I put out a strong buy recommendation and added the stock to our Roadrunner Stocks portfolio on January 24, 2013.
Now, with this trial offer, you can access all my best picks for a full 90 days and get complete details on the stock I reveal in "The Next Disney: Another Epic Stock Success in the Making."
Let me rush you this top-secret recommendation right away. You do not want to look back and see that you missed the next Disney rocketing up the charts from $1 to $126—and beyond.
Click here to get your FREE report and full access to all my latest picks now!
Editor's Note: Here's something else I think you'll really like: When you try Roadrunner Stocks today, I'll throw in a second special report, "Small-Cap Wealth Builders."
It delivers the sort of deep-value, moat-protected stocks Warren Buffett loves. The only problem? They're tiny … and the Oracle of Omaha deploys such large sums that he can't bother with small fry like these. But we bet he would if he could.
Don't miss this unique profit opportunity. And remember, you're always covered by our no-risk 90-day test drive, so your risk in accepting this offer is exactly … zero.
Go here to get started now! | | |
Walt Disney is the king of destination entertainment. He's made millions of children happy. And he's made millions of their investor parents rich, too. Every $10,000 invested in Disney in 1971 is worth $1.2 million today.
If you missed Disney's high-profit opportunity, not to worry. The next entertainment mega-trend is starting right now! It includes 1.1 million square feet of world-class shopping, dining, theater and more. It's just steps away from a major NASCAR speedway! It's the new Disney. If you're looking for that 100:1 return to secure your future, get our FREE REPORT.
| | | 8/20/2014 By Chad Fraser 
With another August comes another quarterly disclosure of the holdings of institutional money managers with assets of at least $100 million. The Securities & Exchange Commission (SEC) requires these managers to report their stock holdings via Schedule 13F within 45 days of the end of each quarter.
In May, when these investors last updated their holdings (as of the end of the first quarter of 2014), we highlighted four picks from each of four different investment gurus---Seth Klarman, David Einhorn, Daniel Loeb and Warren Buffett---to see what they could tell us about which stocks may be moving up---or down.
(It's important to note that Berkshire Hathaway's 13F filing includes trades made not only by Buffett himself but also by Ted Weschler and Todd Combs, portfolio managers Berkshire hired in 2011 and 2010, respectively.)
In our May article, we discussed Seth Klarman's increased position in hepatitis C drug maker Idenix Pharmaceuticals (NYSE: IDIX). Since we published that piece on May 21, Idenix has soared from $6.25 to $24.50 as of August 5, 2014, the day Merck & Co. (NYSE: MRK) closed its $3.85-billion acquisition of the company. That's a 292.0% gain in just two-and-a-half months!
These updates also let us stack these investment pros up against one another and see how their picks compare.
In the last three months, 10 of the 16 stocks highlighted (62.5%) in our May article made a profit (a sold stock is considered profitable if it went down in price). Making a profit is different from outperforming a stock index, however. Of the 10 stocks the gurus bought in the first quarter, five (50.0%) have beaten the S&P 500's 5.8% gain in the past three months.
Of the six stocks sold, four (66.7%) underperformed the S&P 500, so the gurus were better bears than bulls---a reversal of a long-standing trend.
In addition to Idenix, "buy" winners included Seth Klarman's Cheniere Energy (NYSE: LNG) (+30.6%) and Keryx Biopharmaceuticals (NasdaqGS: KERX) (+24.0%); David Einhorn's SunEdison (NYSE: SUNE) (+24.9%); and Warren Buffett's VeriSign Inc. (NasdaqGS: VRSN) (+15.1%).
Daniel Loeb had the quarter's worst trade, selling out of Gilead Sciences (NasdaqGS: GILD), which went on to rise 24.8%. Loeb also missed out on an 11.7% gain by exiting Yahoo Inc. (NasdaqGS: YHOO). Other losing moves included Buffett's increased position in retail giant Wal-Mart Stores (NYSE: WMT), which has slipped 1.1% in the last three months.
Klarman ran the table this time around, notching a perfect four winning trades out of four, while Einhorn had three, Buffett had two, and Loeb was shut out (winning trades being buys that outperformed the S&P 500 or sells that went on to be outpaced by the benchmark index).
In addition to the Yahoo and Gilead misfires, Loeb added new positions in CF Industries Holdings (NYSE: CF) and Verizon Communications (NYSE: VZ), which rose 4.0% and 0.1%, respectively, but that wasn't enough to beat the S&P 500.
The takeaway? Moves like these illustrate how important it is to do your own research and not merely follow the actions of celebrity investors, no matter how distinguished they may be.
Moreover, it's important to keep in mind that these 13F filings are usually out of date by the time they're released and likely don't paint an up-to-the-minute picture of each investor's holdings.
Nevertheless, they remain a gold mine of information as to what the smartest investors are buying and selling. A timely review of them can make you money. With that in mind, here are some highlights from the just-released 13F filings of Klarman, Einhorn, Loeb and Buffett.
Note that the following is not a full account of these gurus' transactions, just a few that stand out.
If you're keen to see what picks the cream of the investment crop are making these days---and who isn't?---read on!
1. Seth Klarman, Baupost Group
| Company | Action | % Change in Holding | Average Price Per Share | Comments | | eBay Inc. (NasdaqGS: EBAY) | Buy | NEW | $52.83 | Klarman bets eBay can overcome strong competition from Google and Amazon, as well as a recent data breach that tarnished its image. Shares are down 2.0% YTD, though the company did report slightly better than expected Q2 earnings. | | BP plc (NYSE: BP) | Sell | -100% | $50.53 | BP stock has fallen since July 29, when the company warned that further sanctions against Russia could hurt profits from its 19.75% stake in Rosneft, that country's biggest oil firm. | | Keryx Biopharmaceuticals, Inc. (NasdaqGS: KERX) | Buy | +67.0% | $16.34 | Klarman makes a substantial addition to the Keryx stake he initiated in Q1. The company is waiting for FDA approval of its Zerenex kidney dialysis drug. A decision is expected by September 7. | | Kosmos Energy Ltd. (NYSE: KOS) | Buy | NEW | $11.14 | Kosmos holds 24.1% of the Jubilee field, offshore Ghana, which is currently producing about 104,000 barrels of oil per day. State-run Ghana National Oil Corp. expects Jubilee to start producing natural gas later this year. | 2. David Einhorn, Greenlight Capital | Company | Action | % Change in Holding | Average Price Per Share | Comments | | Time Inc. (NYSE: TIME) | Buy | NEW | $23.66 | Shares of the Time Inc., the magazine publishing arm of Time Warner Inc. (NYSE: TWX), began trading on June 9. The stock is up nearly 5% since then---but its industry faces an ongoing decline in advertising and circulation revenue. | | Nokia Corp. (NYSE: NOK) | Sell | -100% | $7.53 | Greenlight reverses course on Nokia after taking an initial position in Q1. The Finnish firm sold its mobile device business to Microsoft in September 2013 and now focuses on mobile networks, mapping technology and developing its patent portfolio. | | SunEdison Inc. (NYSE: SUNE) | Buy | +79.8% | $20.81 | Einhorn adds to his initial position in the solar power company, which he established in Q1. SunEdison recently reported Q2 earnings that blew past analysts' expectations. | | Apple Inc. (NasdaqGS: AAPL) | Sell | -32.3% | $84.88 | The device maker has soared 40% in the past year, including a big gain after it completed a 7-for-1 stock split on June 9. | 3. Warren Buffett: Berkshire Hathaway | Company | Action | % Change in Holding | Average Price Per Share | Comments | | Charter Communications, Inc. (NasdaqGS: CHTR) | Buy | NEW | $141.05 | Berkshire's media holdings saw significant movement in Q2. In addition to snapping up shares of Charter, it sold its stake in Starz (see below) and cut back on DirecTV (NYSE: DTV) and Liberty Media Corp. (NasdaqGS: LMCA). | | Verizon Communications Inc. (NYSE: VZ) | Buy | +36.1% | $48.24 | Berkshire bulks up on America's leading wireless provider after jumping in with an 11-million-share stake in Q1. | | Starz (NasdaqGS: STRZA) | Sell | -100% | $31.06 | Starz stock has eked out just under a 1% gain year-to-date; Berkshire received shares in the pay TV operator when it was spun off from Liberty Media in early 2013. | | Suncor Energy Inc. (NYSE: SU) | Buy | +26.6% | $38.80 | Berkshire's stake in the Canadian oil sands giant has see-sawed since it bought its initial interest in Q2 2013. | 4. Daniel Loeb: Third Point, LLC | Company | Action | % Change in Holding | Average Price Per Share | Comments | | Ally Financial Inc. (NYSE: ALLY) | Buy | NEW | $24.08 | The U.S. government rescued Ally, General Motors' (NYSE: GM) former financing arm, in 2008. It went public in April and swung to a bigger-than-expected profit in Q2. Ally was Loeb's second-largest holding by value as of June 30, behind Dow Chemical (see below). | | Rackspace Hosting, Inc. (NYSE: RAX) | Buy | NEW | $33.27 | The cloud-computing firm announced in May that it had hired Morgan Stanley to explore strategic options, which could include a sale or partnership with another firm. Yesterday, activist investor Blue Harbour announced that it had taken a 6.4% stake. | | Cabot Oil & Gas Corp. (NYSE: COG) | Sell | -100% | $34.11 | Third Point unloads its stake in the Marcellus-focused producer as natural gas prices continue to pull back after last winter's price spike. | | The Dow Chemical Company (NYSE: DOW) | Buy | +204.5% | $50.16 | Loeb continues to up his stake in Dow and pressure management to unlock shareholder value, including by breaking up the company. |
Warren Buffett Would Love This Stock
Our top-secret pick has created what the Oracle of Omaha calls an "economic moat." It operates 12 of America's top entertainment venues---and its theme parks can handle more than a million visitors at a time.
No one else in its industry comes close.
We're convinced you can jump on this opportunity now and pocket enormous profits in the next 24 months.
Full details here.
| | |
Just outside the legendary Daytona International Speedway, a new empire is growing. Its visionary founder is tapping into the NASCAR craze. Over 75 million people – including countless kids – are huge fans of this sport. What better place to create a sprawling 1.1-million-acre entertainment destination for shopping, dining, hotels, movie theaters and more! The profit potential is enormous – double, triple, even more in the next 24 months. The time to buy is now. We have a FREE REPORT that outlines why. Click here to start your profit engines.
| | | 8/20/2014 By Jim Fink
As investors approach retirement, many start dropping small-cap stocks from their portfolios in favor of investments that are considered more of a sure thing. Small caps may be great for growing your portfolio when you're young, they assert, but once you're retired you need to use a more conservative strategy. So they begin loading up on government bonds, established companies and other "safe" investments.
But in reality, the higher annualized returns from small-cap stocks can help prolong the life of a retirement portfolio and increase the annual safe withdrawal rate (SWR). Small caps are not just for young people seeking to grow their nest eggs, but also for retirees seeking to prolong their net eggs' life.
Intelligent stock selection matters a lot in maintaining that safe withdrawal rate, of course. But research by economists and finance experts shows that the payoff in terms of higher returns more than outweighs the slightly higher risks involved.
Research by Eugene Fama and Kenneth French has shown that small-value stocks have produced superior returns. They looked at the real (inflation-adjusted) performance of small-value stocks, large-capitalization stocks and intermediate-term government bonds going all the way back to 1927 and now carried forward to 2013.
The difference was significant: Small-cap stocks averaged a 16.2 percent return, larger stocks 9 percent, and intermediate-term government bonds 2.4 percent. So that's a 7.2 percent advantage for smaller stocks.
Small-cap stocks are typically more volatile than their large-cap equivalents, which can be unnerving for some investors. But as long as you maintain sufficient diversification in your portfolio, small-cap stocks can be a crucial ingredient in ensuring that your retirement income will be around for as long as you are.
After reviewing the historical record, there is a solid case for overweighting small-cap value stocks in retirement portfolios, even if there are future reductions in the premiums earned over large-company stocks. However, there is still considerable debate about whether small-cap value stocks truly provide excess returns when risks are appropriately recognized.
It's important to distinguish between assertions made about small cap in general versus small-cap value, since the value category has performed better historically than growth on an absolute and risk-adjusted basis. There are indications that the small-cap category has performed about in line with stocks in general when adjusted for risk.
Larry Swedroe, for one, showed that between 1927 and 2012, small caps outperformed large caps by about 3%, but with virtually identical Sharpe ratios (a ratio developed by Nobel laureate William F. Sharpe to measure risk-adjusted performance). However, a Vanguard study of the period 1927-2004 showed small-cap value earning an average annual return of 15.1% versus 9.9% for growth, with similar standard deviations.
Financial planners have researched the role of the small cap in asset allocation, beginning with a 1997 article by Bill Bengen. His original research on the 4% rule used only large-cap stocks and intermediate-term government bonds, and he later determined that he could improve safe withdrawal rates (SWRs) by adding small-cap stocks to the mix.
Bengen used a small-cap category that included both value and growth and, based on historical data from Ibbotson, showed that SWRs increased from 4.1% to 4.3% by including small-cap stocks. He determined that including 30% small cap in the mix was enough to achieve the 4.3% SWR. Further increases did little to increase the SWR, so he settled on recommending a stock mix that included 30% small cap.
There is something special about small-cap value, and the question is whether its superior performance is likely to continue. Behavioral economists argue that that there is a bias against value stocks that gives rise to the return premium.
Obviously, older investors do have to be more cautious than younger ones, so smart stock selection is paramount. You'll find the best choices today in my Value Portfolio. The Road Ahead
What's going to happen to the stock market in the near term? The market is likely to continue rising until "something" gives, either higher interest rates or lower corporate profits. In other words, that "something" may be unknown but it will be a negative event, whatever it turns out to be. So, risk is high and warning signs are flashing: - Stock trading volume is "dead." Almost nobody is buying and sellers have their hands on the sell button but waiting for a trigger.
- The largest buyers of stocks are the corporations themselves, which have a notoriously bad record of buying at market tops. The smart money (hedge funds, corporate insiders, and institutional investors) are currently net sellers.
- Merger & acquisitions (M&A) activity is at a seven-year high. Historically, extremes in M&A are correlated with market tops.
- Number of initial public offerings (IPOs) in the second quarter was the highest in 14 years and the number of IPOs in week of July 28th is the highest since August 2000. Companies tend to go public when they think valuations are at their highest.
- Margin debt is declining, which historically signals increased investor risk aversion and results in a subsequent decline in equity prices.
- Corporate profit margins are at all-time highs and primed to revert back down to their long-term average level.
- The Bank for International Settlements stated that stock markets are "euphoric" and "detached from reality" thanks to the unsustainable easy-money policies of global central banks.
- Based on the Q Ratio (market price divided by asset replacement cost), the market is 80% overvalued.
- Market cap to GDP ratio of 114.5% is nearly two standard deviations above its mean and is higher than at any other market peak of the past 45 years except the Internet bubble of 2000.
I'm keeping a close eye on the Federal Reserve; a strong signal from the Fed that it's time to raise rates could have a huge impact. But for now, it's too soon to say that this bull market has no more room to run. This article originally appeared in the Small Cap All-Stars column. Never miss an issue. Sign up to receive Small Cap All-Stars by email. | | |
Our top recommendation operates 12 of the most popular entertainment venues in the U.S. Its founders still run the company and have become billionaires. Its existing parks handle 1 million visitors a day. No other competitor comes close. As Buffett says, the company has essentially built a "moat" around its kingdom, impervious to attack.
The stock is 30% undervalued, so you can get it at a bargain. You can potentially double or triple your gains in the next 12 months. But I expect great things in the years ahead. Details here.
| | | | | |
0 comments:
Post a Comment