July 22, 2015
FROM THE EDITOR
Nancy Zambell

by Nancy Zambell
Editor of Dividend Digest and Investment Digest
from Investment Digest, Issue 771

The technology sector is dragging earnings for the second quarter down, and wasn’t helped by yesterday’s selloff in Apple (AAPL), after the company reported a sales shortfall.

But the news isn’t all bad. As of the end of last week, 61 of the S&P 500 companies had reported Q2 earnings, and 72% of them beat expectations (which, admittedly, were low). The blended earnings decline rate for second quarter is now 3.7%, a bit better than the 4%-5% that was estimated at the end of June.

Earnings are weighing heavily on the markets—at least temporarily. But most advisors expect this to be a buying opportunity. You’ll see that our Sentiment Barometer sways more bullish this month, although in our Market Views, our contributors remain somewhat cautious.

This issue includes Mid-Year updates on our January Top Picks, and I think we all have reason to celebrate. More than half of our contributors’ recommendations beat the market returns, and our Top Five Picks were truly stellar, with gains of 51.2%, 43.4%, 36.9%, 27.8%, and 27.1%, respectively. Congratulations to Nadine Wong of Wong’s Biotech Stock Report, Chris Temple of The National Investor, Mike Burnick of Weiss Stock Ratings Heat Maps, Gray Cardiff of Sound Advice, and our own Timothy Lutts of Cabot Stock of the Month.

Our Top Picks cover most of the S&P sectors, including financial, energy, technology, emerging markets, retail, transportation, industrial and healthcare. We also offer several new picks for the remainder of the year, in the emerging markets, technology, pharmaceuticals, ETFs and even a speculative penny stock.

We’ve included several additional recommendations to round out this issue—both growth and value stocks, as well as a couple of funds and ETFs.

We hope you enjoy this issue, and invite you to share your investment strategy questions and comments with us. And don’t forget to visit our website for a growing library of educational articles, videos and my blog.

EDITOR'S PICK

July 24, 2015
eHi Car Services (EHIC)
Timothy Lutts

Timothy Lutts

from Cabot Stock of the Month

The #2 car rental company in China, eHi Car Services (EHIC) has a great trajectory of growth—plus, I like to think it tries harder.
After coming public in November 2014, the stock made a little progress in the first four months of the year, but trading volume remained light. Then, in mid-May, volume mushroomed rapidly, as buyers moved in, driving the stock from 11 to 14 in the days before the company’s first-quarter earnings were released. Happily, the report justified their buying!

eHi’s revenues increased 61% from the year before, driven mainly by a 74% increase in car rental revenues. The company’s fleet size increased by 82% to 24,362 vehicles. And most importantly, the company swung from a loss to a tiny profit. Read More »


FEATURED INCOME INVESTMENT

July 17, 2015
Preferred Apartment Communities (APTS)
Nancy Zambell

Nancy Zambell

from The National Investor

Despite some of our gains on Preferred Apartment Communities, Inc. (APTS) evaporating in the recent past as investors have indiscriminately sold REITs and other rate-sensitive groups as Treasury yields creep higher, this company remains a strong “BUY.”

Though headlines suggest that the housing market is strong, it’s much a “tale of two cities.” And there remains strong demand for rental housing for the many millions of Americans who—thanks to still-tight credit and the rebound in home values—have been priced out of any ability to buy a home. Read More »


INCOME INSIGHTS

Bullish, but Cautious
John Bollinger

John Bollinger

By John Bollinger for Capital Growth Letter
from Dividend Digest 274, July 15, 2015

There is pretty good evidence that the correction has ended. Just 4% peak to trough. Our VIX work confirms, so the name of the game now is to monitor the rally for evidence that it is strong enough to carry to new highs and not just a simple return or snap-back rally before a break down.

The interesting thing is that smaller stocks managed a gain last week, while middle-sized stocks fell a bit and larger stocks were flat. Growth continued to maintain its edge over value. Read More »