October 22, 2014
FROM THE EDITOR
Nancy Zambell

by Nancy Zambell
Editor of Dividend Digest and Investment Digest
from Investment Digest, Issue 762

You could almost hear the brakes of the markets screech, as the more than 1,000-point drop that the Dow Jones Industrial Average had posted in the past month came to a halt at the end of last week (at least for now).

Our advisors are a bit mixed on their short-term market opinions, as you’ll see in our Market Views section of the Digest. And our Advisor Sentiment Barometer—while still bullish—has turned a bit more to the correction side. But one area that the majority of our contributors and I agree on is that increased volatility is a certainty.

Consequently, our recommendations are trending a bit more conservative, with portfolio protection in mind. That means our contingent of value stocks are on the rise, with a few dividend companies also thrown into the mix.

But, first, our Spotlight Stock this month is benefiting from a couple of economic catalysts: an improving economy and lower oil prices. And as my feature points out, innovative technologies should also boost that sector.

Third-quarter earnings reports, so far, are telling us that growth isn’t dead, and our advisors followed through with recommendations that include a company whose sales are rising due to an improved housing market, as well as an airline that is enjoying savings due to the better economy and declining oil prices.

In the technology sector, this month’s picks include a semiconductor stock, a robotics company, a big data star, a couple of communications businesses and an audio specialist.

You’ve seen their commercials, but you may be surprised at the new markets in which our turnaround company is plying its trade. And the stocks in the energy sector—which has recently seen selling pressure—are additional beneficiaries of falling oil prices.

Our value stocks include an emerging market company, an automotive supplier, a previously-high-flying athletic clothing manufacturer, an e-commerce retailer, an LPG carrier, a pork and turkey producer, and two food retailers.

Among biomedical/pharmaceutical stocks, you’ll find a couple of cutting-edge biotechs, along with two large cap stocks that have returned to buyable levels. And we present one low-priced stock—a bank that has emerged from the recession era with great earnings momentum.

Gold is testing the waters and makes an appearance through an ETF. And our Funds and ETFs section further demonstrates our contributors’ thinking on portfolio protection and diversification, as they offer several picks that include volatility, leveraged, dividend and even currency options.

Don’t forget to browse this website for a growing library of educational articles and videos.

EDITOR'S PICK

October 22, 2014
Rosetta Stone (RST)
Ian Wyatt

Ian Wyatt

Rosetta Stone (RST) has had its share of problems over the years. As the Internet grows, there are more free or low-cost language learning courses available online. That has resulted in more competition and put pressure on the product pricing. Until recently, the company was missing out on the opportunity to sell an online learning product to consumers.

The stock has attracted vocal activist investors, including hedge fund manager John Lewis of Osmium Partners, whose firm recently bought 2.1 million shares, or 10% of the company, and David Nierenberg of Nierenberg Investment Management, which owns 7.9% of Rosetta Stone’s stock, and has been actively making recommendations to management.

Things started to change for the better at Rosetta Stone in mid-2012, including its strategy to sell its language education software directly to schools, colleges, companies and non-profits. Additionally, the company made four strategic acquisitions to boost its product offerings and expand its online offerings. Read More »


FEATURED INCOME INVESTMENT

October 16, 2014
Oaktree Capital Group, LLC (OAK)
George Putnam III

George Putnam III

Oaktree Capital Group, LLC (OAK) is a leading investment firm in the turnaround and distressed securities area. It also invests in convertible securities, emerging markets, real estate and value-oriented public equities.

Oaktree’s assets under management have grown steadily over the years to about $91 billion today. After running up to the low 60’s early this year, the stock has fallen back to the low 50’s.

While Oaktree’s reported results can be somewhat lumpy because much of its revenue comes from the profits earned on the investments made by its funds, both the new funds and the existing funds also provide a steady flow of management fees. Read More »


INCOME INSIGHTS

John Nyaradi

John Nyaradi

By John Nyaradi,  from Wall Street Sector SelectorDividend Digest dated October 15, 2014

Monday brought another stock market selloff, as everything sank, except gold. While the spot price of gold jumped 1.11 percent, the SPDR Gold Trust ETF could not even make it to 0.80% (GLD).

Even the dollar was down (UUP). Reality continued to set in as the Federal Reserve’s bond-buying extravaganza continued to wind down. The New York Fed will be conducting the last seven POMO auctions between Tuesday and October 28, when the most important phase of the quantitative easing program will end. Read More »