August 19, 2015
FROM THE EDITOR
Nancy Zambell

by Nancy Zambell
Editor of Dividend Digest and Investment Digest
from Investment Digest, Issue 772

While China’s currency and growth problems continue to weigh on the markets, U.S. economic statistics are holding their own. Trimming unemployment continues to be a long-term challenge, with weekly claims numbers trending up a bit last week. Housing starts rose, but building permits fell. Consumers are spending money, but mostly on autos. And the Michigan Sentiment numbers fell slightly, but not enough to cause any concern. It seems that we are still residing in the steady, but not barn-burning economic recovery stage.

As I shared with our subscribers at Cabot’s third annual conference in Salem, Massachusetts last week, we are mired somewhere in between the early and middle stages of economic recovery.

And uncertainty surrounding the Fed’s eventual rate increases continues to suppress investment enthusiasm. At this juncture, I expect once the Fed actually raises rates—after the initial volatility—the event will be ho-hum to investors, since most of the angst has already been written into the markets.

Certainly, our Cabot subscribers haven’t lost their hunger for good investments. Our turnout last week was fabulous, and the eager investors kept our analysts on our toes, asking thoughtful questions about the markets, strategies and individual stocks. And I just have to brag on our analysts. I have met hundreds of investment advisors, research analysts and editors in my work with various newsletters and the Money Show over the past 20 years. And I must say that Cabot is blessed with some of the most intelligent, hard-working folks in the business.

Our subscribers heard recommendations for short- and long-term investing as well as strategies for growth and income. And many were intrigued by the ideas for portfolio protection, using options, courtesy of Jacob Mintz, chief analyst of Cabot Options Trader. All in all, it was a fantastic event. We thank our subscribers for their enthusiastic participation!

And while our subscribers remain cautiously bullish, the financial industry is trending a bit more bearish, as you’ll see in our Advisor Sentiment Barometer. But in our Market Views section, our contributors are still bullish, but beginning to discuss Value stocks along with Growth.

Our Spotlight Stock combines both strategies–a conservative airline with excellent growth. My Feature article delves a little further into the sector and analyst community’s rising interest in the stock.

Our Value stocks present a nice selection from the construction materials, transportation and media industries. We’ve included some cutting-edge biotech companies, a couple of more conservative healthcare businesses and a variety of technology stocks covering financial apps, Internet security, telecom and hardware.

Growth still reigns king on Wall Street, and our contributors found companies from basic industries, entertainment, retail and financial sectors. We’ve also included a number of funds and ETFs for you, including emerging markets, small-caps, technology, consumer, healthcare and growth.

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

August 21, 2015
Alaska Air Group (ALK)
Richard Moroney, CFA

Richard Moroney, CFA

from Dow Theory Forecasts

After ascending for much of the year, Alaska Air Group (ALK) shares have been jostled by a bit of turbulence following a solid June-quarter report. The airline’s per-share profits surged 56% to $1.76, excluding special items, topping the consensus by $0.03. Revenue increased 5% to $1.44 billion, marking the 23rd consecutive quarter of growth, to match the consensus. Traffic rose 9%.

Alaska Air’s operating profit margin, now up in seven straight quarters, currently stands at its highest level since at least 1979. The company owes much of its improved profitability to lower fuel costs, down 34% to $2.12 per gallon in the June quarter. But Alaska Air showed discipline elsewhere, as operating costs per available seat mile excluding fuel declined 4%. Read More »


FEATURED INCOME INVESTMENT

August 14, 2015
Wal-Mart Stores (WMT)
Russ Kaplan

Russ Kaplan

from Heartland Adviser

Wal-Mart Stores (WMT) has super stores and its spin-off, Sam’s Discount Stores, in almost all countries. New and smaller neighborhood stores have also been very successful.
Investors today are now worried that Wal-Mart will be eclipsed by Amazon, which sells many of the same products on its web site.

Wal-Mart has responded with its own web site, which I think is every bit as good as Amazon’s. The company also benefits by having so many physical stores for people to shop at along with the grocery store component that are now in most Wal-Mart stores. Read More »


INCOME INSIGHTS

More Strength to Come?
Stephen Todd

Stephen Todd

by Stephen Todd for Todd Market Forecast
from Dividend Digest 275, August 12, 2015

We had an oversold market at the opening of the session. Then, there was some merger activity that caused an upmove. Greek banks received some funding. China’s market was up almost 5%, and finally, over the weekend, Barron’s recommended the buying of commodities, specifically gold and crude oil. The latter obviously helped gold and oil shares. Read More »