October 22, 2014
FROM THE EDITOR
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.
October 22, 2014
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 »