August 20, 2014
FROM THE EDITOR
by Nancy Zambell
Editor of Dividend Digest and Investment Digest
from Investment Digest, Issue 760
All of us at Cabot would like to thank those of you who joined us last week at our second annual Cabot Investors Conference in Salem, Massachusetts. We shared some great ideas and conversation, and appreciate your suggestions and the camaraderie you offered all of us, as well as your fellow attendees—we had a great time!
One of the main topics of conversation was, of course, the volatility of the S&P 500. After an incredible rise the last year or so, the Index has seen increased volatility, declining during the first few weeks—as a result of the increased strife in Ukraine, Gaza and Iraq—but the markets have since shrugged off the hostilities, and begun another leg up. Although valuations are climbing, the P/E ratio for the S&P 500 remains under 20—getting lofty, but not outrageously high.
The economy continues to improve, with unemployment slowly declining, but fairly significant jumps in housing starts and building permits.
As well, 469 companies in the S&P 500 Index have reported second-quarter earnings, and 73% have reported earnings, and 64% have reported sales, above the mean estimate. The earnings growth rate was excellent, coming in at 7.6% for the quarter.
Our Spotlight Stock is a homebuilder that’s moving into new markets, taking advantage of a climate of lower interest rates to expand, and should do well in a recovering economy. My editorial this month follows up with a few more insights into the building industry.
With the economic recovery heating up, our contributors found a wide variety of growth stocks for you this month, including an upscale hotel operator, a railroad, a low-cost retailer, a carton manufacturer and a major communications company.
Our high-yield picks include companies in the energy, communications, infrastructure, funeral and financial businesses.
In the growth/technology/biotech arena, you’ll find several names with which you will be familiar, as well as a few up-and-coming tech/biotech companies.
Our financial recommendations are a little out-of-the-box, highlighting a South Korean bank as well as the leading pawn shop operator in Mexico.
For value stocks, you won’t be disappointed with the interesting range of companies, including a TV network, a restaurant supplier, a tire retailer, a major insurance company, a sportswear maker and a premier event site.
We’ve also included a company in the midst of a turnaround, a gold miner, an emerging markets Internet player and a nice selection of energy companies.
Lastly, you’ll find some enticing international picks, as well as an energy fund in our funds and ETFs section.