3 Costly Mistakes People Make With Roth IRAs

Roth IRAs continue to gain popularity as vehicles for retirement savings. That stems from the fact that Roth IRAs offer tremendous tax breaks. Not only do they shelter your investments from capital-gains taxes and dividend taxes, but they allow you to withdraw your funds in retirement without paying income tax on them.

However, taking full advantage of a Roth IRA means avoiding several mistakes that can cost you money in the form of taxes, penalties, and attorney fees. Here are three common and costly mistakes to be aware of and avoid.

Roth IRAs come with rules that need to be followed. Image source: Getty Images.

1. Over-contributing

In 2019, workers under age 50 can contribute a maximum of $6,000 to a Roth IRA. People over age 50 can contribute a maximum of $7,000. However, if your income exceeds a certain amount, then you may not be able to contribute the full amount -- or anything at all. To make the maximum annual contribution, you must have a gross income below $122,000 if you're a single tax filer or $193,000 if you're half of a married couple filing jointly. The amount you can contribute declines as your income exceeds these amounts. Once your income exceeds $137,000 as a single filer or $203,000 as a married couple filing jointly, you're not eligible to contribute to a Roth IRA at all.

Should you contribute more to a Roth IRA than you're allowed, you'll have made what is known as "an ineligible excess contribution," which can result in tax penalties. Specifically, the penalty for ineligible contributions is 6% of the ineligible amount. You pay this penalty when you file your income tax return using Form 5329. To avoid the 6% penalty on excess funds, it's important to know whether you're eligible to contribute to a Roth IRA and how much money you can put in the account each year based on your age and your income. Over-contributing is an easy mistake to make, especially if a recent increase in your income has suddenly made you ineligible to contribute the same amount you did before.  

2. Pulling money out early

Pulling money out early can be a pitfall with many investments. But it can be particularly costly if that investment is held in a Roth IRA. If you withdraw money from a Roth IRA before you're 59 1/2 years old, the amount withdrawn may be subject to a 10% penalty, as well as income tax on any "accrued earnings." Any money you withdraw beyond the amount of your original contributions to a Roth IRA is viewed as "earnings," and it's subject to income tax.

The good news is that there are some notable exceptions to this rule. For example, if the funds go toward the purchase of your first home, or if they're distributed to your beneficiaries upon your death, then the withdrawal will not be subject to penalties or taxes. There are also some breaks available to people using a Roth IRA withdrawal to help pay college expenses. You must also remember the "five-year rule," which requires that your Roth IRA be open for at least five years before you withdraw any funds, lest you face income tax and penalties.

Given the stiff penalties and taxes involved, it's advisable to withdraw money from a Roth IRA only as a last resort in an emergency. And bear in mind that the IRS has good reasons for putting these restrictions on your withdrawals: That money is meant to help you stay financially secure in retirement, not cover near-term expenses.

3. Forgetting to list primary and contingent beneficiaries

When you're setting up a Roth IRA, it's important to pay attention to the fine print and fill out all the forms and paperwork properly. This includes listing primary and contingent beneficiaries for the account. Forgetting to name beneficiaries of your Roth IRA can cause big headaches for your heirs. The money in your account will be made payable to your estate, which means it will go through probate. And probate can be a complicated process that requires your heirs to pay hefty attorney fees to gain access to the money.

Remember to name beneficiaries when you first set up a Roth IRA, and be sure to update the paperwork associated with the account if you'd like to add or remove beneficiaries. For example, if you get divorced, you may want to remove your ex-spouse as a beneficiary, and if you have grandchildren, you may decide to leave some of the money to them.

Roth IRAs are great investment vehicles. But, like most retirement savings instruments, they come with their share of rules and procedures. Failure to follow the rules can lead to expensive problems.

3 Arguments For and Against Buying Canopy Growth

Once considered a taboo industry, marijuana is now big business. According to Cowen Group, arguably the most bullish of all Wall Street investment firms, the global cannabis industry could hit $75 billion in annual revenue by 2030, placing it on par with or ahead of the soda industry. To put things mildly, we just don't see growth stories like this come along all that often.

The big unknown is no longer whether the cannabis industry will be around 10 years from now. Instead, it's which pot stocks should be seriously given investment consideration. Topping that list just might be the world's largest marijuana stock by market cap and the first pot company to ever uplist to the New York Stock Exchange, Canopy Growth (NYSE:CGC).

Image source: Getty Images.

Sporting a more than $16 billion market cap, it's pretty evident that Canopy Growth has a fan base that believes there are plenty of reasons to buy. Then again, this is a company with 22 million shares held short as of Jan. 30, 2019. It's apparent that valid arguments can be made for Canopy Growth from both sides of the aisle, as you'll see below.

Three reasons buying Canopy Growth is a smart investment

The most logical reason to buy into Canopy Growth is because of the massive equity investment of $4 billion it received from Modelo and Corona beer producer Constellation Brands (NYSE:STZ). The investment was announced in mid-August, closed in November, and represented the third such time that Constellation had made a direct or indirect investment in the company. Upon closing, Constellation had a 37% stake in Canopy, with the warrants it received giving it the option at a future date to up its stake to as much as 56%. Not only does this cash infusion give Canopy more than enough capital to execute on its business strategy, which includes acquisitions, but it makes the company a serious buyout target by Constellation Brands a few years down the road.

Secondly, Canopy Growth is going to be a top-notch producer of cannabis, and as a result, it has landed itself an impressive number of supply deals. As of the fiscal third quarter, the company had more than 4.3 million square feet of licensed production space but has aspirations of having all 5.6 million square feet of growing capacity licensed by Health Canada this year. When fully operational, this should work out to north of 500,000 kilograms of yearly pot production. Having supply deals in place with all provinces, around 15% (or more) of the company's peak production should be spoken for each year.

Image source: Getty Images.

Thirdly, Canopy Growth brings intangibles to the table that most other pot stocks can't offer. Its Tweed brand is arguably the most established and recognized throughout Canada. It has multiple channels to sell its product, be it online or through physical retail stores that it owns. And unlike most marijuana stocks, Canopy is soon to have a very diverse revenue stream. Recently, the company was awarded a hemp growing and processing license in New York State that'll allow the company access to the United States' now legal and burgeoning hemp business.

Long story short, there are a lot of very good reasons for Canopy Growth to be the world's largest publicly traded pot stock.

Three arguments why you'll regret buying into the Canopy Growth story

However, there's another side to Canopy Growth that you ought to know and that isn't so palatable to investors. Here are three reasons you could regret buying into this growth story.

For starters, Canopy's intangibles can get lost in the shuffle if you happen to come across its income statement, which is bogged down by hefty operating losses. In the company's recently reported third-quarter results, Canopy tallied almost 170 million Canadian dollars (CA$170 million) in operating expenses, which included a more than quadrupling in general and administrative costs and a near-quintupling in sales and marketing expenses. All told, Canopy delivered an operating loss of CA$157.2 million in the fiscal third quarter. Through the first nine months of its fiscal year, operating losses have ballooned past CA$400 million, demonstrating what a fundamental mess Canopy Growth is at the moment. And, as the icing on the cake, profitability may not happen in 2020, either.

Image source: Getty Images.

The second red flag for Canopy Growth is the company's overwhelming focus on the recreational weed consumer. In the company's fiscal third quarter -- the first quarter to have postlegalization sales in Canada -- Canopy recorded CA$71.6 million in adult-use weed gross sales and just $18.6 million in gross medical marijuana sales, down CA$1.7 million from the year-ago quarter. Although the recreational pot market has a much larger consumer pool, these are typically lower-margin customers since they focus on dried cannabis flower. If Canada follows the same path as Colorado, Washington, and Oregon in the U.S., oversupply and commoditization will wreak havoc on Canopy's already challenged margins.

Last but not least, many optimists are assuming that we'll see a quick and orderly transition to legal sales channels for marijuana in Canada -- but this may be far from the reality. Health Canada has been contending with a mountain of cultivation license applications and sales permits, which, in many cases, is slowing down the ability of growers, processors, and packagers to bring product to market. This is a big reason why cannabis shortages have occurred in nearly every Canadian province since mid-October. In 2019, an estimated 71% of all marijuana sales will still be conducted on the black market, which means Canopy Growth's sales projections in the near and intermediate terms are probably too aggressive.

With these arguments in mind, where do you stand on Canopy Growth?

Cincinnati Financial Corp (CINF) Files 10-K for the Fiscal Year Ended on December 31, 2018

Cincinnati Financial Corp (NASDAQ:CINF) files its latest 10-K with SEC for the fiscal year ended on December 31, 2018. Cincinnati Financial Corp is a property casualty insurance company. It provides coverage for commercial casualty, commercial property, commercial auto, workers' compensation, personal auto and life insurance. Cincinnati Financial Corp has a market cap of $13.98 billion; its shares were traded at around $85.89 with a P/E ratio of 49.65 and P/S ratio of 2.31. The dividend yield of Cincinnati Financial Corp stocks is 2.47%. Cincinnati Financial Corp had annual average EBITDA growth of 2.10% over the past ten years.

For the last quarter Cincinnati Financial Corp reported a revenue of $710.0 million, compared with the revenue of $1.4 billion during the same period a year ago. For the latest fiscal year the company reported a revenue of $5.4 billion, a decrease of 5.7% from the previous year. For the last five years Cincinnati Financial Corp had an average revenue growth rate of 4% a year.

The reported diluted earnings per share was $1.75 for the year, a decline of 72.2% from the previous year. Over the last five years Cincinnati Financial Corp had an average EPS decline of 2.6% a year. The profitability rank of the company is 4 (out of 10).

At the end of the fiscal year, Cincinnati Financial Corp has the cash and cash equivalents of $784.0 million, compared with $657.0 million in the previous year. The long term debt was $834.0 million, compared with $827.0 million in the previous year. Cincinnati Financial Corp has a financial strength rank of 5 (out of 10).

At the current stock price of $85.89, Cincinnati Financial Corp is traded at 36.1% premium to its historical median P/S valuation band of $63.11. The P/S ratio of the stock is 2.31, while the historical median P/S ratio is 1.70. The stock gained 16.04% during the past 12 months.

Directors and Officers Recent Trades:

Director Dirk J Debbink bought 351 shares of CINF stock on 02/15/2019 at the average price of $85.48. The price of the stock has increased by 0.48% since.

For the complete 20-year historical financial data of CINF, click here.

The European Banking System Is A System Of Perpetual Motion

&l;p&g;Several European bank shares have enjoyed a revival this year as even the much-maligned German lender, Deutsche Bank has booked a gain. Consider the following list of returns for 2019 year-to-date:

Lloyds Bank Group&a;nbsp;&a;nbsp;&a;nbsp; +19.39%

UniCredit&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp; +18.69%

Commerzbank&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp; +15.00%

BNP Paribas&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp; +&a;nbsp; 9.58%

Deutsche Bank &a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp; +&a;nbsp; 8.31%

Barclays &a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp;&a;nbsp; +&a;nbsp; 7.07%

Santander&a;nbsp; &a;nbsp; &a;nbsp; &a;nbsp; &a;nbsp; &a;nbsp; &a;nbsp; &a;nbsp; &a;nbsp; &a;nbsp;+&a;nbsp; 3.24%

UBS&a;nbsp; &a;nbsp; &a;nbsp; &a;nbsp; &a;nbsp; &a;nbsp; &a;nbsp; &a;nbsp; &a;nbsp; &a;nbsp; &a;nbsp; &a;nbsp; &a;nbsp; &a;nbsp; &a;nbsp;-&a;nbsp; &a;nbsp;0.95%

Societe Generale&a;nbsp; &a;nbsp; &a;nbsp; &a;nbsp; -&a;nbsp; 7.73%

This table of share price returns on a year-to-date basis reveal that shares in France&a;rsquo;s third-largest bank by market capitalisation have been the worst performer of all major European banks in 2019 and have fallen by 50% since a peak level booked in May 2019. Following the UK start up, Metro Bank Soc Gen is the second-worst performer on the Stoxx 600 Banks Index.

Now one can point out key balance sheet facts about Soc Gen, i.e. its capital ratio fell to 11.2% in Q4 2008 from 11.4% 12-months ago. This made it the second-lowest among Europe&a;rsquo;s largest banks that have reported year-end numbers.

However, this issue which haunts the French lender is a challenge that has cast a shadow across the entire European banking sector for several years now and which the European Central Bank (ECB) sitting at its centre.

The ECB may have announced an end to its asset purchase programme prematurely as its growth forecast for the Eurozone are looking shabby and it has recognised a pressing need to keep government finances and bank balance sheets afloat by continuously flooding the system with cash.

It will be interesting to read between the lines from the comments of Peter Praet, member of the Executive Board of the ECB when he speaks today as his speeches often contain pointed indications on the future possible direction of monetary policy.

I take an interest in such comments as I have argued for many years that the finances of the Eurozone are unsustainable. We know all too well the tragic story of the Greek economy was squeezed and now the region faces mounting pressures in Italy for increased spending, at a time when Italy is in recession. That effectively is another nail in the coffin of the discredited Stability and Growth Pact.

The sad truth is not for those who have less than a strong constitution as the ECB has been guilty of organising a form of banking union by means of smoke and mirrors.

When the European banking crisis hit hard in 2009 the ECB found a solution by not subjecting the regions banks to too rigorous a stress test. In comparison to the aggressive stress testing conducted by the Fed, the Europeans were virtually sent off to have relaxing spa weekend.

The next step was to flood the banking system with incredible volumes of ultra-cheap cash. &a;nbsp;These were known as Targeted Longer-Term Refinancing Operations (TLTRO&a;rsquo;s) and were described as a non-standard monetary policy tool used by the ECB. Through TLTROs we provide long-term loans to banks and offer them an incentive to increase their lending to businesses and consumers in the euro area.

However, instead of lending these funds out to the real economy they used it to buy increasing amounts of Eurozone sovereign debt This allowed yields to stay far lower than a natural market would have dictated. In effect beginning the great Eurozone distortion.

One may argue that I am being ungrateful as the actions of the ECB has created an opportunity to enjoy a decade of apparent tranquillity within the Eurozone banking sector and the huge compression of debt spreads over the benchmark issues of Germany at all maturities of the yield curve.

This is, nothing more than a Financial Faustian Pact. There is now, as the respected financial markets commentator and deal arranger Bill Blain of Shard Capital has said a situation where:

&l;/p&g;&l;blockquote&g;&l;em&g;&a;ldquo;...Europe and its banks are now caught in such a co-dependency cycle, the only realistic choice for the ECB is to keep doing it and for investors to keep arbitraging it. Buy European banks and buy Sovereign debt &a;ndash; Why? They might be locked in a deadly embrace&a;hellip; but its&a;rsquo; highly unlikely the ECB will ever let it unwind. ...&a;rdquo;&l;/em&g;&l;/blockquote&g;

It is a system of perfect perpetual motion as cash and debt is cycled and recycled around and around. When one old government Bill or Bond is due to mature, new cash s raised to pay of the old obligation which become due. No wonder the mountain of sovereign debt keeps rising. No wonder the banks all creak when the integrity of a Eurozone sovereign is questioned.

Eurozone banks are awash with Euro denominated sovereign debt. If a sovereign were to default, many banks would be struggling. They cannot even trade their way out the mess as so many banks are finding the money to be made from trading plain vanilla sovereign debt is miniscule.

This really is a collision of real and fantasy world economics. The Eurozone banking system is supported by &l;em&g;&a;ldquo;funny money&a;rdquo;&l;/em&g; except not many are laughing. Eventually the perpetual motion machine will be seen for what it is...a fake and a fraud...then down will come the pillars and walls.

As it stands there are now &a;euro;722 Billion ($816 Billion) of outstanding TLTRO&a;rsquo;s issued by the ECB to banks across the Eurozone. I will leave you to consider what happen if the music stops, if the tide rushes out or any other clich&a;eacute; one cares for.

The money is so interconnected, that if the lending lunacy stops, so will the Eurozone and wider Europe at both a sovereign debt and bank balance sheet level.

That is when the game will be up, maybe by 2021. Then the European project will be confined to the history books.

No... of course it won&a;rsquo;t...as some other crazy scheme will be created.

Stephen Pope ~ MarketMind

Hot Undervalued Stocks To Own For 2019

tags:TNH,POLA,PANW,NK,ATE,

Investment Thesis

Many companies in the apparel industry faced depressed operating margins in the last couple of years due to rapidly changing technology, general economic conditions, and consumer spending preferences. Companies started to focus on business expansions through acquisitions, closing down less performing business segments and higher promotional activities in order to remain competitive in the business. These initiatives accelerate the operating expenses at the cost of reduced profitability.

Perry Ellis International (NasdaqGS: PERY) is one of such companies that also observed a challenging business environment in last few years. The stock of the company behaved in line with the business of the company, as it should be, and observed a great deal of volatility in last few years. The latest calendar year proved to be a healthy one for the stock, particularly from the start of the November, because of the better-than-expected financial results for the third quarter of the fiscal year 2017. The stock has appreciated over 35% in value since last one year. The expectations for the fourth quarter results are even better due to the shopping season in the last month of the calendar year. Additionally, the double-digit growth in earnings is expected to continue in the fiscal-year 2018 along with improving the financial position of the company. The risk/reward trade-off is looking to be in favor of investors going forward due to the PERY's cheaper valuations as compared to the industry averages. The stock of the company is undervalued and offers an upside potential of above 30% to achieve its target price in the range of $33 to $35 in the next 6-to-12 month investment horizon.

Hot Undervalued Stocks To Own For 2019: Terra Nitrogen Company L.P.(TNH)

Advisors' Opinion:

• [By Logan Wallace]

  Media stories about Terra Nitrogen (NYSE:TNH) have been trending somewhat negative this week, Accern Sentiment reports. The research firm identifies positive and negative press coverage by monitoring more than 20 million news and blog sources in real-time. Accern ranks coverage of companies on a scale of -1 to 1, with scores closest to one being the most favorable. Terra Nitrogen earned a news impact score of -0.02 on Accern’s scale. Accern also gave news articles about the basic materials company an impact score of 46.8553415416776 out of 100, indicating that recent press coverage is somewhat unlikely to have an impact on the stock’s share price in the next few days.

• [By Joseph Griffin]

  Evogene (NASDAQ: EVGN) and Terra Nitrogen (NYSE:TNH) are both small-cap medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, profitability, earnings, dividends and institutional ownership.

Hot Undervalued Stocks To Own For 2019: Polar Power, Inc. (POLA)

Advisors' Opinion:

• [By Shane Hupp]

  Polar Power (NASDAQ:POLA) was upgraded by stock analysts at ValuEngine from a “hold” rating to a “buy” rating in a research report issued to clients and investors on Wednesday.

• [By Stephan Byrd]

  Get a free copy of the Zacks research report on Polar Power (POLA)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

• [By Shane Hupp]

  Polar Power (NASDAQ: POLA) and Ultralife (NASDAQ:ULBI) are both small-cap utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, institutional ownership, profitability, earnings, dividends and valuation.

• [By Joseph Griffin]

  Integer (NYSE: ITGR) and Polar Power (NASDAQ:POLA) are both medical companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, dividends, valuation, profitability, risk, earnings and institutional ownership.

Hot Undervalued Stocks To Own For 2019: Palo Alto Networks, Inc.(PANW)

Advisors' Opinion:

• [By Harsh Chauhan]

  Check Point Software Technologies (NASDAQ:CHKP) had a great July. The cybersecurity specialist was propped up by an analyst upgrade and a second-quarter earnings beat, and news that it is going to double its share repurchase program also boosted investor confidence. But a closer look at how the company has been performing over the past few quarters makes it clear that it is not getting its priorities right, and could end up a laggard in the cybersecurity market compared to the likes of Palo Alto Networks (NYSE:PANW).

• [By Motley Fool Transcription]

  Palo Alto Networks, Inc. (NYSE:PANW) Q4 2018 Earnings Conference Call September 6, 2018, 4:30 p.m. ET

  Contents: Prepared Remarks Questions and Answers Call Participants Prepared Remarks:

  Operator

• [By Chris Lange]

  The number of Palo Alto Networks Inc. (NYSE: PANW) shares short was 4.37 million. The previous level was 4.45 million. Shares traded recently at $198.71, within a 52-week trading range of $126.56 to $214.69.

• [By Ethan Ryder]

  UBS Group upgraded shares of Palo Alto Networks (NYSE:PANW) to a neutral rating in a research note released on Wednesday, The Fly reports.

  Other research analysts have also recently issued research reports about the stock. Wells Fargo & Co boosted their price objective on shares of Palo Alto Networks from $215.00 to $240.00 and gave the company an outperform rating in a report on Tuesday, June 5th. Morgan Stanley lifted their price target on shares of Palo Alto Networks from $224.00 to $240.00 and gave the company a buy rating in a research note on Tuesday, June 5th. Maxim Group lifted their price target on shares of Palo Alto Networks from $212.00 to $262.00 and gave the company a buy rating in a research note on Tuesday, June 5th. ValuEngine raised shares of Palo Alto Networks from a buy rating to a strong-buy rating in a research note on Friday, August 3rd. Finally, KeyCorp lifted their price target on shares of Palo Alto Networks from $245.00 to $275.00 and gave the company an overweight rating in a research note on Friday, September 7th. Two analysts have rated the stock with a sell rating, six have issued a hold rating, thirty-two have issued a buy rating and one has assigned a strong buy rating to the company’s stock. Palo Alto Networks presently has an average rating of Buy and a consensus target price of $239.86.

Hot Undervalued Stocks To Own For 2019: NantKwest, Inc.(NK)

Advisors' Opinion:

• [By Ethan Ryder]

  Nantkwest (NASDAQ:NK) was upgraded by research analysts at BidaskClub from a “sell” rating to a “hold” rating in a research note issued to investors on Friday.

• [By Ethan Ryder]

  Here are some of the headlines that may have effected Accern’s rankings:

  Get Nantkwest alerts: Daily Stock Alert: NantKwest (NK), CGI Group Inc. (GIB) (newsregistrar.com) Shareholders are distrustful How to React (Brief breakdown)- HTG Molecular Diagnostics, Inc. (NASDAQ:HTGM … (thestreetpoint.com) Computing the Quant Signals on NantKwest, Inc. (NasdaqGS:NK) Shares as Price to Cash Ratio Hits -4.363206 (cantoncaller.com) Revenue Approximations Analysis: Aurinia Pharmaceuticals Inc. (NASDAQ:AUPH), NantKwest, Inc. (NASDAQ:NK … (journalfinance.net) Is Market views Favorable For financing? EVINE Live Inc. (NASDAQ:EVLV), NantKwest, Inc. (NASDAQ:NK), OpGen, Inc … (thestreetpoint.com)

  A number of brokerages have commented on NK. BidaskClub downgraded shares of Nantkwest from a “sell” rating to a “strong sell” rating in a research note on Tuesday, June 5th. Citigroup downgraded shares of Nantkwest to a “hold” rating and set a $3.00 target price on the stock. in a research note on Friday, August 10th. Five analysts have rated the stock with a hold rating, The company presently has an average rating of “Hold” and a consensus price target of $4.00.

• [By Ethan Ryder]

  Nantkwest (NASDAQ:NK) and aTyr Pharma (NASDAQ:LIFE) are both small-cap medical companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, risk, earnings, valuation and analyst recommendations.

Hot Undervalued Stocks To Own For 2019: Advantest Corporation (Kabushiki Kaisha Advantest) ADS(ATE)

Advisors' Opinion:

• [By Joseph Griffin]

  Antibe Therapeutics Inc (CVE:ATE) Director Nicolas Bourgeois bought 100,000 shares of Antibe Therapeutics stock in a transaction on Tuesday, September 18th. The shares were acquired at an average price of C$0.26 per share, for a total transaction of C$26,000.00.

Best Financial Stocks To Invest In 2019

tags:SHBI,CPSS,VLY,OSBC,FISI,

Domtar Corp (NYSE:UFS) (TSE:UFS) was the recipient of unusually large options trading activity on Wednesday. Stock traders acquired 6,155 call options on the stock. This is an increase of approximately 2,423% compared to the average volume of 244 call options.

Several research analysts have recently weighed in on the stock. TheStreet raised shares of Domtar from a “c” rating to a “b-” rating in a report on Tuesday, May 1st. Scotiabank reaffirmed a “sector perform” rating and issued a $43.00 price target on shares of Domtar in a report on Wednesday, May 2nd. National Bank Financial upped their price target on shares of Domtar from $42.00 to $45.00 and gave the stock a “sector perform” rating in a report on Wednesday, May 2nd. Royal Bank of Canada upped their price target on shares of Domtar from $50.00 to $52.00 and gave the stock an “outperform” rating in a report on Wednesday, May 2nd. Finally, TD Securities upped their price target on shares of Domtar from $47.00 to $48.00 and gave the stock a “hold” rating in a report on Wednesday, May 2nd. Two investment analysts have rated the stock with a sell rating, ten have issued a hold rating and six have given a buy rating to the company. The stock has an average rating of “Hold” and an average price target of $44.25.

Best Financial Stocks To Invest In 2019: Shore Bancshares Inc(SHBI)

Advisors' Opinion:

• [By Joseph Griffin]

  Media coverage about Shore Bancshares (NASDAQ:SHBI) has trended somewhat positive on Sunday, Accern reports. The research firm rates the sentiment of news coverage by analyzing more than 20 million news and blog sources in real time. Accern ranks coverage of public companies on a scale of negative one to one, with scores nearest to one being the most favorable. Shore Bancshares earned a media sentiment score of 0.09 on Accern’s scale. Accern also assigned media headlines about the bank an impact score of 47.376414932679 out of 100, indicating that recent news coverage is somewhat unlikely to have an effect on the company’s share price in the near term.

• [By Shane Hupp]

  Press coverage about Shore Bancshares (NASDAQ:SHBI) has been trending somewhat positive this week, according to Accern Sentiment. Accern identifies negative and positive news coverage by monitoring more than twenty million news and blog sources in real-time. Accern ranks coverage of publicly-traded companies on a scale of negative one to positive one, with scores nearest to one being the most favorable. Shore Bancshares earned a coverage optimism score of 0.15 on Accern’s scale. Accern also assigned news headlines about the bank an impact score of 46.3784121307224 out of 100, indicating that recent news coverage is somewhat unlikely to have an effect on the stock’s share price in the near future.

• [By Joseph Griffin]

  LSV Asset Management increased its stake in Shore Bancshares Inc (NASDAQ:SHBI) by 134.4% during the 1st quarter, Holdings Channel reports. The firm owned 157,489 shares of the bank’s stock after acquiring an additional 90,289 shares during the period. LSV Asset Management’s holdings in Shore Bancshares were worth $2,970,000 as of its most recent filing with the Securities and Exchange Commission.

Best Financial Stocks To Invest In 2019: Consumer Portfolio Services Inc.(CPSS)

Advisors' Opinion:

• [By Stephan Byrd]

  ValuEngine upgraded shares of Consumer Portfolio Services (NASDAQ:CPSS) from a sell rating to a hold rating in a report issued on Tuesday.

  Other research analysts also recently issued research reports about the company. Jefferies Financial Group reaffirmed a buy rating and issued a $5.00 price target on shares of Consumer Portfolio Services in a research note on Thursday, July 26th. Zacks Investment Research upgraded Consumer Portfolio Services from a sell rating to a hold rating in a research report on Monday, August 27th. Finally, JMP Securities upgraded Consumer Portfolio Services from a market perform rating to an outperform rating and set a $6.00 target price on the stock in a research report on Friday, June 8th. One investment analyst has rated the stock with a sell rating, one has given a hold rating and two have given a buy rating to the company. The stock presently has a consensus rating of Hold and a consensus target price of $5.08.

• [By Stephan Byrd]

  Get a free copy of the Zacks research report on Consumer Portfolio Services (CPSS)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

Best Financial Stocks To Invest In 2019: Valley National Bancorp(VLY)

Advisors' Opinion:

• [By Stephan Byrd]

  Valley National Bancorp (NYSE:VLY) – Investment analysts at Piper Jaffray Companies cut their Q3 2019 earnings per share (EPS) estimates for Valley National Bancorp in a research note issued on Monday, February 4th. Piper Jaffray Companies analyst M. Breese now expects that the financial services provider will post earnings of $0.24 per share for the quarter, down from their previous forecast of $0.25. Piper Jaffray Companies also issued estimates for Valley National Bancorp’s Q4 2019 earnings at $0.24 EPS, FY2019 earnings at $0.95 EPS, Q1 2020 earnings at $0.25 EPS, Q2 2020 earnings at $0.26 EPS, Q3 2020 earnings at $0.26 EPS, Q4 2020 earnings at $0.26 EPS and FY2020 earnings at $1.04 EPS.

• [By Ethan Ryder]

  Valley National Bancorp (NYSE:VLY) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “Valley National Bancorp is a bank holding company whose principal subsidiary is Valley National Bank. Valley National Bank provides a full range of commercial and retail banking services through branch offices located in northern New Jersey. These services include the following: the acceptance of demand, savings and time deposits; extension of consumer, real estate, Small Business Administration and other commercial credits; title insurance; investment services; and full personal and corporate trust, as well as pension and fiduciary services. “

• [By Stephan Byrd]

  Valley National Bank (NYSE:VLY) announced a quarterly dividend on Tuesday, May 22nd, RTT News reports. Stockholders of record on Friday, June 15th will be paid a dividend of 0.11 per share by the financial services provider on Tuesday, July 3rd. This represents a $0.44 annualized dividend and a dividend yield of 3.39%.

Best Financial Stocks To Invest In 2019: Old Second Bancorp Inc.(OSBC)

Advisors' Opinion:

• [By Logan Wallace]

  Get a free copy of the Zacks research report on Old Second Bancorp (OSBC)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

• [By Ethan Ryder]

  Get a free copy of the Zacks research report on Old Second Bancorp (OSBC)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

Best Financial Stocks To Invest In 2019: Financial Institutions Inc.(FISI)

Advisors' Opinion:

• [By Stephan Byrd]

  Get a free copy of the Zacks research report on Financial Institutions (FISI)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

• [By Max Byerly]

  Peoples Bancorp (NASDAQ:PEBO) and Financial Institutions (NASDAQ:FISI) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, dividends and valuation.

• [By Joseph Griffin]

  Financial Institutions, Inc. (NASDAQ:FISI) – Piper Jaffray Companies upped their Q1 2019 earnings per share (EPS) estimates for Financial Institutions in a research report issued on Monday, February 4th. Piper Jaffray Companies analyst M. Breese now expects that the bank will earn $0.61 per share for the quarter, up from their previous forecast of $0.60. Piper Jaffray Companies also issued estimates for Financial Institutions’ Q2 2019 earnings at $0.62 EPS, Q3 2019 earnings at $0.69 EPS, Q4 2019 earnings at $0.70 EPS, FY2019 earnings at $2.62 EPS and Q3 2020 earnings at $0.76 EPS.

• [By Max Byerly]

  Get a free copy of the Zacks research report on Financial Institutions (FISI)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

• [By Motley Fool Transcribers]

  Financial Institutions Inc  (NASDAQ:FISI)Q4 2018 Earnings Conference CallFeb. 01, 2019, 9:00 a.m. ET

  Contents: Prepared Remarks Questions and Answers Call Participants Prepared Remarks:

  Operator

Nomura raises Ipca Labs price target on hope of strong earnings growth ahead

Japanese brokerage house Nomura has retained its buy call on Ipca Laboratories and raised price target to Rs 1,005 from Rs 915 apiece after revising earnings growth estimates upward.

Company's sustained revenue growth should assist EBITDA margin expansion and hence it revised earnings estimate for FY19/20/21 by 29 /13 /11 percent, the brokerage said.

It expects company to deliver 43 percent earnings CAGR over FY18-21, but it has not factored in warning letter resolution & commencement of supplies to US.

Nomura, however, reduced its valuation multiple from 20x earlier to 18x.

related news Top buy and sell ideas by Ashwani Gujral, Sudarshan Sukhani, Mitessh Thakkar for short term Coal India, ACC among 6 'pigs' that CLSA feels can expand your piggy bank

Ipca Laboratories reported a massive 51.7 percent on year growth in its third quarter profit to Rs 160.2 crore, and 10.2 percent increase in revenue from operations to Rs 947.6 crore YoY, aided by domestic and branded formulations, and APIs exports.

Ipca had said domestic formulations business, which contributed 45 percent to total revenue, registered a 10 percent growth during the quarter YoY.

Branded exports revenue grew by 41 percent and active pharmaceutical ingredient (API) exports increased 40 percent YoY, it added.

At operating level, EBITDA (earnings before interest, tax, depreciation and amortisation) jumped 43.4 percent to Rs 231.7 crore and margin expanded by 540 bps to 24.2 percent in quarter ended December 2018 YoY.

Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions. First Published on Feb 18, 2019 09:02 am

UBS Group Analysts Give Vivendi (VIV) a €25.50 Price Target

UBS Group set a €25.50 ($29.65) target price on Vivendi (EPA:VIV) in a research note issued to investors on Friday morning, www.boersen-zeitung.de reports. The brokerage currently has a buy rating on the stock.

A number of other equities research analysts have also recently commented on VIV. Cfra set a €23.00 ($26.74) target price on Vivendi and gave the stock a neutral rating in a research note on Friday, November 16th. Jefferies Financial Group set a €22.00 ($25.58) price objective on Vivendi and gave the company a neutral rating in a research report on Friday. HSBC set a €24.50 ($28.49) price objective on Vivendi and gave the company a buy rating in a research report on Wednesday, January 30th. Credit Suisse Group set a €24.20 ($28.14) price objective on Vivendi and gave the company a buy rating in a research report on Friday, November 2nd. Finally, Barclays set a €23.00 ($26.74) price objective on Vivendi and gave the company a neutral rating in a research report on Friday, February 1st. Four analysts have rated the stock with a hold rating and seven have given a buy rating to the stock. Vivendi presently has a consensus rating of Buy and an average price target of €25.65 ($29.83).

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Vivendi has a 12 month low of €16.85 ($19.59) and a 12 month high of €24.87 ($28.92).

Vivendi Company Profile

Vivendi SA operates as a content media and communication company in France, rest of Europe, the United States, and internationally. It operates through Universal Music Group, Canal+ Group, Havas, Gameloft, Vivendi Village, and New Initiatives segments. The Universal Music Group segment is involved in the sale of digital and physical recorded music; and exploitation of music publishing rights, as well as provides artist and merchandising services.

Featured Article: Analyst Ratings Trading

The Post-Earnings Drop of Coca-Cola Stock Is a Buying Opportunity

Coca-Cola (NYSE:KO) stock dropped sharply yesterday after the consumer-staples giant reported fourth-quarter numbers that were largely in-line with expectations. But KO also issued cautious guidance for fiscal 2019 which seemed to incorporate slowing global economic trends and persistent foreign-exchange headwinds, causing KO stock to decline from $50 to $45.

KO stock was trading right near its all-time highs heading into the Q4 print. But its results were pretty good, as its organic sales rose 5% and its operating profits rose 11%.

In that context, the decline of Coca-Cola stock looks like a buying opportunity. Everything is still going well for KO. The company is continuing to pivot from a soda-focused brand to a multi-beverage brand that is much more relevant to today’s health-conscious consumers. That transition is powering consistent, healthy revenue growth.

Meanwhile, KO has exercised disciplined cost control, pushing its margins higher. The result of these trends is healthy, steady revenue and profit growth.

This healthy, steady top-line and bottom-line growth will ultimately power Coca-Cola stock higher. KO stock was trading at a premium valuation heading into the print, supported by unreasonably high expectations. Now expectations are lower, and Coca-Cola stock is cheaper. Thus, now is the right time to buy KO stock.

Q4 Numbers Were Good, But Not Great

Coca-Cola’s Q4 numbers were good. But they weren’t great or anything special. Instead, they were more of the same stable revenue and profit growth that this company has reported over the past several quarters and years.

Thus, in the big picture, Coca-Cola’s top-line growth trajectory has largely stabilized around 4%, excluding acquisitions. The problem was that, when KO stock was around $50, some investors were hoping that 5% and up sales growth was the new norm. That isn’t the case. Fiscal 2018 was just an unusually good year. Next year (and likely for the foreseeable future), organic sales growth  (i.e. excluding the impact of acquisitions) will be in the 3%-5% range.

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Meanwhile, excluding currency fluctuations, operating income rose 8% in the quarter, and 11% on a trailing-twelve-month basis. That is fairly consistent with what KO has reported over the past several quarters. This low double-digit percentage-operating-profit-growth-trajectory is projected to persist, too, as KO expects its operating profits to rise 10%-11% in 2019.

Overall, KO’s fourth-quarter numbers and its 2019 guidance underscore that Coca-Cola’s growth outlook is stable, but largely below the company’s 2018 results. That disappointed some investors who had bought KO stock last year.

Coca-Cola’s Long-Term Outlook Is Healthy

In the big picture, the long-term fundamentals of Coca-Cola remain healthy. All the post-earnings drop did was make Coca-Cola stock cheaper while showing that KO’s fundamentals remain strong. Consequently, this dip of Coca-Cola stock is a buying opportunity.

Coca-Cola has made a big shift over the past several years, transforming from a soda-focused brand with declining popularity and relevance to a multi-beverage brand with climbing popularity and relevance. As part of this transition, the company has added new iterations like Zero to the core Coca-Cola product lineup, while broadening the product portfolio to include a wide range of teas, coffees, sparkling drinks, and enhanced waters that resonate with today’s health-conscious consumers.

This pivot is working. It’s driving consistent, steady mid-single-digit, organic sales growth. In tandem with management’s cost control measures, the transformation is driving high-single digit percentage to low-double-digit-percentage operating-profit growth.

None of the company’s fundamentals has changed in the wake of its Q4 results. The company’s organic revenues are expected to rise 4% in fiscal 2019, while its operating profits are expected to rise just over 10%.

The only thing that has changed is the valuation of Coca-Cola stock. Heading into the print, KO stock was trading at nearly 23 times analysts’ forward earnings estimate with a sub-3.2% dividend yield. Relative to historical standards, that’s a big P/E multiple and a low yield for KO stock.

Now, though, the valuation of Coca-Cola stock is much more “normal”. Its forward multiple is back around 20, which is roughly in-line with its average valuation over the last five years. The dividend yield has risen to 3.4%, above the average yield of KO stock over the last five years. Meanwhile, KO is still poised to deliver mid-single-digit-organic sales growth and grow its operating profit by about 10%.

As a result, the decline of Coca-Cola stock is a buying opportunity. KO’s fundamentals remain largely unchanged, while KO stock just went from slightly overvalued to slightly undervalued.

The Bottom Line on Coca-Cola Stock

In the big picture, Coca-Cola has a found a winning strategy: Acquiring relevant, popular brands, and distributing them around the globe. As long as this strategy continues to power mid-single-digit organic sales growth and operating-profit growth of about 10%, KO stock should be bought on dips.

As of this writing, Luke Lango was lo

Exencial Wealth Advisors LLC Purchases Shares of 3,546 CDW (CDW)

Exencial Wealth Advisors LLC purchased a new position in shares of CDW (NASDAQ:CDW) in the 4th quarter, according to the company in its most recent filing with the Securities and Exchange Commission (SEC). The institutional investor purchased 3,546 shares of the information technology services provider’s stock, valued at approximately $287,000.

Other institutional investors also recently made changes to their positions in the company. Bessemer Group Inc. grew its stake in CDW by 149.5% in the 3rd quarter. Bessemer Group Inc. now owns 1,295 shares of the information technology services provider’s stock valued at $115,000 after purchasing an additional 776 shares during the period. First Mercantile Trust Co. grew its stake in CDW by 9.7% in the 4th quarter. First Mercantile Trust Co. now owns 1,470 shares of the information technology services provider’s stock valued at $119,000 after purchasing an additional 130 shares during the period. Synovus Financial Corp grew its stake in CDW by 62.1% in the 3rd quarter. Synovus Financial Corp now owns 1,470 shares of the information technology services provider’s stock valued at $131,000 after purchasing an additional 563 shares during the period. Riverhead Capital Management LLC grew its stake in CDW by 82.4% in the 3rd quarter. Riverhead Capital Management LLC now owns 1,550 shares of the information technology services provider’s stock valued at $138,000 after purchasing an additional 700 shares during the period. Finally, Nkcfo LLC bought a new position in CDW in the 4th quarter valued at $192,000. Institutional investors and hedge funds own 90.04% of the company’s stock.

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CDW has been the subject of a number of recent analyst reports. BidaskClub upgraded CDW from a “hold” rating to a “buy” rating in a research note on Wednesday, October 17th. Zacks Investment Research upgraded CDW from a “hold” rating to a “buy” rating and set a $92.00 price objective for the company in a research note on Tuesday, October 23rd. Finally, ValuEngine upgraded CDW from a “hold” rating to a “buy” rating in a research note on Thursday, November 1st. Four investment analysts have rated the stock with a hold rating and six have assigned a buy rating to the company. The company has an average rating of “Buy” and an average target price of $91.50.

CDW stock opened at $93.52 on Thursday. The company has a quick ratio of 1.24, a current ratio of 1.41 and a debt-to-equity ratio of 2.75. The firm has a market cap of $13.88 billion, a PE ratio of 18.34 and a beta of 1.05. CDW has a fifty-two week low of $67.44 and a fifty-two week high of $96.75.

CDW (NASDAQ:CDW) last posted its quarterly earnings results on Thursday, February 7th. The information technology services provider reported $1.32 earnings per share for the quarter, topping the consensus estimate of $1.21 by $0.11. The company had revenue of $4.08 billion during the quarter, compared to the consensus estimate of $4.04 billion. CDW had a return on equity of 72.89% and a net margin of 3.96%. The firm’s quarterly revenue was up 8.6% compared to the same quarter last year. During the same quarter in the prior year, the company earned $0.99 EPS. On average, equities analysts forecast that CDW will post 5.3 EPS for the current year.

The company also recently declared a quarterly dividend, which will be paid on Tuesday, March 12th. Stockholders of record on Monday, February 25th will be paid a dividend of $0.295 per share. The ex-dividend date of this dividend is Friday, February 22nd. This represents a $1.18 annualized dividend and a dividend yield of 1.26%. CDW’s payout ratio is 23.14%.

In related news, Director Steven W. Alesio sold 20,013 shares of the stock in a transaction dated Monday, February 11th. The stock was sold at an average price of $89.66, for a total transaction of $1,794,365.58. Following the sale, the director now owns 24,183 shares of the company’s stock, valued at approximately $2,168,247.78. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, insider Christina V. Rother sold 4,000 shares of the stock in a transaction dated Monday, December 10th. The stock was sold at an average price of $90.75, for a total value of $363,000.00. Following the sale, the insider now directly owns 98,231 shares in the company, valued at approximately $8,914,463.25. The disclosure for this sale can be found here. Insiders have sold a total of 95,815 shares of company stock valued at $8,420,163 in the last quarter. 2.60% of the stock is owned by corporate insiders.

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CDW Profile

CDW Corporation provides integrated information technology (IT) solutions to business, government, education, and healthcare customers in the United States, Canada, and the United Kingdom. It operates through three segments: Corporate, Small Business, and Public. The company offers discrete hardware and software products, as well as integrated IT solutions, including mobility, security, data center optimization, cloud computing, virtualization, and collaboration.

Read More: Price to Earnings Ratio (PE) Basics

Want to see what other hedge funds are holding CDW? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for CDW (NASDAQ:CDW).

Will Walmart's Holiday Quarter Bolster Its E-Commerce Growth?

Last year was a topsy-turvy one for Walmart (NYSE:WMT) investors. The stock climbed to all-time highs early in 2018 due to excitement about the company's growing e-commerce sales. That enthusiasm gave way to reality when its more than 50% year-over-year growth fell to 23% in the final quarter of 2017 (reported in late February of last year), putting investors on notice that it would take longer to build Walmart's budding digital empire. The stock has since climbed out of that hole and is back near its record highs, as shareholders were relieved that the company's 40% year-over-year online sales goals seemed achievable.

Walmart is scheduled to report its fiscal 2019 fourth-quarter financial results before the market opens on Tuesday, Feb. 19. Let's recap the company's showing last quarter and see if it provides any insight into what investors can expect when the company reports earnings.

Image source: Walmart.

Improved comps and growing pains

Walmart reported mixed results for the third quarter. The company generated sales of $124.9 billion, an increase of 1.4% year over year, and up 2.4% in constant currency. This fell short of analysts' consensus estimates of $125.45 billion. Profits fared better, with adjusted earnings per share of $1.08 up 8% compared to the prior-year quarter, beating expectations. 

The best news came from comparable-store sales, which improved 3.4% year over year in Walmart's U.S. markets, resulting from 2.2% ticket growth and a 1.2% increase in foot traffic. Sam's Club produced even better comps, up 5.7%. Digital sales at Walmart in the U.S. climbed 43% year over year, while Sam's Club online sales jumped 32%.

This was the first quarter that included Walmart's recent acquisition of India's e-commerce giant Flipkart. Walmart isn't breaking out those results, but reporting them as part of its international sales segment. The company said the 44 days of results from Flipkart hit gross margins by 42 basis points, as it "drove significant operating income dilution in line with expectations."

What the quarter might hold

A recent report indicates that Walmart's same-day grocery delivery ambitions may have hit a snag. Deliv, one of the company's earliest delivery partners has cut ties with the project, saying its drivers were waiting as much as 40 minutes to pick up orders from Walmart stores. The project is still ongoing; Walmart is still working with seven other delivery companies, and same-day service is still available from 800 of the company's 5,000 stores in the U.S. It's likely this will be discussed on Walmart's conference call. 

Walmart doesn't provide a quarterly forecast, but revised its full-year guidance in the wake of its third-quarter results. The company is now expecting comparable-store sales in the U.S. of "at least" 3% compared to its previous expectations of "about" 3%. That may seem like semantics, but remember we're dealing with billions of dollars here. This outlook is also notably up from the 2% comparable-store sales growth the company forecast for the U.S. market this time last year.

Additionally, Walmart reduced its full-year earnings-per-share guidance to a range of $2.26 to $2.36, down from its previous expectations of $2.65 to $2.80. Much of the decrease is related to Flipkart.

To put that into the perspective of Wall Street sentiment for Walmart -- and while we don't want to fall victim to its short-term mindset -- analysts' consensus estimates are calling for revenue of $138.66 billion, which would represent an increase of 1.7% year over year if achieved. Analysts are also expecting adjusted earnings per share of $1.33, which would be flat compared to the year-ago quarter.

While all of the numbers will be scrutinized, all eyes will likely be focused on two of Walmart's most carefully watched metrics -- comp sales and e-commerce sales -- which reflect the current reality and give insight into the company's future.

We'll know more when Walmart reports earnings before the market opens on Tuesday, Feb. 19.

3 Very Popular Marijuana Stocks You Couldn't Pay Me to Buy

The marijuana industry, and once again marijuana stocks, are blazing hot. Following the end to nine decades of recreational marijuana prohibition in Canada this past October, the red carpet has been rolled out for what's now a legitimate business model. Sales in Canada could easily top $5 billion annually by the early part of the next decade, with global sales expected to more than double from $12.8 billion in 2018 to $31.3 billion by 2022, according to a report from Arcview Market Research and BDS Analytics.

As you might imagine, this expectation of rapid sales growth, and the eventual forecast of strong profitability, is what's responsible for sending pot stock valuations into the stratosphere. Following an abysmal fourth quarter, 15 marijuana stocks ended the month of January higher by at least 50%.

While this industry appears as if it can do no wrong, there are a handful of exceptionally popular pot stocks that you simply couldn't pay me to buy.

Image source: Getty Images.

Cronos Group

This probably comes as no surprise given that I recently referred to Cronos Group (NASDAQ:CRON) as the most overvalued marijuana stock, but I wouldn't buy into the company here even if I were given free money to do so.

The primary reason Cronos Group has essentially doubled in less than two months is because tobacco behemoth Altria (NYSE:MO) agreed to take a $1.8 billion equity stake in the company in December. Upon closing of the deal, the shares issued to Altria in exchange for this capital will give the tobacco producer a 45% stake in Cronos, with the possibility of upping its equity stake to 55% with the warrants it'll also be receiving. This marks the second major equity investment in the marijuana industry, and offers hope that Altria may wind up fully acquiring Cronos Group if its traditional tobacco volumes continue to fall. But even if Altria doesn't purchase the remainder of Cronos Group that it doesn't already own, Cronos will be left with north of $1.8 billion in cash to execute its long-term strategy.

While not oblivious to its envious cash position, it's the company's valuation relative to its strategy that has me baffled. At its peak, Cronos Group is on track to produce around 120,000 kilograms a year, which includes 70,000 kilos from its joint venture and 40,000 kilos from Peace Naturals. What's a real head-scratcher is that you can buy Canadian growers with, say, 100,000 kilos to 113,000 kilos in peak annual production with market caps of as low as $670 million -- i.e., basically a fifth of Cronos' existing market cap.

There's also been a lot of emphasis on international expansion, since domestic Canadian demand may only hit roughly 1 million kilos a year. With most of Cronos' larger peers focusing abroad, Cronos has only managed to really lay its footprint in Israel and Australia. In other words, it's really lagging its peers in terms of forging international sales channels.

Take away the $1.8 billion investment from Altria (which still hasn't closed), and add on a forward P/E ratio of more than 400, and you'll realize that there's really no good reason to buy into the Cronos Group growth story.

Image source: Getty Images.

Tilray

Tilray (NASDAQ:TLRY), the second- or third-largest marijuana stock by market cap, depending on its constant dance with Aurora Cannabis for the No. 2 spot behind Canopy Growth, is another stock I wouldn't buy if you paid me to.

Tilray has found plenty of support from investors thanks to its well-known medical cannabis brands, its ability to push into new markets, and the fact that private-equity fund Privateer Holdings owns close to an 80% stake in the company, making for less chance of a major share dump, at least for now. The company's focus on high-margin alternative cannabis products is another big reason investors have given Tilray a lot of leeway, despite the company losing money.

But even with two notable deal announcements in December with Novartis and Anheuser-Busch InBev, I'm simply not impressed with a $7 billion market cap on a company with only a presumed 912,000 square feet of developed space, of which just over 850,000 square feet is devoted to growing capacity. With little in the way of production updates since the company's S-1 prospectus filing in June, prior to its July IPO, investors are left to believe that Tilray only has the capability of maybe 80,000 kilos in peak yield. That's a drop in the bucket compared to Aurora Cannabis and Canopy Growth and, as noted, investors could buy a grower with more annual production for a tenth of Tilray's current market cap.

Although I understand that investors are paying for the company's superior branding, its international push, and the comfort of having Privateer hold more than three-quarters of the company's outstanding shares, this valuation makes even less sense when you factor in the expected costs of expanding capacity further, as well as pushing into new markets overseas. There's a very real possibility that Tilray could be running in the red for years to come. At a $7 billion market cap, it's simply not a stock any fundamentally focused investor should be buying.

Image source: GW Pharmaceuticals.

GW Pharmaceuticals

Finally, I wouldn't touch what's arguably the most successful publicly traded cannabinoid drug developer on the planet, GW Pharmaceuticals (NASDAQ:GWPH).

I certainly understand the optimism surrounding GW Pharmaceuticals with the June 25 approval of its oral, cannabidiol-based lead drug Epidiolex for the treatment of two rare forms of childhood-onset epilepsy. The Food and Drug Administration (FDA) had never previously approved a cannabis-derived drug before, and with no FDA-approved treatments on pharmacy shelves for Dravet syndrome, it's believed that this creates a pretty clear path to profitability for the company.

But things aren't always what they seem. Namely, we have witnessed other synthetic cannabis products come to market in the U.S. and flop miserably (I'm looking at you, Insys Therapeutics). What's more, GW Pharmaceuticals managed to get Sativex, a cannabinoid-based treatment for spasticity associated with multiple sclerosis, approved in more than a dozen countries worldwide (but not in the U.S.). Despite this approval, Sativex has been a virtual non-contributor to its top-line results. Simply put, cannabis-derived therapies aren't guaranteed any level of success.

There's also that not-so-little problem GW Pharmaceuticals may have with Zogenix (NASDAQ:ZGNX) on its coattails. Zogenix's lead drug, ZX008, has dazzled in late-stage trials and is targeting the same indications as Epidiolex. Even though these drugs have not gone head-to-head in a clinical trial, it's possible there could be some statistical bias for physicians to choose Zogenix's therapy, if approved, given that it's not cannabis-based, and that it demonstrated higher seizure frequency reductions relative to baseline compared to what Epidiolex achieved in its late-stage studies.

Long story short, keep your money far away from these very popular marijuana stocks.

Morgan Stanley: Why GM and Amazon may be investing in 'the next Tesla'

General Motors and Amazon are reportedly in talks to invest in Detroit startup Rivian Automotive and that indicates a massive shift in the "next and potentially imminent" electric vehicle market of pickup trucks, Morgan Stanley said on Wednesday.

"The highly lucrative and US-dominated pickup truck market" is "an important area of investor focus" due to the "culmination of battery cost reduction, architecture, duty cycle, and price point," Morgan Stanley analyst Adam Jonas said. Jonas earned a wide following on Wall Street due to his early calls on Tesla and the rise of electric vehicles.

Morgan Stanley featured Rivian earlier this week as the "next serious competition" for Tesla. The startup's "clean sheet" approach could make it "the next Tesla," Jonas said.

"We have focused considerable research effort on the theme of electric pickup trucks in recent days," Jonas said. Rivian emerged as the firm's top pick to challenge Tesla in the coming years, due to Rivian's "access to talent & capital focused on the fastest growing segments of pickup trucks & SUVs," he said.

Rivian previewed its R1T electric truck prototype in November. Rivian CEO R.C. Scaringe said the R1T will deliver 400 miles of range, with four individual motors allowing for all-wheel-drive. The R1T will be able to hit 60 miles per hour in 3 seconds and tow up to 11,000 pounds. Rivian is also building the R1S, an electric seven-passenger SUV. Rivian says the R1S will also have a range of over 400 miles.

Bloomberg | Bloomberg | Getty Images RJ Scaringe, founder and chief executive officer of Rivian Automotive, speaks after unveiling the R1S electric sports utility vehicle (SUV).

The Amazon and GM deal would value Rivian between $1 billion and $2 billion, according to Reuters on Tuesday.

Morgan Stanley believes Amazon is seizing the opportunity to use its own technology "to shape electric delivery vehicles to support its own logistics efforts," the firm said.

"Amazon has spent the last few years building out and expanding its logistics network and recently invested in autonomous driving startup Aurora," Jonas said.

This story is developing. Please check back for updates.

Contrasting CyrusOne (CONE) and Manhattan Bridge Capital (LOAN)

CyrusOne (NASDAQ:CONE) and Manhattan Bridge Capital (NASDAQ:LOAN) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, risk, dividends, earnings and valuation.

Valuation and Earnings

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This table compares CyrusOne and Manhattan Bridge Capital’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CyrusOne	$672.00 million	8.58	-$83.50 million	$3.12	17.46
Manhattan Bridge Capital	$5.92 million	9.95	$3.43 million	N/A	N/A

Manhattan Bridge Capital has lower revenue, but higher earnings than CyrusOne.

Risk and Volatility

CyrusOne has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500. Comparatively, Manhattan Bridge Capital has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for CyrusOne and Manhattan Bridge Capital, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CyrusOne	0	5	8	0	2.62
Manhattan Bridge Capital	0	0	1	0	3.00

CyrusOne currently has a consensus price target of $66.24, indicating a potential upside of 21.63%. Manhattan Bridge Capital has a consensus price target of $8.00, indicating a potential upside of 31.15%. Given Manhattan Bridge Capital’s stronger consensus rating and higher probable upside, analysts clearly believe Manhattan Bridge Capital is more favorable than CyrusOne.

Insider & Institutional Ownership

98.0% of CyrusOne shares are held by institutional investors. Comparatively, 17.1% of Manhattan Bridge Capital shares are held by institutional investors. 1.4% of CyrusOne shares are held by insiders. Comparatively, 32.4% of Manhattan Bridge Capital shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares CyrusOne and Manhattan Bridge Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CyrusOne	14.07%	5.68%	2.32%
Manhattan Bridge Capital	58.13%	15.54%	7.68%

Dividends

CyrusOne pays an annual dividend of $1.84 per share and has a dividend yield of 3.4%. Manhattan Bridge Capital pays an annual dividend of $0.48 per share and has a dividend yield of 7.9%. CyrusOne pays out 59.0% of its earnings in the form of a dividend. CyrusOne has raised its dividend for 5 consecutive years and Manhattan Bridge Capital has raised its dividend for 3 consecutive years.

Summary

Manhattan Bridge Capital beats CyrusOne on 10 of the 16 factors compared between the two stocks.

CyrusOne Company Profile

CyrusOne (NASDAQ: CONE) is a high-growth real estate investment trust (REIT) specializing in highly reliable enterprise-class, carrier-neutral data center properties. The Company provides mission-critical data center facilities that protect and ensure the continued operation of IT infrastructure for approximately 1,000 customers, including 208 Fortune 1000 companies. With a track record of meeting and surpassing the aggressive speed-to-market demands of hyperscale cloud providers, as well as the expanding IT infrastructure requirements of the enterprise, CyrusOne provides the flexibility, reliability, security, and connectivity that foster business growth. CyrusOne offers a tailored, customer service-focused platform and is committed to full transparency in communication, management, and service delivery throughout its 47 data centers worldwide.

Manhattan Bridge Capital Company Profile

Manhattan Bridge Capital, Inc., a real estate finance company, originates, services, and manages a portfolio of first mortgage loans in the United States. It offers short-term, secured, and non-banking loans to real estate investors to fund their acquisition, renovation, rehabilitation, or enhancement of properties in the New York metropolitan area. The company's loans are principally secured by collateral consisting of real estate and accompanied by personal guarantees from the principals of the businesses. It qualifies as a real estate investment trust for federal income tax purposes. The company generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. Manhattan Bridge Capital, Inc. was founded in 1989 and is headquartered in Great Neck, New York.

Top High Tech Stocks To Buy Right Now

tags:AIRT,GKOS,SUM,BUR,CCJ,

The Walt Disney Company (NYSE: DIS) reported its most recent quarterly results after markets closed on Tuesday. The company said that it had $1.50 in earnings per share (EPS) and $13.34 billion in revenue versus consensus estimates from Thomson Reuters that called for $1.41 in EPS and $13.45 billion in revenue. The fiscal second-quarter from last year had $1.36 in EPS and $12.97 billion in revenue.

In terms of its segments the Mouse House reported:

Media Networks revenues for the quarter increased 3% to $5.9 billion and segment operating income decreased 3% to $2.2 billion. Parks and Resorts revenues for the quarter increased 9% to $4.3 billion and segment operating income increased 20% to $750 million. Studio Entertainment revenues for the quarter decreased 1% to $2.0 billion and segment operating income increased 21% to $656 million. Consumer Products & Interactive Media revenues for the quarter decreased 11% to $1.1 billion and segment operating income increased 3% to $367 million.

ESPN has been a big question mark for the company this year and Disney somewhat addressed it in the report. Cord-cutting and declining advertising have been plaguing this segment but management has a somewhat optimistic stance on EPSN. Disney Chairman and CEO Bob Iger noted that there is a rise in smaller digital streaming platforms and those that include EPSN will help increase engagement.

Top High Tech Stocks To Buy Right Now: Air T, Inc.(AIRT)

Advisors' Opinion:

• [By Logan Wallace]

  News articles about Air T (NASDAQ:AIRT) have trended somewhat positive on Sunday, Accern Sentiment Analysis reports. The research firm rates the sentiment of press coverage by monitoring more than twenty million news and blog sources. Accern ranks coverage of public companies on a scale of negative one to one, with scores closest to one being the most favorable. Air T earned a news sentiment score of 0.16 on Accern’s scale. Accern also gave media coverage about the transportation company an impact score of 46.6995978620286 out of 100, indicating that recent press coverage is somewhat unlikely to have an impact on the company’s share price in the next few days.

Top High Tech Stocks To Buy Right Now: Glaukos Corporation(GKOS)

Advisors' Opinion:

• [By Dan Caplinger]

  Wednesday carried the stock market further into record territory, as investors celebrated favorable readings on U.S. gross domestic product, which rose an estimated 4.2% during the second quarter. The Nasdaq Composite led the way higher with gains of 1%, but a solid advance for the S&P 500 pointed to the broad-based nature of the late summer rally. Adding to the positive sentiment among investors was good news from several prominent companies. Square (NYSE:SQ), Glaukos (NYSE:GKOS), and Ballard Power Systems (NASDAQ:BLDP) were among the best performers on the day. Here's why they did so well.

• [By Shane Hupp]

  Glaukos Corp (NYSE:GKOS) – Equities research analysts at Piper Jaffray lowered their Q3 2019 EPS estimates for Glaukos in a report released on Wednesday, May 9th. Piper Jaffray analyst M. O’brien now anticipates that the medical instruments supplier will earn $0.02 per share for the quarter, down from their previous forecast of $0.03. Piper Jaffray also issued estimates for Glaukos’ Q4 2019 earnings at $0.02 EPS.

• [By Max Byerly]

  Glaukos (NYSE: GKOS) and NuVasive (NASDAQ:NUVA) are both medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, risk, earnings, profitability, analyst recommendations and valuation.

Top High Tech Stocks To Buy Right Now: Summit Materials, Inc.(SUM)

Advisors' Opinion:

• [By Max Byerly]

  GMT Capital Corp grew its holdings in Summit Materials Inc (NYSE:SUM) by 5.3% in the second quarter, HoldingsChannel reports. The institutional investor owned 927,315 shares of the construction company’s stock after acquiring an additional 46,300 shares during the quarter. GMT Capital Corp’s holdings in Summit Materials were worth $24,342,000 at the end of the most recent reporting period.

• [By Stephan Byrd]

  Massachusetts Financial Services Co. MA grew its position in Summit Materials Inc (NYSE:SUM) by 46.2% in the 2nd quarter, according to its most recent filing with the Securities & Exchange Commission. The firm owned 974,473 shares of the construction company’s stock after buying an additional 308,159 shares during the period. Massachusetts Financial Services Co. MA’s holdings in Summit Materials were worth $25,580,000 at the end of the most recent quarter.

• [By Ethan Ryder]

  Solium Capital Inc. (TSE:SUM) Director Marcos Lopez sold 2,148 shares of Solium Capital stock in a transaction on Friday, June 1st. The shares were sold at an average price of C$11.13, for a total value of C$23,907.24.

Top High Tech Stocks To Buy Right Now: Burcon Nutrascience Corp(BUR)

Advisors' Opinion:

• [By Ethan Ryder]

  Press coverage about Burcon Nutrascience (NASDAQ:BUR) (TSE:BU) has trended somewhat positive recently, according to Accern Sentiment. The research group ranks the sentiment of press coverage by analyzing more than 20 million news and blog sources in real time. Accern ranks coverage of publicly-traded companies on a scale of -1 to 1, with scores nearest to one being the most favorable. Burcon Nutrascience earned a media sentiment score of 0.12 on Accern’s scale. Accern also assigned news headlines about the biotechnology company an impact score of 46.7838004109175 out of 100, meaning that recent press coverage is somewhat unlikely to have an impact on the company’s share price in the next few days.

• [By Max Byerly]

  Shares of Burford Capital Limited (LON:BUR) have received a consensus recommendation of “Buy” from the six research firms that are covering the company, MarketBeat reports. Five investment analysts have rated the stock with a buy rating. The average 12-month target price among analysts that have covered the stock in the last year is GBX 1,593.60 ($21.22).

Top High Tech Stocks To Buy Right Now: Cameco Corporation(CCJ)

Advisors' Opinion:

• [By Reuben Gregg Brewer]

  Cameco Corporation (NYSE:CCJ), the largest publicly traded uranium miner, has been struggling along with the moribund price of the nuclear fuel it mines. The stock is down over 70% since commodity markets started to tumble in 2011. The early 2016 commodity upturn, meanwhile, has seemingly left uranium behind. Investors have ample reason to worry, but for more intrepid stock buyers, Cameco's low stock price could be a long-term opportunity.

• [By Shane Hupp]

  Get a free copy of the Zacks research report on Cameco (CCJ)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

• [By Reuben Gregg Brewer]

  A steep drop in the price of uranium has punished uranium miners like industry giant Cameco Corporation (NYSE:CCJ). However, the company's conservative approach has allowed it to weather this difficult stretch in relative stride, with its uranium contracts giving it financial leeway that many peers simply haven't had.

• [By Reuben Gregg Brewer]

  The point here is that just because a company isn't technically in the energy sector doesn't mean that the energy sector isn't an important area to monitor. As another example, a supply demand imbalance in the uranium market is wreaking havoc on Cameco Corp. (NYSE:CCJ) as low commodity prices make turning a profit increasingly difficult. This is partly being driven by overproduction on the mining side of the business, but also by the demand side from utility customers. Demand for nuclear power fell off after the Fukushima nuclear power plant disaster in Japan even though long-term construction trends in places like China and India suggest it will recover in the future.

Altius Minerals (ALS) Given a C$16.50 Price Target by Raymond James Analysts

Altius Minerals (TSE:ALS) has been assigned a C$16.50 price target by Raymond James in a note issued to investors on Friday. The firm currently has an “outperform” rating on the stock. Raymond James’ target price would indicate a potential upside of 35.91% from the stock’s previous close.

Separately, Canaccord Genuity dropped their price objective on Altius Minerals from C$19.00 to C$18.00 in a research note on Tuesday, January 15th. One investment analyst has rated the stock with a hold rating and four have issued a buy rating to the stock. Altius Minerals presently has an average rating of “Buy” and a consensus price target of C$17.10.

Get Altius Minerals alerts:

Shares of ALS traded up C$0.10 during mid-day trading on Friday, reaching C$12.14. 120,856 shares of the company’s stock traded hands, compared to its average volume of 62,804. The stock has a market cap of $512.51 million and a price-to-earnings ratio of 19.27. Altius Minerals has a 12 month low of C$10.04 and a 12 month high of C$14.80. The company has a debt-to-equity ratio of 27.62, a quick ratio of 3.35 and a current ratio of 3.35.

Altius Minerals (TSE:ALS) last released its earnings results on Wednesday, November 7th. The company reported C$0.14 EPS for the quarter. The business had revenue of C$13.68 million for the quarter. As a group, analysts predict that Altius Minerals will post 0.5 earnings per share for the current fiscal year.

Altius Minerals Company Profile

Altius Minerals Corporation operates as a diversified mining royalty, streaming, and mineral project generation company in Canada and Brazil. The company owns royalties and streams in 15 operating mines of copper, zinc, nickel, cobalt, iron ore, precious metals, potash, and thermal and metallurgical coal; and various pre-development stage royalties in mineral commodities.

Read More: Leveraged Buyout (LBO) Explained

S&P 500 halts win streak at 5 days as energy and communication-services stocks stumble

Stocks finished lower Wednesday, snapping a five-day winning streak for the S&P 500, after President Donald Trump's State of the Union address offered few details on his economic agenda. The president, however, insisted China commit real, structural reforms before a trade deal can be reached. The Dow Jones Industrial Average DJIA, -0.08% finished 21 points, or less than 0.1%, lower at 25,390, while the S&P 500 index SPX, -0.22% closed off by 0.2% at 2,732, registering its first loss of the past five sessions. The energy sector, down 0.8%, and the communication-services group, which includes names like Facebook Inc. FB, -0.39% ended with a 1.5% loss on the day. The Nasdaq Composite Index COMP, -0.36% meanwhile, ended 0.4% lower at 7,375. The three main equity benchmarks have mostly gained, rising by at least 16%, since a Dec. 24 recent nadir for the stock market. In corporate news, shares of Snapchat-parent Snap Inc. SNAP, +22.02% surged by 22% after its quarterly results late Tuesday. More broadly, investors were focused on progress in trade talks between the U.S. and China and kept one eye on the Federal Reserve after former boss Janet Yellen said during a CNBC interview that the next move for the central bank could be a rate cute, if sluggish global growth begins to hurt U.S. economic expansion. The Fed under Chairman Jerome Powell has recently adopted a more accommodative monetary policy stance after four rate increases in 2018.

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Quote References DJIA -21.22 -0.08% SPX -6.09 -0.22% FB -0.67 -0.39%

Are You More Like Warren Buffett Or Jimmy Buffett ? (As An Investor)

&l;img class=&q;size-full wp-image-1344&q; src=&q;http://blogs-images.forbes.com/robisbitts2/files/2019/02/104997688-Jimmy_Warren.1910x1000.jpg?width=960&q; alt=&q;&q; data-height=&q;523&q; data-width=&q;1000&q;&g;&l;strong&g;&a;nbsp;&l;/strong&g;

Two of the most influential investors of our time actually share the same last name&a;hellip;Buffett.&a;nbsp; Warren and Jimmy are not related (as far as I know) and their fans are probably very different from each other.&a;nbsp; Yet they have both been wildly successful American entrepreneurial stories.&a;nbsp; And, thanks to the success of the Margaritaville brand and a long-running series of packed stadium concerts, Jimmy Buffett has garnered financial success that puts him in the stratosphere of wealth as well.&a;nbsp; From what I can gather from online sources, Warren&a;rsquo;s net worth is over $80 Billion, while Jimmy&a;rsquo;s is &a;ldquo;only&a;rdquo; about $550 Million.

Here is more on the &a;ldquo;tale of the tape&a;rdquo; between the two, just for fun:

&l;img class=&q;size-full wp-image-1345&q; src=&q;http://blogs-images.forbes.com/robisbitts2/files/2019/02/B1.jpg?width=960&q; alt=&q;&q; data-height=&q;681&q; data-width=&q;731&q;&g;

&a;nbsp;

I am a big fan of both men, and I think their accomplishments each include a combination of the art and science of success.&a;nbsp; For Warren Buffett, it was decades of toiling with balance sheets, income statements, inspecting business culture and growth prospects.&a;nbsp; For Jimmy it was hitting the road to spread his unique message through music, and as time went on, finding many other ways to cash in on that.

Both are extremely loyal to their business teammates.&a;nbsp; Warren and his relatively silent partner Charlie Munger have known each other since 1959, and reportedly have never had a fight.&a;nbsp; Jimmy Buffett&a;rsquo;s keyboardist (Michael Utley) has been with him since 1975, a year after Jimmy started the &a;ldquo;Coral Reefer Band.&a;rdquo;&a;nbsp; Many other band members have been in place for decades.

Both have evolved with their professions and endured through times of great turmoil and upheaval.&a;nbsp; Warren had to account for a stock market gradually invaded by algorithms, quants and others who have made traditional value investing a very patient game that relatively few investors can relate to compared to decades ago.&a;nbsp; Jimmy had to embrace the commoditization of the music business, in which people now download songs for free instead of buying record albums.&a;nbsp; Fortunately for Jimmy, his live concerts were already legendary by the time this started to happen.

In their respective playing fields and as investors, Warren and Jimmy Buffett (who, again, are not related) have each brought admirable qualities to the nature of business, investing and the way we approach what drives us.&a;nbsp; And while they have done so in completely different spheres, capitalism ultimately became something they could capitalize on, by making smart decisions, being patient and looking at their businesses with wide perspective that has only increased with age.&a;nbsp;&a;nbsp; Or as Jimmy says, &a;ldquo;Changes in latitudes, changes in attitudes, nothing remains quite the same.&a;rdquo;

&a;nbsp;

&l;em&g;Comments provided are informational only, not individual investment advice or recommendations. Sungarden provides Advisory Services through Dynamic Wealth Advisors&l;/em&g;

2019 Mutual Fund Guide: Profit from These Trends

Change is inevitable, as Benjamin Disraeli, the 19th-century British prime minister, once said. He was talking about society. But it's also true in the nearly $16 trillion world of mutual funds—and we're not just talking about recent gyrations in the financial markets. Take the past year. For the first time in history, mom-and-pop investors can invest in free mutual funds. The four funds, all Fidelity index funds, charge no annual fees. "I used to say expense ratios can't get to zero," says Sean Collins, chief economist at the Investment Company Institute, "and I've had to change my tune."

See Also: Mutual Fund Rankings, 2019

The drop in expense ratios is just one of many shifts under way in the mutual fund industry. Other trends include lower investment minimums, reduced sales loads, an explosion of quantitative strategies, and the ongoing flow of assets out of actively managed funds and into index funds. All told, the mutual fund world has become extremely competitive. Says Brian Hogan, head of Fidelity's investment product solutions and innovation division: "The pace of change is accelerating. If we don't disrupt what we're doing, someone else will."

We'll highlight the biggest developments in the fund world today and give advice, where possible, on how best to navigate them. Change is constant. When it comes to mutual funds, that's been good for investors so far.

1. Ever-lower fees

It's now a well-worn investing mantra: Fund fees eat into your investment returns. As a result, for several years now investors have been dumping their high-cost actively managed mutual funds for low-cost index mutual funds and ETFs (more on that later). In large part, that's why mutual fund expense ratios have dropped 40% since 2000, from an average of 0.99%, or 99 cents for every $100 invested, to 0.59% in 2017, the Investment Company Institute says.

That trend will continue. Consulting firm PwC predicts that fees for actively managed funds will fall by another 20% by 2025. Expense ratios for index funds will drop more, by 21%. "Where does it stop?" asks ICI's Collins. "Are we going to see a world where fund advisers are offering to pay to subsidize expense ratios? I don't think we really know at this point."

At Vanguard, the industry low-fee standard bearer, the notion of a zero fee or even a negative fee is not plausible. "It costs something to run a mutual fund," says Jon Cleborne, a principal in Vanguard's Retail Investor Group. "There are licensing fees, auditing fees, servicing fees." His view is that transparency in fees is more important than charging the lowest fee.

Shareholders who pay little or nothing to invest in some funds might end up paying in other ways. For instance, Fidelity's zero-fee funds, which have pulled in $2.5 billion since their August launch, were designed to attract new customers who would pay for other Fidelity products. "People will buy a combination of products," says Fidelity's Hogan, with the firm likely earning fees from follow-on investments in actively managed funds, money market funds, stocks and bonds.

But, as when the four-minute mile was bested, now that the zero-expense-ratio barrier has been broken, you can expect to see more funds with no charge—or close to it. The first zero-expense-ratio ETF may launch this year, predicts Todd Rosenbluth, an analyst at CFRA Research. JPMorgan and Schwab, in particular, have the resources to cut an ETF's fees to nothing. An increase in assets and higher trading volume, for instance, could offset any potential losses.

See Also: The Kiplinger 25 — Our Favorite No-Load Mutual Funds

But focusing exclusively on fees isn't always the best strategy. It behooves investors to make sure they fully understand a fund before buying shares and to be confident that it offers the kind of market exposure they seek. "Don't choose a fund based just on an eye-catching or even zero expense ratio," cautions CFRA's Rosenbluth.

For instance, Fidelity Zero Extended Market Index (FZIPX) and Fidelity Extended Market Index (FSMAX) both invest in midsize companies. The Zero fund has a 0% expense ratio, and consumer stocks such as Lululemon Athletica and Advance Auto Parts are among its top holdings. FSMAX, on the other hand, charges a 0.045% annual fee and holds more tech stocks. A cautious investor might prefer the Zero fund; an aggressive investor might favor the other fund.

2. Falling costs elsewhere

Lost in the excitement about Fidelity's zero-fee fund launch last year were two other pieces of good news for investors: Fidelity eliminated its minimum investment to open a brokerage account (from $2,500), and it lowered the minimum initial investment for all its mutual funds to $1 (from $2,500). To be fair, Fidelity was a little late to the zero-minimum brokerage account party. TD Ameritrade and Merrill Edge already required no minimum to open an account. (Schwab joined the party late, too, last November.) And Fidelity's latest salvo came well after Schwab trimmed the minimum investment on all of its OneSource, no-transaction-fee funds to $100 (from $2,500) back in 2015.

In any case, in November, Vanguard followed the trend in a slightly different fashion. It trimmed expense ratios for millions of investors by reducing the $10,000 investment minimum for its Admiral share class to $3,000, allowing more investors to qualify for the lower-cost shares. Investing costs across the board "just keep going down and down and down," says Vanguard's Cleborne.

3. More unique offerings

Investors can already choose among thousands of funds. That means firms must be creative about the new products they launch.

Funds focused on environmental, social and corporate governance factors will continue to abound. These ESG funds are a draw for investors who want to align their portfolio with their social values. But the investment style is also gaining traction for homing in on specific criteria—such as diversity in the workplace—that many now view as having a material, positive effect on the company's bottom line (see What You Need to Know About Values Investing).

You may also see new funds that offer exposure to slices of the market we haven't seen before. DoubleLine Infrastructure Income, for instance, is a three-year-old fund that focuses on a nascent sector of the bond market: financing that funds infrastructure projects, such as commuter rail systems. The firm says the sector offers yields akin to those of intermediate-term bonds, but with less volatility. And Fidelity has filed for approval to launch a fund focused on companies that are run by their founders, a criterion that many solid stock pickers have long said has merit.

Quantitative strategies, which are hugely popular among ETFs, are creeping into the mutual fund world. Such funds follow rules-based approaches or focus on particular market niches, such as small companies trading at bargain prices. "It's an easy way for mutual fund companies to offer more low-priced products," says CFRA's Rosenbluth.

New products can be enticing, but investors would be wise to make sure new funds fit in with their overall investment plan. Be clear about your investment rationale for buying a fund. Will it address a specific goal, such as providing lower volatility or a higher yield? Do you see merit in the fund's investment approach?

4. Shifting asset flows

Index funds and ETFs continue to draw investors' money away from more-expensive, actively managed mutual funds. And the trend is unlikely to end anytime soon.

Actively managed funds, especially U.S. stock funds, continue to lose money as index mutual funds and ETFs rake it in. Although index mutual fund assets account for just 20% of all mutual fund assets, actively managed U.S. stock mutual funds have seen net outflows—more money has gone out the door than has come in—every calendar year since 2005, while index mutual funds have seen net inflows. It's not exactly a dollar-for-dollar exchange, says ICI's Collins, "but it's close."

Meanwhile, ETFs continue to grow in popularity, too, thanks to increasing investor familiarity and a growing group of fee-only financial advisers who prefer these funds as primary investment vehicles. ETF assets over the 10-year period ending in 2017 have increased at an annual rate of 16%; mutual fund assets, by contrast, have grown by 2%. ETFs now make up 19% of all assets in investment funds (mutual funds make up the rest).

Mutual fund investors have been savvy about shifting their assets around. In 2018, they were selling high and buying low, at least with regard to stock funds. Over the 12-month stretch, foreign stock funds took in $25 billion. At the same time, $110.7 billion exited U.S. diversified stock funds. This came as U.S. stocks peaked and foreign markets tumbled: International stock markets gave back 14.2% in 2018, far more than the 4.4% loss in the U.S. market.

Investors are devoting more money to bond mutual funds, too, despite the rise in interest rates in recent months. (Yields and prices move in opposite directions.) Aging baby boomers getting their portfolios ready for retirement and investors nervous about a bear market in stocks are primarily driving this shift, says ICI's Collins. Indeed, bond fund categories—including intermediate-term bonds, ultra-short debt, municipal bonds and bank loans—dominated the top 10 Morningstar fund categories with the biggest net inflows over the past year.

5. Closed funds reopening

As a result of market downturns or poor short-term performance, funds that had closed to new investors may reopen. It has happened before: In 2008, amid the financial crisis, Fidelity Contrafund, which had closed to new investors in 2006, and Fidelity Low-Priced Stock, which closed in 2003, reopened to new investors. So did Dodge & Cox Stock, which had closed to new investors in 2004. All three funds remain open.

More recently, foreign stock markets have suffered losses, and two solid funds in this category that were previously closed to new investors have reopened. FMI International, closed to new investors in April 2017, reopened in April 2018. In December, Oakmark International, a Kiplinger 25 fund, lifted a restriction that had limited new investors to buying shares directly from Oakmark. "We've already seen closed funds reopen, and I think we'll see more of that in 2019," says Rosenbluth.

Shrewd investors will keep an eye on good funds that are now closed to investors and may reopen. Two standouts we're watching closely: Harding Loevner Emerging Markets and Dodge & Cox International.

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