Category Archives: Stock Markets

Investing, Market News, Options, Retirement, Stock Markets

Expert Daytrader Alerts: Master The Global Financial Markets

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  • Tech Stocks
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Investing, Retirement, Stock Markets

Stock Markets: Understanding the Dow Jones Industrial Average

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One of the most important factors in gauging the stock market is Dow Jones Average; this index was established by a great publishing company that is still trusted by many investors.

Investors can measure the stock movements using this index and it is a trustworthy indicator of potential trends in both stocks and bonds. If you are interested to know more about it, this article is for you!

Introduction: A Brief History

The history of the Dow Jones Industrial Average all goes back to the end of the 1800s. A time the stock market was reaching the public interest. Considering that no TV or internet was available to the people back then, it should be easy to see that Charles Henry Dow and Edward D. Jones came up with a great idea in publishing stock news for the masses.

This financial news publisher was a daily magazine that published the news of 1 major stock back then. They created a chart of 12 houses of these 12 companies. As time went ahead, Dow Jones stock Averages added more and more companies in their charts; they indicate stock substitution, correlated changes and other factors based on divisor.

These Average signs facts are to show the Average prices of each stock on a daily basis. Dow Jones Industrial Average or DJIA is now based on 30 different stocks on an industrial basis. There are other stocks, they cover as well; Dow Jones transportation stocks, Utility Composite and several; bod Averages along with that. Here is a total list of Dow Jones Average magazine covers;

  • Dow Jones Industrial Average or DJIA- stock of 30 companies in total
  • Dow Jones Transportation Average or DJTA- stock of 20 transportation companies in total
  • Dow Jones Utility Average or DJUA- stocks of 15 Utility companies in total
  • Dow Jones Composite Average or DJIA- this Average considered the total composite of DJAI DJTA DJUA put together
  • Bond Shares

This magazine is the leading stock magazine for decades for an investor who we trying to measure their markets. Although other popular scales of the stock market in American Securities Market are: the S&P 500 Index and the Russel 2000 Index.

As one of the area’s most favored stock advisors, this publishing service has done great services for investing public. The most interesting aspect was that this magazine was a market analyst journalist rather than investors.

When this magazine started to publish, it was the blooming years of the stock market. Some even believe it was the effect of Dow Jones Average journal that led to much great marketing minds to jump-start their activity.

As the economy grew, many companies added to the stock market Average. However, from there, is only one local company that has been a part of Dow Jones’s Average magazine from the beginning; this magazine was named General Electric that has seen more than a century together with Dow Jones Average publisher.

Annual Dow Jones Average Trends

This magazine has always stood proud in the hallmarks of stock history. Although experts mark the 2008 financial crisis that was a widespread low time for many, it also affected Dow Jones’s Average publishing.

This hallmarks are concentrated on a market’s doomsday; 29th of September in the year 2008. Dow Jones Average loss was to a point that was recorded in the whole history of the stock market.

It was technically the third-ranking the history of stock loss registration. On the contrary, the golden year for stock ranking registration was the year 1915; a value increase of 81.66 increase.

Mutual funds in Dow Jones Average Publishing

If you are fascinated by the magnificence stock sharing company. you can invest it. The easiest way to get in the game with Dow Jones Average is to make an indirect investment; you can invest by buying index fund shares.

However, any of the index funds such as mutual funds and exchange-traded funds are replicable. That means they can replicate before fees and expenses; by holding similar stocks in the exact same proportions.

Downfalls and setback of Dow Jones Average magazine

Some expert believes that Dow Jones Average offers an inaccurate representation of overall market performance. According to Eric Edelman, one of the greatest and most accurate stock critics, S&P 500 and Russ3l 300 indexes are much more accurate when it comes to stock predictions.

Some other critics have pinpointed to price based criteria of their index; they claim that Dow Jones Average magazine gives a higher price to some stocks; these stocks are usually are given a higher influence to compare to their cheaper counterparts.

This is for their lack of comprehension of the stock’s price relativity to a particular company’s size and market capitalization. This way of calculation affects the price of the stock percentage. It results in showing a company’s stock market a lot weaker in the size is much smaller.

The same counter effect causes the large stocks to decide for Dow Jones Average magazine total index; that is the reason many smaller companies have been unhappy with the relevant results. For instance, being and UnitedHealth Group have the largest stock on Dow Jones Average’s Index.

The method of their calculation makes these two giant shareholders the most influential factor over the index data of this publishing.

Conclusion

Dow Jones Average magazine is one of the leading and oldest magazines in the stock market. While there are many who subject to this magazine’s function, others have been their loyal customers. As it goes for every system, there are advantages and disadvantages in any given system; and Dow Jones Average is not exempt from this fact.

Recently there has been a study conducted on the correlation facts in Dow Jones Average publishing data. This comparison has taken place between index movements. The result has revealed that these correlation compounds are higher at the time of the market including cycle; similarly, when there is a flat effect in the market, this correlation rises.

Economy, Investing, S&P 500, Stock Markets

Stock Markets: Q3 Earnings Season Update

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Stock Markets: Q3 Earnings Season Update

Uncertainties concerning the US and China trade negotiations remain an issue affecting business performance in the US. Out of this concern, the Fed cut interest rate in October 2019 by 0.25 percent. In terms of growth, the US GDP grew at a rate of 1.9 percent against a market expectation of 1.6 percent. The growth is a slight decline from 2.0 percent realized in Q2 of 2019. However, consumption by households grew to 2.9 percent while government spending increased by 2 percent.

The US economy performed better in Q3 compared to the rest of the world, as both the fixed income and equities earning were positive. Below are two highlights from the US third-quarter earnings results.

Stock Market Earnings Were Better Than Expected

Many analysts had expressed reservations regarding the third-quarter performance due to the current global economic slowdown and the China-US trade wars. The actual results from the Q3 period indicate that the markets have appreciated. An Increase in consumer spending resulted in a better than expected GDP for the third quarter

The S& P 500 is considered a good indicator of US stocks and business performance. To date, 91 percent of companies in the S&P 500 have reported their earnings. Seventy-three percent of these companies have reported better than expected per share. Historically, an average of 56 percent of companies usually achieves better than expected EPS. In terms of sales, 60 percent of the companies have reported figures above estimates, which is above the five-year average. The S&P 500 is on an uptrend throughout the third quarter. It gained 1.7 percent in that period. The index is now up by 20.9 percent in 2019; it’s the best-run since 1997.

Despite the positive earning, some analysts viewed the earning as a mixed bag. The aggregate net income for the companies that have reported so far is lower than in the net income of the same companies in previous periods. However, revenue growth is in a range previously achieved by this group of companies. For these companies, net income is down by 0.6 percent, while revenues are up by 4.9 percent.

US Economy Resilience to Tariffs and Wage Inflation

Trade wars between china and the US have seen the two countries impose steep tariffs upon each other. The depreciation of the Chinese Yuan countered a recent decision by the US to apply tariffs on more Chinese imports. The twists and turns that have characterized trade negotiations with China have not impacted the Q3 earnings significantly as initially feared. Although manufacturing dipped in Q3 2019, businesses still reported increased revenues.

For several months, the average hourly rate has been increasing steadily. While unemployment at its lowest level in decades, the wage rate is rising at a faster pace than inflation. For Q3, the annualized weekly wage rate rose to 3.3 percent. The rise was an improvement of a 2 percent increase in the second quarter. The increase in wages has not affected profits and earning to warrant a freeze on employment or layoffs.

Conclusion

In Q3, the earnings in the US appreciated. A Majority of companies forming the S&P 500 have reported a higher than expected EPS, better sales than the forecasts, or both. Businesses have proved resilience to rising wages, and the uncertainty brought about China and US trade wars.

Investing, Stock Markets

Enterprise Valuation Techniques: Determining a Company’s Total Worth

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Enterprise Valuation Techniques: Determining a Company’s Total Worth

The companies that have the potential to be successful entice investors to venture their capital to them. Although, a slothful evaluation with these robust companies always comes with a price. Investors must scrutinize thoroughly if these companies are worth buying for.

Company Valuation is an overall system of thoroughly appraising the economic value of an entire business. Company Valuation is used in order to estimate the fair market value of a business for several purposes. Aside from buying and selling shares, the process in determining an enterprise’s value is also beneficial in settling disagreements concerning taxation, distribution of business acquisition value with business assets, shareholder or partnership interests, and divorce proceedings. There are several useful techniques that can be utilized for company valuation depending on what aspect of that company you want to focus on such as: discounted cash flow valuation, times revenue method, market capitalization, liquidity valuation, valuation by share price, valuation by comparing companies, valuation through financial ratios, asset-based valuation, and earnings-multipliers.

Company valuation is a complicated financial evaluation that must be done by qualified valuation accountants awarded with a professional designation. This process will give aid especially to owners who are reaching a deal in selling their company and investors who are willing to buy a business. In this article, we are going to discuss the different methods in calculating an enterprise’s worth to raise awareness on how and why these methods are used. 

Discounted Cash Flow Valuation

Discounted Cash Flow is a method of appraising the worth of a company through forecasting its forthcoming cash flows. Through this valuation technique, sequences of assumptions are used in concluding cash flows forecasts regarding the potential performance of a company. Subsequently, the projected company performance will be interpreted to forecast the possible cash flow provided as a result of the operations of the company. 

This technique estimates the enterprise’s value by means of the Net Present Value method. NPV method is a contemporary way of assessing investment offers. This technique is based on the time value of money which estimates the return on investment by considering the factor of the time element. Using the NPV method, cash flows of the investment projected must be logically assumed. Correct discounts are recognized in the NPV method in order to mark down cash flows. For you to calculate the present value of cash flows, the opportunity cost must be considered as the discount rate.

Discounted Cash Flow has been used in most situations because it calculates the company’s value with accuracy. Therefore it is the most reliable valuation technique that exists today. Despite all of that, the DCF method also comes with some risks.

Why Discounted Cash Flow Should Be Analyzed

Valuation through the use of the Discounted Cash Flow method is beneficial for the owners since the cash of a company is what they are mainly concerned about. The DCF method help makes assumptions regarding the future cash flow to be generated by a company. Despite the affirmative earnings, a company that has unstable liquidity will not be attractive for investors since it is unable to pay off its obligations. 

Valuation Methods: Revenue Multiples

The Times Revenue method is a business valuation technique useful for estimating a company’s worth. For this method, the basis of verifying the highest value of a company is the multiple of the current revenue in which affected by a variety of factors such as the status of the industry in which the company belongs and its macroeconomic setting. Under this method, a company is valued on the range between 2 revenue multiples.

For example, a company that gained revenue worth $2 million for the current year is valued between 2x to 4x revenue. Therefore, it will have a total value of between $4 million to $8 million. 

Why Revenue Multiples Should Be Analyzed

The Times Revenue method may appear for some as an unreliable valuation technique in determining the current value of a company. The reason behind the doubt in using this method is that the continuous revenue growth does not indicate profitability growth. Despite its undependability, this method is advantageous for financial analysis in which the revenue is used as an independent variable and its limitations are manageable for complex analysis purposes. Thus, the Times Revenue method is still favorable for buyers because it estimates the purchase price offered by them.

Market Capitalization

Market Capitalization is the most uncomplicated and the easiest method you can understand since this determines the worth of a company based on the total value of all the company’s stocks. This technique is used in estimating a company’s value by simply multiplying the company’s number of outstanding shares to the price per share. For instance, a company is selling 100,000 outstanding shares for $50 per share. Therefore, the company could be appraised at $5 million.

Why Market Capitalization Should Be Analyzed

If you want to compare companies, this valuation method will be reliable in evaluating their relative size because it measures its value on the open market. In addition, it allows predicting its potential growth in the future and helps to determine risks in obtaining which makes the method a dependable basis for investors who are interested in buying shares of stock. 

Risks Using Market Capitalization

Although the Market capitalization is the simplest method, this is not the most effective way to appraise a company’s value because the share price is only based on the declared value in which the real value of the company may not be considered. Your evaluation of business might be put in jeopardy if you rely exclusively on this valuation technique. These are the reasons why depending on the Market Capitalization alone will bring uncertain company valuation results:

  1. The share price is constructed through the foreseeable positive outcome of an upcoming set of products of a company. These newly-launched products might end up as a failure and will result in a decrease in the share price.
  2. The share price might be based on an inaccurate forecast about the development of the company. The mistakes on the company’s projection might be the result of taking it as an insignificant part of the valuation. 
  3. The share price is based on the historical growth in which the company expects to continue. Using solely the past development of a company is a slothful way of estimating a company’s value.
  4. The share price is being relied on news reports or rumors that are unnecessary in completing the company valuation. 
  5. The share price is irrelevant to the company’s value if it is being traded inactively. 

Liquidation Value

Liquidation Value is a way of measuring the value of a company once it is bankrupt or shutting down its business. An enterprise’s worth is determined using this valuation technique by getting the amount of its cash after selling off all its assets and settling all its obligations. However, Liquidation Value is against the going concern principle which is about the presumption that a business has to continue its operation for the foreseeable future or at least 12 months.

Why Liquidation Value Should Be Analyzed

If a company is projected or planning to wind up in a span of 12 months, the Liquid Valuation is a reliable and acceptable method from the fact that it does not violate the going concern principle. 

Company Stock Comparisons

Comparing companies within the same industry is one of the useful techniques in measuring a company’s value. Considering the share price of the companies sold before is an effective way to estimate your price per share. On the other hand, applying this company valuation method also has drawbacks:

  1. You may find comparing indistinguishable companies complicated from the fact that modification on the calculations has to be done in order to identify their distinctions.
  2. The sales of a company are not equivalent to another company.
  3. The sales report of the companies has to be up to date in order for the current fair market value to be concluded.

Share Prices and Financial Ratios 

The shares undervalued by the market are attractive for value investors. They are executing this kind of game plan because they think that the underpriced valuation of the market is its exaggerated response from either good or bad news. Therefore, companies trade their shares less than intrinsic or book value. The underestimated shares by the market give value investors an opportunity to buy the shares of a company because of the shares’ future earnings power. Here are the practical financial ratios that will provide aid for company valuation:

  1. Price-Earnings Ratio – This ratio reveals the link between the fair market value per share and the earnings per share. It is also known as the Earnings- Multiplier method. Since a company’s profit is a more precise basis of financial performance than sales revenue, this method is frequently used to get the exact company value than the Times Revenue method. It is calculated as market value divided by the earnings per share.
  2. Price-Book Value Ratio – This ratio reflects the relationship between the market value and the book value per share. It is computed as market value divided by the book value per share.
  3. Price-Sales Ratio – The price to sales ratio determines the percentage appraised by the company per dollar of the sales. It is computed as market capitalization (or the number of outstanding shares multiplied by the price per share) divided by the total sales over the past 12 months. 
  4. Price-Cash flow Ratio – This ratio measures the correlation between the market value per share and the generated cash flow. To calculate the ratio, get the company’s market capitalization and divide it by the operating cash flow for the past 12 months. 
  5. Price/Earnings-Growth (PEG) Ratio – The PEG ratio finds out the proportion between the Price/Earnings Ratio and the projected earnings growth of a company for the given years. To get the ratio, take the Price-per-Earnings ratio and divide it by the expected earnings-per-share growth. 

Asset-Based Valuation Using the Going Concern Approach

Just like the Liquidation Value, this method uses a simple formula in order to get the value of a company. The only difference is that the going concern approach supposed that the company will continue its operation without being at risk of liquidation. This method calculates the fair market value of the total assets including intangible assets such as trademarks and patents. 

However, the way how intangible assets are being measured is different from the valuation of the other assets. The value of marketable securities already has a determined fixed value. The intangible assets are appraised under the discretion of the company which might result in overvaluation.  The techniques mentioned are the commonly-used company valuation method in the present day. These methods are known from their dependability towards precise valuation. The methods that are also useful include breakup value, replacement value, and a lot more.

 

Dividend Stocks, Energy Stocks, Stock Markets

What’s Behind Recent General Electric Stock Price Action?

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What’s Behind Recent General Electric Stock Price Action?

General Electric GE stock represents the shares of the General Electric Company. The General Electric Company is an American multinational with diversified interests in technology and financial services. As of 2018, the company operations spread across the aviation, renewable energy, finance, and lighting industries. General Electric products range from aircraft engines, domestic appliances, and medical imagining equipment. 

GE Stock Price History

 On November 12, 2019, the General Electric stock’s closing price is $ 11.42. Notable price levels of the GE stock are as indicated.

  • The record high price was 60.00, the Stock closing price on August 28, 2000.
  • GE’s last 12 months’ high price is 11.75, which is 2.9% above the current share price.
  • GE’s last 12 months low price is 6.60, which is 41.7% below the current share price.
  • The average gas price for the last 52 weeks is 9.36.

Rise and Fall of General Electric Company 

General Electric is one of the 12 companies that composed the Dow Jones Industrial Average. It joined in 1986, and its membership lasted for 122 years. After world war 11, GE became a giant manufacturing company in the US. Its product range was everything from household appliances to military equipment. GE diversified into other industries, including plastics and computing. After Acquiring NBC television network in 1986, GE became a major player in the entertainment industry. The company reached its peak in August 2000, with a market capitalization of $594.

The years between 2001 and 2017, were harsh to General Electric. The company navigated September 11, 2001, terrorists attracts that threatened its airline business. In the same period, the company acquired several enterprises that did not perform as expected. The 2008 financial crises hit the company hard. It’s stock prices depreciated by 42 percent, forcing the company to rethink its operating strategy. GE had to sell some of its money-making ventures such as NBC Universal and GE Plastics to focus on its core functions of manufacturing.

The company slashed its dividend for the first time in 2009 and further in 2010. In June 2018, the GE stock got removed from Dow Jones Industrial Average. In November of the same year, GE share price fell to below $9, the lowest since the 2008 financial crisis.

General Electric Resurgence Attempts

 In a bid to prevent total collapse, GE named its first outsider CEO in 127 years on October 1, 2018. The stock spiked to a high of $ 13.08 within days. The new CEO has moved fast to slash the company’s rising debts. He has sped up GE’s separation from oil and gas giant Baker Hughes. The CEO has reviewed dividends downwards as well as offloading the BioPharma business. 

The new CEO holds high regard in Wall Street. Despite this, the GE stock has lost 24 percent in value since he took over. Analyst predicts the share would be trading at $4 if GE had a CEO with inferior ratings. The China-US trade wars are making the company situation more challenging. The aviation sector has been the best performing division of the company. With the grounding of the Max 737 due to safety concerns, GE cash flows will be lower by around $300 per quarter. 

GE Future Price Outlook 

The stock has lost 69 percent of value in the last three years. Few investors are buying the GE stock. The CEO expects the company’s industrial businesses to have cash outflows in 2019. Forecast for 2020 is positive cash flows and acceleration in 2021. Should the cash flow growth proceed beyond, 2021, then GE is a good value currently.

Conclusion

General Electric has had its glorious days. Analysts still believe that the company has better days ahead. The market has high confidence in the current CEO. Time will tell whether General Electric can turn its fortunes around. However, the majority of the analyst community still seems to be neutral on the stock.

 

 

Stock Markets

Corporate Earnings Preview: Stock Markets Q3 2019

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Ask Traders Commentary – Corporate Concerns Persist:

Current Market View: Corporate earnings performances during the third quarter period will depend heavily on trade war effects and the economic trends that began during the second quarter.

For the second consecutive quarter, EPS growth in the S&P 500 dropped and the word “tariff” was used in the Q2 conference calls of 142 different companies in the S&P 500.  As a result, expectations for earnings growth have steadily deteriorated amongst analysts.

However, this leaves open the potential for upside surprises. In Q2, roughly 3/4 of all companies in the S&P 500, and this trend could continue during the next reporting periods.

Our Predictions for Q3 2019:   The S&P 500 finished the Q2 reporting period trading at 2,940 and market valuations have since risen by just 1.63%.  Despite the continued concerns over global growth, a steady EPS performance for the S&P 500 in Q3 should help the index vault key psychological levels at 3,000 for the majority of the coming quarterly period.

For more financial news and stock market trading tips, visit AskTraders.com

Earnings Season Preview
S&P 500, Stock Markets

Economic Data Reports Send U.S. Stocks To Sustained Highs

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Economic Data Reports Send U.S. Stocks To Sustained Highs

Even with recent declines seen during the summer of 2019, the S&P 500 has managed to post a series of long-term higher highs that have defined an uptrend for the benchmark.

S&P 500
S&P 500

Recent jobs reports in the U.S. have been critical in terms of the implications they hold for the future monetary policy actions at the Federal Reserve.  Stock market valuations will continue to be influenced by interest rate policy changes that are made during the remainder of this year.

Consensus estimates suggest the U.S. economy added an average of roughly 150K jobs for each month of this year (down slightly from the 160K recorded in prior averages).  The national unemployment rate in the U.S. is expected to hold at lower levels, which is a key indicator of economic strength.

On balance, the U.S. is still posting some very strong economic numbers and any positive surprises in the next few jobs reports will likely push the average consensus in analyst surveys closer to the long-term averages.  Current expectations for future rate hikes this calendar year remain questionable. However, all of these data figures will help to clarify some of these issues in the months ahead.

It will also be important to continue watching for developments in the U.S. ISM Services report, which has largely supported the bullish angle over the last year. With the readings that were posted for the last few months. This recent decline from the previous month’s readings may appear ominous but we are still coming off of figures that represent a 12-year high. 

As a result, some declines were reasonably expected in the analyst surveys. Markets have still managed to trade higher after these prior releases on the argument that this long-term strength does bode well for the upcoming nonfarm payrolls figures coming out in the months ahead.

The services sector represents 70% of the US economy and these reports cover businesses like retailers, hospitals, and restaurants. Numbers above 50 signal expansion in the economy, and readings above 55 are considered “exceptional.” We are firmly above those levels, and this helps tip the odds in favor of a bullish data surprise for payrolls reports that follow.

The ISM indexes for new orders have recently seen gains of 64.8 (from 62.7 previously, marking another long-term high). All told, 16 of 17 of the industries that are tracked in the report are showing strong evidence of expansion. This is highly encouraging for the underlying trend in the U.S. economy, as it shows companies are actually having difficulties with skilled labor shortages.

Supply costs have also been seen rising in the recent reports and this brings us back to the potential market disruptions that could be caused by the implementation of a trade war.  As labor costs also move higher, we are looking at a scenario that is essentially ripe for upside inflationary pressure in the U.S. economy.

Stock Markets

HECO: Socially Responsible Investing Backed By Strong Earnings

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HECO: Socially Responsible Investing Backed By Strong Earnings

Socially responsible investing combines the ambition to make money with the motivation to enact positive change in the world.  It is a popular approach to finance that has been around for decades. However, in recent years, the concept has been catching on at an even faster pace.  

Since 2017, global investments based on ethical and social principles have increased by 34% and reached $30.7 trillion.  In the U.S. alone, one in every six dollars under professional asset management is invested using socially responsible financial strategies.  New research from Morningstar suggests these trends will continue growing, as nearly three-fourths of all investors are at least “moderately interested” in devoting long-term savings to sustainable investments.

Strategy Shares EcoLogical Strategy Fund

One selection following these investment objectives is the Strategy Shares EcoLogical Strategy Fund (NYSEARCA: HECO).  The underlying strategies guiding the ETF seek long-term capital appreciation, are ecologically focused, and backed by strong earnings results in core stock holdings.  Since inception, investments in the Strategy Shares EcoLogical Strategy Fund have outperformed the MSCI ACWI TR Index by 7.36%.

To achieve these goals of sustainability, the Strategy Shares EcoLogical Strategy Fund focuses on companies that are components of recognized environmentally focused indices.  Investment strategies apply strict criteria to identify global businesses with emerging projects positioned to benefit from ecologically conscious legislation and cultural shifts in market consumption.  

During periods of normal market volatility, at least 80% of the portfolio allocation is devoted to green bonds, mutual funds, ETFs, equity, and fixed-income securities of ecologically-focused companies.  At least 65% of total allocation is devoted to common stocks and fixed-income securities of ecologically-focused companies based in the U.S. The remaining portion of the allocation is devoted to ADRs and stocks connected to ecologically-focused businesses that are based outside the U.S.

The Strategy Shares EcoLogical Strategy Fund is broadly diversified across industry sectors and its positive outlook is supported by notable earnings results that have been generated during the market’s most recent reporting period.

During the first-quarter, casualty and property insurer Travelers Companies (NYSE: TRV) beat the market’s consensus earnings forecasts on underwriting improvements and significant declines in catastrophe losses.  Core earnings posted at $2.83 per share, with nearly $800 million in net income for the period.

Travelers Companies - TRV

The EPS figure indicates annualized gains of 17% and the performance surpassed analyst expectations ($2.72 per share) by 4.04%.  The revenue figure indicated annualized gains of 5.2% (at $7.67 billion) and comfortably surpassed Wall Street’s estimates calling for revenues of $7.1 billion.  Catastrophe losses dropped by 45.5% on an annualized basis (to $193 million) and written premiums rose to $7.06 billion (a gain of 3.5%). Shares of Travelers Companies stock currently show YTD gains of 23.54%.

Another market sector that continues to generate enhanced returns can be found in traditional payment networks.  Major credit card companies have shown strength in digital payments to overcome disruption efforts of big tech companies like Apple, Inc. (NASDAQ: AAPL) and others.  To capitalize on these trends, the Strategy Shares EcoLogical Strategy Fund includes exposure to these traditional payment networks with two names that have outperformed the S&P 500 by a wide margin in 2019.

Mastercard (NYSE: MA) released first-quarter results that beat market forecasts for both earnings and revenue.  Solid transaction volumes and a lift from new products/services propelled net income to $1.9 billion (EPS of $1.80).  This represents a gain of 26.7% relative to the $1.5 billion in net income (EPS of $1.41) posted during the same period last year.  

MasterCard - MA

Mastercard’s adjusted earnings were $1.78 per share during its most recent reporting period, which represents an annualized gain of 18.7% and was firmly above the market’s consensus estimates ($1.66 per share).  Revenues increased from $3.58 billion last year to $3.89 billion (a gain of 6.7%) and this also beat analysts forecasts of $3.85 billion. Mastercard stock shares currently show YTD gains of 33.31%.

Visa (NYSE: V) shares continue to reach new highs, even in cases where the rest of the market is declining.  The company’s most recent quarterly report showed annualized gains of 8% in net revenues (at $5.5 billion) and a 17% annualized gain the bottom-line figure (EPS of $1.31).  Payment volumes were higher by 8% (to $2.1 trillion) and this was accompanied by an increase of 9% in the number of total transactions (to 47.4 billion). Share repurchases of $2 billion also boosted EPS for the period.  

VISA - V

Visa’s revenue growth did show some evidence of slowing but management has noted rising volatility in currency markets as a peripheral factor which may prove to be temporary in nature.  Shares of Visa stock currently show YTD gains of 23.27%.

Key names in the technology sector (which represents 42.29% of allocation) include Adobe (NASDAQ: ADBE), which also beat Wall Street’s earnings targets for the fiscal first-quarter with adjusted EPS of $1.71 and sales of $2.6 billion.  Consensus estimates were calling for EPS of $1.62 on sales of $2.55 billion. On an annualized basis, this performance indicates sales gains of 25% and EPS gains of 10%.  

Adobe - ABDE

Current-quarter earnings guidance was reduced to an adjusted $1.77 per share (with sales figures expected to come in at $2.7 billion).  Previously, Wall Street analysts modeled second-quarter earnings of $1.88 per share on sales of $2.72 billion. However, even with these recent reductions, it should be noted that Adobe’s updated guidance implies annualized sales gains of 23.6% and earnings gains of 6.63%.  Adobe shares are currently showing YTD gains of 21.45%.

For investors seeking well-diversified, long-term capital appreciation through ecologically focused investment strategies, the Strategy Shares EcoLogical Strategy Fund is one name that should be on the radar.  Even with its recent moves higher, shares of HECO are still trading below their long-term premium/discount averages. This suggests that the Strategy Shares EcoLogical Strategy Fund is attractively valued at current levels.  As core holdings continue to show evidence of consistent earnings strength, HECO finds itself in a strong position to continue producing gains in 2019.

Stock Markets

OIPIX: Powerful Returns Driven by High Caliber IPOs

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OIPIX: Powerful Returns Driven by High Caliber IPOs

In 2018, investors saw a surge in activities connected to initial public offerings (IPOs), as 190 companies entered the market and collectively raised a total of $47 billion.  But the current IPO pipeline may be even more intriguing, as several multibillion-dollar companies are slated to enter the public market this year. These highly anticipated new issues have the potential to ignite the market’s interest in the months ahead and many investors are looking for ways of gaining sustainable exposure to new growth opportunities as they develop.

One option is the Catalyst IPOx Allocation Fund (MUTF: OIPIX), which applies quantitative models to select and rank high-caliber IPOs using two distinct and complementary strategies.  The Fund includes roughly 150 long equity holdings, with an average market capitalization of $13.3 billion and a median market capitalization of $5.1 billion.  Stock weightings are broadly distributed across industry sectors, with information technology stocks making up 32.0% of the total holdings, health care stocks making up 24.2% of the holdings, and communication services making up 12.7% of the holdings.   

The Fund’s Core Long Component includes exclusive mutual fund access to the IPOX U.S. 100 Index, which tracks a group of 100 top-ranked companies in the IPOX U.S. Composite Index and has exhibited a strong level of long-term outperformance relative to the S&P 500.  Common stock in these high-quality companies is purchased either at the time of the initial offering or later during the post-IPO trading phase. Stocks exhibiting bullish momentum and sustainable growth in market value during the periods following the initial floatation are analyzed as viable opportunities for inclusion in the Fund.

Since 2014, the IPOX U.S. 100 Index has produced returns of 695.64% (as of March 31, 2019).  Over the same period, the S&P 500 Total Return Index has produced returns of only 261.24%. The divergences here are exceptionally striking, given the fact that the S&P 500 broke above its prior all-time highs during this timeframe. The underlying strength of these trends supports the outlook for continued moves higher in shares of OIPIX.

In conjunction with the Core Long Component strategy, the Dynamic Component of the Catalyst IPOx Allocation Fund’s identifies 30 to 70 attractively valued IPOs (based on price/sales multiples) not included in the Core Long Component.  Timing is critical for this portion of the strategy, as stocks become eligible for inclusion on the IPO date and remain viable as potential investment opportunities for a period of one month.  The sum result of these dual approaches is a unique market instrument designed to capture the enhanced long-term returns often associated with promising IPO investments.

Broad sector diversification is another feature of the Catalyst IPOx Allocation Fund.  Key stock holdings include Paypal (NASDAQ: PYPL), Takeda Pharmaceutical Ltd (OTCMKTS: TKPHF), Verizon Communications (NYSE: VZ), Thermo Fisher Scientific (NYSE: TMO), Stryker Corp. (NYSE: SYK) and Worldplay, Inc. (NYSE: WP).  Impressively, all of these companies beat consensus estimates for earnings during the most recent reporting period, and these bullish performances have helped drive OIPIX gains relative to the S&P 500.

As the Catalyst IPOx Allocation Fund’s largest stock holding, recent earnings performances from Paypal have been particularly notable.  For the first quarter, Paypal reported adjusted EPS of $0.78 (beating analyst expectations by 14.71%) on revenues of $4.13 billion. Total payment volumes rose by 25% on an annualized basis (to $161 billion), and the company revealed its peer-to-peer payment app Venmo is on pace to generate revenues of $300 million in 2019.

Strong earnings growth amongst these companies has been widespread, and this suggests share gains in OIPIX may continue.  Another notable example can be found in Thermo Fisher Scientific, which posted earnings of $2.81 per share during the most recent reporting period.  This figure beat analyst estimates by $0.07, and the company’s revenues of $6.13 billion also beat expectations by $89.47 million. The market is currently anticipating annualized earnings growth of 13.78% for Thermo Fisher for the second quarter and earnings growth of 12.27% for the third quarter.

Consistencies in projected growth and earnings have been reflected in market valuations.  For the period 06/30/2017 – 06/30/2018, the Catalyst IPOX Allocation Fund returned +21.20% and significantly outperformed its S&P 500 Total Return Index benchmark by +683 basis points.  Over the last three years, those performances have been recognized with Morningstar’s 5-star rating for risk-adjusted returns positioned at the top of the mid-cap growth category (555 total funds).  These three-year performances were also recognized with a Lipper Fund award from Refinitiv as the best alternative event-driven fund (with the highest consistent return value out of 49 total funds).

While U.S. equity markets continue to exhibit evidence of underlying stability, the continued trend implication is that 2019 may be a massive year for IPOs. While the total number of public offerings could decline this year, there are several events on the horizon with the potential to generate an explosive impact on the market.  As a result, sustainable consistency in deal flow should create a favorable environment for the Catalyst IPOx Allocation Fund. YTD returns in OIPIX continue to outpace the S&P 500 Total Return Index benchmark and this bullish activity is likely to catch the market’s attention in the quarters ahead.

Retirement, Stock Markets

Retirement: Key Traits of Successful Financial Advisors

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Retirement Planning: Key Traits of Successful Financial Advisors

For many people, the active management of investment finances often becomes an overwhelming challenge.  Significant pitfalls can be encountered when mistakes are made, and this is the primary reason a financial advisor strives to provide the guidance that is needed to achieve long-term financial goals.  

The term financial advisor is generally used to describe someone that helps with investment management, taxes, retirement strategy, and general financial planning.  Of course, not all investment strategies are created equal, and there are many different types of financial professionals. Depending on the type of specialty that is needed, some financial professionals may not be sufficiently qualified to meet the requirements of every investment situation.

This is why it’s always a good idea conduct research beforehand so that it is possible to learn about what’s available and decide on the type of financial advisor that will be best-suited to deliver favorable results. Under ideal scenarios, investment advisors can help navigate the treacherous waters of economics and money management to offer support on the journey toward achieving financial freedom during the later stages of life.

What exactly is a financial advisor?

First and foremost, a financial advisor works as a coaching mentor to help explain when it’s best to make certain financial decisions.  Most are experienced in analyzing what’s happening in the financial markets and translating that information into actionable strategies which positively impact individual financial circumstances.  Some financial advisors will have more expertise in one area rather than another, so it’s critical to assess individual needs first and then pair those requirements with an advisor’s strengths and abilities.  

For example, one advisor may specialize in stock recommendations while others might create an entire financial plan that includes estate recommendations, tax strategies, and insurance planning.  This is why financial advisors are often separated into two different categories: investment advisors and financial planners.

We sat down with financial advisor coach Stan Mann to ask questions and learn about which strategies tend to work best for high net worth clients.  

What are three important traits seen in successful financial advisors?

Stan Mann: From a marketing standpoint, three characteristics of successful financial advisors are:

1. They understand that effective marketing is crucial for their success. A financial advisor who is a competent marketer will be much more successful than an excellent financial advisor who is not a good marketer.

2. Successful financial advisors implement their knowledge. They go out in the field and put it into action. Knowledge is not power. Knowledge is potential power.

3. They have a marketing plan that they follow step-by-step. It is based upon the fundamentals of marketing: strategies and tactics. They adopt specific strategies and implement tactics to achieve their goals.

For instance, a webinar strategy would include tactics like:

  • Writing a direct mail letter or email inviting prospects to a presentation
  • Making a website to maximize conversions
  • Creating a powerful presentation that employs powerful video marketing techniques
  • May decide to place an ad in their local paper

What challenges do financial advisors face in this year’s market environment?

Stan Mann: One big challenge financial advisors face in this year’s market environment is the flood of marketing messages. This makes it very difficult for an individual financial advisor to be heard. Therefore, a financial advisor needs to be unique and different from its competitors, so he stands out from the crowd. Another challenge is that people want to work with specialists, so advisors need to specialize in solving a particular problem for a specific group of people. They need to choose a niche.

What is one easy step financial advisors can take to attract more clients?

Stan Mann: Create a headline for your business that concisely tells who you help and how they benefit from your services. Some examples are: Helping families and business owners develop a sound financial strategy; Agent with New York Life offering personal and retirement protection; I help Ford Motor Company executives make the best use of the retirement options.

Is there anything else struggling financial advisors should know to achieve better success rates?

Stan Mann: Marketing alone will not sell big-ticket items that are provided by financial advisors. The goal of marketing is to get a sales interview. At that point, the advisor takes over and needs to convert the prospect and eventually enroll them in all their financial planning services, from investment management to estate planning.

Role of Financial planners

Financial planners tend to offer broader specialties, which can vary widely in scope.  Some financial planners are able to create personalized financial plans for clients that cover everything from investments to household budgeting and estate planning.  

As a result, these services are typically more comprehensive in nature. But they can also vary widely from one financial planner to another. Other financial planners may only be able to offer a limited number of services, so it is important to be clear availability before entering into contractual agreements.

One formal distinction many find preferable is the Certified Financial Planner (CFP) designation, which requires a bachelor’s degree (or higher) from an accredited college, extensive coursework confirmed through a board-registered educational program and successful completion of the CFP certification exam.  CFP certification status can also be verified through the Certified Financial Planner Board of Standards.

Role of Investment advisers

In contrast, an investment advisor tends to be more specialized in terms of the advice and services that are made available.  Investment advisors help clients to understand the true value of securities and construct strategies for developing an asset portfolio.  Investment advisors can be a firm or an individual person, and they typically analyze the value of stocks, bonds, mutual funds, and other market instruments.  

A good investment advisor can assess a client’s financial goals and give recommendations to buy, sell or hold certain assets depending on current market conditions.  Some individual investment advisors hold certification as a Chartered Financial Analyst (CFA), which is a highly regarded classification in the field of economics.

When is financial advice needed?

Over the course of a person’s lifetime, financial goals will often evolve and change in ways that can be unpredictable.  Events like a death in the family or major career change can negatively influence personal finances.

When big changes occur, it can be helpful to get an expert’s perspective and to get a second opinion before making any important financial decisions. Here are some examples of life situations which could benefit from expert advice from a finance professional:

1. Starting financial planning in early career

In the early years, it might feel as though the future is infinite and that there is no rush to begin financial planning.  But the reality is that it is never to early to start building a financial strategy for the road ahead, and a financial advisor might be able to help avoid many of the pitfalls and mistakes commonly encountered by newbies.  

Creating a personal budget, securing a mortgage, or preparing an investment portfolio can all be made easier with the help of a seasoned professional.

2. Getting married

Properly dealing with touchy money issues could turn out to make all the difference when developing the financial future with a new spouse.  New household unions can create a completely different set of financial challenges, and it is always a good idea to gain advice from people that have encountered those challenges themselves.

3. Entering middle age

Entering the period of middle-age can present its own set of challenges, and these are the years many people must pay college tuition for their children.  In addition to this, the period of middle-age is also when many people begin to look at new savings strategies for the retirement years.

4. Preparing for retirement

Reaching the pre-retirement years can be a transformational period in a person’s life.  Most people don’t know how much money will be needed in order to achieve security after a career is finished.  These are critical questions which can have dramatic ramifications if things are not planned correctly, and a financial adviser can help make preparations to achieve security in the years that follow.

5. Planning for later years

Once a person finishes a working career, it is time to start asking some critical questions.  Will it be possible to continue living comfortably on savings? Are potential health expenses adequately covered?  Will children, family, and loved ones be secure in the event of an untimely passing? Checking in with a financial can help with the answers to these questions and keep things on track for a secure future.  Retirement comes with its own unique set of “what-ifs” but proper financial planning can help to reduce the number of potential uncertainties.

The Bottom Line

No matter what stage of life a person has reached, a little support and guidance can always be valuable and there are many options available when it comes to selecting a financial advisor.   Financial experts are able to assess complex economic situations and devise strategies to benefit from the natural ebb and flow of the market.

Partnering with an investment expert can provide the guidance needed to avoid the stress and uncertainties that are often encountered in various stages in life, and the best financial advisors are able to offer hands-on support and individually tailored strategies to help achieve a strong financial future.  

For this article, we interviewed Stan Mann, Financial Advisor Coach and Founder of StanMann.com.