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Young Research & Publishing Inc.

Investment Research Since 1978

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Microsoft Beat Wall Street: Here’s How

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Microsoft's reported quarterly financial results beat Wall Street's expectations. A big part of the company's successful quarter was an impressive 62% increase in sales for its Azure cloud computing segment when compared to last year. Tae Kim reports at MarketWatch: On Thursday, Bernstein analyst Mark Moerdler reaffirmed his Outperform rating for Microsoft shares, citing the company’s stellar earnings report. He also raised his price target for the stock to $203 from $174. “This was again another strong quarter as Microsoft continues to deliver Commercial Cloud growth as well as growth in … [Read more...]

Is the Stock Market Run Set to Continue? And Should You Care?

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The stock market has been on a tear since the Fed announced it would start what has been labeled non-QE QE (quantitative easing) in October. The S&P 500 is up 15% since then. The more speculative Nasdaq is up more than 20% and the FANG+ Index (a new index comprised only of the hottest tech stocks) is up 35%. Envious of the returns in the S&P or Nasdaq? Don’t be. You can’t call yourself an investor today and expect to keep up with either index. Even the S&P has now become way too speculative for investors in or nearing retirement. To keep up with the S&P today you … [Read more...]

Is Competition Finally Impacting Netflix?

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Anna Nicolaou reports for the Financial Times that Netflix is blaming less-than-expected subscriber growth in the United States on increased competition and its higher prices. She writes: Netflix added 8.8m subscribers in the final three months of 2019, eclipsing its guidance for 7.6m and analyst forecasts for 7.9m. This was welcome news for the first quarter that the streaming group competed head-on with Disney and Apple, which launched rival services in November. However in the US, its largest market, Netflix added only 420,000 subscribers in the fourth quarter — below its guidance for … [Read more...]

Value Stocks are Nearly the Cheapest They’ve Ever Been…

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“Value stocks are nearly the cheapest they’ve ever been compared with growth companies,” writes Jason Zweig in his WSJ column Intelligent Investor referencing a study by Research Affiliates. The study finds that value stocks aren’t necessarily inexpensive relative to their own earnings and assets, but they are when compared to growth companies. It looks like this is another example of an emotionally charged market. When it will end? Nobody knows, but it may not be pretty when it does. Zweig writes: Financial logic says cheap stocks should ultimately earn higher returns than expensive ones; … [Read more...]

Is This the Last Dance for Glamour Stocks?

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Great piece by Jason Zwieg in this weekend’s WSJ. Zwieg offers some solace to investors who still think financials and fundamentals are a more meaningful indicator of corporate performance than fantasies and fairytales about the future. Emphasis is ours. Pop quiz: Name the giant store whose customers scoff at whatever goes on sale, but flock to buy whatever costs the most. It isn’t a supermarket. It’s the stock market—especially over the past decade, when value stocks have moldered in the bargain bin. Such companies, trading at low prices relative to their earnings, net assets or other … [Read more...]

Preferred Stock vs. Common Stock: What You Need to Know

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What is the difference between preferred stock and common stock? Does preferred mean that preferred stock is better than common stock? We explain some of the differences between preferred stock and common stock below. While most investors are familiar with common stock, many are not familiar with preferred stock and how preferred stock differs from common stock. Preferreds have been around for many years though. Preferred stock got its start with the railroads in the 1800s. Preferred stocks aren’t as popular or issued by as many firms as they once were, but the size of the preferred … [Read more...]

When Dividends Pay You to be Patient

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When stocks move sideways, make sure you’re being paid to invest. Because the stock market has a history of doing just that. From 1929-1954: From 1965-1981: Over the last year: Originally posted on Your Survival Guy.  … [Read more...]

Stocks Cap Their Best First Three Quarters in 22 Years

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Despite the ongoing trade war and skirmishes in the Middle East, stocks posted their best three first three quarters since 1997. Gunjan Banerji writes in The Wall Street Journal: The S&P 500 is now sitting just 1.6% below July 26’s all-time high, but it has also risen a mere 2.2% from a year ago after a brutal selloff last fall—encapsulating the sideways trading pattern that has gripped markets since the beginning of 2018. The quarter ended on a relatively quiet note. The S&P 500 ticked up 0.5% to 2976.74 Monday, paced by Apple, which closed at its highest level this … [Read more...]

How Much More Are Stocks Really Worth when Rates Are Low?

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Gary Shilling warns against overpaying for stocks simply because rates are low. In piece for Bloomberg, he explains that investors "tend to be overly enthusiastic at business cycle peaks when corporate cash is plentiful and purchase their shares at high prices." He writes: U.S. stocks are expensive by historical standards, and the bulls try to justify current valuations by pointing to extremely low levels of interest rates. There are a number of reasons why that’s no reason to pay sky-high prices relative to profits. With companies preparing to start reporting results for the third … [Read more...]