Why Shaw Communications Stock Is Rated a "Buy With Caution" Today

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Shaw Communications (NYSE: SJR) is a $12 billion company today. Investors that bought shares one year ago are sitting on a 20.92% total return. That’s above the S&P 500’s return of 17.81%.

Shaw Communications stock is beating the market, and it reports earnings tomorrow. But does that make it a good buy today? To answer this question, we’ve turned to the Investment U Stock Grader. Our Research Team built this system to diagnose the financial health of a company.

Our system looks at six key metrics…

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✗ Earnings-per-Share (EPS) Growth: Shaw Communications reported a recent EPS growth rate of 25%. That’s below the media industry average of 37.65%. That’s not a good sign. We like to see companies that have higher earnings growth. 

✓ Price-to-Earnings (P/E): The average price-to-earnings ratio of the media industry is 35.76. And Shaw Communications’ ratio comes in at 13.42. It’s trading at a better value than many of its competitors.

✗ Debt-to-Equity: The debt-to-equity ratio for Shaw Communications Stock is 102.45%. That’s above the media industry average of 62.48%. That’s not a good sign. Shaw Communications’ debt levels should be lower.

✓ Free Cash Flow per Share Growth: Shaw Communications’ FCF has been higher than that of its competitors over the last year. That’s good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It’s one of our most important fundamental factors.

✓ Profit Margins: The profit margin of Shaw Communications comes in at 11.27% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. Shaw Communications’ profit margin is above the media average of -1.72%. So that’s a positive indicator for investors.

✓ Return on Equity: Return on equity tells us how much profit a company produces with the money shareholders invest. The ROE for Shaw Communications is 20.04%, and that’s above its industry average ROE of 12.51%.

Shaw Communications stock passes four of our six key metrics today. That’s why our Investment U Stock Grader rates it as a Buy With Caution.

Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That’s why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth.

If you’re interested in finding Strong Buy stocks yourself, check out Fundamental Analysis Pro. It’s a free five-part mini-course that will teach you how to grade stocks like a Wall Street veteran. Click here to learn more. …read more

A Better Way to Invest in an Expensive Market

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Benjamin Graham, widely considered the father of value investing, once said, “In the short run, the market is a voting machine, but in the long run, it is a weighing machine.”

In other words, over short periods, markets tend to move irrationally along with market psychology. But over longer market cycles (at least 10 to 12 years), fundamentals are ultimately what matter.

Since 1996, the U.S. stock markets have acted almost entirely like voting machines. Only during brief bear markets and corrections do they seem to act like weighing machines.

The chart below shows the average price-to-earnings ratio of the S&P 500 since 1970.

As you can see, for the last two decades, stock market P/E ratios have been elevated most of the time. Since 1996, the average P/E has been 23.36. Meaning that stocks are almost always expensive. And dividend yields are almost always low.

Only during brief and sporadic crashes and corrections do we get a chance to buy stocks at bargain prices.

The average bear market lasts around 15 months (since 1900), though they vary widely. The crashes happen fast, while the bull markets take years to peak.

Now, once again, we find ourselves facing historically pricey stocks pushing higher and higher.

Clearly, it’s good to own some stocks for the long run. So you can either “dollar cost average” into it (invest the same amount monthly over years), or try to time it using stops and/or gut feeling.

Both strategies can work, but they have their own drawbacks. Dollar cost averaging into stocks means that you’re overpaying most of the time.

Trying to time the market is difficult and can be terrifying.

Personally, I use a combination of the two for stocks. I mostly dollar cost average into stocks I want to own forever. But I do hold onto more cash when stocks are pricey, take some profits, and wait for a correction or crash. It’s the modern version of value investing.
The Cause and Result
I believe this problem is primarily created by persistent low interest rates.

Eight years of near-zero percent interest rates have distorted markets greatly.

The sheer size of government as a percentage of the economy is also problematic, since large bureaucracies are woefully inefficient. But that’s another article entirely.

It’s primarily these low rates that have convinced the market that risk/speculation will be rewarded. And it’s “working” in the sense that stocks are going up due to artificial forces acting on them.

Toss in the rise of algorithmic trading funds, which now make up 27% of all stock market volume, and the moves are even harder to predict.

This is probably why 90% of actively managed funds have underperformed against their indexes over the last 15 years. That’s 1.5% a year for a cumulative gain of 25% for the Jack Bogle fans.

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Startups: A Market That Always Has Bargains
I still own public stocks, don’t get me wrong. But that stuff is mostly on autopilot, with a few exceptional cases.

Ninety-five percent of my attention is on startup equity these days.

With startups, you can almost always find …read more

How Tax Reform Will Ignite a Stock Market Boom

In our last broadcast, I sat down with Chief Investment Strategist Alexander Green to talk about the prospects for tax reform and to discuss the effect it will have on the economy, the financial markets and your portfolio.

Alex argues that meaningful tax reform is only weeks away – and that lower corporate and individual rates will boost the economy, corporate profits and share prices.

Here’s the second part of our interview…

ST: You’ve mentioned that a lower corporate tax rate will boost research and development, hiring and capital spending. But how about lowering individual rates? I’m sure our readers would like some relief there. But is it realistic – and would it help?

AG: Lower individual tax rates are also coming. But I want to emphasize that the key is not to simply lower rates. If Congress cut tax rates and did nothing else, we would still be stuck with a code that incentivizes individuals and corporations to make non-economic decisions that have no value except to shelter income. Plus, tax cuts are always temporary and easily reversed. So the historic thing would be to reform the code and produce something that is dramatically simpler and fairer.

ST: And would lower individual rates help the economy and stock prices?

AG: Absolutely. Consumer spending is 70% of the economy.  People with more after-tax income in their pockets are going to spend more. That will not hurt sales and earnings.

ST: You mentioned that one particular aspect of tax reform is a real game changer for our readers. Tell us more about that.

AG: Trump promised to cut the corporate tax rate to 15%.  Trust me, that won’t happen. Like a good negotiator, he threw an unrealistic number out there as his initial offer. The final rate is likely to be closer to 20% to 25%. That’s still much better than what we have now – and a huge incentive for businesses to invest in buildings, equipment, software and technology.

ST: But what’s the game-changing part?

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AG: The game-changing part is that Trump doesn’t want just tax relief for megacorporations. He wants to help small business owners, which include many of our readers. Congress can do that by extending the reduction in corporate taxes to so-called pass-through entities.

ST: Explain what those are.

AG: Most small businessmen set up their businesses as either S corporations or limited liability companies, better known as LLCs. Profits and losses at S corporations and LLCs are shifted to the personal returns of the owners, whose income is currently taxed as high as 39.6%. Does it make any sense – or seem fair to you – that that the top tax rate for a Fortune 500 company is 35%, the highest in the world, but for a mom and pop business it’s 39.6%?

ST: I guess mom and pop didn’t go out and hire an army of lobbyists.

AG: Exactly. Yet according to the Tax Policy Center, pass through entities account for at least 95% of all business tax returns and 60% of net business income generated by U.S. …read more

Forward Guidance: Andy Snyder’s Unusual Passive Income Source

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On this week’s episode of Forward Guidance, Manward Press Founder Andy Snyder joins us to discuss income investing in a low-interest-rate world.

You may remember Andy as the former Editor-in-Chief of The Oxford Club and the author of the popular Lecture Notes column in Investment U. But about two months ago, Andy left a rewarding job at the Club to pursue his passion project full time.

As Andy explains, Manward Press is a lifestyle and financial publishing company dedicated to helping men (and many women) achieve success and fulfillment. It’s focused on a research-backed “Triad” of personal goals: Liberty, Know-How and Connections.

Financial guidance is an important aspect of Manward Press, as Andy considers income security to be crucial to personal liberty.

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That’s why Andy has been a vocal critic of what he calls the “Zero Economy,” or the Federal Reserve’s policy of maintaining artificially low interest rates. He wrote about this topic frequently in Investment U.

Andy sees the Fed’s low-interest lending and quantitative easing policies as unsustainable in the long term. He points out that it now has $4.5 trillion in bonds and asset-backed securities on its balance sheet – and that every attempt to unwind that balance sheet has sent the market into a panic (as with the 2013 “taper tantrum”).

He also notes that the persistent low-interest environment is depriving retirees of their living income – and may be contributing to a bubble in junk bonds and dividend stocks.

Even after the Fed’s rate hikes this year, the benchmark 10-year Treasury yield is still falling over time, shown in the graph below.

In Andy’s view, this is a result of lukewarm economic growth – and of the Fed procrastinating on unwinding its balance sheet. Despite the Fed’s attempt to increase benchmark rates, Andy doesn’t think investors are confident about the current interest rate situation.

That’s why he’s been recommending a unique approach to income investing to Manward Trader readers. Unlike traditional income investing, Andy’s method doesn’t involve fixed-income securities. Instead, he uses growth stocks with relatively predictable returns to generate a steady stream of profits.

If you want to learn more about this unique approach to income investing, check out Manward Trader, the new financial research service from Manward Press.
Thoughts on this article? Leave a comment below. …read more

Why General Mills Stock Is Rated a "Hold" Before Earnings

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General Mills (NYSE: GIS) is a $33 billion company today. Investors that bought shares one year ago are sitting on a -13.64% total return. That’s below the S&P 500’s return of 17.81%.

General Mills stock is underperforming the market. It’s beaten down, but it reports earnings next week. So is it a good time to buy? To answer this question, we’ve turned to the Investment U Stock Grader. Our Research Team built this system to diagnose the financial health of a company.

Our system looks at six key metrics…

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✗ Earnings-per-Share (EPS) Growth: General Mills reported a recent EPS growth rate of 1.64%. That’s below the food products industry average of 11.4%. That’s not a good sign. We like to see companies that have higher earnings growth.

✓ Price-to-Earnings (P/E): The average price-to-earnings ratio of the food products industry is 24.94. And General Mills’ ratio comes in at 18.63. It’s trading at a better value than many of its competitors.

✗ Debt-to-Equity: The debt-to-equity ratio for General Mills stock is 184.4%. That’s above the food products industry average of 71.94%. That’s not a good sign. General Mills’ debt levels should be lower.

✗ Free Cash Flow per Share Growth: General Mills’ FCF has been lower than that of its competitors over the last year. That’s not good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It’s one of our most important fundamental factors.

✓ Profit Margins: The profit margin of General Mills comes in at 9.43% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. General Mills’ profit margin is above the food products average of 7.56%. So that’s a positive indicator for investors.

✓ Return on Equity: Return on equity tells us how much profit a company produces with the money shareholders invest. The ROE for General Mills is 30.58%, and that’s above its industry average ROE of 17.52%.

General Mills stock passes three of our six key metrics today. That’s why our Investment U Stock Grader rates it as a Hold.

Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That’s why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth.

If you’re interested in finding Strong Buy stocks yourself, check out Fundamental Analysis Pro. It’s a free five-part mini-course that will teach you how to grade stocks like a Wall Street veteran. Click here to learn more. …read more

This Graph Will Scare the Heck Out of Tech Investors

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When Charles Dow first calculated the Dow Jones Industrial Average, it contained 12 companies and had a value of 40.94. Today, it’s closing in on 21,500 – but General Electric (NYSE: GE) is the only surviving company from the original dozen.

Needless to say, GE wasn’t the force behind this 52,000%-plus gain in the Dow. As technology advanced through the 19th and 20th centuries, innovative new companies joined the market through IPOs. In the process, they offered incredibly profitable opportunities to technology-minded investors.

That’s why tech IPOs were once eagerly anticipated events on Wall Street. You’ve probably seen graphs showing the profit margins of investors who bought Apple (Nasdaq: AAPL) in the ‘80s, or Amazon (Nasdaq: AMZN) in the ‘90s.

But as you can see from this week’s chart, the days of lucrative tech IPOs are over. Out of the five top IPOs of 2015, not even one had a positive annual return.

At first glance, that might seem impossible. Technology is advancing faster than ever, and tech startups like Airbnb, Uber and Dropbox are growing faster than ever.

But the problem with the modern tech sector isn’t the tech. It’s the lack of incentives for fast-growing startups to go public.

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Back in 2001, when investors were reeling from the dot-com crash and the Enron scandal, Congress passed a reform called the Sarbanes-Oxley Act. This law imposed a bundle of regulations meant to increase the transparency of publicly traded companies.

Sarbanes-Oxley was a well-intended attempt to fight fraud and disinformation in the financial sector. But it had an unforeseen side effect: It effectively made it impossible for young, fast-growing companies to go public. In order to meet Sarbanes-Oxley reporting requirements, a company needs a full staff of corporate attorneys and accountants. These are unaffordable luxuries for small startups.

Steve Jobs and Steve Wozniak didn’t have a $1,000-an-hour corporate lawyer working with them in Jobs’ mom’s garage. But if they were launching Apple today, they’d need one in order to go public.

Nowadays, by the time a tech company gets a ticker symbol, it has already gotten pretty big. And that means its best days of growth are probably behind it.

That’s why today’s tech IPOs are stagnant at best… and money sinks at worst. In the post-Sarbanes-Oxley world, you need private equity to capitalize on the best tech startups.

For decades, this lucrative asset class was reserved for the ultra-rich. But not anymore. Click here to learn how you can own a piece of today’s most exciting startups for as little as $100.
Thoughts on this article? Leave a comment below. …read more

Buy or Sell Monsanto Stock Before Earnings?

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Monsanto (NYSE: MON) is a large cap company that operates within the chemicals industry. Its market cap is $52 billion today, and the total one-year return is 11.29% for shareholders.

Monsanto stock is underperforming the market. It’s beaten down, but it reports earnings next week. So is it a good time to buy? To answer this question, we’ve turned to the Investment U Stock Grader. Our Research Team built this system to diagnose the financial health of a company.

Our system looks at six key metrics…

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✗ Earnings-per-Share (EPS) Growth: Monsanto reported a recent EPS growth rate of 28.51%. That’s below the chemicals industry average of 52.47%. That’s not a good sign. We like to see companies that have higher earnings growth.

✓ Price-to-Earnings (P/E): The average price-to-earnings ratio of the chemicals industry is 21.73. And Monsanto’s ratio comes in at 20.87. It’s trading at a better value than many of its competitors.

✗ Debt-to-Equity: The debt-to-equity ratio for Monsanto stock is 165.12%. That’s above the chemicals industry average of 59.46%. That’s not a good sign. Monsanto’s debt levels should be lower.

✗ Free Cash Flow per Share Growth: Monsanto’s FCF has been lower than that of its competitors over the last year. That’s not good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It’s one of our most important fundamental factors.

✓ Profit Margins: The profit margin of Monsanto comes in at 26.96% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. Monsanto’s profit margin is above the chemicals average of 12.84%. So that’s a positive indicator for investors.

✓ Return on Equity: Return on equity tells us how much profit a company produces with the money shareholders invest. The ROE for Monsanto is 39.68%, and that’s above its industry average ROE of 24.32%.

Monsanto stock passes three of our six key metrics today. That’s why our Investment U Stock Grader rates it as a Hold.

Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That’s why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth.

If you’re interested in finding Strong Buy stocks yourself, check out Fundamental Analysis Pro. It’s a free five-part mini-course that will teach you how to grade stocks like a Wall Street veteran. Click here to learn more. …read more

The Coming Tax Reform... and Why It’s a Game Changer for Investors

According to House Ways and Means Committee Chairman Kevin Brady, the House is moving forward on a single unified tax reform plan.

So I recently sat down with our Chief Investment Strategist Alexander Green to get his views on what this means for the economy, the stock market and your portfolio.

ST: Earlier this year, the Republicans found that reforming Obamacare was much more complicated than they thought it would be. They couldn’t get it done. Is tax reform really going to happen this year?

AG: Absolutely. It needs to happen, and it will happen. If it doesn’t, what will Republicans run on in 2018… “Elect us – we can’t even get things done without partisan gridlock”?

ST: Healthcare is a big sector – nearly 20% of the economy – but tax reform is the whole economy. If they can’t get healthcare done, how will they get tax reform done?

AG: There is actually more agreement among Republicans on tax reform than there is on healthcare reform. All conservatives want to simplify the code, reduce individual and corporate rates, and give U.S. corporations an incentive to repatriate foreign earnings. It’s a shame that billions of dollars of corporate profits are sitting in cash overseas when those companies would love to bring the money back here to invest in factories, equipment and labor. But the tax penalty is simply too high.

ST: Is tax reform really that big a deal? Has it been overhyped?

AG: No. It’s hard to overestimate its value. Tax reform will have a huge impact on economic growth, investment and corporate profits. And – not incidentally – those are exactly the elements that drive stock prices higher.

ST: How?

AG: Let’s start with the basic idea that anything the government does to incentivize people to start or expand a business is a good thing. It means more money is available for research and development, factories, employees, office space and capital investment.

Yet our corporate tax rate – at 35% – doesn’t just make us less globally competitive, it actually drives U.S. companies out of the country.

ST: How so?

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AG: Some firms do a so-called inversion, in which they actually move their headquarters overseas. Others agree to be acquired by a foreign buyer to – once again – relocate overseas.

Burger King moved to Canada after its 2014 acquisition of Tim Hortons to avoid $275 million in corporate taxes.

Budweiser was bought by InBev – now Anheuser-Busch InBev (NYSE: BUD), the maker of Stella Artois and Bass – and now calls Belgium its corporate home.

Ingersoll-Rand (NYSE: IR) is based in Bermuda. Liberty Global (Nasdaq: LBTY.A, .B, .K) is headquartered in the U.K. Seagate Technology (Nasdaq: STX), Accenture (NYSE: ACN) and Chiquita Brands are all based in Ireland. And I don’t think it’s because the Dublin area is a good place to raise bananas.

ST: Right. Are corporate tax rates really that much lower overseas?

AG: Dramatically lower. In Ireland, for example, trading income is taxed at a top rate of 12.5%. That’s roughly a third of our corporate tax rate.

ST: How about those …read more

Why Accenture Stock Is Rated a "Hold" Today

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Accenture (NYSE: ACN) is a large cap company that operates within the IT services industry. Its market cap is $83 billion today, and the total one-year return is 8.66% for shareholders.

Accenture stock is underperforming the market. It’s beaten down, but it just beat earnings estimates. So is it a good time to buy? To answer this question, we’ve turned to the Investment U Stock Grader. Our Research Team built this system to diagnose the financial health of a company.

Our system looks at six key metrics…

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✗ Earnings-per-Share (EPS) Growth: Accenture stock is underperforming the market. It’s beaten down, but it just beat earnings estimates. So is it a good time to buy?

✓ Price-to-Earnings (P/E): The average price-to-earnings ratio of the IT services industry is 25.99. And Accenture’s ratio comes in at 22.55. It’s trading at a better value than many of its competitors.

✓ Debt-to-Equity: The debt-to-equity ratio for Accenture stock is 0.32. That’s below the IT services industry average of 143.97. The company is less leveraged.

✗ Free Cash Flow per Share Growth: Accenture’s FCF has been lower than that of its competitors over the last year. That’s not good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It’s one of our most important fundamental factors.

✗ Profit Margins: The profit margin of Accenture comes in at 9.57% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. Accenture’s profit margin is below the IT services average of 12.51%. So that’s a negative indicator for investors.

✓ Return on Equity: Return on equity gives us a look at the amount of net income returned to shareholders. The ROE for Accenture is 51.57%, and that’s above its industry average ROE of 26.05%.

Accenture stock passes three of our six key metrics today. That’s why our Investment U Stock Grader rates it as a Hold.

Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That’s why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth.

If you’re interested in finding Strong Buy stocks yourself, check out Fundamental Analysis Pro. It’s a free five-part mini-course that will teach you how to grade stocks like a Wall Street veteran. Click here to learn more. …read more

Is Buying Low and Selling High Possible in America Anymore?

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Paris’ ritzy Place Vendôme is a nice place to shop, but it’s not a cheap place to shop. It offers top-quality goods at premium prices. New York’s Wall Street is no different.

The stocks on display there are as richly priced as a Louis Vuitton handbag. So if you’re hoping to find a bargain, you may have to look elsewhere.

According to the pervasive narrative, U.S. stocks are hitting record highs because earnings growth is strong. Unfortunately, this feel-good narrative ignores one important fact: the S&P 500’s earnings per share (EPS) are lower today than they were three years ago.

In September 2014, the S&P’s trailing 12-month EPS topped $113. Today, the S&P’s earnings are still below that number. And yet, despite this earnings nongrowth, the S&P 500 Index has advanced 30% since then.

In other words, U.S. stocks have simply become more expensive during the last three years, not more valuable.

The earnings trend looks a little better if we begin the analysis five years ago, instead of three. Since June 2012, the S&P’s earnings per share have increased about 16%. That’s not bad. But that result doesn’t come close to matching the S&P’s 107% price gain over that time frame.

You read that correctly… Stock prices more than doubled while earnings increased only 16%. A trend like this is called “multiple expansion” because investors pay an ever-expanding price multiple for each dollar of earnings.

In the specific case of the S&P 500 Index, investors paid about 14 times the index’s earnings in 2012. But today, that multiple has expanded to more than 21 times earnings.

One major cause of the S&P 500’s spectacular gain during the last few years has been the even more spectacular gains of these five stock market darlings: Facebook (Nasdaq: FB), Amazon (Nasdaq: AMZN), Apple (Nasdaq: AAPL), Netflix (Nasdaq: NFLX) and Alphabet (Nasdaq: GOOG) – the stock formerly known as Google.

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These five stocks, like Sherpas on an ascent to Everest, have been carrying a big part of the load during the S&P’s climb toward record highs.

As the far left side of the below chart shows, the combined stock market gains of these five stocks contributed to about 10% of the S&P 500’s total three-year gain through May 2015. Over the ensuing two years, that percentage continued to rise to almost 50%.

In other words, during the last three years, the stock market gains of Facebook, Amazon, Apple, Netflix and Alphabet produced nearly half of the S&P 500’s total gain during that time.

But now what?

These five stocks cannot compensate for the other 495 stocks in the S&P 500 forever. As mighty as they are, they cannot carry the world. But even if they do manage to carry the index for several more months, better investment opportunities beckon elsewhere around the globe.

As the chart below shows, the S&P 500 is trading at 37-year highs, based on its price-to-EBITDA valuation (i.e., gross earnings). This nosebleed valuation is 43% higher than the valuation of non-U.S. stocks, as represented by the MSCI EAFE Index.

Clearly, the average …read more

Why Oracle Stock Is Rated a "Hold" Before Earnings

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Oracle (Nasdaq: ORCL) is a $189 billion company today. Investors that bought shares one year ago are sitting on a 17.21% total return. That’s below the S&P 500’s return of 19.45%.

Oracle stock is underperforming the market. It’s beaten down, but it reports earnings tonight. So is it a good time to buy? To answer this question, we’ve turned to the Investment U Stock Grader. Our Research Team built this system to diagnose the financial health of a company.

Our system looks at six key metrics…

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✗ Earnings-per-Share (EPS) Growth: Oracle reported a recent EPS growth rate of 7.84%. That’s below the software industry average of 15.85%. That’s not a good sign. We like to see companies that have higher earnings growth.

✓ Price-to-Earnings (P/E): The average price-to-earnings ratio of the software industry is 64.29. And Oracle’s ratio comes in at 20.9. It’s trading at a better value than many of its competitors.

✗ Debt-to-Equity: The debt-to-equity ratio for Oracle stock is 105.77%. That’s above the software industry average of 62.54%. That’s not a good sign. Oracle’s debt levels should be lower.

✗ Free Cash Flow per Share Growth: Oracle’s FCF has been lower than that of its competitors over the last year. That’s not good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It’s one of our most important fundamental factors.

✓ Profit Margins: The profit margin of Oracle comes in at 24.32% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. Oracle’s profit margin is above the software average of -21.12%. So that’s a positive indicator for investors.

✓ Return on Equity: Return on equity tells us how much profit a company produces with the money shareholders invest. The ROE for Oracle is 18.48%, and that’s above its industry average ROE of 11.31%.

Oracle stock passes three of our six key metrics today. That’s why our Investment U Stock Grader rates it as a Hold.

Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That’s why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth.

If you’re interested in finding Strong Buy stocks yourself, check out Fundamental Analysis Pro. It’s a free five-part mini-course that will teach you how to grade stocks like a Wall Street veteran. Click here to learn more. …read more

The Subtle Genius of Amazon’s Whole Foods Buyout

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I do the grocery shopping for my household.

And that means that every time I go to the store, I eventually must play the checkout game. I have to examine the lines and find the one that I think is going to move the fastest based on the number of items each person in front of me has… whether they’re a “talker” or not… and whether they’ll freeze up the register by paying with a check.

Some people were confused by Amazon’s (Nasdaq: AMZN) recently announced $13.7 billion buyout of Whole Foods (Nasdaq: WFM).

I was not.

And that’s because I believe that we’re well on our way to a cashless society. For the most part, we’re already there. No one carries cash anymore. And among the younger generations, the idea of carrying a wallet is becoming outdated.

If you haven’t noticed, whenever you’re out shopping, more and more, people are paying with their smartphones. And most retailers – even grocery stores – offer tons of mobile coupons.

I don’t often cheer acquisitions. But this is one that sparked me to send an email with a couple of exclamation points.

It’s one of those things I’ve been waiting for from Amazon.

Last year, Amazon began live testing a grocery store concept, Amazon Go, in Seattle, Washington. It’s all about “walk out” technology.

There are no cashiers or registers.

As shoppers enter the store, they tap their smartphones at a turnstile. This links to their Amazon accounts. And the shoppers simply pick the items they want off the shelves and walk out. The store keeps track of what was purchased and charges their Amazon accounts.

No fuss. No muss. It’s the grocery store of our dreams where there are no lines at checkout.

Amazon Go is the brick-and-mortar of the future. But Amazon isn’t the only company using the internet to improve the grocery shopping experience.

Already, there are grocery delivery services like Peapod and Fresh Direct, as well as grocery pickup services. Even Wal-Mart (NYSE: WMT) and Kroger (NYSE: KR) have been focused on online sales.

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Currently, 25% of all Americans buy at least some groceries online. In fact, in 2016, the amount of groceries purchased online was equivalent to the sales of 764 grocery stores.

Over the next decade, the percentage of Americans who purchase some groceries online will increase to 70%.

And by 2025, 20% of all grocery shopping will be done through digital channels. That’s a fivefold increase from the current 4.3% of all grocery dollars being spent digitally.

But here’s where the worlds of Amazon and Whole Foods collide… They’ve both pioneered mobile payment for groceries.

There’s only one brick-and-mortar store that sees more Apple (Nasdaq: AAPL) Pay transactions than Whole Foods does…

Last year, the monthly number of Apple Pay transactions increased 50% over 2015. It still has a long way to go to unseat standard credit card purchases.

For Whole Foods, 1.7% of all credit card transactions were made with Apple Pay. That’s more than four times the national average.

This data backs up something that I see firsthand… Consumers love shopping at Whole …read more