The Key to Avoiding Obvious Mistakes Understanding how to value a business is the key to avoiding making obvious mistakes when purchasing or selling common stocks. When you know what your investment is worth, the market cannot take advantage of your gullibility.

In part 2 of this series I focused on how to value slow and moderately growing businesses. In this article, Part 3, I will shift my focus on how to value faster growing companies (growth stocks).

The venerable investor Warren Buffett has a real knack of putting complex concepts and ideas into simple and easily understood terms. In my opinion, his quote, “Price is what you pay. Value is what you get” is one of the more profound and important statements he has ever uttered.

As a seasoned and grizzled veteran of the financial services industry for now going on 50 years, the most commonly asked questions I have received, and still do to this day, are: when to buy and when to sell a stock?

Cisco Systems Inc. (CSCO) is one of the highest quality large-cap technology companies in the world. After being overvalued for most of 2019, this high-quality once pure growth stock, now dividend growth stock, has come into fair value.

Since the beginning of April 2009, the Standard & Poor’s 500 (the stock market) has enjoyed one of the longest bull markets on record. As a result, I am starting to hear from a lot of investors that they are becoming worried that this great bull market must soon come to an end.

This article is offered as part of our ongoing FAST Graphs YouTube request series. Although time does not allow me to cover every stock that is requested, I do try to provide analyze out loud videos on stocks that either are currently in the news, or that offer special lessons on valuation.

14 years ago the Redstone family spun out Viacom (VIA) from CBS Corp (CBS). However, the companies have decided to once again merge into what they hope will become a dominant entertainment company. Given that the entertainment market is extremely competitive and quite risky, future visibility is very muddy in my humble opinion.

The primary purpose of this article on the importance of forecasting the future results of a business is offered to illustrate the conceptual validity of forecasting earnings (and every other metric) as the key to long-term investor success.

As investors, we can learn a great deal from the past about the businesses we are contemplating investing in. However, as investors, we must also recognize that we can only truly invest in the future.

I would like to credit my good friend Jeff Miller for providing the inspiration for this article. In his recent article titled “Weighing The Week Ahead: Falling Confidence A Possible Threat To Markets” he suggested a must read article by Safal Niveshak titled “Why Value Investing Works.”

I am a value investor, and all my investments are made with a long-term objective in mind. Consequently, I am a believer that time in the market is often what matters most. However, I will qualify that remark by saying that you also make your money on the buy side.

My personal investing strategy is based on the simple logic and reality that great businesses are by definition, better than average. Therefore, to my way of thinking, it logically follows that the best investment returns would be achieved by investing in the best businesses that you could identify.

This FAST Graphs analyze out loud video will cover a mid-cap dividend growth stock that many may not be familiar with. However, I believe this particular dividend growth stock offers an intriguing opportunity of high current yield, above-average growth yield and enticing capital appreciation potential based on its low valuation.

To me, fair value, as it relates to common stock investments, is manifest when the current earnings yield provided by the company’s profits compensates me for the risk I am taking by providing both a realistic and acceptable return on my invested capital.

When it comes to writing about investing in common stocks, my favorite theme typically revolves around valuation. In fact, I once had a reader dub me “Mr. Valuation.” Which, I might add was very flattering to me.

An article on when to sell a stock would not be complete without some discussion about what I consider to be the worst reason to sell a stock. Ironically, this reason may be the one that is most commonly implemented by investors.

Before I get too deep into this article, I want to start out by stating that Microsoft (MSFT) has long been one of my favorite companies. Many years ago, I invested in Microsoft as a pure growth stock and sold it in 2000 when it became dangerous overvalued after making a very healthy long-term profit.

The most common complaint that I have heard from investors over my 49+ years in the financial services industry is as follows: “Everyone wants to tell me what to buy and when, but no one ever tells me when to sell.”

The key to success is to find and implement the strategy that best fits your own unique goals, objectives, needs, and most importantly – risk tolerances.

This article is a refresh and an update of an article I originally posted in 2015. However, the principles I am presenting are timeless and worthy of being revisited.

One of the great benefits for subscribing to The Dividend Kings service are the carefully-selected portfolios presented in our portfolio tracker. However, I want to caution the subscriber that these portfolios should not be looked at as simply cut-and-paste investment options.

This article is a refresh and an update of an article I originally posted in 2015. However, the principles I am presenting are timeless and worthy of being revisited. Moreover, I have updated the supporting examples to more precisely reflect our current market environment.

One of my greatest pet peeves as a long-time investment professional is the industries’ notion that stocks can be generally categorized into only two styles commonly referred to as growth investing or value investing.

I have held AbbVie (ABBV) since it was originally spun off from Abbott Labs. Moreover, I have been aggressively adding to my position for clients needing current income and dividend growth.

I am a firm believer and ardent supporter of conducting comprehensive research and due diligence on any company (stock) you might consider investing in. However, I have also experienced the reality that far too many investors make their decisions based on opinions, emotions or vague ideas about a company...

In his Berkshire Hathaway 1994 annual report Warren Buffett said ignore political and economic forecasts. I considered this one of the more profound pieces of investment advice and wisdom that I ever came across.

My personal anecdotal experience suggests that many investors operate under the fallacy: “my mind’s made up – don’t confuse me with the facts.” This behavior often results from only reading the headlines while skimming over the in-depth analysis that is truly needed to make a sound or prudent investing decision.

Avon’s Historical Operating Results and Price Action Since 2008 Avon’s earnings have continuously eroded and its stock price has followed. Moreover, after its dividend grew for many years, the company cut it by 18 ½% for 2012, slashed it an additional 68% in 2013 and then eliminated their dividend altogether in 2016.

This is a follow-up to my first article in a continuing series where I will be identifying and presenting dividend growth stocks for an above-average long-term total return objective.

This is the first in a continuing series where I identify and present dividend growth stocks for an above-average long-term total return objective. Throughout this series I will be illustrating that there are several prudent sources of long-term return and there is also luck or chance.

I find it serendipitous that after just completing a 19-part series on how highly valued the general market is, I get the pause that refreshes. Now please don’t read more into my words than are being offered. I still believe that the market at large is fully valued.

This is part 19 and the final part of my series covering all the various sectors reported by FactSet. However, the popular idea of saving the best for last does not apply in this instance.

As a rule, I have never been very fascinated by the Transportation Sector. This is especially true regarding airlines and air transport companies. Nevertheless, there are two airlines and two air freight carriers in the Transportation Sector that I felt comfortable featuring in this article.

Technology Services Sector covered in this article is a sector where overvaluation is rampant. In other words, this is currently a hot sector where sound valuation has been thrown out the window in favor of what I can only describe as hype and speculation.

Simply Google the phrase “what effect is Amazon having on retail” and you’ll discover a significant amount of information, articles and theories. Personally, I found the following article written by Susan Ward that articulated the sales of brick-and-mortar versus online to be quite illuminating.

Although I consider the overall stock market as represented by the S&P 500 to be overvalued, not all stocks are overvalued.

One of the main goals of this series of articles is to illustrate the significant differences between individual stocks, and the significant differences between different sectors. Therefore, from this perspective, I have been attempting to illustrate the “nature of the beast” for each of the sectors I have covered.

The Non-Energy Minerals Sector is mostly comprised of very cyclical and typically commodity-based companies. Consequently, very few companies in this sector offer the consistency and predictability that prudent and/or conservative investors might require.

A major goal of this series on sectors is to illustrate the reality that it is a market of stocks rather than a stock market. With this article I am technically covering the Industrial Services Sector.

Although many Health Technology Sector companies have significantly outperformed the market on a long-term basis, they have significantly underperformed the market since the beginning of 2015.

The Health Services Sector is one of the smallest sectors as presented by FactSet as it only contains 137 companies out of more than 19,000 in the US and Canadian universe.

I found more value in the Finance Sector than I did in any other sector that I screened. All in all, I identified 131 attractively valued companies out of the 1,888 companies in the Finance Sector.

The Energy Minerals Sector is comprised of 619 companies. And, as it is with every sector, they come in all shapes, sizes and colors. However, a common attribute that is shared by most companies in this sector is a significant amount of cyclicality in their operating results, i.e., earnings and cash flows.

My primary objective is to illustrate how different individual companies are from each other, and even how different companies operating in the same sector can be. It is a market of stocks not a stock market.

As I stated in previous articles in this series, my primary objective is to provide the reader with a clear perspective of just how different individual stocks are and how different companies operating in different sectors are.

As I stated in the introduction in Part 4 of this series, my primary objective is to provide the reader with a clear perspective of just how different individual stocks are and how different companies operating in different sectors are.

My primary objective with this series of articles (identifying attractively valued stocks in different sectors) is to provide the reader with a clear perspective of just how different individual stocks are and how different companies operating in different sectors are.

This is part 3 of a series where I have conducted a simple screening looking for value over the overall market based on industry classifications and subindustry classifications reported by FactSet Research Systems, Inc.

This is part 2 of a series where I have conducted a simple screening looking for value over the overall market based on industry classifications and subindustry classifications reported by FactSet Research Systems, Inc.