ADOBE SYSTEMS INC. $65 - Nasdaq symbol ADBE

ADOBE SYSTEMS INC. $65 (Nasdaq symbol ADBE; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 497.7 million; Market cap: $32.4 billion; Price-to-sales ratio: 8.3; No dividends paid since June 2005; TSINetwork Rating: Average; www.adobe.com) earned $151.3 million, or $0.30 a share, in its fiscal 2014 first quarter, which ended February 28, 2014. That’s down 14.9% from $177.9 million, or $0.35, a year ago. Revenue fell 0.8%, to $1.00 billion from $1.01 billion.

The declines are mainly because Adobe is now selling its Creative Cloud package of photo-editing and desktop-publishing programs as a subscription instead of a one-time purchase. That hurts the company’s short-term growth, but it should provide stable revenue streams as more users switch over. Subscriptions now supply over half of Adobe’s revenue.

The company spends 21% of its revenue on research, which hurts its earnings. That’s partly why the stock trades at a high 59.1 times the $1.10 a share that Adobe will likely earn in fiscal 2014. A high p/e increases the risk of a sudden price drop if its growth stalls. As well, Adobe mainly serves customers in cyclical businesses, like publishing.

Adobe is a hold.

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Blue Chip Stocks

Blue chip stocks are big, well-established, dividend-paying corporations with strong business prospects. These are companies that also have sound management that should be able to make the right moves to keep competing successfully in a changing marketplace.

Dividend Stocks

Dividend stocks make cash payouts that serve as a way for companies to share the wealth they’ve accumulated. These payouts are drawn from earnings and cash flow and paid to the shareholders of the company. Typically, these dividends are paid quarterly, although they may be paid annually or even monthly as well.

Value Stocks

What are value stocks?

One of the sweetest and most profitable pleasures of successful investing is to buy high-quality “value stocks” (or stocks that are reasonably priced, if not cheap, in relation to its sales, earnings or assets), then hold on to them as mainstream investors recognize the value and push up the share price.

Growth Stocks

Growth stocks are companies that are likely to have sales and earnings growth well above market average. Frequently they pay few, if any, dividends. Instead they typically reinvest any extra cash flow to promote further growth. Chosen wisely—according to Pat McKeough’s advice—high-quality growth-oriented stocks can be worthwhile additions to most well-diversified portfolios.

ETFs

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ETF is an acronym for exchange traded fund.. These exchange traded funds are used to track indexes as closely as possible, since investors cannot actually buy an index outright.

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Pat McKeough has been making investing for beginners simple—and profitable—by helping investors make big gains for more than 25 years. His advice to beginning investors is the same as it is for all investors: buy high-quality, mostly dividend paying stocks (or ETFs that hold these stocks) and evenly spread your investments over the five main economic sectors (Resources, Manufacturing, Finance, Utilities and Consumer). Pat also believes investors should avoid stocks in the broker/media limelight and focus on those with hidden or little-noticed assets.

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AI Investing

Artificial intelligence (AI) is essentially the merging of today’s big computing with big data. This has resulted in breakthroughs in everything from creating machines to recognize faces with more accuracy than a human, to the development of chatbots able to collect, organize and simplify all the Internet has to say on any topic.

Spinoffs

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A penny stock in general trades for under five dollars a share, and as the name implies, sometimes for pennies. Most of the time they’re young companies, or start-ups in speculative markets like mining or technology.

Mining Stocks

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Energy Stocks

What are energy stocks?

Businesses that work in the extraction, refining and delivery of energy sources such as natural gas, oil, uranium and coal, are considered energy stocks.