investment
An investment is an asset or property acquired to generate income or gain appreciation. Appreciation is the increase in the value of an asset over time. It requires the outlay of a resource today, like time, effort, and money, for a greater payoff in the future or for generating a profit.
An investment involves using capital in the present to increase an asset’s value over time.
Investments may include bonds, stocks, real estate, or alternative investments.
Investments can be diversified to reduce risk, though this may reduce the amount of earning potential.
In business contexts, investments are financial; however, consider how some people spend time to make higher incomes in the future (i.e. invest in a college education).
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Every Monday we feature “A Stock to Sell” as our daily post. With every stock or investment we recommend as a sell, we give you a full explanation of why we advise against investing in it at this time.
SolarCity Corp. (symbol SCTY on Nasdaq; www.solarcity.com) provides rooftop solar systems for homeowners, businesses, schools and government agencies in the U.S.
The company creates a customized energy plan for each customer, then sells, finances, engineers, installs, monitors and maintains the system. Customers can “sell” any electricity they don’t use onto the power grid for credits they can use to “buy” electricity at night.
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SolarCity Corp. (symbol SCTY on Nasdaq; www.solarcity.com) provides rooftop solar systems for homeowners, businesses, schools and government agencies in the U.S.
The company creates a customized energy plan for each customer, then sells, finances, engineers, installs, monitors and maintains the system. Customers can “sell” any electricity they don’t use onto the power grid for credits they can use to “buy” electricity at night.
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Pat McKeough responds to many requests from members of his Inner Circle for specific stock advice as well as questions on investment strategy and the economy. Every week, his comments and recommendations on the most intriguing questions of the past week go out to all Inner Circle members. And each week, we offer you one of the highlights from these Q&A sessions.
Q: Pat: Could you give an update on Northland Power?
A: Northland Power Inc. (symbol NPI on; www.northlandpower.ca) develops, builds, owns and operates natural-gas-fired power plants, wind farms, solar projects and hydroelectric facilities. The company converted to a corporation from an income trust on January 1, 2011.
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Q: Pat: Could you give an update on Northland Power?
A: Northland Power Inc. (symbol NPI on; www.northlandpower.ca) develops, builds, owns and operates natural-gas-fired power plants, wind farms, solar projects and hydroelectric facilities. The company converted to a corporation from an income trust on January 1, 2011.
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TEMPUR SEALY $58.80 (New York symbol TPX; TSINetwork Rating: Speculative)(800-878-8889; www.tempursealy.com; Shares outstanding: 61.0 million; Market cap: $3.5 billion; No dividends paid) continues to fend off attempts by activist investor H Partners Management to replace the company’s CEO.
H Partners, which owns 10% of Tempur Sealy’s shares, is best known for taking part in the turnaround of theme-park operator Six Flags Entertainment between 2010 and 2013. H Partners believes Tempur Sealy has performed poorly compared to other mattress makers since its 2013 purchase of Sealy Corp.
Whatever the outcome of H Partners’ investment, the activist investor’s involvement should draw attention to Tempur Sealy’s growth prospects.
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H Partners, which owns 10% of Tempur Sealy’s shares, is best known for taking part in the turnaround of theme-park operator Six Flags Entertainment between 2010 and 2013. H Partners believes Tempur Sealy has performed poorly compared to other mattress makers since its 2013 purchase of Sealy Corp.
Whatever the outcome of H Partners’ investment, the activist investor’s involvement should draw attention to Tempur Sealy’s growth prospects.
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CHESAPEAKE ENERGY $16.02 (New York symbol CHK; TSINetwork Rating: Extra Risk) (405-848-8000; www.chk.com; Shares outstanding: 665.0 million; Market cap: $10.1 billion; Dividend yield: 2.2%) has filed regulatory reports showing that its chairman, Archie W. Dunham, recently purchased one million of the company’s shares at prices ranging from $13.92 to $14.05, for a total of $14 million. Dunham now holds 2.6 million shares.
As well, activist investor Carl Icahn recently increased his stake in the company to 10.98% from 9.98%. He bought his shares for $14.15 each and now holds 73 million shares, up from 66 million. Icahn has a long history of pushing companies to make changes that increase shareholder value.
Investors can put too much weight on insider trading, since insiders can delude themselves about their employer just as easily as outsiders—and it pays to remember that insiders may sell for a variety of personal reasons that have nothing to do with the company. On the other hand, insiders only make substantial buys for one reason—they think the company has investment appeal.
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As well, activist investor Carl Icahn recently increased his stake in the company to 10.98% from 9.98%. He bought his shares for $14.15 each and now holds 73 million shares, up from 66 million. Icahn has a long history of pushing companies to make changes that increase shareholder value.
Investors can put too much weight on insider trading, since insiders can delude themselves about their employer just as easily as outsiders—and it pays to remember that insiders may sell for a variety of personal reasons that have nothing to do with the company. On the other hand, insiders only make substantial buys for one reason—they think the company has investment appeal.
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PLEASE NOTE: Our next Hotlines will go out on Friday, April 10, 2015. PHILIPS ELECTRONICS N.V. ADRs, $29.30, New York symbol PHG, is selling most of its light emitting diode (LED) components and automotive lighting division (which is changing its name to Lumileds) to private equity firm GO Scale Capital. Under the deal, Philips will sell 80.1% of Lumileds for $2.9 billion. That’s equal to 11% of its $26.6-billion market cap (or the value of all of its outstanding shares). Philips expects to complete the sale in the third quarter of 2015....
PLEASE NOTE: Our next Hotline will go out on Friday, April 10, 2015. HECLA MINING CO., $3.18, symbol HL on New York, explores for, mines and processes silver and gold in the U.S. and Mexico. This week, the company agreed to buy Revett Mining Company (symbol RVM on New York) for $20 million in Hecla shares....
PLEASE NOTE: Our next Hotline will go out on Friday, April 10, 2015. RIOCAN REAL ESTATE INVESTMENT TRUST, $29.47, Toronto symbol REI.UN, has agreed to swap some properties with U.S.-based Kimco Realty (New York symbol KIM). Under the deal, RioCan will acquire Kimco’s 50% interests in a mall in Calgary and another in Mississauga for a total of $87.5 million. That will give the trust 100% of both malls, making it easier for it to expand or redevelop them....
Every Thursday we bring you one of our best U.S. stock picks. You will read about stocks making moves you should know about, most often from our newsletter on U.S. investing, Wall Street Stock Forecaster.
On Tuesday, we profiled a Canadian company in the chemical waste business with a high dividend yield (see the article here). Today we report on a U.S. chemical stock that’s not widely known, but also has an admirable record with dividends.
QUAKER CHEMICAL CORP. (New York symbol KWR; www.quakerchem.com) began operating in 1918 and currently operates 34 plants in 21 countries. These facilities make lubricants and chemicals that keep mechanical parts from rusting.
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On Tuesday, we profiled a Canadian company in the chemical waste business with a high dividend yield (see the article here). Today we report on a U.S. chemical stock that’s not widely known, but also has an admirable record with dividends.
QUAKER CHEMICAL CORP. (New York symbol KWR; www.quakerchem.com) began operating in 1918 and currently operates 34 plants in 21 countries. These facilities make lubricants and chemicals that keep mechanical parts from rusting.
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SUN LIFE FINANCIAL $39.03 (Toronto symbol SLF; Shares outstanding: 612.7 million; Market cap: $24.0 billion; TSINetwork Rating: Above Average; Dividend yield: 3.7%; www.sunlife.ca) sells life insurance, savings, retirement and pension products to individuals and corporations. Sun Life has $734.4 billion of assets under management. It mainly operates in Canada, the U.S. and the U.K., but it continues to expand in Asia. In 2013, it sold its riskier, money-losing U.S. annuity business, which sells products that guarantee minimum long-term returns even if markets fall....
Are TV financial pundits guilty of pump and dump schemes?