How To Invest
In addition, Pat thinks then beginner investors should cultivate two important qualities: a healthy sense of skepticism and patience.
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Investors should approach all investments with a healthy sense of skepticism. This can help keep you out of fraudulent stocks that masquerade as high-quality stocks. It will also keep you out of legally operated, but poorly managed, companies that promise more than they can possibly deliver.
If you are a new investor, you should also realize that losing patience can cause you to sell your best choices right before a big rise. All too often, investors buy a promising stock just as it enters a period of price stagnation. Even the best-performing stocks run into these unpredictable phases from time to time. They move mainly sideways in a wide range for months or years before their next big rise begins. (Stock brokers often refer to these stocks as “dead money.”)
If you lack patience, you run a big risk of selling your best choices in the midst of one of these phases, prior to the next big move upward. If you lose patience and sell, you are particularly likely to do so in the low end of the trading range, when stock prices have weakened and confidence in the stock has waned.
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Alliance Fiber Optic Products, $18.63, symbol AFOP on Nasdaq (Shares outstanding: 18.4 million; Market cap: $344.2 million; www.afop.com), supplies fibre optic components, subsystems and modules for the fibre-optic network equipment market. For the three months ended March 31, 2014, Alliance expects to report sales of $24.8 million, up 104% from a year earlier. In 2013, the company’s sales rose 63% over 2012, to $76.1 million, and it made $0.93 a share, up from $0.34. Alliance gets 75% of its sales by making connectors that link two or more fiber optic strands together. The company is a leading supplier of connectors that minimize signal loss at that junction, and it sells the widest range of connectors in the industry....
FLYHT Aerospace Solutions, $0.63, symbol FLY on Toronto (Shares outstanding: 162.8 million; Market cap: $97.8 million; www.flyht.com), supplies a number of products and services to the aviation industry. These include a data-collection device, called AFIRS UpTime, that records flight information as it happens and relays it to the aircraft operator’s facilities by satellite. FLYHT also sells a system called FLYHTStream, an emergency device that sends real-time data to the ground to be analyzed immediately. Recently, the company introduced the Dragon, a lightweight, portable satellite communication device that lets users access FLYHT’s technology with an iPad. The company changed its name from AeroMechanical Services in 2012....
Canexus Corp., $5.25, symbol CUS on Toronto (Shares outstanding: 180.8 million; Market cap: $936.3 million; www.canexus.ca), produces sodium-chlorate and chlor-alkali products, largely for the pulp and paper and water-treatment industries. The company’s six plants—four in Canada and two at one site in Brazil—aim to use nearby low-cost electricity sources and transportation facilities to cut their production and delivery expenses. Canexus also provides “transloading” services (transfers of oil and gas by-products, such as butane, from railcars or pipelines to trucks) at its terminal in Bruderheim, Alberta....
Financial Select Sector SPDR Fund ETF, $21.82, symbol XLF on New York (Shares outstanding: 851.4 million; Market cap: $18.6 billion; www.spdrs.com), holds a number of stocks we recommend in Wall Street Stock Forecaster as its top holdings, including Wells Fargo, JP Morgan Chase and American Express. It also holds some stocks we don’t recommend, including its second-largest holding, Berkshire Hathaway. Unlike many holding companies, Berkshire Hathaway trades at a premium to its net asset value. We think the company is fully valued at today’s share price. What’s more, its chairman and CEO, famous investor Warren Buffett, celebrated his 83rd birthday last August. When he dies, or if he becomes incapacitated, the stock is vulnerable to a sudden and severe downturn....
We haven’t found any cruise line or casino companies that we want to recommend as buys, but here’s a look at two of the most prominent cruise operators, as well as two casino stocks. Carnival Corp., $37.38, symbol CCL on New York (Shares outstanding: 592.2 million; Market cap: $22.1 billion; www.carnival.com), operates a fleet of 101 cruise ships worldwide. In North America, these vessels operate under the Carnival Cruise Lines, Holland America Line, Princess Cruises and Seabourn banners. Other global brands include AIDA Cruises, Costa, Cunard, Ibero Cruises and P&O Cruises....
The Dow Jones Industrial Average dropped nearly 600 points in a little over a week. Speculative stocks such as Facebook are down around 20% from their peaks of the previous month. Meanwhile, Russia is concentrating its troops on Ukraine’s eastern border, and Ukrainian troops clashed with pro-Russian protesters who have occupied government buildings in the eastern part of the country. Meanwhile, China says it is restructuring its economy, and this is likely to cut its rate of economic growth. It has allowed its yuan to creep downward in foreign exchange markets in the past year, which will make its exports cheaper in world markets. In response, the European Central Bank has hinted that it may act to weaken the euro, to remain competitive. Many investors wonder what, if anything, they should do with their investments in response to any or all of these news items. The answer depends on what investments you already hold....
Noodles & Company, $35.79, symbol NDLS on Nasdaq (Shares outstanding: 28.2 million; Market cap: $1.2 billion; www.noodles.com), operates fast-casual restaurants in the U.S. Its Noodles & Company chain offers made-to-order dishes, including noodles and pasta, soups, salads, sandwiches and appetizers. Colorado-based Noodles & Company operates 380 restaurants, including 318 company-owned and 62 franchised locations, across 29 states and the District of Columbia. It was founded in 1995. In the three months ended December 31, 2013, the company’s revenue rose 17.4%, to $91.5 million from $77.9 million a year earlier. Same-restaurant sales rose 4.3%. Earnings per share jumped 57.1%, to $0.11 from $0.07....
Glu Mobile, $4.02, symbol GLUU on Nasdaq (Shares outstanding: 80.5 million; Market cap: $312.5 million; www.glu.com), develops games for smartphones and tablet computers. The company gives its games away for free, and generates revenue by selling a variety of additional content and features to players. Glu also sells advertising that it imbeds in its games. The company’s better-known games include Contract Killer, Deer Hunter, Eternity Warriors and Frontline Commando. They are playable on a range of platforms, including the iPhone, Android devices, Windows Phone, Facebook and Macintosh computers....
China Nepstar Chain Drugstore (ADR), $2.30, symbol NPD on New York (ADRs outstanding: 98.7 million; Market cap: $225.0 million; www.nepstar.cn), is China’s largest drugstore, based on the number of directly operated outlets. Founded in 1995, the company has 2,066 outlets in 77 cities, one headquarters distribution centre and 16 regional distribution centres across China. China Nepstar uses directly operated stores, centralized procurement and a network of distribution centres to offer a wide variety of merchandise apart from pharmaceuticals, including over-the-counter drugs, nutritional supplements, personal care products, family care items and convenience goods, including food. In the three months ended December 31, 2013, China Nepstar’s revenue rose 11.6%, to $123.9 million from $111.0 million a year earlier (all figures in U.S. dollars). Same-store sales gained 15.8%, mostly because the company launched new promotions....
PFB Corporation, $5.51, symbol PFB on Toronto (Shares outstanding: 6.7 million; Market cap: $37.4 million; www.pfbcorp.com), makes building-insulation products that are sold across North America under a number of banners, including: 1) Plasti-Fab EPS Product Solutions, which are made from expanded polystyrene; 2) Advantage ICF Systems, which are insulating concrete forming systems for building foundations and walls in homes and businesses;...