All 3 major US stock market indexes closed a bit higher. The US stock market is performing very strongly this year. Many stocks have either small or very large gains. The stock market on the internet. These are the daily closing prices for 3 major indexes, source : Yahoo finance
- S&P 500
Stock market investing
Top reasons to invest in high dividend yield stocks.
High dividend yield stocks can be an attractive investing choice in the stock market. They offer income and cash while if they are undervalued relative to their intrinsic or fundamental value, the return can be substantial compared to risk taken.
The basic advantages of investing in high dividend yield stocks
1.Sustainable income, cash to provide liquidity and help in financial planning in advance. Ability to cover expenses, holidays, gifts, or even larger financial choices such as a loan payment. Sustainable income is not an absolute term however, pending to economic and financial performance of the company and profitability.
2.Stocks with high fundamental analysis score and a high quality dividend are often safe and have lower volatility.
3.An average dividend annual yield of 10% is equal to doubling your initial capital investment in less than 8 years. Assuming there are no extreme stock market price action volatility with compounding, this seems an interesting idea for capital preservation and growth.
4.High dividend yield stocks are safer than IPOs or speculative stocks with losses, based on momentum and growth expectations which often are too optimistic by financial analysts.
5.High dividend yield stocks are often neglected by financial analysts and investors, considered boring. But is a stock that is providing a good risk-adjusted and inflation protected income, cash, money really boring?
These are some of the advantages that high dividend yield stocks offer. Even having a technical analysis indicating a range bound price action, a stock that offers an attractive dividend yield can be useful both in a portfolio for diversification and for producing cash and money at regular times. A stock and equities portfolio consisting only of high dividend yield stocks can play important role in financial planning, asset management and long term retiring goals. There are many stock market screeners that will help you make a thorough research and financial analysis to find these regular making money high dividend stocks.
Stock market financial analysis
5 interesting facts about financial analysis.
Yes stock market financial analysis is exiting and not easy.many analysts tend to favor buy ratings on stocks,some financial analysts guess,financial analysts could be parrots in some cases,target prices are somehow tough to focus on and a lot of times analysts do not just invest their own money to their recommendations unless they work for an asset management company.
These are all interesting facts about stock market and stock investing.
Investing with Exchange traded Funds
Exchange-Traded Funds Are an Interesting Way to Invest.
Reading this article about ETFs on FT.com and systemic risks it is interesting and worthwhile to refer to some of the advantages and disadvantages of Exchange traded funds.
As the article mentions, ETFs have gained a lot of popularity during last years as a new form of passive investing. There are many categories of ETFs offering both flexibility and the freedom for a passive investor to choose what type of investment to focus on. From popular commodities such as oil and gold to major indices such as S&P 500 or Nasdaq ETFs allow to any investor to follow the moves without worrying too much about individual stock picking.
Major advantages of ETFs:
1. Invest in a wide range of assets at any time on a daily basis, buy or sell
2. Passive investing, capturing the return of the whole index
4. Innovation investing in new asset classes and flexibility, new investing ideas
5. Offer liquidity
6. Tax advantages
7. Lower costs compared to Mutual funds
Major disadvantages of ETFs:
1. Systemic risks
2. Not control at the individual components of the ETF, passive investing
3. Not be able to outperform the general market, as their return should match the return of the asset class i.e. S@P 500
4. Problems for emerging markets due to illiquidity and fast turnover
There are also major differences between Europe and USA as ETFs are more popular in the USA, and are much more tax-efficient in the US market. Distribution and fragmentation have made ETFs less popular as investing choices in Europe.
So overall Exchange Traded Funds are a smart and effective way of investing. But there are a passive way of investing, so they are not suitable for stock-pickers. This does not mean that they are only long-term horizon related investing tools. The oil has made a nice rally during last week and an investor in an oil ETF going long would have a nice return in a very short period of time. ETFs are another great example of financial engineering, offering solutions, innovation, and flexibility to modern investing.
Stock market and Exchange Traded Funds
Stock trading and stock investing starts with the fundamentals.What drives up or down stocks and their prices?It is demand and supply based on fundamentals and expectations.Good fundamentals will usually drive stock prices up.But valuations is always a top factor to consider in the stock market.A great stock of a company could be overvalued.So while technical analysis of stocks is important the main focus should be on the fundamental analysis of a company and its stock.Because just buying a stock because it is in uptrend is very risky without an analysis of basic fundamentals such as profitability,cash flow etc.
TIME INC NEW COM Fundamental Analysis
Name: TIME INC NEW COM
Symbol: NYSE: TIME
Sector: Consumer Discretionary
Time Inc. is a media company. The company has several well-known publications and provides content marketing, targeted local print and digital advertising programs, branded book publishing, and marketing and support services, including subscription sales services for magazines and other products, retail distribution and marketing services, and customer service and fulfillment services, for the company and third-party clients, including other magazine publishers.
Stock price close on 14th November 2016: $13.70
Market Cap 1.36B
PE Ratio (TTM) -15.15
52 Week Range 12.23 – 17.66
Dividend & Yield 0.76 (5.80%)
We will have a 5 year financial analysis of important fundamental metrics such as revenues, profit margins, net income, earnings per share, cash flow and balance sheet, examining years 2011 to 2015.Starting with revenues first thing we notice is a steady 5 year decline in revenues growth. For each of the last 5 years the company has made less sales compared to previous years. So we have a 5 year negative growth rate for revenues. Current sales growth for year 2015 is -5.43%. What is remarkable is the fact that gross margin shows a stability for the 5 years period, currently at +60.72% having a range of +62.12%/+60.72%. But net margin shows a different story. It has followed the same path as sales, declining for each of the last 5 years ranging from +10.01% during 2011, the highest piece to -28.39% for year 2015, which is the lowest for the 5 year range.
Net income after taxes shows a declining trend for the last 5 years ranging from +368 millions in 2011, the highest point to our range to -881 millions in 2015, the lowest point of reference. Diluted normalized EPS show a steady declining trend for the 5 years period ranging from 3.54 the highest price in the range in 2011, to -1.72 in 2015, the lowest point in the range. Cash flow analysis shows that cash from operating activities remain positive for each of the 5 years, but still showing a declining trend, ranging from 474 millions in 2011,the highest point in our range to 154 millions in year 2015, the lowest point in the range. Free cash flow follows the same trend as operating cash flow, a declining trend from 426 millions in 2011, the highest point in our range to -58 millions for year 2015, the lowest point to the range. And also turned negative from positive.
What we can notice for the 5 years analysis are the following. A decrease of total assets and total equity, an increase of total liabilities and mainly a huge increase in total debt ranging from 34 millions in 2011, the lowest point in our range to 1,293 millions in year 2015, the highest point in the range. Current ratio for year 2015 is 1.26 and quick ratio is 1.23, both above 1 which is considered as a safe ratio but most importantly also both ratios are currently at the highest price for the 5 years range. Debt/Equity ratio has skyrocketed the last 5 years and is currently at 0.7178, the highest point in the time range but still below the price of 1, again considered safe.
Relative value analysis:
Comparing the Net Profit Margin, Return on Equity, Interest Coverage ratios we notice that TIME INC NEW Com has lower ratios than the industry ratios. Price to cash flow ratio is also higher for the company compared to the ratio of the industry. However the company has a higher dividend yield than the dividend yield of the industry.
The company has a current PEG ratio of 2.21 and estimated earnings growth for next 3-5 years of 5%.During last 4 quarters the stock has only one positive earnings surprise and the consensus for earnings in year 2017 has been in decline.
The stock has been recently in a downtrend and current price of $13.70 is blow moving averages of 50 days and 200 days, currently at 13.83 and 14.58 respectively. However the stock has made a recent bounce from low price range of about $12.5 per share, while momentum indicators such as MACD,Stochastics and RSI show bullish momentum and are not at extreme levels.
We strongly believe that unless a radical financial improvement happens our recommendation is to avoid buying the stock. In fact we favor selling the stock at any strong rally as very poor financial performance and a technical analysis that shows the stock is still in downtrend does not give us any strong argument to buy the stock.
Legal disclaimer and sources:
The author has not any current shares of the stock in his portfolio or intends to buy, sell any stocks of the company in the near future. This is an independent financial analysis with not any financial compensation from any source. Sources used are investools.com, zacks.com, stockcharts.com and yahoo finance.
One of the most important things for the stock market to make money with is timing
The stock market is volatile,risky and unpredictable.there are no guarantees about making money or having profits.Someone can lose a lot of money at the stock market.But one very important aspect to remember is that timing is very important for stocks.This first week of US elections result the US stock market had a rally.yet not all stocks performed well.There are some sectors that did very well.
Financials sector did very well this week
Financial stocks performed very well with strong gains,even Wells Fargo had a nice rally.Also industrials,information technology,materials and energy performed well, while real estate and telecommunication services were among the weak sectors.
This date was taken from source investools.com
Being at the right sector the correct time is essential to ride the wave and pick stocks that will perform well and make money with.It is not easy though.
Stock market volatility
Now that we now the result and winner of US elections the stock market needs to find a direction.Asian stock markets tanked as the winner of US election was officially announced.Gold moved up,oil down,European stock markets opened lower but now rebound.
How will the US stock market react to the election result?A sell-off is very likely.But this could be a great opportunity to buy stocks at lower prices or sell stocks that deem to be overvalued.Overall volatility seems to be present,so a lot of caution is required when investing or trading the stock market not only today but the following days until the investors and traders and hedge funds, or big institutional investors make an opinion on the market not based on emotions such as fear or greed but on logic.Stock market always makes dips,and rallies.
Stock market today’s rally has something interesting
What is the stock market today’s feature that is worth mentioning?In such a strong rally even stocks that have been in a downtrend lets say with strong short selling interest may get positive reaction and trend higher.This however may not be a catalyst for a permanent trend change.If fundamentals have not changes caution is required as this strong rally may be short for stocks that have poor or bad fundamentals.