Money Morning's best stocks to buy last week hinged on several key third-quarter earnings reports that had a big impact on markets.
Lifted by a barrage of encouraging data, the Dow and S&P 500 Index logged their third consecutive week of gains. The Dow jumped 1.11%, the S&P climbed 0.88%, and the Nasdaq added 0.74% for the week. All key sectors of the S&P ended in positive territory, boosted by telecoms and utilities.
Yet markets remain temperamental, influenced by earnings and driven by drama on Capitol Hill. And despite all the stock frenzy, consumer sentiment slid to 73.2 in October - its lowest read since December 2012.
Investors must tread carefully and be selective as money managers cash in year-to-date winners.
Money Morning provides readers with carefully selected moves to make when markets are volatile - and in any market conditions. Here's a recap of our best stocks to buy now and investing tips from last week:
- Money Morning Chief Investment Strategist Keith Fitz-Gerald joined FOX Business News to tell investors what to look for in the week's market-moving earnings reports, from tech to tacos. As Fitz-Gerald explained, investors can learn a lot from companies' earnings if they know what to watch for. He tackled the tech market by discussing Google Inc.'s (Nasdaq: GOOG) gigantic gains. He also weighed in on the debate of whether the Internet search leader's shares are akin to the dot-com bubble era or if they have more upside. From fast food giant McDonald's Corp. (NYSE: MCD) to video-streaming behemoth Netflix (Nasdaq: NFLX), get Fitz-Gerald's insight here.
- Speaking of tech, Money Morning Defense & Tech Specialist Michael A. Robinson is bullish on Apple Inc. (Nasdaq: AAPL). Robinson owns more than a dozen Apple products himself, and he's also enthusiastic about Apple stock. Robinson closely follows Chief Executive Officer Tim Cook's strategy and says the Apple leader is focused on improving shareholder value, achieving high profit margins, and rewarding shareholders through dividends and stock buybacks. Robinson lists three catalysts demonstrating Apple's potential, and he believes the Apple stock price will double from here.
- This year's stock market has been anything but boring. A number of companies like Tesla Motors Inc. (Nasdaq: TSLA) and Netflix Inc. (Nasdaq: NFLX) have seen shares more than double and presently trade at sky-high multiples of earnings and cash flow. While these companies have been lucrative for active traders, they're risky for conservative investors who prefer the buy-and-hold approach. Select stodgy equities, dubbed "boring" stocks, offer significant advantage to investors who hold shares long enough for them to grow into their businesses. Sometimes boring is better, so check out these boring stocks to buy now.
- It's been a banner year for initial public offerings (IPOs) in both number and returns. According to data from IPO research firm Renaissance Capital, the U.S. IPO Index offered an average 30% return in Q3. In the first three quarters of 2013, some 152 IPOs debuted, an activity level on pace with the tech bubble period. And with Twitter Inc. (NYSE: TWTR) scheduled to debut Nov. 6 at a modest $17 to $20 per share, the IPO calendar shows no signs of slowing down as we head into year's end. Trying to capture big gains in the elusive IPO market is tricky and full of risk. But there's another, safer way to play the IPO market - IPO exchange-traded funds (ETFs). Money Morning shared two IPO ETFs that offer investors a chance to play the IPO market for big gains - and not get burned.
- It's hard to beat Master Limited Partnerships (MLP) when it comes to yield and tax advantage. According to Money Morning Global Energy Strategist Dr. Kent Moors, the MLP market is about to heat up thanks to a changing landscape in the sector. New "MLP clones" are just starting to materialize that will provide some additional, attractive options for the average investor. These options "should hand us some interesting new ways to make some serious money," as Moors explains in The Big (and Profitable) Changes in MLPs.
- While income-hungry investors clamor for big yields, sometimes lower-yielding stocks are the better investment. You see, dividends are paid out of cash, and cash comes from earnings. A lot of companies that offer tempting yields are short on cash. They lure investors with flush payouts. Putting too much emphasis on an investment's cash distribution and ignoring fundamentals invites unnecessary risk. "That's why we need to look well beyond yield to evaluate a dividend payer, and focus on total return," writes Money Morning Global Investing & Income Strategist Robert Hsu. He shares a company that pays out a modest 3.5% yet is really "high yield" in disguise. It's all in plain sight right here.
- Money Morning Resource Specialist Peter Krauth has a well-known bullish stance regarding precious and shiny metals such as gold, silver, platinum, and palladium. But recently Krauth has taken a shine to another metal that's neither precious nor shiny. The metal is aluminum, one of the most consumed metals on the planet. It's also one of the most attractive metals in the resources market in terms of price. Krauth describes a stock in the industry that has plenty of profit potential and explains why we should Make a "Precious" Exception for This $4 Stock.
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