Best stocks to buy for the week ending March 21, 2014: Stock futures ended last week on a bullish note despite ongoing tensions in Ukraine, where Russia continues to trade sanctions with the West.
The Dow Jones Industrial Average gained 1.48% last week to finish at 16,300.45. The S&P 500 hit an intraday all-time high on Friday and gained 1.37% to close at 1,866.60. The Nasdaq ended the week at 4,276.79, up 0.74%.
Money Morning keeps readers current on the best stocks to buy now, and last week was ripe with picks across industries. Here's what we covered.
- On Friday, Money Morning Executive Editor William Patalon III told readers that recent insider buying for a particular stock sent the biggest "buy" signal he's seen. The transaction took place last Monday, March 17, when the stock was at $7.17 a share; on Thursday, shares had zoomed more than 9% to close at $7.74. Here's why Patalon is so bullish on this national security and defense firm.
- More and more initial public offerings (IPOs) are hitting the market - in 2013 alone, 230 U.S.-listed IPOs issued, a 58% increase from 2012. But retail investors have the difficult task of finding real profitability. "If you're not an 'insider,' you'll be watching from afar when an IPO makes its debut," said Money Morning Defense & Tech Specialist Michael A. Robinson. But Robinson provided readers with a solution - one that will give individual investors access to the profits that roll out of the IPO market, but with much less risk.
- The American Association of Individual Investors found that bearish sentiment - 18% at Christmas - doubled to 36% of investors by the first week of February; as of last week, one-quarter of all investors were in the bear camp. That's why on Wednesday Robinson offered readers this strategy - the best play for a scary market...
- Money Morning Global Energy Strategist Dr. Kent Moors traveled to Mexico last week to give a presentation at a Bloomberg advisory session on Mexican energy markets. The country ranks sixth in the world for technically recoverable shale gas and seventh in tight/shale oil. And after 76 years of laws that confined its resources within the country, Mexico is undergoing substantial energy reform that's cracking open this formerly "forbidden" market... and offering "significant upside to investors."
- Commodities tend to perform best in the latter part of a cyclical bull market - which is where all indicators say we are now - and food prices are rising accordingly. Corn has gained 13%, sugar is up 22%, wheat is up 20%, and coffee is up 79%, all in the last seven weeks. Money Morning Global Resource Specialist Peter Krauth suggested this exchange-traded fund (ETF) as a great way for investors to cash in on the upswing.
- A 25-year Pennsylvania State University study showed that stocks of spin-off companies outperformed industry peers and the S&P 500 by about 10% per year. And a J.P. Morgan study revealed that spin-offs beat the stock market by more than 20% on average, during the first 18 months after the transaction. Last week, a trio of big U.S. companies announced spin-offs, making them some of the hottest stocks to watch in 2014. But we didn't stop there - we brought you a list of 22 more notable spin-offs expected this year.
- Global agriculture seems bound for volatility in 2014. The crisis in Ukraine, the breadbasket of both Europe and Northern Africa, is just one part of a broader perfect storm for agricultural investors, as four trends are creating supply concerns right now - and when supply concerns rise, so do grain prices. We shared four ways investors can take advantage of increased volatility in the global agriculture sector - one ETF is up 19% so far this year.
- Last Friday, a biopharmaceutical company announced study results showing its cutting-edge cancer therapeutic drug reduced the risk of the disease worsening, and death, by 25%. The very same day last week, the drug gained preliminary commercial approval from the European Commission. The company's stock soared 130% on the news. But if the drug receives final approval in three months' time, this biopharma stock could soar even higher - more than 200% higher, according to one research analyst firm.
- Canada is mostly known for its mining and resource stocks. That's why Canada's tech industry profit opportunities often get overshadowed by commodities-related companies. But Canada is also home to tens of thousands of tech companies, with a combined total of $155 billion in annual sales. And this one tech pick - a penny stock that's been flying under the radar - has jumped more than 119% so far in 2014 and offers plenty more gains to come...
- Last week's Federal Open Market Committee meeting stirred concerns about interest rate hikes, which leads investors to evaluate their dividend stock holdings. The key is to focus on companies that continuously raise their payouts over time - such companies have historically outperformed those that don't pay dividends in the wake of Fed rate hikes. To that end, we shared 25 companies that just boosted their dividend payouts.