Best Stocks to Buy: A Roundup from the Money Morning Investment Team
By Diane Alter, Contributing Writer, Money Morning•
Last week's best stocks to buy list at Money Morning stemmed from key events from the U.S. Federal Reserve - if you missed it, here's what you need to know...
Markets initially rallied on the news, but fell sharply Friday after St. Louis Fed President James Bullard said the Fed may make a small cut to its quantitative easing (QE) measures in October. So, we're back to watching every economic report for hints that a QE taper is likely.
In the meantime, here are our best stocks to buy now from last week's Money Morning investment reports and daily articles:
Even though a Fed tapering and interest rate increase are presently off the table, we know both are coming. That's why it's time to start hedging portfolios. "To do otherwise, Money Morning explains, "is to invite slow death for your core holdings." Luckily, there are moves investors can make to maximize protection while minimizing risk. We share the easiest ways to hedge an inflation and grow a portfolio with a few select stocks.
The stock market has staged a significant run so far in 2013, with a plethora of equities trading for $10 or less logging tremendous gains. Savvy investors who regularly trade low-priced names with discipline and solid risk management are enjoying steady profits. Finding the best stocks to buy in this $10 and under category isn't always straightforward. That's why investors looking for names in this space benefit from expert recommendations. Executive Editor William Patalon III revisits one of Money Morning's June picks that is up some 40%, with more upside expected.
Income investing has become a favorite theme over the past few years, but hunting strictly for yield is dangerous, cautions Money Morning Global Investing & Income Strategist Robert Hsu. Doing so can lure you into bad investments because yields are high for a reason. "Growth is the new income," Hsu says. "The two are inseparable." There are a number of growth and income candidates to choose from, so Hsu has helped by narrowing choices down. In The Only (Reliable) Way to Make 10% or More a Year Now (Part III), he shares two stocks he likes in a sector that provides both high yield and growth, plus one standout REIT.
Yahoo! Inc. (Nasdaq: YHOO) has been a standout this year and trades near the top of its 52-week range. Much credit for the stock's strong performance goes to Chief Executive Officer Marissa Mayer. Under her reign, shares have added 80% thanks to a number of acquisitions and successful platform launches. Investors are now wondering if it's too late to get in or if it's time to take gains. Money Morning has the answers and more here.
Whole Foods Market Inc. (NYSE: WFM) shares are up some 500% in five years. A leader in the organic and natural food retail industry, the company had sales of $11.7 billion last year. In an effort to boost its bottom line further, WFM plans to increase store count and improve customers' shopping experience. Competition in the space is growing, forcing Whole Foods to lower prices. So far, the move has worked to the company's advantage, giving consumers an impression that store products are more affordable than they were few years ago. But what does this mean for investors? Money Morning has all the details on if Whole Foods is still among the best stocks to buy for share-price growth.
Speaking of small caps, this year's stock market proves that bigger isn't always better. The Russell 2000 Small Cap Index gained 10.7% over the May-July period, compared to the 6.6% returned by the broader-based Russell 3000 Index. In the S&P 500 Index, small caps have outperformed their larger counterpart by nearly 18% - and more gains are expected. Money Morning explains it all in "Small-Cap Stocks to Buy as the Little Guys Crush the Big Boys."
Short sales are often left for Wall Street's "Big Boys." These sales are executed by traders betting a stock's price will decline. Advantages are many in a falling market, but risks grow when equities are rising. Currently, we're in the worst short market in a decade, the Wall Street Journal reports. However, with the five-year-old bull market looking old, short sellers may be coming close to reaping rewards - if they're strategically positioned and disciplined. "You can't get greedy picking tops or bottoms," explains Money Morning Capital Wave Strategist Shah Gilani, who reminds investors of the old Wall Street adage, "Bulls make money and bear make money. Pigs get slaughtered." Gilani shares one of the best ways to capture short gains right now with nominal risk. Here's the full story.
While scores of consumers continue to be tightfisted with spending, one retail segment that continues to thrive is the luxury market. Year to date, the Dow Jones Luxury Index is up 18%, in line with the Dow and the S&P 500. Although luxury shares have lately been mixed at best, a number of factors point to a surge in the industry. Discerning investors shopping for the right luxury stocks to buy now should start here.
Commodities have been volatile since the 2008 financial crisis. While off their peak, five years after the Great Recession, silver, gold, and Nymex crude oil have returned 96%, 68%, and 13% respectively, according to FactSet. All are poised to go higher. Silver prices were stoked last week thanks to the Fed. The metal's long-term outlook remains bullish. Money Morning explains why the central bank is unlikely to taper this year and why that's bullish for silver, which rallied 21.3% last month and remains on track to log its first quarterly gain since Q3 of 2012. Read why silver prices should continue on an upward trajectory here.
Oil also looks like it's headed higher. Even though prospects of a U.S. military strike against Syria for its alleged use of chemical weapons have subsided, the Middle East situation is still grave. An alternative diplomatic solution is widely preferred, but there's little confidence Syria will comply. Lack of confidence and mounting uncertainty will keep oil prices volatile since the stability of the entire region is at risk. Money Morning Global Energy Expert Dr. Kent Moors explains the moves investors in the oil sector need to make now.