Tag Archives: Rule Breakers

Business, Finance, Occupation & Industry

Rule Maker? Rule Breaker? The Best Companies are Both

Leave a comment

By Joe Tenebruso and Richard Engdahl, The Motley Fool

Filed under:

Joe Tenebruso’s “Tier 1 Portfolio” has been beating the market handily since its inception. In this series of interviews, Joe talks about what makes a Tier 1 company and which stocks make the cut.

At Tier 1 Investments, I seek out and invest in elite businesses. These include companies with the most valuable brands, best management, superior products and services, and strongest competitive advantages. I call these businesses Tier 1 enterprises.

In 1999, Tom & David Gardner wrote Rule Breakers, Rule Makers, which laid out the foundations of Foolish investing. At Tier 1, my favorite companies are the ones that both make and break the rules.

There’s no doubt that Apple is at the center of technology’s largest revolution ever, and that longtime shareholders have been handsomely rewarded with over 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool’s senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

var FoolAnalyticsData = FoolAnalyticsData || []; FoolAnalyticsData.push({ eventType: “TickerReportPitch”, contentByline: “Joe Tenebruso and Richard Engdahl“, contentId: “cms.30266”, contentTickers: “NASDAQ:AAPL, NASDAQ:GOOG”, contentTitle: “Rule Maker? Rule Breaker? The Best Companies are Both”, hasVideo: “True”, …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

My Top 2 Stocks: Netflix and Intuitive Surgical

Leave a comment

By Anders Bylund, The Motley Fool

ISRG Revenue TTM Chart

Filed under:

I’m an unabashed growth investor. Not just any old growth, but the kind of earth-shaking hypergrowth that comes with disrupting traditional business ideas. If our Rule Breakers newsletter had a star constellation in the zodiac, I’d be born under it.

So I hope you’re not surprised to learn that 4 of my 15 stock positions come straight from David Gardner‘s growth-focused newsletter. Two more live on David’s side of the scorecard in our Stock Advisor service.

Here’s how I ended up making longtime Stock Advisor pick Netflix my largest holding, and how Rule Breaker Intuitive Surgical became my second-fattest position.

Netflix: Through thick and thin
Video maven Netflix is not just my largest holding but also my oldest. I first got into the stock at $28 per share, way back in 2006. That was when Blockbuster made a serious attempt to kill its newfangled rival, only to fatally weaken its own financial health instead. I had just done several months of intensive research on the movie rental industry, and came away convinced that Netflix had that game in the bag. That’s when I bought my first Netflix shares.

The stock price has multiplied more than five-fold since then, which goes a long way toward explaining its large stature in my portfolio. But that’s not the whole story.

Many investors might have taken their profits and headed for the exits when Netflix traded at $300 per share. I didn’t because I saw even higher values in the years ahead. The all-digital strategy of global domination had barely started to play out in those heady days of early 2011.

Many more might have — and did — run away when Netflix changed its service prices, separated the digital church from its DVD state, and wanted to cram a totally separate DVD service named Qwikster down our throats. This trifecta of management errors played out in a matter of weeks, and the stock lost three-quarters of its value.

I thought about the mistakes and, yes, I briefly considered selling. But CEO Reed Hastings saw the error of his ways, reversed the unforgivable Qwikster mistake (which might have worked just fine in 2013, mind you!), and vowed to tread more carefully when making large changes to the core business plan.

Netflix is still way ahead of the admittedly growing pack of hungry rivals. Everyone wants to rule the just-blossoming era of digital video distribution. So far, only Netflix has found a business model that works, and the company has a lead time of several years as the others figure out its secret sauce for customer satisfaction.

So I stayed. Not only that, but I bought more shares at $83. Hastings has done nothing to lose my long-term trust since then, and I still see outsized value in the stock.

This growth story is just getting started. I’m letting this winner run for the long haul. Quite possibly decades.

Intuitive Surgical: Betting …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Finding the Next Home Run Stock

Leave a comment

By Brian Stoffel, The Motley Fool

Filed under:

Founding Fool David Gardner has made a career by bucking conventional wisdom with his Rule Breaker philosophy of stock selection; he finds companies that, though viewed as overvalued, have game-changing advantages over their peers.

Luckily for us, he has laid out six signs of the perfect Rule Breaker stock.

  1.  A top dog and first mover in an important, emerging industry.
  2.  Sustainable advantage gained through business momentum, patent protection, visionary leadership, or inept competitors.
  3.  Strong past price appreciation.
  4.  Good management and smart backing.
  5.  Strong consumer appeal.
  6.  A documented history of being viewed as overvalued.

I’ve actually written articles using this very strategy three times before,  and it has led me to big gainers, like 3D Systems and lululemon athletica, which are up 195% and 106%, respectively, since I wrote about them.

And even if we take some of the underperformers into account, buying all of the stocks that came through this screener from the time I wrote about them would have produced a portfolio that has returned 38%, besting the S&P 500 — including dividends — by 10 percentage points.

Read below to see how you can find the next home run stock, and at the end, I’ll offer up access to a special free report on The Motley Fool’s top stock for 2013.

Talk about a needle in a haystack
While most of the six traits traits are qualitative in nature, two of them could be considered quantitative. This can help us mere mortals get started by setting up a screen to narrow down our field.

We can find strong past price appreciation by screening for stocks that are up at least 100% over the past year. To zero in on stocks that are viewed as overvalued — David’s second quantitative trait — I looked for one or two-star stocks as rated by CAPS, as well as for companies with a P/E over 35.

When I ran the screen last week, I got five companies that weren’t already Rule Breakers.

Company

Market Cap

P/E 

52-Week Price Change

What it’s involved in…

Pharmacyclics

$6.6 billion

80

265%

Biopharmaceuticals

Medidata Solutions

$1.4 billion

76

116%

Software for clinical medical studies

PulteGroup

$7.8 billion

37

138%

Building/Financing homes

Spectranetics

$648 million

311

139%

Makes single-use instruments for heart operations

Ryland Group

$1.7 billion

45

118%

Building/Financing homes

Source: Yahoo! Finance.

Now, we can use the rest of Dave’s qualitative traits to narrow down our field.

1. Top dog and first mover in an important, emerging industry
Of these five companies, two were easy to throw out from the get-go. Both PulteGroup and Ryland Group are riding the waves of optimism in the home building sector after it absolutely crashed during the Great Recession. Though shareholders have been treated to a nice ride over the past year, neither of these companies are in …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

3 Stocks That Blew the Market Away

Leave a comment

By Rick Aristotle Munarriz, The Motley Fool

Filed under:

Don’t settle for ordinary quarterly reports.

Every week, I take a look at three companies that beat market expectations, since I believe that it’s the biggest factor in a stock beating the market. Leaving Wall Street‘s pros with stunned expressions can be a good thing. It usually means that the companies have more in the tank than analysts figured. Capital appreciation typically follows.

Let’s take a look at a few companies that humbled the pros over the past few trading days.

We can start with Deckers Outdoor .

The company behind Ugg boots and other stylish yet rugged outdoor footwear saw its shares move 15% higher last week after posting better-than-expected results.

It wasn’t pretty. Revenue only inched 2% higher, and profitability fell 23% to $2.77 a share as rising costs of sheepskin and other materials mauled margins. However, $2.77 a share is actually well ahead of the $2.57 a share that analysts were modeling.

Dendreon also came through with solid results. The drugmaker’s deficit of $0.26 a share was less than half the red ink that Wall Street was targeting. This is a welcome development at Dendreon, as it had posted larger losses than analysts were banking on for 10 consecutive quarters until late last year.

Shares of Dendreon didn’t move on the beat, and there’s a good reason for that. Its flagship drug is Provenge, a costly yet compelling treatment for late-stage prostate cancer. Sales were up sequentially — and that’s encouraging — but Dendreon warned of softness for the current quarter.

Finally, we have ZAGG . The heavily shorted maker of accessories for tablets and smartphones generated a profit of $0.37 a share after backing out a non-cash impairment charge. Analysts were settling for net income of $0.29 a share.

Net sales had soared 30% at ZAGG, boosted by strong sales of keyboards that attach to tablets. Yes, ZAGG isn’t just about its invisibleSHIELD protective film covering anymore.

Moving in the right direction
It’s important to keep watching the companies that surpass expectations. Over time, it will be a lucrative experience for investors as the market rewards the overachievers. That’s the kind of surprise that we look for in the Rule Breakers newsletter service. Want in? Check out a 30-day trial subscription.

Resurgence, or dead-cat bounce?
Shares of Dendreon have surged in recent months, with the stock gaining new life from the depths of late 2012. Has the company really solved its underlying problems, or are investors setting themselves up for more disappointment? Our new premium research report on Dendreon answers these questions, and many more, while also outlining just how Dendreon intends to regain its former glory. Claim your copy, and a year of free analyst updates, by clicking here now.

…read more
Source: FULL ARTICLE at DailyFinance