SodaStream surges after reporting strong Q2 numbers
This morning SodaStream International (NASDAQ: SODA) announced:
* Sales in the Americas shot up 55% to $30.7M
* Western Europe saw 26% sales growth rate
* The company’s two segments accelerated almost lockstep, soda maker kit sales were up 25% and consumables rose 28%
* Gross margin down 10 bps to 54.3%
* SodaStream lifted its guidance for 2013, with revenue expected to increase 30% vs. 27% prior and EBITDA 38% vs. 36% prior.
As a result, the stock is over 17% as of 11:00 am!
Check out the chart on SodaStream:
Jay’s Notes: SodaStream is a Tomorrow’s Treasures stock that we first recommended to subscribers back in October of 2011 when shares were around $29. It is now at $67 up 131% since we first spotted the opportunity!
As a Christian investor, I proactively seek out pro-Israeli companies in a way we can put our money into companies that support our biblical values. Companies, like SodaStream who are based in Israel and have met our moral and financial criteria offer a way to make good returns while supporting companies that embrace our Christian values. I am reminded of Genesis 12:3 – “I will bless those who bless you, and whoever curses you I will curse; and all peoples on earth will be blessed through you.”
At Wall St. Renegade, we have portfolio strategies for investors of all shapes and sizes, from all walks of life – from conservative options for the investor who recently retired to aggressive for the investor seeking to maximize growth. We believe in prudent planning in attempt to get the highest possible returns with the lowest amount of risk. We believe in diversification, asset allocation, tax efficiency, and using low cost investment vehicles. Let us now how we can help you!
Innovation breeds success
Over the past few months, you have heard a lot about All-Weather Portfolio, the strategy that combines stocks, bonds, commodities and currencies to help protect your portfolio from inflation and the up and down swings of the market. Then we introduced you to the Tomorrow’s Treasures Portfolio, which focuses on explosive small cap stocks that have the ability to grow into tomorrow’s leading companies. Today I’d like to introduce you to our Contrarian Strategies Portfolio, which focuses on some of the world’s most innovative companies.
In this portfolio, we bought companies like Tesla Motors (NASDAQ: TSLA), Green Mountain Coffee (GMCR), and SolarCity (NASDAQ: SCTY) before they soared. These are the kinds of innovative companies we love! Tesla Motors is changing how we drive cars. Green Mountain Coffee Roasters is changing how we enjoy coffee. And SolarCity is revolutionizing the delivery of solar energy to homes and businesses across the U.S. You get the point! Innovation drives success and can help you supercharge your portfolio returns.
Don’t you think buying even 100 shares of Tesla at $37 a share could have significantly helped your portfolio this year?
Take a look at this impressive chart:
We recommended this to our Contrarian subscribers at $37 on March 3rd. The stock is up 225% since then! Not all of our picks are winners, but a few like that can certainly help you make some progress.
A Mobile App Innovator
Today I wanted to introduce you to one of the leading edge companies in the design and development of mobile apps…
The $2-trillion global electronics market is one of the world’s most cutting edge industries. This includes the more than $300-billion semiconductor market. major vertical market segments include: wired and wireless communications; industrial, medical, and automotive electronics; computers; and consumer electronics, such as multimedia and personal entertainment devices. These segments account for more than 90 percent of electronics equipment revenue and semiconductor revenue worldwide.
Today’s products compete mainly on the basis of the apps—the software they can run—whether they’re games on a mobile phone or protocols on a network router.
To be successful, new designs must be optimized at the system level, as well as system-on-chip (SoC) and silicon levels. There is only one company with the combination of industry vision, product line breadth, and advanced technology to fully address all of these challenges.
The company I am referring to is Cadence Design Systems (NASDAQ: CDNS). It is the leader in global electronic design innovation. Customers use its technologies and services to design and develop tomorrow’s electronics products.
To keep pace with market demand for more performance and functionality in today’s mobile phones, digital cameras, computers, automotive systems and other electronics products, manufacturers pack billions of transistors onto a single chip. This massive integration parallels the shift to ever-smaller process geometries, where the chip’s transistors and other physical features can be smaller than the wavelength of light used to print them.
Designing and manufacturing semiconductor devices with such phenomenal scale, complexity and technological challenges would not be possible without electronic design automation (EDA). It is essential for everything from verifying that the myriad transistors do what the designer intended to dealing with physical effects on electrons traveling miles of wires with widths sometimes measuring less than 100 nanometers.
Cadence Design Systems is a leading global EDA company. Cadence customers use its software, hardware, and services to overcome a range of technical and economic hurdles.
Its technologies help customers create mobile devices with longer battery life. Designers of ICs for game consoles and other consumer electronics speed their products to market using its hardware simulators to run software on a ‘virtual’ chip—long before the actual chip exists. Cadence bridges the traditional gap between chip designers and fabrication facilities, so that manufacturing challenges can be addressed early in the design stage. And its custom IC design platform enables designers to harmonize the divergent worlds of analog and digital design to create some of the most advanced mixed-signal system on chip (SoC) designs. These are just a few of the many essential Cadence solutions that drive the success of leading IC and electronic systems companies.
To learn more about innovative stocks like Cadence found in our Contrarian Strategies Portfolio, SUBSCRIBE NOW!
Finding high yield opportunities in a low interest environment is quite the challenge. However, our low-risk investing approach focuses on safe, high dividend stocks that can weather any kind of storm that might come our way…
The perfect blend of growth & income
For the past two decades I have spent the better part of my time as a financial analyst finding the right opportunities for my most conservative clients. The majority of my clients have always been those close to or already in retirement. They are typically over age 50 and looking for the perfect blend of growth and Income.
Over the years, I have created a special way to protect their money in this volatile market, while adding consistency and quality to their portfolios. I help them sleep well at night knowing they have rock-solid investments that are helping to maintain their standard of living as I grow their income year after year.
My strategy is designed to bring generous dividend checks like clockwork each and every quarter. It may sound boring, but it takes a lot of old-fashioned hard work to be able to deliver consistent results.
Believe it or not, high-dividend-paying stocks have actually contributed 44% of the S&P’s total return over the past 80 years. Dividend stocks are like the Holy Grail of investing. Yet, many investors choose bonds for income over quality dividend paying stocks and this is often a huge mistake.
Let’s go all the way back to January of 1990 for an example. 1989 had been a tough year. There had been a recession, inflation was at 5.1%, and economic growth had come to a screeching halt. The Fed decided to raise rates to combat inflation also slowed the economy down. By 1990, economic trouble continued with the Gulf War, which would lead to massive spikes in oil prices. So investors were nervous to say the least with high unemployment, massive government budgetary deficits, and slow Gross Domestic Product (GDP) growth.
Interest rates were hovering around 8%.
Let’s say you were afraid of the markets and decided to forgo the stock market and instead looked for safety in the bond market. In 1990, you could have bought $100,000 of a quality bond paying 8%, which would mature in 2013 (23 year bond). You would have received $8,000 a year for the past 23 years and then receive your original $100,000 back at maturity here in 2013. Not too shabby!
However, what if instead you decided to place your money in a quality dividend paying stock and hold the stock just like the bond all the way until 2013?
What kind of stock would you pick? As an example, let’s pick one of my favorite sectors, which is the food industry. Think about it: people need to eat no matter what the economy is doing and the global population keeps growing! And one of the most sought after foods is meat. Of the meat companies, my favorite is Hormel Foods (NYSE: HRL). Now this is a classic rising dividend stock.
If you chose to buy $100,000 worth of Hormel on January 2, 1990, it would have provided $2,910 a year of income, with a yield of about 3%. This provided much less income in 1990 than the 23-year bond. However fast forward to today and you will be amazed at the difference:
|Hormel Foods (NYSE: HRL):
|@ 8% Interest maturing 2013:
|* 20 year Treasury Bond@ 2.68%
As you can see, the dividend stock grew the investors income AND substantially increased their capital as well. The bond investor enjoyed a steady 8% income for 23 years, but was in shell shock when they had to renew their bond at a measly 2.68% when the bond came due.
Become a dividend millionaire
There are countless stories of hard working folks who amassed fortunes simply by investing in high quality dividend paying stocks. Remember the secretary at Abbott Labs. (NYSE: ABT) who bought her company’s stock in 1935? If you haven’t heard this story, she collected and reinvested her dividends for 75 years, all while amassing a $7 million fortune! You might not have heard this exact story, but I am sure you have heard of one where someone is getting paid thousands or even millions of dollars in dividend income.
I have seen school teachers and fire fighters and telephone workers who never made huge incomes now getting paid more in dividend income while retired than they ever earned while working. Think about that – earning more income in retirement than you earned while working. This is a huge shift: Instead of working hard for your money, your money is working hard for you!
Not all high dividend stocks are created equal!
Sometimes companies have very attractive dividend rates. This can often be for a number of dangerous reasons. A company could be paying out too much income and be unable to sustain its current revenue trend or maybe the company’s stock price has fallen significantly and it still pays the same dividend. Either way, both companies are in high danger of cutting or eliminating their dividends.
Introducing our five-step process:
We instead, want to focus on high quality companies that meet our five metrics:
1. Strong Relative Strength: We look for companies performing in-line with the market or better.
2. Attractive Yields: We look for stocks with an above average dividend yield (3% or greater).
3. Reliable Dividends: We fully examine the length and consistency of a company’s dividend payouts. We also look for companies that have a high probability that they will continue payouts in the future.
4. Stable and Increasing Dividend Payments: We look for companies that have a history of stable and increasing dividend payouts.
5. Increasing Earnings Growth and cash flow: We look for companies that have a trend of increasing earnings as this shows a company is earning more and can sustain and possibly increase its dividend. More importantly, we look for companies that have been increasing their free cash flow.
Enron, WorldCom, and other great collapses have shown us that profits and earnings can be manipulated. However, cash flow (money coming in and out of a company) tells the true story of what’s really going on. This is the very pulse of EVERY single company.
Free cash flow (FCF) represents the cash that a company is able to generate after laying out the money required to maintain or expand its asset base. Free cash flow is important because it allows a company to pursue opportunities that enhance shareholder value. It is the money used for research and development, acquisitions, expansion, and the money used to reward investors through share buybacks and dividend payments.
In finding the right high dividend stocks I look for those with an increasing trend of Free Cash Flow (FCF). This helps me find stocks that have the potential to grow earnings, further reward shareholders, and best yet – outperform the market!
This five step process helps us discover a rare breed of dividend stock that can sustain its performance well into the future and provide you with above average income to outpace inflation!
Fixed income instruments may look a safe bet with their “guaranteed” income. However, when you look closer they are “guaranteed losers” because they offer 0% income growth and aren’t keeping pace with inflation and taxes!
Since 2012, the rate of inflation has been around 2%, yet look at your fixed rate investment choices:
▪ Money market accounts paying next to nothing
▪ Certificates of Deposits (CDs) not paying much more.
▪ Treasury Notes (T-Notes) failing to keep up with the Consumer Price Index (CPI)
Today, the average S&P 500 dividend payment is a little over 2%, which still doesn’t keep up with inflation. What if instead you could have an average dividend yield of 5% or more in consistent stable companies?
Right now is the prefect time to find great companies that are writing big paychecks. Corporate America is holding more cash than ever before. You just need to find the right companies and that’s where we come in…
We help you find solid companies that pay above average dividends where we are highly confident they will continue to pay them quarter after quarter.
We use our five-step process to find companies likely to pay sustained and increasing dividends…and also have strong prospects for growth as well.
This is a safer, long-term, income approach that offers you a strong mix of dependable investments with limited fluctuations.
Included in our Global Income Portfolio are a diverse group of income investments such as:
- Real estate investment trusts (REITs): REITs offer investors an opportunity to gain access to a real estate portfolio without the headache of being a landlord. REITs typically include high-quality commercial properties, ranging from apartment buildings and office complexes, to health care facilities and shopping malls. Because REITs have no investment minimums, they allow large and small investors an easy way to participate in commercial real estate.
The best part: REITs must pay out 90% of its operating profits as dividends in order to be exempt from having to pay corporate income taxes. As a result, most REITs pay frothy dividends.
- Master limited partnerships (MLPs): Investors keep searching high and low for better yields, but many miss the boat on MLPs. Few investors have a good knowledge of MLPs, because they have the stigma of being too mysterious and complex. But investing in MLPs isn’t that difficult. Like a traditional stock, these investments trade on public exchanges and have outperformed the S&P 500 in 11 of the past 12 years.
From 2002-2011, the average annual return for MLPs was nearly 16% compared to less than 5% for the S&P 500. Today, the average MLPs yield close to 7%, which is more than three times the current average yield of the S&P’s 2.2%. Almost all MLPs are pipeline businesses making money from the processing or transport of oil, natural gas or coal. Thanks to strict environmental regulations, they don’t face much competition. And because they transport these commodities rather than explore them, they are theoretically less affected by ongoing volatility in commodity prices.
- Business development companies (BDCs): A BDC is a form of publicly traded private equity that loans money to small and upcoming businesses. In return for taking the risk of loaning the money, these startups pay the BDC interest, often also offering an equity stake.
Because they are required to pay regular dividends, income from BDCs is generally more stable than that of regular stocks, especially during the ups and downs of the economy. They also have a diversified asset base, typically consisting of a portfolio of 50 or more loans/equity. Because of this nature, BDCs have plenty of capital available for growth.
- Preferred stocks: These stocks tend to pay sizable dividends typically greater than those of common shares. They have characteristics of debt instruments as well as equities. One of the major advantages of a preferred stock is the priority dividend payout. This means preferred shareholders get dividends before the common shareholders. Dividends payout on preferred stock is very similar to coupon payments on a bond. Preferred stocks don’t have a maturity date like bonds, but they do have a par value, which is used to figure out the payouts.
On rare occasions, the portfolio service might even recommend going short to take advantage of bearish market conditions or using other hedging vehicles to protect against downturns. We help provide you with the what, when, and why of every recommendation we make to provide you with steady, inflation-beating income opportunities. Not only do we provide recommendations, we also track, choose, and monitor each investment with precision and care.
Here’s a look at how we make our selections:
▪ We create a universe of 200-300 stocks that have good prospects for earnings growth and have great upside potential going forward.
▪ We then apply a set of stringent screening criteria to find companies with strong balance sheets.
▪ We narrow our universe down to stocks with dividend yields of 3% or better.
▪ We focus on payment ratios that are generally less than 70% unless they are an MLP or REIT, which may be legally required to pay out more. This ensures that a company is retaining enough revenue to reinvest for future growth.
▪ We screen out investments that have cut dividends over the past five years.
▪ We then focus on diversification making sure we cover enough sectors and have a good group of companies.
As a Global Income Portfolio member, you’ll be alerted when the time is exactly right to buy the next opportunity. There will always be 20 ideas ready for you to take action on. Don’t miss out!
Today, you can go above and beyond standard dividends, and generate a higher income with low risk. Get started today!
As a member of the Global Income Portfolio, you’ll receive:
- Best Buys Now! – The hottest Global Income stocks on our buy list right now. We tell you the top 5 stocks to buy right now so you can get your money to work immediately.
- Target Buy and Sell Prices – “buy up to” prices and “target sell” prices so you’ll know exactly where to get in and out. We typically hold around 20 stocks.
- Monthly Newsletter and Updates – Once per month you will receive a comprehensive newsletter and update where I highlight new stock picks in depth and provide commentary and an update on the current holdings.
- Trade Alerts – Any time we buy or sell a stock in the portfolio, you will receive a special email trade alert so you’ll know what’s happening in the portfolio and what actions you need to take in order to follow along.
- 24/7 Website Access – You will have your own username and password to log into our Global Income Portfolio via our website.
Ticker Symbol: INVN
Action: Buy up to $20
I am making an earnings play on InvenSense Inc. I will add 10% to the position on Monday with a buy up to $20. Its next earnings date is October 29th and I am looking for a 15-20% pop to breakout to new highs (above $22). It provides motion processing solutions that enable a motion-based user interface for consumer electronics. Its solutions are comprised of an integrated circuit that incorporates motion sensors, such as gyroscopes, with associated software. The Company offers devices for applications in console and portable video gaming devices, handset and tablet devices, digital still and video cameras, digital television and set-top box remote controls, 3D mice and portable navigation devices. Its technology is comprised of four proprietary components: its patented Nasiri-Fabrication process, advanced MEMS gyroscope design, mixed-signal circuitry that provides sensor signal processing and enables SensorFusion technology critical to its MotionProcessing platform, and MotionProcessing library and MotionApplication software solutions. I am putting a 15% stop loss on this.
7/12/13 Analysis… Adding a 10% allocation to InvenSense Inc. (NASDAQ: INVN) with a buy up to $16.75. It provides motion processing solutions that enable a motion-based user interface for consumer electronics. Its solutions are comprised of an integrated circuit that incorporates motion sensors, such as gyroscopes, with associated software. The Company offers devices for applications in console and portable video gaming devices, handset and tablet devices, digital still and video cameras, digital television and set-top box remote controls, 3D mice and portable navigation devices. Its technology is comprised of four proprietary components: its patented Nasiri-Fabrication process, advanced MEMS gyroscope design, mixed-signal circuitry that provides sensor signal processing and enables SensorFusion technology critical to its MotionProcessing platform, and MotionProcessing library and MotionApplication software solutions. It reports earnings on July 30th and I am looking for a 20-25% pop. This is a higher risk trade.