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Buy Fast-Growing Companies Falling On Earnings Letdowns

Posted: 26 Jul 2019 08:46 AM PDT

The Only 8 Stocks You Should Buy Today

Fellow Investor,

After many years of analyzing the stock market, I've concluded there are only 3 kinds of companies worth investing in:

1. A company that makes something everybody NEEDS

2. A company that makes something everybody WANTS

3. And a company that helps get rid of something everybody HATES

Imagine a product so essential that nearly every household in America has it in their refrigerator. Imagine a product that takes advantage of one of the most basic drives of human beings—sex. Imagine a product that helps people get rid of body odor or unwanted body hair.

Now imagine there was one company that made ALL of these products.

You don't have to imagine such a company. It already exists. And it's been making money hand-over-fist for investors since 1846.

But I bet you've never considered buying this stock.

I've analyzed all 4,500 publicly-traded companies on the stock exchange and come up with exactly eight stocks like this one that make money year after year … in good times and bad … bull markets and bear.

These are the only 8 stocks you need to buy! Click here now to find out how they could help you grow $10,000 into $118,000 – or more.

Livongo Shares Surge on First Day of Trading

Posted: 26 Jul 2019 03:00 AM PDT

Digital health company soars in IPO debut.

Livongo, a digital health company dubbing itself the "Netflix of healthcare," went public on Thursday under the ticker LVGO.

The company offered about 12.7 million shares at a starting price of $28 per share, giving the company an expected valuation of about $2.5 billion, and with the hope of raising $355 million net of fees. Shares immediately surged over 50 percent from that IPO price in early trading.

One of three companies going public with a digital health focus, Livongo uses technologies to help patients with diabetes. The last digital health companies to go public did so over three years ago.

Action to take: As with all IPOs, we prefer to wait until a regular trading pattern and price have been established. Companies that go public also do so before they reach profitability, making them riskier—but often more potentially rewarding.

As the initial lockup period for corporate insiders expired (typically within six months), we will also be able to tell whether or not C-suite executives are looking at further gains for shares, or are looking to cash out now. This strategy is a powerful "tell" for investors, and following it would have avoided the worst of the tech-bubble-era companies going public that quickly went bust.

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Unusual Options Activity: Targa Resources Group (TRGP)

Posted: 26 Jul 2019 03:00 AM PDT

Big bet on shares rallying through October.

On Thursday, a large bet was made on shares of Targa Resources Group (TRGP) continuing its recent rally higher.

Over 5,250 of the October $43 call options traded hands, against an open interest of 242—making for a 21-fold increase in volume. With a current share price around $40.50, this is a bet that shares will move at least 6 percent higher in the next 84 days.

Targa is a storage and transport company for natural gas and oil, with a focus on large shale plays in Texas and Oklahoma. It has over 30,000 miles of pipeline, six terminals, and over 47 natural gas processing facilities. The company makes fee-based revenue for transporting and storage of oil and gas, and has managed to stay profitable as natural gas has slid to multi-year lows.

Action to take: The out-of-the-money option looks attractive, as shares have been trending up in recent weeks. Common shares, however, yield 9 percent, an unusually high yield for a traditional C-corp stock. Other energy infrastructure companies offering high yields typically structure themselves as partnerships.

With a likelihood of shares rallying, the shares look better than the option thanks to the high yield investors can get while waiting for a move higher.

 

 

Durable Goods Orders Surge in June

Posted: 26 Jul 2019 03:00 AM PDT

Gain was four times larger than expected.

 

For the month of June, durable goods came in with a 2 percent gain, four times higher than the expected rise of 0.5 percent.

At the same time, the May durable goods data was revised from being down 1.3 percent to down 2.3 percent, indicating that there are some longer-term weaknesses.

For core durable goods, a rise of 1.2 percent was reported against an expected gain of just 0.2 percent. This comes off the May gain of 0.5 percent, which was revised higher from 0.3 percent.

Durable goods are those that are not expected to wear out quickly, such as a car or refrigerator, which can last for years or even decades. This is opposed to a non-durable goods such as foods, which are consumed or worn out over a shorter period of time.

The 2 percent increase in manufactured durable goods comes to an increase of $4.9 billion, to a total of $246 billion. The largest increase came in from transportation equipment, which rose 3.8 percent.

Shipments of durable goods, indicating actual sales are occurring and that the growth is not related to inventory buildups, also showed a rise of 1.4 percent, following a 0.5 percent increase in May. On a year-over-year basis, however, the overall data is negative, again suggesting an economic slowdown in growth at the very least.

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Insider Activity: Roadrunner Transportation Systems (RRTS)

Posted: 26 Jul 2019 03:00 AM PDT

 

Major holder adds to truck transportation company.

On Thursday, Elliott International, LP, bought 1,866 shares of Roadrunner Transportation Systems (RRTS). While the total cost was under $20,000, Elliott already owns over 23,148,000 shares of the company— making them a major shareholder.

The recent buy increases their holdings by 0.01 percent, the fund has been a repeat buyer of shares near current prices in prior months in the 1,500-8,000 share range.

Roadrunner operates asset-light transportation and logistics services, primarily in the United States and Canada, through 40 service centers and with over 150 third-party delivery agents. The company also offers international air and ocean freight transportation as well, but it primarily in the business of trucking.

Action to take: Elliott has been making major share purchases at the company in the past year, as shares have declined 81 percent and a slowing economy have weighed particularly heavily on the trucking business.

Buying any asset that's fallen 81 percent from its highs tends to rebound strongly, provided it doesn't go bankrupt.

With the company currently at a loss, and with its total debt load now equal to its total equity, investors may want to wait for an improvement in the company's operations before investing. Let the deep value funds like Elliott see if they can turn things around first.

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