Posts tagged with: Fundamental analysis

Should you buy when corporate insiders are buying, and sell when insiders are selling?  Do insider transactions mean anything at all for the future direction of stock prices?  What about the market as a whole?  Join me today as I cover the topic of insider trading.

 

Sign up for FREE email updates to be notified of new podcast episodes, timely videos featuring market analysis and commentary, special offers, and more.

corporate boardroom

(CC image by ShellVacationsHospitality on Flickr)


Section 1: Insider Ownership

Founders or controlling shareholders

C-suite executives

Boards of directors

Executive compensation: performance-based incentives

Warrants vs. options

Restricted stock as a retention incentive

Employee stock purchase plans (ESPP)


Section 2: Common Types of Transactions

Exercise of stock options

Open market purchases

Open market sales

What’s legal and what isn’t


Section 3: How to Trade in Response to Insider Buying & Selling

A review of the research on insider trading

Figure out who the major insiders are, and how they typically transact

Routine vs. non-routine trades

Isolated vs. sequenced trades

Look for anomalies and follow suit (if everything else checks out with the company and its chart – always do technical analysis)

 

 


 

References

 

List of Insider Transactions (finviz.com)

SEC Info: Insider Trading Reports

Institutional Holdings: NASDAQ.com

Trends in Board of Director Compensation: Harvard Law


Intro music and mid-program music by audionautix.com


Find more episodes of the Torpedo Trading Podcast at this link

Continue Reading →

How can you and I profit from corporate mergers and acquisitions?  What should you do when one of your stocks gets a buyout offer?  Today I’ll be discussing all kinds of corporate deals and what they mean for investors.  I’ll also present a couple ETFs that allow you to emulate the merger arbitrage strategy used by many hedge funds.

 

Sign up for FREE email updates to be notified of new podcast episodes, timely videos featuring market analysis and commentary, special offers, and more.

Pac-Man eating

(CC image by Pierre Boisonnet on Flickr)


Section 1: Transaction Types & Examples

Cash buyouts

Stock-for-stock transactions / mergers

Combinations (cash + stock)

Merger of equals

Spinoffs


Section 2: How to React to a Buyout Offer

Terms: – what are you getting for your shares, what are the tax consequences, and what’s the chance the deal gets done?

Valuation (two of the best books are by Aswath Damodaran: The Little Book of Valuation and Investment Valuation: University Edition)

Likelihood of a bidding war

Recent price history of the stock


Section 3: Profiting from Corporate Deal-Making

Merger arbitrage strategies: active & passive

ProShares Merger ETF (MRGR)

IQ Merger Arbitrage ETF (MNA)

Buying stocks in anticipation of a deal


 

References

Largest corporate spinoffs – Wikipedia

Largest corporate acquisitions – Wikipedia

Paper on merger-arbitrage strategy by Brenda Kahn, University of Southern Indiana (PDF)

The Hedge Fund Journal – Ride the M&A Wave With Merger Arbitrage (PDF)

Fairmark.com – tax consequences of cash received in mergers


Intro music and mid-program music by audionautix.com


Find more episodes of the Torpedo Trading Podcast at this link

Continue Reading →

Are you ready for the next financial crisis?  No one knows for sure when the crash will happen, but here are some sensible steps everyone should take to keep from being caught off-guard when it does.  I also tell you what signs to look for that will foreshadow the next crisis, so you can be calm and confident while others panic.

 

Sign up for FREE email updates to be notified of new podcast episodes, timely videos featuring market analysis and commentary, special offers, and more.

 

Bunker

(CC image by Psaiko on Pixabay.com)


Section 1: What Will the Next Crisis Be Like?

A brief review of the last few major financial crises

Signs and signals to watch for, this time around


Section 2: How to be Safe During Normal Times

Cash

Diversification

Alternative assets

Hard assets

Know your goals and risk tolerance, and keep your assets in alignment with them

Multiple income streams

Preparedness outside of the financial world


Section 3: Getting Defensive When Risk is Elevated

Move to a conservative asset allocation, as I have already done with my own assets

A little-known tactic to avoid getting trapped within your retirement account

Protecting a portfolio using options without selling the stock

What to sell

What not to buy


Section 4: What to do When the Crisis Arrives

From smoke to fire: The stages of a crisis, and the actions you should be taking in each

Embrace risk as others are becoming the most fearful of it

Follow trustworthy news sources; stay away from mainstream media as much as you can


References

Episode 15: How to Get a Return on Cash

Washington Post (April 2, 2007): Huge mortgage lender files for bankruptcy

The Survival Podcast – rational preparedness without the prepper mania

ZeroHedge – Why the Fed is Trapped: A 1% Increase In Rates Would Result In Up To $2.4 Trillion Of Losses

Battery1234 – Steven Harris’s website on how to make your own home battery bank for emergency power


Intro music and mid-program music by audionautix.com

Find more episodes of the Torpedo Trading Podcast at this link

Continue Reading →

A Long-Term Income Play in Korea, Available to US Investors!

 

Disclosure: I own shares of KT Corporation as of the date of this posting.

I’ve already got a Dividend Stock of the Month for May 2017, so I’m calling this my “Investment of the Week!”  But let me be clear, I intend for this to be a long-term investment.

In this video, I explain what this company does and why I selected it from a long list of dividend-paying stocks in the telecom sector.  The stock has gone up by about 5% in the two weeks since I released the video – so far, so good!

 


Shortly after I made this video, Moon Jae-In won the Korean presidential election.  As I anticipated, he is already talking tough on the chaebol conglomerates, one of which is KT Corp.  Should we be worried?  Just the opposite – we should be excited about this!

Korea’s chaebol are generally well-managed, conservatively-run companies that are built for survival over the long run.  What they lack are high dividend yields, big stock buybacks, or fully transparent management.  Therefore, many institutional investors have not given as much weight to Korean stocks in their portfolios as they should.

After the recent scandals involving Samsung’s Lee Jae-yong, impeached president Park Geun-hye, and others, the new President Moon finally has the momentum he needs to push for reform of these massive conglomerates.  The main goal of the reforms will to be to increase transparency, which will help these companies gain trust and attract more capital from abroad.  Sure, they’ll probably create some extra compliance costs for KT and other chaebol, but I expect that negative to be far outweighed by the benefits of more capital rolling in.  I think we’ll see the dividend payouts increase as part of this process too.  After all, KT is sitting on over $8 billion of cash.  In Korean won, that’s something like 88 zillion.  (Just kidding)  Note: Most Korean companies pay dividends annually, not quarterly, and they are variable from year-to-year.

Here’s another point I forgot to make during the video: Like many Korean companies, KT Corp is a good value relative to its earnings-per-share.  Here are the trailing and forward P/E ratios for KT Corp relative to its biggest peers in the US telecom sector, even after the recent rally (data from Yahoo Finance):

  • KT Corp: 12.6 trailing, 11.8 forward
  • AT&T (T): 18.7; 12.9
  • T-Mobile (TMUS): 34.7; 27.8
  • Verizon (VZ): 15.2; 11.8

As I always say, due your own due diligence before investing and don’t rely solely on my conclusions.  Other necessary disclaimers can be found on this page.

I’m still on the lookout for good quality dividend-paying stocks that can withstand market turmoil, so stay tuned to the live stream and YouTube channel to discover them.

 

 

Continue Reading →