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Income stocks can help give your portfolio the solid foundation you need to weather any market shifts

Shareholder friendly.

Those two words sum up income stocks. It means these stocks have decided to take some of their net income and deliver it back shareholders on a regular basis.

It means their businesses aren’t run for the most growth, but for steady long-term wealth accumulation. Yes, the stocks rise and the companies grow, but some of that cash for expansion is returned to shareholders on a regular basis.

Some industries are famous for their income — real estate investment trusts, utilities, master limited partnerships. But usually, mature companies where explosive growth is no longer the driving force, are the most solid dividend payers. At my Growth Investor service, we own a stable of these companies in our Elite Dividend Payers portfolio.

Here, while my Portfolio Grader found plenty of “A”-rated dividend stocks, I wanted to pick stocks that also delivered reliable dividends that would beat inflation as well.

These seven “A”-rated dividend stocks to depend on all fit that bill except one, where growth is just too tempting to pass up, so its yield is a little light.

Dividend Stocks to Buy: Southern Company (SO)

Dividend Yield: 3.6%

Southern Company (NYSE:SO) is the second largest utility in the U.S. It runs the power companies for Georgia, Mississippi and Alabama. It also has extensive natural gas operations up and down the East Coast.

It’s the only utility in the U.S. that is building a new nuclear facility. Then its project management partner and nuke builder Westinghouse went bankrupt. That meant Southern had to take over the entire project.

And it has done well. While the completion date has been pushed to 2021 or 2022, things are moving along on schedule.

On the growth side, its massive natural gas distribution business as well as its renewable energy business are doing very well. And it’s one of the best-run utilities out there.

With a 3.6% dividend and 12-month return of 46%, SO stock is a rock-solid pick for any portfolio.

Procter & Gamble (PG)

Dividend Yield: 2.4%

Procter & Gamble (NYSE:PG) has been in business since 1837.

Wrap your head around that. It has been around for more than 150 years. Martin Van Buren was president when PG launched in Ohio. J. P. Morgan was born that year. There were still border wars with First Nation tribes.

When you have been around that long, it means you’re doing something right from the boardroom down to the products.

Now, there have been some challenges of late, as new generations of less brand-conscious consumers have hit the markets and PG had to readjust its product portfolio.

But it is finally through that transition. PG has raised its dividend every year for the past 60 years. That is an accomplishment few stocks can make. And it’s that kind of focus on shareholder value that makes this unique.

The 2.4% dividend may not be huge, but it’s consistent. And its 33% stock gain in the last year is also a nice kicker. However, if you do also want growth in your portfolio, there are better places to find it going forward.

Equity Residential (EQR)

Dividend Yield: 2.7%

Equity Residential (NYSE:EQR) is a Chicago-based real estate investment trust (REIT) that specializes in upscale apartments in some of the top cities in the U.S. You can find its properties in San Francisco, Los Angeles, New York, Washington, D.C., Boston, Seattle and more.

In these types of cities, many people that work for big firms receive relocation allowances to find a place to live until they can settle in. Some firms even lease apartments and allow their employees to use them if they’re in town on long-term assignments.

That makes these cities’ real estate needs unique. And that is a good thing for a niche player like EQR. It can keep its occupancy rate high, as well as its rates, because it offers top locations and quality accommodations in strategic cities.

Now that prices in many of these cities have become incredibly expensive, renting has also become a real option for residents that want, and can afford, the convenience of downtown locations.

The stock is up 18% in the past year and has a solid 2.7% dividend.

Dominion Energy (D)

Dividend Yield: 4.4%

Dominion Energy (NYSE:D) is one of the leading utilities in the country. It can stretch its roots back to 1795, but in its most recognizable form, it’s been around for a century.

It supplies electrical power to Virginia (which is part of the internet backbone, houses the Pentagon and one of the largest shipbuilding plants in the world) and also has an extensive natural gas production and distribution network that covers the Eastern seaboard and beyond.

Dominion also has a number of wholesale power generation plants that extend into the Midwest.

Its Cove Point plant in Maryland is being converted from a natural gas import hub to an export port for liquified natural gas (LNG). It will be one of the few on the East Coast and will see a significant rise in business as export restrictions on LNG fall. Oil-and-gas logistics are actually a theme we’re profiting from within our Growth Investor buy list.

But overall, D is a solid, successful company that offers few surprises. And that’s a good thing for an income stock. In the past year Dominion stock was up 21%, and it continues to deliver a rock-solid dividend, now yielding 4.4%.

Leidos (LDOS)

Dividend Yield: 1.3%

Leidos (NYSE:LDOS) isn’t throwing off a staggering dividend yield, at 1.3%. But this is a growing, dynamic company that is well positioned for the future of defense and security in the U.S. and beyond.

It has a storied history that stretches back to 1969. And it has been a private contracting institution since its early days. It has worked on some of the biggest scientific challenges the U.S. government has come up against in the past 50 years.

And now, it is focused on aerospace technologies. A recent $1.7 billion merger with aerospace firm Dynetics was announced just a month ago.

This put LDOS in prime position for all the space work that is heating up both on the government side — the Space Force — and the private side — the big defense contractors that build the equipment for the government.

As a smaller player in the aerospace and defense sector, it can leverage its growth because it is more concentrated.

But given the fact that all the major industrial powers now have active aerospace programs, this is the next frontier. And LDOS is already a reliable partner.

And while the dividend isn’t a big driver, the fact the stock is up 80% in the past year yet sits at a price-to-earnings ratio of 22 means that growth is just beginning.

Carlyle Group (CG)

Dividend Yield: 3.6%

Carlyle Group (NASDAQ:CG) is one of my favorite companies when it comes to foundational stocks that deliver solid dividends.

It’s a private equity firm that continues to draw exclusive clients from the corridors of power around the world. The kind of people and families that make decisions that make business happen.

You know, royal families from the Middle East. Political dynasties in the U.S. World leaders from around the globe.

But CG has always been discreet. It does deals, makes its money, disburses it to shareholders and keeps a low profile in a business that is often just as much about headlines as assets under management. It’s the kind of business that deserves consideration for any Growth Investor.

It’s a steady hitter, not a swing for the fences kind of operation.

But it certainly delivers for shareholders. In the past 12 months, CG stock was up a stunning 95%, yet it continues to deliver a bountiful 3.6% dividend. And it has done all this with a trailing price-to-earnings ratio of … 12.

PennyMac Mortgage Investment Trust (PMT)

Dividend Yield: 8.1%

PennyMac Mortgage Investment Trust (NYSE:PMT) is one of my favorite stocks now because it’s well positioned for all the good things happening in today’s economy.

With interest rates low, a solid economy, low unemployment and confident consumers, the housing market is well positioned for strong growth.

PennyMac is a great way to play this trend.

It doesn’t own properties, it manages the mortgages of residential properties. It originates them, manages them, bundles them and resells them.

Plus, it’s set up as REIT, which means it is obligated to pay its net income back to shareholders, and it chooses to do that via its hefty dividend of 8.1%. Plus, the Tax Cuts and Jobs Act now allows REIT investors to deduct 20% of their dividend. Then, the remainder is taxed at the shareholder’s marginal rate. Check with your tax professional for more details.

The stock is up a solid 19% in the past year and it still trades at a single-digit P/E.

That being said, in the big picture, there’s been a major development in the technology field I’m especially keen on now: artificial intelligence (AI)

The AI Master Key

If artificial intelligence sounds futuristic, even far-fetched — well, keep in mind, you’re already using it every day. If you’ve ever used Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google Assistant or Apple’s (NASDAQ:AAPL) Siri … if you’ve had Netflix (NASDAQ:NFLX) recommend a movie or Zillow (NASDAQ:Z) recommend a house … even an email spam filter … then you’ve used artificial intelligence.

In this new world of AI everywhere, data becomes a hot commodity.

As scientists find even more applications for artificial intelligence — from hospitals to retail to self-driving cars — it’s incredible to imagine how much data will be involved.

To create AI programs in the first place, tech companies must collect vast amounts of data on human decisions. Data is what powers every AI system. As one AI researcher from the University of South Florida puts it, “data is the new oil.”

To cash in, you’ll want the company that makes the “brain” that all AI software needs to function, spot patterns and interpret data.

It’s known as the “Volta Chip” — and it’s what makes the AI revolution possible.

You don’t need to be an AI expert to take part. I’ll tell you everything you need to know, as well as my buy recommendation, in my special report for Growth Investor, The A.I. Master Key. The stock is still under my buy limit price — so you’ll want to sign up now. That way, you can get in while you can still do so cheaply.

Author: Louis Navellier

Source: Investor Place: 7 ‘A’-Rated Dividend Stocks That Provide Inflation-Beating Income

After a rough start to the week, the markets are back in rebound territory.

While recent economic data this week isn’t spurring on the bulls, it isn’t so bad as to encourage the bears to start selling off in earnest.

The economy seems to be solid and while next-year growth may be slow, it doesn’t look like there are any dangers that would completely derail it. Plus, the Federal Reserve is remaining supportive this December, as opposed to a year ago when its “tough love” tanked the markets.

But the fact that the Fed still has to support the market with quantitative easing and mortgage-backed security buying, while also acting as the lead lender in the U.S. overnight lending market, shows that while the economy has wings, they can only get it aloft as much as a chicken.

The seven lumbering large-cap stocks to avoid below are stocks that have been in a downtrend. And given their size, it’s going to take a while for them to regain and sustain any altitude. There are plenty of other large cap growers out there, don’t hold and hope on these.

These are all “F”-rated stocks in my Portfolio Grader right now.

Large-Cap Stocks to Sell: Exxon Mobil (XOM)

Exxon Mobil (NYSE:XOM) may be throwing off a 5.1% dividend, but that doesn’t help when the stock is off 14% in the last 12 months.

With a market capitalization of almost $290 billion, it’s not like XOM is going to disappear off the face of the earth, but it certainly isn’t a good choice now.

Oil prices have been locked into a tight trading range in the mid $50 range, which has seen some upside movement in recent days. U.S. inventories were emptied more than expected around the holidays. This may be a sign of an upturn, but with the global economy stabilizing rather than expanding, it’s not likely that global demand is going to take off — even if the Saudis cut production at their OPEC meeting this week.

Also, Russia and China just finished a pipeline from Siberia to Shanghai, so the natural gas China usually got from the U.S. is now online and getting shipped from Russia.

When times are bad for energy, XOM loses all the way up and down the energy markets.

Equinor (EQNR)

Equinor (NYSE:EQNR) is a leading integrated oil company that is based in Norway.

Norway has significant offshore energy assets and this is the company that manages all levels of upstream, midstream and downstream aspects of those assets. It also has operations in the U.S., Mexico and other countries as well.

Again, this isn’t a great time to be an integrated oil company. And its 4.4% dividend makes much difference when the stock has lost nearly 24% in the past year.

There’s a decent chance things will turn around, since the energy markets are highly cyclical, but there’s no point waiting for that to happen. Other sectors are producing good gains right now, including many stocks that pay strong dividends — a combination I like to call the Money Magnets.

And the global economy still isn’t out of the woods. Also, as China adapts to the trade war, there may be a permanent shift in demand.

Schlumberger (SLB)

Schlumberger (NYSE:SLB) is the largest oilfield services company in the world, and has been for some time. It’s been at this since 1926, which means it survived the Great Depression, a World War and the Great Recession.

It is one of the mainstays in the energy world and the perfect bellwether for the industry. If demand is growing and wells are pumping, SLB is doing its work. If those wells are closing and the ones that are pumping are slowing down production, SLB is along for the ride.

Its global diversification can help keep it busy, but aside from supporting oil companies in managing their supply and production, it also does a fair amount of work in exploration services.

But when fields are going idle, exploration isn’t exactly booming.

Its 5.7% dividend isn’t too tempting right now, since it’s off 19%.

FedEx (FDX)

FedEx (NYSE:FDX) is certainly one of the biggest names in logistics. But that is no longer good enough, even in the age of e-commerce.

You would think that this would be a great time of year for FDX. There are projected to be 2 billion packages delivered just between the U.S. Postal Service and FedEx. That should bring in a great quarter.

But FDX has stopped working with Amazon (NASDAQ:AMZN) and is refocusing its business in other areas. Plus, this year there is less time to get everything delivered, and given weather issues, this may get ugly. And that means lower margins. Profitability, and operating margins in particular, are a key component of my Money Magnets strategy for Growth Investor.

There’s also the bigger issue that many companies are looking for alternatives to shipping goods — in-store pick up, local deliveries or local services to deliver the last mile.

Retailers are changing the way they use logistics companies. And that means logistics companies need to retool as well. Add to that the slow global economy and the trade war with China and it’s no surprise FDX stock is off 29% in the past year.

ArcelorMittal (MT)

ArcelorMittal (NYSE:MT) is the world’s largest steel producer. It has operations around the globe, not just making steel but mining ore as well.

It is also a perfect indicator of how well the steel industry is doing these days.

And given the fact that the stock is off 24% in the past 12 months, the answer is pretty obvious. Also bear in mind, the stock price is a projection of performance about six months into the future.

The U.S.-China trade war has hit many economies beyond the two titans. Also, car demand in India is at multi-year lows. Emerging markets aren’t doing well because of the shadow cast by the major economies they supply.

If there’s one stock to follow to get insight into the fate of the global economy, MT would be the one. And right now, the stock is telling us there isn’t much upside expected in 2020 for this sector.

Molson Coors Brewing (TAP)

Molson Coors Brewing (NYSE:TAP) announced a restructuring in late October. And part of that restructuring was cutting 400-500 workers. The CEO’s statement began, “Our business is at an inflection point.”

In the age of small brewers popping up all over, the big beer companies — and TAP is certainly one of those — are finding it harder to stay competitive. Plus, the legalization of marijuana in over a dozen states combined with the fact that younger generations are less interested in drinking (or eating) carbs, also has posed long-term challenges to the way the industry operates.

TAP has chosen to choose its own fate rather than have it chosen by the markets. And it is revamping its product focus to alternative products and its larger brand beers.

We’ll see if it works. But there’s no point in getting in now to see if it does. Its solid 4.6% dividend doesn’t make up for its 20% losses. If you want a nice yield AND solid capital gains, there are better places to look.

Teva Pharmaceuticals (TEVA)

Teva Pharmaceuticals (NYSE:TEVA) has had a tough few years. Once one of the world’s largest generic drug makers, with a few brand name drugs in its portfolio, it is now struggling to find a bottom.

The stock is off almost 74% in the past 3 years, and 52% in the past 12 months. It has been a long, unmitigated slide.

There have internal problems on the management side, tough markets to sell into, the opioid drug issue and rising competition. It has been tough to go from darling to dog so quickly.

But the fact is, some of the troubles were self-generated. Just a couple of weeks ago, Teva Pharmaceuticals was subpoenaed by Brooklyn federal prosecutors along with other generic opioid manufacturers in a new criminal probe.

This is certainly a falling knife that there is absolutely no point in trying to catch until it hits the ground. And right now it’s still gaining momentum.

The bottom line is that pharmaceuticals, like some of the other sectors we just looked at, is a volatile business. This can make it hard to deliver stable, growing gains … much less dividends.

Yet those are both the hallmarks of a successful long-term stock portfolio. So, for that, we’ll have to look elsewhere.

‘Money Magnets’: The Best Dividend Growth Stocks Around
So — whatever your portfolio size and goals — you’ll want to look at the group of stocks I’ve nicknamed the Money Magnets.

Not only did these stocks earn an “A” in my Portfolio Grader, thanks to strong buying pressure and great fundamentals …

The stocks also earn an “A” in my Dividend Grader. These stocks are able to pay great yields — and have the strong business model to back it up.

All in all, I’ve got 29 strong dividend growth stocks for you now in Growth Investor — averaging 4% yields — far more than the S&P 500 or even a Treasury bond. These stocks are poised to do well as we continue to see international capital flow to the U.S. markets. Click here to see how I found these stocks, and how you can get great performance out of YOUR portfolio — come what may.

Author: Louis Navellier

Source: Investor Place: 7 Lumbering Large-Cap Stocks to Avoid

If we can be sure of one thing in 2019, it’s that not all stocks are created equal.

We have seen sectors rise and some of the big names falter all the same. This has certainly been a stock picker’s market.

And I say that knowing full well that the S&P 500 is up an impressive 26% year-to-date.

But healthcare is a tricky sector because it incorporates a variety of stocks — from drug companies to hospitals to insurers to medical device makers. All are on different sales calendars and don’t march in lockstep.

The thing to watch in the sector is how the economy is doing. If people are working then they have more money, and they will use some of that money for healthcare purposes.

As far as legislation that can clear up the direction of the U.S. healthcare system, that is a long way away.

For now, it’s best to stick with only the most powerful stocks the market has to offer — and avoid the weakest. And the doctor is ordering you to banish these seven sickly healthcare stocks from your portfolio, if you’ve got them.

Healthcare Stocks to Sell: Mednax (MD)

Mednax (NYSE:MD) is a Florida-based firm that has been supplying physician services for anesthesia, pediatric specialties and newborns since 1976.

These contract services have been in big demand for a while, as the healthcare landscape was developing under new “Obamacare” legislation.

But those days are passed and healthcare organizations are settling in the current state of limbo. But that means staffing is a bit more predictable and MD’s services are finding fewer customers.

MD has begun restructuring to get back in step with market conditions. Whether that works or not, remains to be seen. But it’s getting downgraded across the board and year-over-year revenue is declining. There’s more downside than upside left for this stock.

Fresenius Medical Care (FMS)

Fresenius Medical Care (NYSE:FMS) has been doing pretty well this year, relative to the category it finds itself in today.

This Germany-based firm specializes in treatment and services for patients with chronic kidney failure and is one of the top providers, along with DaVita (NYSE:DVA). The problem is, while this is a growth sector, especially in the United States, Medicare is tight with its payments, so the margins are low. And solid operating margins are crucial to the profitability standards I set for any investment.

In July, President Donald Trump issued an executive order allowing in-home services for kidney dialysis and other treatments and both sector-leading stocks popped.

But it may not be FMS that is the biggest winner, especially given the fact that its dialysis clinics and home services would initially add to costs. This is ultimately a win for insurers rather than these specialized companies.

The stock is only down 3% in the past year, but it’s up 13% year-to-date, so this performance is showing a downtrend is still in place.

Healthcare Services Group (HCSG)

Healthcare Services Group (NASDAQ:HCSG) is a good example of a middling company in the ancillary services sector of the healthcare industry — including laundry and dietary services for long-term care facilities — that has been struggling between strength and weakness for a while.

It’s a good sector and it is a pretty big name in the industry, having been around since 1976. But the dynamics in this sector are shifting, as the insurance industry would prefer to pay to keep people at home, rather than pay for facilities. The same goes for Medicare.

Struggles with margins have been ongoing. And then in late October, third-quarter earnings hammered the company. While revenue was in line with expectations, earnings missed by almost 10%. That’s not encouraging.

It also means analysts cut their price targets moving forward and institutional investors are looking to move their money, further driving down the stock.

Brookdale Senior Living (BKD)

Brookdale Senior Living (NYSE:BKD) provides senior living communities to more than 75,000 residents. It has been in business since 2005.

During that time, BKD has been able to capture the first wave of baby boomers and the tail end of their parents heading into assisted living facilities. And this market looked like it was going to expand for decades as boomers started filling up these facilities in huge numbers.

Now, real estate is an area I’d consider crucial to my Growth Investor strategy … if the business model is strong. But along the way, technology has shifted this particular trend. In-home care has increased and there is now more care that can be conducted from homes due to advances in equipment.

This means assisted living facilities are under pressure. They proliferated, anticipating a growing base, and now that growth looks to be less than expected. Given the fact that they’ve dumped huge sums in large campuses, this is not the “sure thing” it was five years ago.

There will be growing competition in this sector and Medicare and insurers will have some leverage here, all challenging BKD’s margins in coming quarters, if not years.

HCA Healthcare (HCA)

HCA Healthcare (NYSE:HCA) is a for-profit company that operates hospitals, urgent care facilities, outpatient services facilities and the like.

It was founded in 1968 and comprises nearly 250,000 employees in 21 states, including 38,000 physicians and 87,000 nurses. It’s No. 63 in the Fortune 500.

This isn’t a stock or company teetering on the brink of existence. But it will be in an increasingly challenging sector moving forward.

The graying of America was supposed to be a boon for these types of companies. But the real challenge underneath it all is how Americans pay for all of this increased healthcare.

Insurance companies are not interested in expanding the margins for hospital companies. And Medicare is already under pressure for funding as it is; more people in the system won’t help its generosity.

This is one of those stocks that may not fall significantly, but it won’t rise much either. There are simply better places to put your money to work.

Cigna (CI)

Cigna (NYSE:CI) is one of the leading health insurers in the U.S. and beyond. It has a $75 billion market capitalization and has been around since 1792. Nope, that not a typo, it’s 227 years old.

It bought the first insurer in America — Insurance Company of North America — in a 1982 merger. That’s some serious staying power.

Recently, this sector has been under duress because Wall Street was worried that Democratic presidential candidate Elizabeth Warren was going to destroy the health insurance industry with her Medicare for All health coverage program.

But Warren recently laid out the plan and it looks like such an outcome would be at least three years out if she were to be elected. And that means it would be up for implementation as she ran for a second term, which gives companies even more time.

CI and other insurers were all part of a relief rally. But the fact is, the popularity of Medicare for All isn’t lost on these big insurers. And it’s going to be a tough transition to come up with a better private solution or figure out what to do when the current system transitions. In the meantime, I see much stronger stocks out there.

Encompass Health (EHC)

Encompass Health (NYSE:EHC) provides post-acute healthcare services, such as inpatient and in-home rehabilitation as well as hospice care.

Basically, it’s part of a growth sector that benefits from the graying U.S. population as well as the trend to provide services outside brick-and-mortar corporate facilities.

And its home care services are broader than simply rehabilitation. It provides nursing care as well as physical therapy. Also, its physical therapy division is available to people of all ages that are in need of rehabilitation services.

The trouble is, this sector is in its early days and the industry is undergoing some volatility, given the vague future of U.S. healthcare policy, and thus, how companies can best adapt.

Plus, the enthusiasm for this sector a few years ago has made stocks like EHC relatively expensive, so its valuations aren’t in line with the current state of the sector. Wall Street doesn’t like surprises, and this sector may be full of them in coming quarters.

There are certainly worse stocks out there, but there are also better ones right now.

Why I Like Dividend Growth Stocks Now
If you think what happened in the stock market the last few months is wild, just look at the bond market. We’ve got falling and even negative yields overseas. But as investors retreat to U.S. Treasuries it’s causing bizarre effects here, too. Just look at what happened this summer, when the two-year Treasury actually began to yield MORE than the 10-year Treasury. And even the 30-year Treasury can’t be relied upon for good yield anymore.

So if a stock’s earnings picture is uncertain, not only is it going to be volatile, but people are going to look elsewhere seeking income.

Meanwhile, other stocks not only earn an “A” in my Portfolio Grader, thanks to strong buying pressure and great fundamentals …

The stocks also earn an “A” in my Dividend Grader. These stocks are able to pay great yields — and have the strong business model to back it up.

All in all, I’ve got 29 strong dividend growth stocks for you now in Growth Investor — averaging 4% yields — far more than the S&P 500 or even a Treasury bond. These stocks are poised to do well as we continue to see international capital flow to the U.S. markets. Click here to see how I found these stocks, and how you can get great performance out of YOUR portfolio — come what may.

Author: Louis Navellier

Source: Investorplace: 7 Sickly Healthcare Stocks to Avoid

Imagine watching an NBA basketball game, and Lebron James is having a terrific game. He has just made six shots in a row. The game is close, and Lebron is clearly lining up to take another jump shot.

What are the odds that he is going to make that shot?

In basketball, players and coaches will often talk about the “hot hand.” This refers to the phenomenon that someone who has made several baskets in a row has a greater chance of making the next one.

But that’s a fallacy. The odds that Lebron James or any other player will make his next shot remains the same, regardless of how many baskets they have made previously.

The belief in the “hot hand” is a well-studied example of Recency Bias.

And if you don’t know the term, you certainly understand Recency Bias if you’ve ever had an annual performance review at your job.

Odds are that your supervisor remembers a lot of what you’ve done in the last month but can’t remember work completed nine months ago. As a result, you’re more likely to be judged for the last month, than the last year.

And this same bias is likely affecting your portfolio, too.

Now, as you know, this is the Peak Performance Series at Market360. Each day, I’m detailing the human behaviors that can cost us big money as investors … and how you can neutralize their costly effects.

The human brain is a marvelous tool for creating art, music, language, and engineering feats, but it’s a terrible tool for investing.

The more you know about the workings of your own mind, the “bugs” inside it, and how they work against our investment performance, the more you can develop strategies to mitigate the negative effects of those bugs.

Over the past week, we’ve talked about Overconfidence, Disposition Effect Bias, Self-Attribution Bias and Crowd-Seeking.

So, in today’s essay, I’ll detail Recency Bias, how it works, and how you can avoid it.

Online Gaming Winner

In investing, Recency Bias occurs when a stock has momentum, either up or down. If a stock has been going up for the last six months, folks naturally believe it is likely to keep going up.

The inverse also happens. If a stock hasn’t gone up in six months, it seems likely to not turn around and go up any time soon.

On a wider level, if it has been 10 years since the last bear market (sound familiar?), investors are more likely to believe one is not coming soon.

But using Project Mastermind, we don’t need to rely on momentum to tell us which stocks to buy or sell. We use math and the latest technology to find the stocks that are about to break out to the upside — regardless of how they have performed recently.

During the third quarter in 2016, SINA reported a 21% increase in total revenues and a 21% jump in advertising revenues. Income from operations surged 147%. Net income per share was $0.56, which topped estimates for $0.34 by 64.7%.In December 2016, the system that became Project Mastermind found SINA Corporation (NASDAQ:SINA) — an online gaming company in China.

Just two months after I made my recommendation, the stock was up 23%. Just between mid-May and June 2017 the stock soared 41%.

Most analysts don’t even cover stocks this small, or they recommend them after their big run up. That’s where Recency Bias can cost you money.

However, as we just saw, if you can find the right stock BEFORE that next major event … you can make large gains in a much shorter period of time.

But you don’t have to let your future be governed by Recency Bias or any of the other biases we have covered in the Peak Performance Series.

All you need is the right tools.

That’s why I developed my stock grading system.

Instead of eyeballing a stock chart and seeing how it has performed lately, my system runs the numbers using thousands and thousands of points of data (fundamental as well as momentum indicators). It finds the very best names and sends me an alert that a stock is about to skyrocket. Because the alert is developed using only data, I don’t have to worry about falling victim to Recency Bias.

Join me now and you won’t have to worry about that, either.

Instead, you can go back to investing in your retirement. And if you’ve already started investing, the gains with my Project Mastermind can help you supercharge it.

I’m expecting some of the fastest gains in my career — we’re talking about moves of 100%, 200% and even 500% in months instead of years. That being said, the key is not to get impatient … or greedy. My system isn’t capable of that; it simply looks for the same precursors that have portended every great stock play of my career. Click here to find out more.

Just Tuesday, I issued a brand-new Buy Alert based on Project Mastermind in Accelerated Profits. It is a Chinese company that is in prime position to benefit from any U.S.-China trade deal. But, more importantly, it has the fundamentals required to keep it firing on all cylinders.

The company is set to report its earnings results for its first quarter in fiscal year 2020 next week, and a strong report could make its stock surge.

I don’t want you to miss out once the stock really takes off, so make sure to sign up here to get my buy advice.

Author: Louis Navellier

Source: Investor Place: Recency Bias: A Better Way to Predict a Stock’s Future

Whenever something dramatic happens, a lot of folks like to go on TV and play the “blame game.” It can get very philosophical. But I’ll let you in on a secret: At the end of the day, the culprit is almost always the same …

Emotions are what’s driving our behavior.

That’s true today, and it was true in 100,000 B.C.

Imagine you and your hunter/gatherer tribe are out and about … moving to a place with more fresh water.

On your way, you see three dozen terrified members of your neighboring tribe running for their lives. It’s a human stampede.

Your instincts will tell you to run like the wind. Your instincts will say there’s a good reason three dozen people are running for their lives. It doesn’t matter if you can’t see a saber-toothed tiger or a rival tribe with spears … you just know it’s time to run.

This reason — survival — is the core reason why humans find comfort in crowds. It’s how we survived in the wild and became the dominant species on Earth. To this day, we know having your own crowd — your family, friends, and coworkers — leads to longer, better lives.

However, the desire to be part of a crowd can kill your stock portfolio. Going your own way can save it.

So far in our Peak Performance Series at Market360, we’ve looked at how emotions impact our behavior, as investors. We’ve seen how emotions lead you to poor buys … how they lead you to poor sells … and can cause you to misinterpret the results.

Bottom line: The human brain is a marvelous tool for creating art, music, language, and engineering feats, but it’s a terrible tool for investing.

The more you know about the workings of your own mind, the “bugs” inside it, and how they work against our investment performance, the more you can develop strategies to mitigate the negative effects of those bugs.

In today’s essay, I’ll detail Crowd-Seeking Bias, how it works, and how you can neutralize its negative effects.

The Problem With Crowd-Seeking

A lot of you are probably fans of momentum investing. The truth is, I am, too. You always want to capitalize on a trend, and trends are made up of people.

But while following the crowd CAN result in great momentum plays … you don’t want to do so blindly.

The crowd-seeking I’m talking about – follow the herd, think later — is responsible for a lot of failed investments. It means you won’t pick up on a shift in the trend. Thus you’ll get your timing all wrong. You’ll often end up buying near the highs and selling near the lows.

With Crowd-Seeking Bias, even the best investing ideas can become a losing proposition.

The flip side is to be a contrarian. In other words, to buy the dip and sell the highs.
As we’ve established, though, it goes against our instincts. That’s why everyone isn’t Warren Buffett. But you can get his level of returns (or better) by checking your emotions at the door – and sticking with a pattern that works.

Instead, Go Bargain-Hunting

The premise is simple:

There’s an easy way to resist our tendency for crowd-seeking, and it’s to look for buys when a stock has become a bargain. And I don’t just mean “cheap”; I mean a good value.

In other words, look for a company that’s still growing like crazy — in terms of sales, operating margins, and especially earnings. Whenever its stock experiences a sell-off … then that’s a great opportunity. And those fundamental factors are exactly what I’ve designed my system to detect.
But, again, you only want the highest-quality companies.

Then you can shift the engine into reverse, too. When an investment starts to slip on these factors, it’s time to sell. (Especially when the crowd hasn’t caught on yet.)

In total, there’s 8 factors to look for. Apply them to the fastest-moving stocks around, and that’s the basis for my newest endeavor, Project Mastermind.

Once you have these 8 precursors in mind, the results can be phenomenal. For example …

Here’s a company called Arm Holdings:

This stock was going nowhere for several years. During this time, the company showed six of the eight precursors for Project Mastermind.

Then one March, things changed. Arm registered all eight precursors … and shortly after, the company’s stock took off. Shares jumped 182% over the next 11 months!

But in February of the following year, the company’s performance started to fade. Specifically, two of my precursors dropped off. That’s what Project Mastermind picks up on, and I decided to take this cue to get out. Shortly after, the stock flattened out.

With this Project Mastermind concept, we found:

  • Cognex Corporation for 101% gains.
  • DryShips for 320% gains.
  • Bitauto, which returned 209%.
  • And Ebix for 186% gains.

Now, that’s all in the past. But if you know anything about code, you know that it can be improved over time. That’s why I’m even more excited now than I was when my system identified those plays.

Project Mastermind Presentation Now Available

Operating margins, sales metrics, earnings projections … it all sounds pretty boring, I know. That’s exactly the point.

These factors don’t activate your feelings. They do activate something much more important: the system behind my new Project Mastermind.

Not a lot of people take the time to assess stocks this way – much less all 8 factors. So, it’s a great way to beat the Crowd-Seeking Bias we discussed today … and end up with better gains in half the time.

As promised, I’ll be back with my next entry in the Peak Performance Series at Market360. In the meantime, go here for the Project Mastermind recording & transcript.

Besides the glimpse at my system, I even reveal my #1 stock pick. Click here for details.

Author: Louis Navellier

Source: Investor Place: How to Get Better Returns by Ditching the Crowd

The markets are volatile this year. And that’s been pretty evident early in the week.

But the fact is, the Federal Reserve still has room to move and some of this bad news is simply from the U.S.-China trade war. It just seems dark because there’s little real direction in the global economy and it’s hard to know where we stand.

Remember, at many points this year the markets were rallying on news that U.S. and Chinese trade negotiators were going to talk. And that’s happening again this month, so I’m sure the markets will be in bull mode again then, if not before.

The larger point is, you need stocks that are going to keep chugging along during these volatile times. One of the best ways to do that is find a U.S. sector that will be around regardless of what happens — like healthcare.

The seven healthcare stocks that are still worth a “buy” here are the kind of stocks that will keep you calm when the markets aren’t. They’re niche companies that provide big growth now, and a growing markets share for years to come.

Healthcare Stocks to Buy: The Joint (JYNT)

The Joint (NASDAQ:JYNT) is a small, specialized chiropractic franchise company with the goal of creating a place for accessible and affordable chiropractic care for everyone.

Since its beginnings in 1999 — and its later recreation in 2010 — it now has more than 425 offices around the country. And it continues to grow.

This alternative treatment has become increasingly popular for chronic joint pain, rather than pain killers and surgery. Chiropractic care is often seen as a more affordable and less risky option as traditional Western medicine becomes more expensive for individuals.

The stock has been on fire. It’s up 615% in the past three years. And the franchise model means it can grow without the company taking on huge amounts of debt.

Fulgent Genetics (FLGT)

Fulgent Genetics (NASDAQ:FLGT) is another healthcare company that has the future in mind. When it was founded in 2011, its goal was to provide affordable genetic testing.

And since then, genetic testing has become a necessary tool in the next generation of pharmaceuticals — gene therapies. By understanding each patient’s genetic markers, doctors can now customize treatments for everything from cancer to depression.

Although it only has a market cap of $188 million, Credit Suisse, Piper Jaffray and Raymond James all cover the stock. That should give you an idea of how interesting FLGT is. There are companies an order of magnitude larger that don’t get coverage from the big brokerage houses. This is how you attract big money … a key factor in the stock strategy I’ve nicknamed “Money Magnets.”

And this attention is also seen in FLGT stock — it’s up 200% year-to-date. But it has a big future ahead.

Viemed Healthcare (VMD)

Viemed Healthcare (NASDAQ:VMD) is another niche player in the growing sector of home healthcare — healthcare that comes to you.

VMD is the largest independent, non-invasive ventilation therapy provider in the U.S. Basically, it provides home equipment and support patients with a variety of respiratory diseases.

And all the equipment is supported by 24/7 access to professional staff.

If that’s a bit to get your head around, this certainly won’t be. VMD has seen a compounded annual growth rate of 44% since 2010, according to its most recent investor presentation.

In 2015, this was a $48 billion industry. By 2023 it’s projected to be a $75 billion industry as baby boomers get older. And that’s just the beginning. Boomers are on a graying trend that will last for decades.

In 29 states, serving nearly 20,000 patients, VMD has a strong footprint in this sector and that means a lot of growth — or a buyout at a big premium.

Ensign Group (ENSG)

Ensign Group (NASDAQ:ENSG) is one of the larger healthcare stocks in the group, with a market cap of $2.2 billion. It has also been around for 20 years, so it’s testament to the growth that’s possible in niche healthcare services as baby boomers start to get older.

ENSG is involved in all aspects of home healthcare support services, from assisted living and rehabilitative care to hospice. These are all crucial services for people who aren’t necessarily interested in leaving their homes for assisted living facilities. And this demographic continues to grow.

And for those in facilities, ENSG is also involved with independent living and assisted living communities.

It operates 248 healthcare facilities, 24 hospice agencies, 25 home health agencies and seven home care businesses across a handful of states.

ENSG stock is up this year, but isn’t a high-flier like some of the younger companies. But it’s in the right place at the right time and is fairly valued. It also pays a dividend of 0.5%. In my Growth Investor model portfolio, we do maintain a healthy weighting in income — as I’ve found it’s the best way to smooth out your returns. My Money Magnets are, on average, yielding 4.1% now.


Catasys (CATS)


Catasys
(NASDAQ:CATS) has built a business in an emerging sector that looks to help people with untreated behavioral health conditions that worsen into chronic medical diseases.

In this world, CATS works with insurers and has developed its OnTrak program to help patients improve their lives so that they don’t end up with serious medical issues down the road.

These issues include everything from depression and anxiety to eating disorders to smoking.

CATS seems to be gaining traction now, especially as healthcare coverage becomes an issue of interest thanks to the coming election season. This is a valuable approach — whether things stay the same or coverage is expanded.

The stock reflects this optimism: It’s up 61% year-to-date.

NeoGenomics (NEO)

NeoGenomics (NASDAQ:NEO) operates cancer-focused genetic testing labs across the United States, Switzerland and Singapore.

Diagnostics are generally a big theme for me at Growth Investor. But the big potential with NEO is its ability to test various cancer genomes, which is one of the biggest sectors in the pharmaceutical industry now — and easily for the next five years.

With the amount of knowledge that has been gathered because of the advancement of numerous technologies, including raw computing power, the ability to look into a cancer in an individual patient to find tailored treatment is nearing.

Also, finding soft spots in cancers to exploit on a molecular level has huge promise as well.

NEO operates in two segments, one that provides services to pathologists for cancer patient diagnoses and one that supports research from pharmaceutical companies.

The stock is up 56% year-to-date, with a lot of investor support for the long term.

VolitionRx (VNRX)

VolitionRx (NYSEAMERICAN:VNRX) is another firm that is in the next-generation cancer sector. It develops blood-based cancer tests to diagnose various types of cancer.

Based out of Singapore, it has access to major markets in Asia, which will provide massive potential. And because it’s not a U.S.-based company, there isn’t the threat that it will become hostage to sanctions at some point.

If there is one healthcare system that has more growth potential than the U.S., it’s China. Providing healthcare to 1.4 billion people is a daunting task. And simple, quick and accurate solutions to challenging problems are very valuable.

Plus, China is also more interested in finding solutions within its sphere of influence moving forward, which helps VNRX.

The stock is up 182% year-to-date, which is evidence of its potential impact in the world’s biggest healthcare market.

There’s Another Important Piece of the Puzzle

While these stocks certainly have great growth prospects, dividends are also important these days, and here’s why.

These days, the global bond market is just going haywire: We’ve got falling and even negative yields overseas. But as investors retreat to U.S. Treasurys it’s causing bizarre effects here, too. Just look at what happened this summer, when the two-year Treasury actually began to yield MORE than the 10-year Treasury.

And even the 30-year Treasury can’t be relied upon for good yield anymore. In August, its yield dropped below 2% for the first time ever.

So — whether you’re managing big institutional cash, or your own portfolio — you’ll also want to look at my Money Magnets.
Not only did these stocks earn an “A” in my Portfolio Grader, thanks to strong buying pressure and great fundamentals …

The stocks also earn an “A” in my Dividend Grader. These stocks are able to pay great yields — and have the strong business model to back it up.

All in all, I’ve got 27 strong dividend growth stocks for you now, and one more coming, in Growth Investor … almost all of which yield more than the S&P 500. These stocks are poised to do well as we continue to see international capital flow to the U.S. markets. Click here to see how I found these stocks, and how you can get great performance out of YOUR portfolio — come what may.

Author: Louis Navellier

Source: Investor Place: 7 Next-Generation Healthcare Stocks to Buy

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