"The conditions are in place for a 'Best Buy' opportunity," says Jim Stack, whose buy signal should receive special attention give the accuracy of his sells signals which side-stepped the bear market.

In addition, the money manager and editor of Investech Market Analyst is beginning to increase his equity positions, such as Nike (NYSE: NKE). He states, "With a portfolio of iconic brands, an identified growth strategy, recognized innovation, and sound financial footing, Nike fits the bill of being a great company."

"Very rarely do we have all these conditions in place - that's only occurred five times in the last 45 years. Historically, this means we should give the growing evidence of a new bull market every benefit of doubt.

Continue reading Step up to Nike (NKE): A 'great company'

Step up to Nike (NKE): A 'great company' originally appeared on BloggingStocks on Thu, 02 Jul 2009 11:30:00 EST. Please see our terms for use of feeds.

"We are selectively taking advantage of deep values such as Waste Management (NTSE: WMI), which is selling at a compelling valuation," says Jim Stack, a safety-first money manager.

In his InvesTech Market Analyst he adds, "Waste Management displays the characteristics we search for in new investments including a distinct competitive advantage and solid financials.

"It is a giant in its industry; Waste Management is the largest solid waste management company in North America. Founded in 1894, it serves nearly 20 million customers.

"With the nation's largest network of landfills, Waste Management has significant pricing power and can charge fees to competitive waste haulers who don't own, or have access to, their own landfills.

Continue reading Waste Management (WMI): 'Deep value' in waste

Waste Management (WMI): 'Deep value' in waste originally appeared on BloggingStocks on Wed, 11 Feb 2009 10:30:00 EST. Please see our terms for use of feeds.

Written before yesterday's sharp rise, stock market historian and advisor Jim Stack had forecast an "imminent bottom" for the market. A long-term timer, he is not looking for quick pops and drops; rather, the "safety-first" money manager focuses on slowing positioning his portfolio for long-term, secular trends.

Indeed, in his InvesTech Market Analyst he was among the few to accurately forecast the current crisis; over the prior year and a half, he predicated both the bust of the housing bubble and the derivatives-based meltdown that would result.

After maintaining a defensive, cash-heavy portfolio during the market's downturn, he is now becoming more optimistic, noting, "All of our bearish extremes readings that precede the best stock buy opportunities are now in place."

Stack explains, "How can we put this bear market in historical perspective? No doubt about it, this bear market is a whopper - both in size and severity.

"With a 42.5% loss in the S&P 500 Index, it is rapidly closing in on the big bear markets of 1973-74 and 2000-02. In fact, no bear market in the past 70 years has declined over 50%.

"In severity, this bear has unfolded much faster than past bear markets, wiping out $6.7 trillion in stock values in barely 12 months - equivalent to over 90% of the loss in the 2000-02 bear market in two-fifths of the time

"In measuring impact on investors' portfolios, this bear has 'repossessed' more than 84% of the prior 5-year bull market gains! Both the DJIA and S&P 500 Index are back to price levels seen over 10 years ago in 1998.

"Why has the stock market decline turned so precipitous in the last few weeks? In bigger bear markets, investors always end up throwing out the baby with the bath water.

Continue reading Jim Stack: Market historian calls 'imminent' bottom

Jim Stack: Market historian calls 'imminent' bottom originally appeared on BloggingStocks on Wed, 29 Oct 2008 14:30:00 EST. Please see our terms for use of feeds.

"We continue to apply our value-oriented principles in selecting new growth stocks as we look for companies with superior profitability and strong balance sheets," says Jim Stack.

In his InvesTech Market Analyst, he and analyst Bruce Morison explain, "Our latest featured investment, Charles Schwab Corp. (NASDAQ: SCHW), is a prime example and stands out as a conservative way to access to opportunities in the battered financial group."

"We are increasing our equity allocation in stocks that should show strong relative performance in a market upturn.

"We continue, however, to be very selective in terms of quality, as well as downside risk. Over the past 20 years, brokerage/asset management firms have produced more than twice the return of the market following a bear market.

"The Charles Schwab brand is one of the most well-known and trusted names in the financial services industry. Its strategy is to be competitively priced, but more importantly to be positioned as the gold standard in client service and integrity.

Continue reading Charles Schwab (SCHW): Value play in 'battered' financials

Charles Schwab (SCHW): Value play in 'battered' financials originally appeared on BloggingStocks on Wed, 03 Sep 2008 10:35:00 EST. Please see our terms for use of feeds.

Money manager and newsletter advisor Jim Stack, well-known for his safety-first strategy, recently added Microsoft (NASDAQ: MSFT) to his model portfolio, noting, "We had wanted to increase our allocation to technology which has typically been a leading sector in new bull markets."

In his InvesTech Market Analyst, he explains, "This stock exhibits all the qualities we look for in a new purchase and is currently selling at a very attractive valuation."

"From its founding in 1975, Microsoft has become the world's largest software company with offices in over 100 countries. Its Windows operating system -which runs on 90% of all PCs currently in use - and for the Windows Office applications utilized by over 400 million users.

"This firm is extremely profitable with company-wide operating margins in excess of 40%. The Windows operating system and Office productivity suite have operating margins averaging closer to 70%.

"The company is completely debt free and generates over $1 billion in free cash flow each month. Management has done an excellent job of utilizing shareholder capital with a return on equity of over 40% compared to an average of 15% for S&P 500 companies.

Continue reading Microsoft (MSFT): A 'safety-first' tech play

Microsoft (MSFT): A 'safety-first' tech play originally appeared on BloggingStocks on Tue, 29 Jul 2008 10:51:00 EST. Please see our terms for use of feeds.

Jim Stack is well known for his "safety-first" approach to money management, focusing on a balance between risk and reward. In his InvesTech market Analyst, he notes, "We now see a window of opportunity in Waters (NYSE: WAT).

Here, Bruce Morison, consultant for Stack Financial Management, explains, "In a market overreaction to a weaker-than-expected fourth quarter, an opportunity has been created to invest in this high-quality company at an attractive valuation level.

"The stock dropped 20% when the company reported earnings that were $0.08 shy of the $1.06 estimate that Wall Street was forecasting. The shortfall was primarily a result of a higher-than-expected tax rate for 2007 and weaker sales in Japan.

"The Japan results reflected a change in government regulations for water testing. Our concern over this event is limited given that Japan accounts for less than 10% of the Waters' sales and is not a key growth market for the firm.

"A quick recap of the company ... Waters Corporation is a medium sized company based in Milford, Massachusetts which designs, manufactures, and services high performance liquid chromatography (HPLC) and mass spectrometry (MS) instrument systems.

Continue reading Waters (WAT): An 'environmental' investment

Waters (WAT): An 'environmental' investment originally appeared on BloggingStocks on Fri, 21 Mar 2008 13:00:00 EST. Please see our terms for use of feeds.