For Big Returns, Look for Smaller Players Profiting from an Industry Boom
When an industry is growing, investors may tend to go for the company that can boast the largest growth, or is simply the biggest player. That provides the perceived safety of a well-known name that other investors know about, as well as the best liquidity for getting out of a trade. However, that leaves investors with opportunities to profit from companies that may not be as large or well known, but can still post a massive profit. In the defense industry, the ...
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Look Outside of the Best-Known Names for Great Returns on Big Trends
During an investment boom, some companies tend to soar relative to their peers. That’s because the market perceives them as having the best advantage. However, for a big enough trend, multiple companies can become winners. That means investors have a second shot at investing in a big trend by following companies that can still benefit from that trend. And investors may have better returns buying these companies over the industry leader after it’s already had a big rally. For instance, in the ...
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Buy Industry Leaders on Bad News
Investors looking for market-beating gains can find them by buying and holding great companies over the long term. The trick is when to buy a great company. If a company is well run, leads its industry, and is profitable, getting a bargain is rare. But sometimes a share price might get knocked down a bit on some bad news. Even if it’s not a full-blown bear market, it could provide a short-term entry point for some quick profits on a turnaround. That ...
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Hedge Your Portfolio With this Recession-Resistant Giant
Investors remain concerned about a slowing economy. Inflation and unemployment have risen in recent weeks. While still off their highs from the past few years, it’s possible that the economy could slide further, even into a recession. For that scenario, investors don’t need to cash out or go to bonds, where they may still get hit by rising interest rates. Rather, it makes more sense to buy an industry leader with a track record of holding its value in a recession. That ...
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Don’t Overlook Stealth AI Plays
The market’s love of AI stocks has helped lead to a strong rally this year. However, investors have largely poured money into large-cap chipmaking stocks as a way to play that trend. Doing so overlooks companies that can see big improvements in productivity and returns by embracing companies using AI software themselves. Once the market figures out the opportunity at the software level, which doesn’t involve the expenses of producing physical hardware, returns could take off. One leader in the AI software ...
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Stick With Tech Companies that Can Deliver
Investors can often get caught up in tech trends before they move past the drawing board. That can lead to some stocks getting overvalued, and others getting undervalued. In the chipmaking space, companies developing AI chips have seen all the attention. But existing chipmakers that can still deliver critical chips outside the AI realm can also be valuable. And buying them now may give investors an edge going into the end of the year. For instance, wireless communications chip company Qualcomm (QCOM) ...
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Certainty Can Drive Stocks Higher
Investors don’t like uncertainty. They tend to give a company a lower valuation when its future outlook appears grim. That could occur for a variety of reasons, such as a series of poor earnings reports. Or there could be some kind of tax or legal overhang on shares. Resolving those issues could benefit shares. Besides providing an immediate boost, it could also set up a stock for a longer-term move higher. Investors who buy after the uncertainty immediately disappears can still ...
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Look for Long-Term Ideas Trading Near Lows Now
With stocks showing some seasonal weakness, investors may want to turn from volatile big-name companies near their highs. Instead, it may be time to look at stocks that are well off their highs, and could be set up for a strong year-end rally. Some companies in tech fit the bill. With the market’s interest in artificial intelligence-related stocks, the big winners could come from other tech trends that are still unfolding. For instance, this could be the first year that over half ...
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