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Value Investing Outlook for the 2nd Half of the Year

So far, value stocks have underperformed in 2018 especially when compared to FANG stocks and other higher growth names in the market. This underperformance makes sense since most value stocks were either overvalued or priced for perfection entering the year. The good news for value investors is that underperformance in 2018 has made valuations more […]

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Facebook Shares Could Gain More In 2018 Than Its 55% 2017 Return

After a stellar 55% return in 2017, Facebook (NASDAQ: FB) shares have the potential to return even more for investors in 2018. With the company set to announce its Q4 2017 earnings after market close on Wednesday, January 31, investors will be paying close attention to not only how the shares perform against analyst expectations, […]

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Facebook Trades At A Similar Valuation to Google, Despite Growing Twice As Fast

  When comparing two companies in the same industry, investors are usually willing to pay a higher P/E multiple for faster growth. Since the investor is getting more earnings growth from the faster growing stock the investor usually has to pay a premium vs. its slower growing counterpart. In the case of Facebook and Google […]

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Consumer Staples Stocks Sport High Yields, But Stay Away For Now

At first glance, buying shares in dominant global consumer staples stocks that have dividend yields of over 3.5% may seem too good to pass up. Such is the case with many household consumer staples companies such as Coca Cola (NYSE: KO), Proctor and Gamble (NYSE: PG) and General Mills (NYSE: GIS). The yields are appealing […]

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Is Facebook The Cheapest Stock On Wall Street?

As a value investor, I seek to invest in companies which have large market share, solid growth, and trade at a compelling valuation. However, these investments are rare because most times companies with these characteristics trade at very high valuation multiples, repelling most value investors. Facebook (NASDAQ: FB), the most dominant social networking company in […]

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Don’t Follow the Herd

  As tempting as it is to join the herd and buy stocks based on perceived government policy changes, savvy investors should pay more attention to company earnings.  There have been some shifts in the financial landscape post election that will increase earnings for some sectors, most strikingly the sharp rise in interest rates, yet […]

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Dial Up Big Gains With Verizon Stock

  One month ago Verizon agreed to pay $4.8 billion to acquire Yahoo’s core operating businesses. The deal received a lukewarm reception in the investment community, and the price of Verizon shares, which traded at $56.10 on the day of the announcement, have since fallen to a current share price of $53.5. In terms of […]

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Why the Rally in Facebook Stock Could Just Be Getting Started

Facebook stock is hitting all-time highs after the world’s largest social network posted earnings after the bell Wednesday that handily beat estimates. Facebook reported adjusted earnings of $0.97 per share vs expectations of $0.82  per share. Although Facebook stock has appreciated significantly so far in 2016, here are three reasons why the rally may just be […]

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Ideal Asset Management Quoted in The Wall Street Journal

Rahul Shah , CEO of Ideal Asset Management, shared his views on Facebook stock with The Wall Street Journal: …“There’s a common misconception that the law of large numbers will prevent Facebook from growing further,” said Rahul Shah, chief executive of Ideal Asset Management, who says Facebook accounts for about 40% of his allocation. “But […]

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Brexit’s Impact on US Earnings Season

  As the stock market has largely digested the fallout from the Brexit relatively unscathed, attention is likely to shift to US earnings, which begin in earnest in less than two weeks. The effects of Brexit have led to two immediate ramifications for US earnings: a stronger US dollar versus the British Pound (and to […]

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Biotech Bloodbath Set To Continue On Wall Street

The biotech sector has paid investors handsomely over the past several years, but recent negative headlines, unrealized innovations and sharp stock declines suggest that the tide is turning for the worse. Over the past five years, investors bid up shares as increased drug pricing and a relaxed regulatory environment lead to strong earnings growth for […]

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Ideal Asset Management CEO featured on thestreet.com

Rahul Shah, CEO of Ideal Asset Management, shared his views on a number of stocks with an interview on thestreet.com. He shared his views on  Facebook, Walmart, Norfolk Southern, and Fedex. To see the interview click here: http://www.thestreet.com/story/13555083/1/why-you-should-watch-out-for-walmart-but-buy-facebook-fedex.html

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Avoid Norfolk Southern Shares — More Room to Fall

Recently, Canadian Pacific dropped its bid for Norfolk Southern, removing one of the last hopes that investors had for a rebound in this struggling railroad stock. Norfolk Southern has seen its rail volumes decline substantially due to the collapse in energy prices that have shocked the markets over the past several quarters. Although energy prices […]

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Don’t Diversify for the Sake of Diversification

Investors have heard it all before “in order to reduce risk one must diversify stock holding in different sectors”. Another long held view is “no more than 5% of one’s portfolio should be in any single security”. In most markets this advice makes a lot of sense. In today’s stock market however, diversification for the […]

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Facebook Stock is Downright Cheap

Finding bargain stocks in today’s market is like finding a needle in a haystack. Most growth companies that are performing well are trading at high valuations. Meanwhile, many stocks that look cheap on a valuations basis are increasingly looking like value traps. However, there are diamonds in the rough. Facebook in particular seems to be […]

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What Will The Fed Do Next?

The Federal Reserve Board raised short term interest rates by a quarter point at its last meeting on December 16. Although the stock market reacted favorably on that day, stock prices have dropped sharply along with the price of oil in the early weeks of the new year. With stock markets around the world experiencing […]

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A Shift In Consumer Spending Habits

This Holiday Season has shown a shift in consumers’ spending habits, largely influenced by the increased reliance of mobile phones. Shopping holidays such as Thanksgiving, Black Friday, Cyber Monday and the week leading up to Christmas, are now influenced by the e-commerce trend. Consumers find online shopping more practical, to avoid long lines, crowded parking […]

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Oil Below $40, Should You Buy The Dip In Energy Stocks?

On December 8, Brent Crude oil fell below $40 a barrel for the first time since March 2009. As a result, the drop has sparked major conversations with concerns that oil may drop even lower than it did in this year. The drop in oil prices was largely triggered by an oversupply of oil in […]

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Exploring Cord Cutting With Rahul Shah, CEO of Ideal Asset Management

Rahul Shah was recently interviewed by Viraj Shah from InvestCorrectly about cord cutting. The following in an excerpt from the interview: This an interview with Rahul Shah, CEO of Ideal Asset Management. In it we discussed a number of cord cutting topics related to Netflix, Inc. (NASDAQ:NFLX), DISH Network Corp (NASDAQ:DISH), and the cable companies. […]

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The Race To A $1 Trillion Valuation

The race to become the first $1 trillion market cap U.S. company comes down to Apple, Google and Facebook. As it currently stands Apple’s market cap is $665 billion, Google’s market cap is $530 billion, and Facebook’s market cap is $300 billion. The non-gaap estimated 2016 PE ratios for the three companies are 11x for […]

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Facebook And Mobile Advertising

  Facebook And Mobile Advertising Consumers are now turning to their cellphones to purchase products, often on a whim – and the data highlights this as this year, mobile advertising revenue was 76% of total advertising revenue, up from 72% last year. The shift to mobile advertising, sparked by a migration to smartphones over laptops, […]

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US Consumers Stronger Than Market Thinks, Says Ideal Asset CEO

Ideal Asset Management’s CEO, Rahul Shah, gave his views in an interview with thestreet.com. He shared his on views on three stocks: Fedex, Apple, and Facebook. To watch the interview and read the accompanying blog post click here.

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The Cord Cutting Trend: What Are Investors To Do?

  How is “cord-cutting” affecting the media industry? The media industry is quickly changing as the “cord-cutting” phenomenon impacts traditional TV services and revs up the competition among streaming services and pay-TV. The phrase “cord-cutting” refers to pay-TV subscribers canceling their subscriptions for what they believe are more accessible and more cost effective options such […]

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Emerging Market Weakness to Infect US Markets? — Part II

Emerging Market Correction Blog Series Rising Rates and Currency Weakness As we explored in our last post – stock market investors have been roiled in 2015 by increased volatility. We at Ideal Asset Management see this as a result of a slowdown in emerging markets which was exacerbated by China’s decision to devalue its currency […]

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Emerging Market Weakness to Infect US Markets?

Emerging Market Correction Blog Series Oil, Jobs, and Earnings Stock market investors have been roiled in 2015 by increased volatility. We at Ideal Asset Management see this as a result of a slowdown in emerging markets which was exacerbated by China’s decision to devalue its currency in August. Emerging market weakness can be seen in […]

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3 Things to Watch for During Earnings Q2 Earnings Season

Earnings season has gotten off to a nice start with shares of Netflix and Google both surging after they beat their earnings estimates. Even Philip Morris International, which is heavily exposed to currency risk, beat the street. As earnings season continues to unfold, investors will be scrutinizing corporate results as well as the stock market’s […]

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3 Forces To Keep Stock Prices Rising

As the bull market rolls on, investors must come to grips with the fact that stocks as an asset class are no longer cheap. Does this mean that the bull market will end soon? Not necessarily. With a host of potential market pitfalls on the horizon, the prudent investor may want to raise cash levels […]

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Growth Stocks vs. Value Stocks: Who Wins In Today’s Market?

In the current market environment growth stocks may outperform value stocks. While value stocks tend to generate more free cash flow and pay higher dividends than growth stocks, some growth stocks have lower PEG Ratios (price earnings to growth rate) than their value counterparts. Over time, growth stocks can provide more capital appreciation than value […]

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The Stock Market is at a Crossroads

The U.S. stock market is at a crossroads. Valuations have reached long term historical averages reducing the chances of outsized gains. Meanwhile, the U.S. economy continues to add over 200,000 jobs monthly. Strong consumer confidence is indicating continued earnings growth for U.S. corporations. Amid this backdrop, the stock market has been oscillating between gains and […]

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Stay Away From Coke and Pepsi Shares, Macy’s A Much Better Buy

Ideal Asset Management’s CEO Rahul Shah shared his views on Coca-Cola, Pepsico and Macy’s in a video interview for TheStreet.com. Rahul Shah explained why he is bearish on Coca-Cola and Pepsi, while he is bullish on Macy’s shares. A link to the full video is below: http://www.thestreet.com/video/13085074/stay-away-from-coke-and-pepsi-shares-macys-a-much-better-buy.html?puc=yahoov&cm_ven=YAHOOV

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Are Coca Cola and Pepsico Fizzling Out?

Coca Cola (NYSE:KO) and PepsiCo (NYSE:PEP) are widely held blue chip companies that investors buy for their low volatility, long term capital appreciation, and as a source of additional income. They both provide large dividend yields, which have increased their appeal in today’s low interest rate environment. Currently the stocks trade at elevated valuation multiples […]

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Currency Headwinds Present New Buying Opportunities

As earnings season winds down, the strength of the US dollar has created significant headwinds for many multinational US corporations, while at the same time creating new potential buying opportunities for investors in the long-term. Leading the charge in these currency headwinds has been the continued weakness in the Euro, as many US companies derive […]

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The Real Price of Low Oil Stocks – Don’t Get Stuck in a Value Trap

With the price of oil down nearly 50% from its highs, investors are recommending buying oil stocks in hopes of a rebound. While this may seem like an opportunity to jump on, from our point of view it’s too early in this continuing oil story to step in and buy at these levels. Earnings for […]

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Facebook, Bed Bath & Beyond Are Poised to Impress in 2015

Ideal Asset Management’s top holdings, Facebook, Viacom, Bed, Bath and Beyond, were discussed in a recent conversation between CEO Rahul Shah and TheStreet.com’s Gregg Greenberg.  Rahul Shah explained why these stocks are poised to outperform in 2015. To see the full video click here: http://www.thestreet.com/story/13018319/1/facebook-bed-bath-beyond-are-poised-to-impress-in-2015.html?puc=yahoo&cm_ven=YAHOO

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Short Term Pains Equal Long Term Gains

With the S&P 500 down nearly 3%, stocks have had a tough start in 2015. Macroeconomic forces are creating fear in the marketplace with investors choosing to sell now and ask questions later. The price of oil has fallen below $50 a barrel, 10-year treasury yields have fallen below 2%, and news of slow growth […]

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Terror Fears Among 10 “Gray Swans” That Could Upend 2015 Market

Ideal Asset Management’s CEO Rahul Shah was quoted in a Marketwatch article published on January 9th titled “Terror Fears Among 10 ‘Gray Swans’ That Could Upend 2015 Market” Excerpts from the article incude: Typically, when the U.S. begins a military intervention, oil prices rise and the dollar strengthens, while stocks and U.S. Treasury yields fall, […]

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Top Stocks for 2015

After another strong year for the S&P 500, bargains are harder to come by. However, the backdrop of an improving economy, low interest rates, and reasonable valuations, presents the astute investor with opportunities to generate strong returns. We believe there is a significant chance of a pullback in the market next year, which would present […]

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Investing in Volatile Markets

Over the past couple of months, the U.S. stock market experienced increased volatility; on September 18th, the S&P 500 closed at 2011.36 and on October 15th, it fell to 1862.49, followed by a swift rebound to a new all time high of 2031.21 on November 6th. At Ideal Asset Management, we believe it is in […]

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Investing in Companies Before They Boom

CEO Rahul Shah had the opportunity to meet Chris Latham and discuss some of his investment philosophies in an article titled “Investing in Companies Before They Boom”. Shah discussed some of his previous undervalued purchases, namely Marvel.  He spoke about purchasing the company before Disney acquired it. Latham states, “That’s what Rahul Shah did when […]

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The Case for Viacom

While shares of Viacom (NYSE: VIAB) are down over 20% year to date, we feel the stock is poised to outperform going forward. The case for investing in Viacom includes its low valuation, large stock buyback program, consistent stream of affiliate fees from cable providers, strong film slate at Paramount Pictures, and increased revenue from […]

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Facebook Heading Higher

Ahead of the 3Q 2014 Facebook (NASDAQ: FB) earnings results and call, we at Ideal Asset Management believe that year over year (YOY) Facebook earnings growth will be faster than the 25% YOY currently predicted by analysts (according to Yahoo! Finance). Below we have outlined a few catalysts we believe will contribute to Facebook’s expedited […]

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Bed Bath and Beyond Stock: Buy While Within Reach

Flying JetBlue has been a great source of excitement. Yes, Terra Blue potato chips are delicious. Also, purchasing a sleeping kit was a luxury my wife and I gave ourselves every time we flew. Obviously, we wanted to be comfortable in our seats; but also, my wife was happy to get a Bed Bath and […]

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Time To Like Facebook!

Shares of the largest social network have dropped substantially from a high of $72 to a recent price of $59 in a matter of weeks. Interestingly, there has been no news which has changed its compelling growth story.  Facebook has made a couple of large acquistions recently; messaging service Whatsapp for $19 billion and virtual […]

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Starz – A Shining Opportunity

Starz is an interesting investment at current levels. Starz is a premium cable channel which is available for an extra cost per month by most cable providers such as Comcast, Time Warner Cable and Verizon Fios. Starz has long-term contracts with built in price increases with these cable providers providing a consistent stream of revenues. […]

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The Case For Adding Bank Stocks

Looking at the valuations of defensive stocks vs. cyclical stocks, the best gains may come from cyclical stocks. The best forward returns are likely to come from bank stocks such as JP Morgan Chase and Wells Fargo. These stocks come with more than their fair share of risk.  However, the potential gains prove they are […]

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Dollar General – A Compelling Buy

An important factor in finding a great investment is finding a company with long-term consistent growth. A long track record of success usually indicates a business model that thrives in any economic environment. Such companies are attractive investments because the likelihood  they will experience a substantial drop in earnings is minimal. Some of the best […]

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Free Cash Flow – A Valuable Tool

  Free Cash Flow is one of the most instructive financial metrics used to determine the financial health of a company. It is financial jargon for what is left over when one subtracts the amount of cash needed to run a business (called Capital Expenditures) from the amount of cash it generates (called Cash Flow […]

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It’s All about the Material!

When I was younger my mother would excitedly ask me to guess how much she paid for a sweater that she had bought from the store. My mom was, and still is, always looking for bargains. I would guess an absurdly low number. I would exclaim “I don’t know, 15 dollars?”. However, I was dead […]

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