By SA Editor Jason Kirsch :
The following summary of our Editors' Picks for the previous trading day is a potential new feature that we're currently testing. Each article listed below has been selected by our editorial staff as a widely appealing and highly convincing analysis with a clear actionable takeaway. Please use the comment box at the end of this article to express your thoughts. We are grateful to hear your feedback.
Today's list features a comprehensive review on Apple ( AAPL ), a dividend analysis of Coca-Cola ( KO ), and an analysis of Berkshire Hathaway's (BRK.A) (BRK.B) cash position as compared to Warren Buffett's recent statement, among other articles.
Picks Of The Day
Apple Stock: Focus On The Big Picture by Andres Cardenal, CFA
With all of the investors interested in Apple stock , it's bound that many will get caught up in short-term forecasts. Andres Cardenal argues that doing so is a mistake. In this article, he focuses on the company's key fundamental drivers to prove that the tech company is a good investment. Cardenal's analysis is a must read for Apple investors or anyone considering taking a position in the tech giant.
Tags - CFA, Fundamental Analysis, Long Ideas
Source: Coca Cola
Coca-Cola Brand And Dividend Soak Up Syrupy Capital Gains by David J. Waldron
David Waldron argues that Coca-Cola, while perpetually overpriced, should be in every long-term investor's portfolio because it is, well, Coca-Cola. The author notes that there is some uncertainty behind the actions of the new CEO, but either way, Coca-Cola's economic moat, strong balance sheet and payout strategy continues to make KO a great long-term dividend play. Better yet, it is historically less-volatile than the market, making it a strong defensive holding if the market experienced a correction.
Tags - Dividend Plays, Long Ideas
Is Warren Buffett Leading Investors Or Misleading Investors? By Gary Gordon
The author debates whether Buffett, who has always been a strong independent, second-level thinker that focuses on protecting his downside is making the right decisions (holding a lot of cash) at this point in his career. He uses Buffett's words of wisdom as leverage to show the uncertainty in today's market and nudges investors to proceed with caution. Overall, the economic evidence presented in this article is valuable for any investor that values fundamental indicators.
(Source: General Electric)
GE's John Flannery Puts Another Distraction Behind Him by John M. Mason.
The blue-chip company has been making headlines lately when it made major changes to its executive management team. In addition to removing three top executives from the ranks, the company's new chairman and CEO, John Flannery, has recently placed Ed Garden, co-founder of Trian Fund Management, an organization that has a 0.82 percent stake in GE ( GE ), on its Board of Directors. Mason believes that this action is so that GE avoids distractions of a potential proxy fight, which would disrupt the company's recovery. The author notes that expectations are high for Flannery and that GE could take a serious hit if things don't work out.
Tags - Corporate Governance, Catalysts
Retire Smarter: Sun Communities Tallies Hurricane Damage by George Schneider.
This article was a response to another contributor who mentioned that Hurricane Irma negatively affected this REIT that owns and operates recreational vehicle communities down south. The author argues that this is not the case, and that it turns out that Sun Communities' ( SUI ) major properties are not only still in good shape but fully covered by insurance. While the stock took a small dive in the midst of the hurricane, it seems to have recovered.
Tags - Hurricane, REIT, Dividend Ideas
(Sources: New Constructs, LLC and company filings)
Dentsply: An Example Of Misaligned Incentives Leading To A Bad Outcome by David Trainer
In this highly detailed article, contributor David Trainer argues that those interested or already invested in Dentsply ( XRAY ) should proceed with caution. In addition to recently overpaying for a competing company, unreasonable market expectations make this stock a risky play.
Its synergies expected by many investors have not materialized and revenues look weak. Management is struggling to keep margins steady and are receiving highly favorable compensation packages that aren't aligned with its shareholders' best interests. ROIC figures are declining and there's not a significant positive catalyst on the horizon to buffer a potential downfall.
Tags - Short Idea, Mergers and Acquisitions
(Source: Hercules Capital)
VC Tech Exposure With 10% Yield by BDC Buzz
In this article, the author explains both why he recently sold his position in Hercules Capital (HTGC) and why he may repurchase in the near future. The VC firm is yielding 10% with a high credit quality portfolio, argues the author. The BDC lists some recent developments of the company's holdings and argues that its pending approval to be externally managed may have a negative impact on dividend coverage going forward. The BDC lists dozens of quotes by management supporting their recommendation that dividend investors should conduct further analysis before making an investment decision.
Tags - Externalization, VC Firm, Dividend Ideas
A Lecture On Financial Markets 101 by Ploutos
The author communicates parts of a recent speech that he gave to students and faculty at his former high school. He discusses important topics such as opportunity cost, risk, diversification, the principle of compounding and investor behavior. His advice is valuable for even the most experienced investor.
Tags - Portfolio Strategy, Investing 101, Fundamental Analysis, Psychology, Behavioral Economics
Primer: What Is A CEF Rights Offering (+UTG Case Study ) by Stanford Chemist.
With Reeves Utility Income Fund's (UTG) rights offering on the horizon, the author provides a valuable primer on CEF rights. In the article, Stanford Chemist explains what they are, how they're traded and how they should be handled by investors. It's a valuable piece for anyone considering purchasing these securities.
Tags - CEF Rights, Dividend Ideas
Archrock Partners' Place In The Oil Industry - Darren McCammon's Idea Of The Month by Darren McCammon
The US will go from having a little too much volume of natural gas to not having enough, which will benefit Archrock Partners (APLP), according to Darren McCammon. He shares his views in a video interview on Cheddar.
Tags - Long ideas, Basic Materials, Oil And Gas Equipment & Services
Source: Simple Digressions
Amerigo Resources: De-Risked And Strongly Undervalued Base Metals Play by Simple Digressions - PRO Pick of the Day
Simple Digressions makes the case for Amerigo Resources (ARREF) as a small company that benefits from a relationship with one of the world's biggest copper producers. An off-the-radar gem, perhaps.
Have any thoughts about these articles? Email us at email@example.com and we'll do our best to get back to you quickly. Check out yesterday's edition if you'd like to catch up on our Editors' Picks.
In the comment section below, let us know which articles you thought were the most convincing and valuable to our community.
See also The Lower Volatility Stock Portfolio For Retirees And Others on seekingalpha.com