Daily Gains Letter

Stock Analysis

Stock analysis is the application of a method or set of criteria to evaluate a company’s stock. This analysis can fall into several areas; more broadly this encompasses fundamental analysis, technical analysis, and quantitative analysis. Fundamental analysis covers the research of a company’s financial statements, its management, the marketplace, the firm’s competitors, and forecasts for the future of the business.

Technical analysis is the study of a stock’s chart. Someone using technical analysis wouldn’t look at the income statement, but would spend their time looking at the chart and indicators, such as volume, moving averages, and past market moves to forecast future stock moves. Quantitative analysis is when a computer is programmed to look for patterns using mathematics. Some examples of quantitative analysis can be found in statistical arbitrage or algorithmic trading.


Next Stock Market Crash Coming Soon?



Stock Market CrashA look at the charts makes me a bit nervous that the next stock market crash could be on the horizon. The fact is that the market has not witnessed a correction of any major proportions in excess of 10% since the stock market began to turn up in March 2009. Sure, we have had the occasional five-percent adjustments in stocks, but these periods of selling were short-lived, always followed by periods of buying support. I suspect we could be on the verge of another correction that could drive the major stock indices down to test their respective 200-day moving averages (MAs) after already breaching the key short-term 50-day MA. While we would all love to see stocks continue to creep to new record highs, this is not ... Read More



YUM! Brands: The Next Big Restaurant Stock Winner?



YUM BrandsYou can't blame newly installed McDonald's Corp. (NYSE/MCD) CEO Steve Easterbrook for not being enthusiastic about the fast food restaurant stock. I’m certainly not; you can see my negative view towards the seller of the “Big Mac” here. Even after Easterbrook's new strategy to turn things around, you can’t get angry at me for not getting too excited. (And then there’s YUM! Brands, Inc., which is looking pretty darn good in comparison—but more on that later.)

McDonald’s New Strategy Not Doing Much for Operations

What is McDonald’s doing to try to turn t ... Read More


Apple: Still a Stock Market All-Star?



Apple a Stock Market All StarI no longer own an “iPhone” and I don't have plans anytime soon to order the “Watch,” a smartwatch from Apple Inc. (NASDAQ/AAPL). Yet despite my personal needs, I do think Apple is the king of the mountain in the stock market’s technology space. Some are suggesting the iPhone will eventually meet its match, but I have yet to see this. Apple sold something like 74.5 million iPhones in its first quarter. This a huge number, and it could get even better if existing users of older iPhones decide to stay. I didn't; I switched to the “Samsung Galaxy,” which I feel is a comparable alternative to the iPhone. But this is not about my personal taste. The reality is that Apple ha ... Read More



Alibaba: A Threat to Google?



Alibaba A Threat to GoogleSome say Alibaba Group Holding Limited (NYSE/BABA) is the Google Inc. (NASDAQ/ GOOG) of China. And that is currently the case at this juncture...until Google can gain a foothold in the country’s Internet technology sector. But that will not be easy. Comparing Alibaba to Google in the technology sector at this time is difficult. If we could fast-forward a few years, the answer to which Internet starlet is a better choice would likely be clearer. Google is currently nearly twice as big as Alibaba based on market capitalization. This on its own doesn’t mean that Google is superior; however, I will explain why I think it may indeed be the better choice now in the Internet technology ... Read More



Restaurant Sector: Two Contrarian Players to Watch



Restaurant SectorWhy the Restaurant Sector

This may be a surprise to you, but one of the top-performing sectors over the past few years has been the restaurant sector. While there has clearly been some euphoric buying, the fact that we are seeing stronger job growth and rising home wealth in the U.S. has helped as well. If you look at the chart of the Dow Jones U.S. Restaurants & Bars Index, you can see the upward moves, highlighted by several breakouts along the way, including the recent breakout from the sideways channel. I doubt the gains ahead will be as dynamic for the restaurant sector, but there will continue to be opportunities to accumulate stocks on price weakness.

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Microsoft Stock a Better Choice Than Apple?



Microsoft Stock a Better Choice Than AppleIn the 1990s, Microsoft Corporation (NASDAQ/MSFT) was the toast of Wall Street and arguably one of the top technology growth stocks in the world, based on my stock analysis. At that time, personal computers (PCs) and laptops were the only computing devices around, as portable mobile devices were not widely developed yet. Microsoft, of course, developed the “Windows” operating system and associated applications. There was no real competitor at that time; Apple Inc. (NASDAQ/AAPL) was really not considered a valid threat yet, according to my stock analysis. In fact, Apple was on the fringe ... Read More



Fear of Ebola Now Creating Weakness in U.S. Stocks?



Ebola Scare Is Affecting U.S. StocksThe fear of Ebola has caused an increase in pressure towards the U.S. stock markets, particularly in the travel sector and aviation stocks. The concern is real, and if it is allowed to grow in the United States, Asia, or Europe, we could see a significant decline in travel demand that could impact the next few quarters, as my stock analysis would suggest. The impact on the aviation space has been evident already, as we have seen travel-related stocks come off their tops; albeit, much of this also has to do with the current stock market risk, based on my stock analysis. However, a big plus to the tra ... Read More



Banks a Better Play Than Market-Leading Tech Picks?



Bank Stocks Are Now Looking Good for InvestorsWhile it’s well known that technology has led the broader stock market higher, there is a safer and more conservative play for investors at this time, according to my stock analysis. Where? Investors may want to take a glance at the banking sector. Banks have dug themselves out of the financial crater that was imposed on the group by the sub-prime debt crisis back in 2007, which sent the global economy and banks into a massive tailspin, as is well represented in my stock analysis. But that was then. As my stock analysis indicates, the banking sector has been rallying over the p ... Read More



What You Need to Know to Profit from the Battle for Smartphone Supremacy



Profit from the Smartphone SectorApple Inc. (NASDAQ/AAPL) will launch its next-generation “iPhones” to the world on Tuesday and, while the expectations are high, it likely won't blow away investors or competitors, based on my stock analysis. In my view, it’s more about the apps and functionality of the smartphone, rather than screen size and aesthetics. Of course, Apple also has to deal with the embarrassing leak of private pictures from “iCloud” belonging to several celebrities last week. The company believes the leaks weren’t due to any flaw in its security system but that they were a result of targeted attacks. Apple has had secur ... Read More



China a Game-Changer for This U.S. Automaker



China an Especially Lucrative Move for This AutomakerThe superhighway that Tesla Motors, Inc. (NASDAQ/TSLA) is building across the United States appears to be taking shape with consumers and investors. The maker of the quick-charge electric-battery vehicle has recovered since taking a hit on growth and valuation concerns. The stock is still not cheap, but based on what is developing and its longer-term prospects, a stock like Tesla may be worth a closer look as an investment opportunity. Back in April, I suggested picking up some shares of Tesla as an investment opportunity at a price tag of $193.00. The stock ... Read More