What's the source of your investment strategy? Many look to great investors like Warren Buffett for guidance on how to invest. Some take what we at the Fool call a "motley approach" and try a little bit of everything. Others really don't have an investment strategy at all. They just throw their money at whatever looks good at the time.
Here's another angle: Learn from successful companies. In other words, see what made a given company do well in the market and find others that exhibit similar attributes. There are plenty of companies to choose from, but let's see how this approach plays out with an example from the biotech world:�Vertex Pharmaceuticals (NASDAQ: VRTX ) . Here are three investment strategy lessons from Vertex's success.
1. Understand the market opportunity.
Even the best-run company in the world won't produce stellar returns if it operates in a sector with lackluster sales potential.�Before buying a stock, make sure you understand the market opportunity. Look at the realistic potential for sales and the strength of competitors. If all looks good, the stock can advance to your next stage of analysis.
Best Restaurant Stocks To Invest In 2015: Entropic Communications Inc.(ENTR)
Entropic Communications, Inc., a fabless semiconductor company, designs, develops, and markets systems solutions to enable connected home entertainment. Its products include integrated circuits and related software associated with home networking solutions based on the Multimedia over Coax Alliance standard; direct broadcast satellite (DBS) services; high-speed broadband access; and silicon tuners. The company?s products enable the delivery of various streams of high-definition television-quality video, standard-definition television-quality video, and other multimedia content, such as movies, music, games, and photos into and throughout the connected home. It serves telecommunications carriers, cable operators, and DBS service providers, as well as the providers of over-the-top services. Entropic Communications offers its products through its direct sales force, as well as through a network of sales representatives and distributors worldwide. The company was founded in 20 01 and is headquartered in San Diego, California.
Advisors' Opinion:- [By Evan Niu, CFA]
What: Shares of Entropic (NASDAQ: ENTR ) got crushed today by as much as 16% after the company reported earnings.
So what: Revenue in the first quarter added up to $74.5 million, which translated into non-GAAP net income of $300,000. That rounds to $0.00 per share, which was in line with consensus forecasts. CEO Patrick Henry acknowledged that 2013 will be a transitional year for the company.
- [By Lauren Pollock]
Entropic Communications Inc.(ENTR) said its board has authorized a $30 million share-repurchase program. The chip maker recently had a market capitalization of $394.1 million, according to FactSet.
Top Warren Buffett Stocks To Own Right Now: SPS Commerce Inc.(SPSC)
SPS Commerce, Inc. provides on-demand supply chain management solutions worldwide. It offers integration, collaboration, connectivity, visibility, and data analytics over the Internet using a software-as-a-service model. SPS Commerce, Inc. provides its solutions through SPSCommerce.net, a hosted software suite that enables suppliers, retailers, distributors, and other customers to manage and fulfill orders. The company?s platform delivers various solutions to suppliers and retailers, including trading partner integration, trading partner enablement, trading partner intelligence, and various peripheral solutions. It also operates Retail Universe, a collaborative online Website that facilitates relationships and communications with members of the retail ecosystem. The company was formerly known as St. Paul Software, Inc. and changed its name to SPS Commerce, Inc. in May 2001. SPS Commerce, Inc. was incorporated in 1987 and is headquartered in Minneapolis, Minnesota.
Advisors' Opinion:- [By CRWE]
SPS Commerce (Nasdaq:SPSC), a leading provider of on-demand supply chain management solutions, and Wicresoft, a leading global IT solution service provider specializing in providing consulting, information technology and business process outsourcing, and IT infrastructure services, have partnered to provide supply chain solutions in China, Hong Kong and Japan.
Top Warren Buffett Stocks To Own Right Now: Hospitality Properites Trust (HPT)
Hospitality Properties Trust, a real estate investment trust (REIT), engages in buying, owning, and leasing hotels. The company�s hotels are operated as Courtyard by Marriott, Residence Inn by Marriott, Staybridge Suites by Holiday Inn, Candlewood Suites, AmeriSuites, Prime Hotels and Resorts, Homestead Studio Suites, TownePlace Suites by Marriott, and SpringHill Suites by Marriott or Marriott Hotels and Resorts. As of June 30, 2005, it owned 298 hotels located in 38 states in the United States; Puerto Rico; and Ontario, Canada. The company�s hotels are primarily designed for business, governmental, and family travelers. As a REIT, the company would not be subject to federal income tax provided it distributes at least 90% of its REIT taxable income to its stockholders. Hospitality Properties was formed in 1995 and is based in Newton, Massachusetts.
Advisors' Opinion:- [By Markus Aarnio]
American Hotel Income Properties' competitors include Hospitality Properties Trust (HPT), RLJ Lodging Trust (RLJ), and Hersha Hospitality Trust (HT).
Top Warren Buffett Stocks To Own Right Now: Market Vectors Poland ETF (PLND)
Market Vectors Poland ETF (the Fund) seeks to replicate the price and yield performance of the Market Vectors Poland Index (the Index). The Index is a diversified index consisting of at least 25 companies either headquartered in Poland or deriving at least 50% of their revenues from Poland. It invest in sectors, such as financials, energy, industrials, consumer staples, telecomm services, materials, consumer discretionary, utilities, information technology and healthcare. The Fund�� investment advisor is Van Eck Associates Corporation. Advisors' Opinion:- [By Benjamin Shepherd]
Market Vectors Poland (NYSE: PLND) is a great exchange traded fund (ETF) play on the continued strength of the Polish economy.
Financial services figure prominently in the ETF�� holdings at 44 percent of assets, but that�� lower than other competing products and largely reflective of the major role the financial sector plays in Poland�� economy. More than 23 percent of assets are allocated to basic materials and energy due to the country�� resource wealth.
The ETF is also relatively cheap with an expense ratio of just 0.61 percent. It also offers the added benefit of a nearly 3.2 percent yield, thanks to the tradition of Polish stocks paying stable dividends.
What�� more, the fund is inexpensive in terms of valuation because it price has been depressed by the ongoing crisis in Ukraine. Both countries have historically been Russian satellites, but Poland was quick to integrate itself with Western Europe after the country�� communist government fell in 1989. As a result, it enjoys the diplomatic cover of the EU and the military protection of the North Atlantic Treaty Organization, making it unlikely that Russia will interfere in the country�� politics.
Despite those protections, the fund�� price-to-forward-earnings ratio has fallen from about 19 to just 14 over the past few weeks and shares are now trading at book value. Shares are also trading at just 0.58 times sales, a substantial discount to the fund�� historical valuation largely due to regional concerns.
Top Warren Buffett Stocks To Own Right Now: Kulicke and Soffa Industries Inc.(KLIC)
Kulicke and Soffa Industries, Inc. designs, manufactures, and sells capital equipment and expendable tools used to assemble semiconductor devices, including integrated circuits, high and low powered discrete devices, light-emitting diodes, and power modules. It also services, maintains, repairs, and upgrades its equipment. The company operates in two segments, Equipment and Expendable Tools. The Equipment segment manufactures and sells a line of ball bonders, heavy wire wedge bonders, stud bumpers, and die bonders. Its Ball bonders are used to connect very fine wires, primarily made of gold or copper, between the bond pads of the semiconductor device or die, and the leads on its package; Heavy wire wedge bonders are used in the power semiconductor and automotive power module markets; and Die bonders are used to attach a die to the substrate or lead frame, which will house the semiconductor device. This segment?s Stud bumpers mechanically apply bumps to die, while still in the wafer format, for some variants of the flip chip assembly process. The Expendable Tools segment manufactures and sells various expendable tools for a range of semiconductor packaging applications. Its products include capillaries, bonding wedges, and saw blades. The company?s customers primarily comprise semiconductor device manufacturers, outsourced semiconductor assembly and test providers, other electronics manufacturers, and automotive electronics suppliers in the United States and the Asia/Pacific region. Kulicke and Soffa Industries sells its products through manufacturers? representatives and distributors. The company was founded in 1951 and is headquartered in Singapore.
Advisors' Opinion:- [By Brian Pacampara]
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, chip equipment maker Kulicke and Soffa Industries (NASDAQ: KLIC ) has earned a coveted five-star ranking.
- [By Jake L'Ecuyer]
Equities Trading UP
Kulicke and Soffa Industries (NASDAQ: KLIC) shares shot up 8.95 percent to $13.76 after the company reported upbeat Q2 earnings and issued a strong Q3 revenue forecast.
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