Out Fox The $treet

Following a legendary investor into a stock can be a compelling proposition, but should investors actually do it? Recently, Carl Icahn has been in the news with huge gains from positions in Apple , Netflix, and Herbalife to name a few. One rarely mentioned position is the one that Icahn has been accumulating in Nuance Communications ( NASDAQ: NUAN     ) on each drop of the stock. While Icahn has been very successful with numerous positions, the biggest risk for somebody following his moves or any other legendary investor is that they can exit a position and cause the stock to crash before the small investor even knows what happened. Another major concern is chasing a position after somebody of the stature of Icahn files for a greater than 5% holding. Read the full article here . Disclosure: Long NUAN. Please review the disclaimer page for more details. 

The common perception by investors is that Steve Ballmer was a complete failure while CEO of Microsoft ( MSFT ) . Sure he could've done better at developing a mobile software strategy. Sure he could've done better at developing products to compete with Apple's ( AAPL ) slew of consumer gadgets that made billions over the last decade. Investors miss the point, though, that not only did Microsoft perform in line with the other technology powers from the 2000 technology bubble, but it wasn't a product design firm like Apple. Most investors forget that Apple designed the most appealing computer at the time so it was only staying within its core competency by building a iPod, iPhone and iPad. Microsoft though got distracted attempting to make products instead of focusing on developing software to dominate the mobile world. Instead, Google ( GOOG ) now dominates the mobile world with the Android even surpassing iOS from Apple. Read the full article at Seeki...

The secular decline of the PC market should make any investor question why Dell ( DELL ) should obtain a premium valuation to the LBO offer of $13.65. The company has limited traction in the mobile sectors of smartphones and tablets, suggesting the business is only getting worse, not better. The stock should've been hammered Friday on the report by David Faber on CNBC suggesting the operating income forecasts used to value the LBO will be cut. The stock though actually rose for the day to close at $14.31 and above the offer. Read the full article at Seeking Alpha. Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

This article is a continuation of a monthly series highlighting the top net payout yield stocks that was started in June (see article ). The series highlights the best stocks for the upcoming month. Please review the original article for more information on the net payout yield concept. December Returns Below are two charts highlighting the monthly returns of the top 10 stocks from December (see list here ). Due to limitations with YCharts, the chart was broken into the Top 5 and Next 5 lists. Read the full article at Seeking Alpha. Disclosure: Long AMP, COP, DTV, KSS, MSI, NLY, WLP. Please review the disclaimer page for more details. 

This article is a continuation of a monthly series highlighting the top net payout yield stocks that was started in June (see article ). The series highlights the best stocks for the upcoming month. Please review the original article for more information on the net payout yield concept. November Returns Below are two charts highlighting the monthly returns of the top 10 stocks from November (see original list here ). Due to limitations with YCharts, the chart was broken into the Top 5 and Next 5 lists. Read the full article at Seeking Alpha. Disclosure: Long AMP, COP, DTV, GS, KSS, MSI, NLY, WLP. Please review the disclaimer page for more details. 

This article is a continuation of a monthly series highlighting the top net payout yield stocks that was started in June (see article). The series highlights the best stocks for the upcoming month. Net Payout Yields Defined The net payout yield is the combination of the dividend yield and the net buyback yield added together to calculate the yield returned to shareholders. The net buyback yield adds stock repurchases and subtracts shares issued. The yield is calculated using the amount of buybacks over the last four quarters divided by the current market cap. Read the full article at Seeking Alpha. Disclosure: Long COP, DTV, GS, KSS, MSI, WLP. Please review the disclaimer page for more details. 

After the close on Tuesday, Dell (DELL) announced that the Board of Directors has adopted a dividend policy under which the company plans an initial dividend rate of $0.32 per share per year. Based on the current price, the dividend yield would be 2.7%. Considering the recent history of share repurchases, this move towards a decent dividend highlights the shift in mindset for the market. Dell has repurchased 14% of its outstanding shares over the last four years and considering the company trades at a sub 6 PE the logic would suggest continuing that plan. Why start a dividend now? The market, though, has increasingly stated that share repurchases don't work. Sure looking at Figure 1 below suggests that theory to be correct, but where would the stock price be if the company hadn't bought all those shares? The 2014 estimates around $2 would quickly drop to around $1.72 without the share reduction. Investors forget that these moves don't happen in a vacuum. Read the full ar...

In general my firm is very bullish on companies with stock buybacks and especially ones that contribute to reaching lofty net payout yields (combination of net stock buybacks and dividends). Studies such as  this one  show that buybacks contribute along with dividends to the ability to predict future alpha. Unfortunately the off-the-cuff results from the last 15 months suggest the hardware and communications equipment sub sector of tech doesn't benefit from buybacks, at least in the short run.  Read the full article at Seeking Alpha.  Disclosure: Long AAPL, CSCO, and MSFT. Please consult your financial advisor before making any investment decisions. Please review the disclaimer page for more details. 

Dell (DELL) handily beat earnings estimates but posted revenue numbers that were disappointing sending the stock down 8% in after hours. Reviewing the numbers, it's difficult to understand what the market wants out of companies today. DELL only has a forward PE of 8 so the expectations should be significantly lower than what the market apparently wants. DELL reported record cash flow of $2.4B for the quarter and $5.2B over the last four quarters. With an enterprise value around $22B, it only trades at 4x operating cash flow. Wow! The company has a record cash balance of $16.2B even after buying back $1.1B in stock during the quarter. Though DELL does have over $7B in debt. DELL remains very attractive on a valuation basis, but it appears to be a value trap where the multiple will never match the cash flow. Too many investors want revenue growth or nothing at all. The market remains incredibly binary. Results: Revenue in the quarter was $15.7 billion, ...

This article is the fifth in a  series  focusing on sectors that have struggled to recover from their pre financial crisis levels. Large-cap techs are one of the most hotly debated sectors today. With tech companies like Apple ( AAPL ), IBM ( IBM ) and Oracle Corp. ( ORCL ) trading significantly higher than 2007-08 highs, many investors expect the laggards to catch up soon while others expect them to slowly decline. The sector generally peaked at the end of 2007, so the companies mentioned have been down for over four years now. The sector is also very different from the others covered, since none of the companies were anywhere close to all-time highs reached in the internet bubble of 2000 when the crash started in 2007. Also, while these stocks remain below financial crisis highs, they aren't down as much as the other sectors, partly due to strong balance sheets loaded with vaults of cash. Read the full article at Seeking Alpha.  Disclosure: Long AAPL, CSCO, and MSFT...