Out Fox The $treet

Home Depot had a surprising quarterly report with only in line numbers. The home improvement retailer has seen a period of strong EPS growth topped by further multiple expansion. Several signs are starting to point towards the end of the glory days. Home Depot (NYSE: HD )  continued a recent tradition of raising EPS estimates, but the stock is trading down on the news. After years of outsized stock gains, one has to wonder if the glory days are over. Read the full article on Seeking Alpha.  Disclosure: No position. Please review the disclaimer page for more details. 

Lowe's produced surprisingly good Q1 results with comp sales growth finally topping rival Home Depot. The stock valuation remains stretched as the home improvement retailer spends less on capital returns and the stock hits new highs. The recommendation is to ride the stock higher, but investors need to soon lock in gains. My  investment theme  with  Lowe's (NYSE: LOW )  for several months now was that the valuation was stretched too far. The home improvement retailer proved me wrong with the Q1 results and the stock surged to new highs.  Read the full article on Seeking Alpha.      Disclosure: No positions mentioned. Please read the disclaimer page for more details.

After a weak end of 2015, the Net Payout Yields model on Covestor has seen a big rebound in 2016. After a couple of days in March, the model is up 0.6% for the year while the SP500 is down 2.8%. No trades took place in February with the last trade being selling Lowe's (LOW) and buying Qualcomm (QCOM) in early January. As Lowe's downsized buybacks and Qualcomm loaded up on buybacks with the stock selling off, the later became more attractive due to a higher net payout yield. Please contact Stone Fox Capital at info@stonefoxcapital.com  or contact Covestor to invest. Disclosure: Long QCOM. Please review the disclaimer page for more details. 

Lowe's generated substantial comp sales growth during Q4 due to warm weather over the holidays. The purchase of RONA, subsequent exit of an Australian business, and reduced stock buybacks are all warning signs. The recommendation remains to avoid the richly priced home improvement retailer benefiting abnormally strong comp sales growth. Despite generally positive  Q4 earnings ,  Lowe's (NYSE: LOW )  traded mostly tepid for the next couple of days. Even with the ongoing positive results, the stock is struggling per my  prior warning .  Read the full article on Seeking Alpha.  Disclosure: No positions mentioned. Please read 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 back in June, 2012 (see article ) and explained in August, 2012 (see article ). The series highlights the best stocks for the upcoming month. Please review the original articles for more information on the net payout yield concept. May Returns Below are two charts highlighting the monthly returns of the top ten stocks from May (see list here ). Due to limitations with YCharts, the chart was broken into the Top 5 and Next 5 lists. The Top 5 stocks had a strong May after a weak April. American International Group ( AIG ), DirecTV ( DTV ) , and Kohl's ( KSS ) had strong gains for the month that easily beat the 2.3% gain of the S&P 500. Seagate Technology ( STX ) though smashed those performances with a phenomenal 17.4% gain. The only disappointment was that L Brands ( LTD ) dropped 0.8% for the month. Read the full article at Seeking Alpha. Disclos...

This article is a continuation of a monthly series highlighting the top net payout yield stocks that was started back in June, 2012 (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. April Returns Below are two charts highlighting the monthly returns of the top 10 stocks from April (see list here ). Due to limitations with YCharts, the chart was broken into the Top Five and Next Five lists. The Top Five stocks had a disappointing month after a strong April. American International Group ( AIG ) and Kohl's ( KSS ) had solid gains for the month that easily beat the 2.4% gain of the S&P 500. Both Seagate Technology ( STX ) and DirecTV ( DTV ) performed ok with flat results for the month. The biggest problem was that Motorola Solutions ( MSI ) plunged 10.2% after an earnings warning. Read the full article at Seeking Alpha. Disclosure: Long all sto...

In a surprising turn of events on Monday, Sears Holdings Corporation (NASDAQ: SHLD ) investors completely ignored the surprising earnings guidance in favor of the news regarding the CEO leaving. The company reported that earnings would smash the analyst estimates of $0.86, but the market focused more on the replacement of the CEO due to family health issues. The stock plunged 6.4% on Tuesday as investors became concerned that more » Disclosure: Long SHLD. Please review the disclaimer page for more details. 

This model was up 0.01% in November versus a 0.3% gain for the benchmark S&P 500. The model slightly under performed the market in November, which can happen in solidly positive months. As of the end of November, the model was up nearly 20% for the year compared to 12.5% for the S&P 500.   In general, the model had a very uneventful month with flat returns and no trades. Bottom Performers While the model was flat for the month, several stocks had meaningful moves in November. The weakest stocks were Kohl’s Corporation (KSS), WellPoint, Inc. (WLP) and Entergy Corporation (ETR) . Kohl’s lost nearly 16% due to a weak earnings report at the end of the month. The stock plunged from nearly $51 to below $46 on disappointing sales. The company continues a large buyback and should be able to load up on shares at these attractive levels. WellPoint plunged at the beginning of November due to the re-election of President Barack Obama, which secure...

--> This model was up 4.8% in August versus a 2.0% gain for the benchmark S&P 500. The model rebounded sharply from a weak performance in July. Trades As mentioned previously, one goal of this model is to slowly trim the amount of positions back closer to 20 after reaching 26 a few months back due to mergers and partial positions. Hence, the model only made a sell during August to reduce the position total down to 24. Express Scripts (ESRX) was sold as the merger with Medco Health (MHS) led to the reduction of share buybacks. Considering the company doesn’t pay dividends, it left the Net Payout Yield (NPY) heading towards zero. The stock was sold at $62.49 on the spike higher following strong earnings. This sell further highlights the ability of the model to be opportunistic when a position no longer meets the set criteria. Instead of having a rigid sell point at a quarter end, the model is able to trade positions when the market presents an ideal time. ...

This model was down 0.5% in July versus a 1.3% gain for the benchmark S&P 500. Oddly the model has fluctuated a lot in recent months with large cap stocks in the model moving up or down 10% on earnings reports. While typical of smaller companies this usually doesn’t happen in companies with market caps exceeding $10B. Trades As mentioned previously, one goal of this model is to slowly trim the amount of positions back closer to 20 after reaching 26   due to mergers and partial positions. Hence, the model sold the remaining holdings in Home Depot (HD) and added to existing small positions in Hartford Financial (HIG) and WellPoint (WLP). Home Depot was unloaded as the stock finished a long run from October last year where the stock went from just over $30 to the selling price over $51. This considerable gain pushed the Net Payout Yield (NPY) down as the company dropped buybacks. Not to mention that competitor Lowes (LOW) remains a Top 5 holding. The two purcha...

This model was down 7.7% in May versus a 6.3% loss for the benchmark S&P 500. In a rare occasion, the model underperformed the market by more than 100 basis points. While disappointing, this does happen sometimes. The benefit is that the stocks with large buybacks are able to purchase more shares at these cheaper prices. Trade Only one major position change was initiated in May with the addition of Ameriprise Financial (AMP) in two transactions. The company has a spectacular net payout yield exceeding 15% with the dividend portion at nearly 3%. The other major transaction was switching out of Phillips 66 (PSX) and back into a full position on ConocoPhillips (COP) after the spinoff back in April. After some research, ConocoPhillips provides the higher guaranteed yields while Phillips 66 remained uncommitted on buybacks. A half position in Home Depot (HD) was sold to reduce exposure to the home improvement sector since both Home Depot and Lowes (LOW) had become t...

This model gained a solid 4.3% in March versus 3.1% for the benchmark S&P 500. The model remained strong all month even as the SP500 struggled toward the end of the month.   Trade March was a normal trading month for this model with only 1 trade initiated in order to reduce the cash balance. Time Warner (TWX) was bought as the stock flashed one of the highest Net Payout Yields in the over $10B market cap group with a huge buyback. The stock also maintains a strong 2.9% dividend providing for that investor class as well. For more details on why Time Warner was selected, please read this article . Top Performers The largest gains came from Lowes (LOW) , WellPoint (WLP) , Gap (GPS) , and Goldman Sachs (GS) along with several other stocks that had solid gains. Most of those stocks saw gains that exceeded 10%. Typical of a model that allows for trading signals based on an indicator such as the Net Payout Yield, a stock like Goldman Sachs was purchased ...

This report is very behind schedule this month, but I thought it was worth writing anyway. This model continues to work well and the word needs to get out more about the advantage of net payout yields over just focusing on dividends. November was yet another solid month, with a 0.05% gain for this portfolio, on both a relative and absolute basis, as the benchmark S&P 500 lost 0.51%. When the market has down months this model continues to shine and overtime the results become much more evident. For the last 12 months, the portfolio was up 12.72% versus the 5.63% for the benchmark. Despite all the volatility in the markets, the Net Payout Yields Model has had a great absolute and relative performance. Trades The model had only one trade in November. Lowes (LOW) was purchased on November 1st as the net payout yield (NPY) surpassed 16% at the end of October. While LOW only paid a dividend of 2.6% at the time, 2.3% now, the company bought back a significant amount of stock in the f...

After recent Q2 earnings reports, the market was  impressed  with the talk from Home Depot ( HD ) management and  disappointed  with Lowe's ( LOW ). According to most analysts including Mad Money host Jim Cramer, HD is winning the home improvement market. Click  here  to see the video where Cramer breaks down the two companies. It's very difficult to argue with Cramer or any other Wall Street experts. Sure investors can spends hours researching the stores, but ultimately both are great companies. Consumers tend to shop at the closest store and HD is restructuring so the better results at HD might just be a bounce back from lackluster results previously. Please read the full article at Seeking Alpha.  Disclosure: Long HD and LOW in client and personal accounts. Please review the disclaimer page for more details.