Out Fox The $treet

Gilead Sciences continues a recent trend with limited revenue growth in Q3. The biotech has the pipeline to generate decent growth over the next 5 years. A boost to the capital returns could yield a 4% dividend and 10% EPS growth. For years,  Gilead Sciences  ( GILD ) has been plagued by declining sales form their crucial HCV drug franchise causing a painful few years for shareholders. The stock topped $120 back in 2014 and the company finally appears poised for a sustainable turnaround, albeit a minor one. Read the full article on Seeking Alpha.  Disclosure: Long GILD. Please review the disclaimer page for more details. 

IBM led the world in patents for the 26th consecutive year. The dividend yield sits at the highest level in over a decade at 5.2%. The stock continues to trade at only 8.5x forward EPS estimates. The Red Hat deal provides a potential catalyst with a new CEO. International Business Machines   ( IBM ) continues to lead the country in technology development that doesn't actually lead to meaningful revenue growth. The technology company does generate enough to reward investors with a 5%+ dividend yield and a stock trading at only $120 with a potential big catalyst from the Red Hat merger. My   investment thesis   remains bullish on this dip to $120. Read the full article on Seeking Alpha.  Disclosure: Long IBM. Please review the disclaimer page for more details.   

Intel (INTC) announced adding $15 billion to the share buyback plan bringing the total to $19.7 billion. On initial review, the amount isn't substantial enough to move the needle on the stock. Intel has a market cap of $215 billion so the total amount falls short of 10% of the outstanding shares. Based on history, the semiconductor giant isn't aggressive on share buybacks either. A net payout yield of 6.4% isn't impressive in a market with beaten down stocks. Besides, Intel wasn't that good with the last big buyback program in 2015 when the NPY topped 10% and the stock actually dipped. Stay tuned, more to come here based on whether Intel is actually aggressive buying shares on the dips. Disclosure: No position mentioned. Please review the disclaimer page for more details. 

Applied Materials (AMAT) spent the last year convincing people of a new normal in the semiconductor space, but the December guidance suggests the cyclical sector hasn't changed at all. - Downside Q1 guidance has revenue of $3.56B to $3.66B (consensus: $3.98B) and EPS of $0.75 to $0.83 (consensus: $0.93; -25% Y/Y at midpoint). Consensus was for a revenue decline so it wasn't like the market expected great quarterly numbers from AMAT. The odd part was the decision of the BOD to spend $751 million during the quarter on share repurchases. Any company expecting to miss estimates by such a wide margin should not be loading up on stock buybacks. The question here is whether the cycle has further downside. AMAT still expects solid profits so now isn't the time to runaway, but its too early until after Thanksgiving to even think about chasing the after-hours dip to $32. Lets see where AMAT trades on Friday.

Cisco Systems is now more appealing than originally thought at lower levels. The catalyst from the shift to software is still taking a long time backing the original bearish thesis. The ability to boost the net payout yield via massive stock buybacks has changed the equation. The stock offers a near 11% yield. My   view   on   Cisco Systems   ( CSCO ) was rather harsh as the networking giant saw the stock surge in the last year, but the actual quarterly results didn't improve significantly. The aggressive use of cash repatriated from foreign locations combined with solid execution on   recent earnings reports   has my view turning more bullish now. Read the full article on Seeking Alpha.  Disclosure: No position. Please review the disclaimer page for more details. 

Appaloosa and Senator sent letter to company requesting corporate changes that are rearview mirror leaning. The activists are right that a more focused and nimble company is needed to achieve better results. The company already has a plan that needs focus and any disruption from activists could be a negative on the existing plan for higher EPS targets in 2019/2020. Allergan  ( AGN ) is down 50% from all-time highs back in 2015 so understandably activists are agitating for changes. The time to make those moves was a few years back while now the biopharma needs to execute on the initiatives already set forward by the CEO. Read the full article on Seeking Alpha.  Disclosure: Long AGN. Please review the disclaimer page for more details. 

The airline stocks took a hit today due to some weaker than forecast numbers from Southwest Airlines (LUV) . Investors need to avoid the urge to dump airlines like American Airlines Group (AAL) and United Airlines (UAL) .

Anybody following my research knows that IBM (IBM) has been an attractive stock to own below $150 as the market missed the turnaround story and shift into new technologies like blockchain. The company issued a long-term model today at an Investor Briefing that should help the stock gain from here at $155.

IBM has longed focused on blockchain technology as a distributed transaction ledger of the future. The company continues to expand partnerships and develop a robust platform for enterprise customers. The tech giant is favorably valued for multiple expansion if blockchain becomes the hot technology of 2018. With all of the hype over cryptocurrencies and blockchain in the last month,  International Business Machines  ( IBM ) could make the name change to International Blockchain Machines and see a significant pop in the stock. Such a name change wouldn't be absolutely misplaced either unlike some of the small caps such as  Riot Blockchain  ( RIOT ) that recently made such moves and saw substantial stock gains in a matter of days, if not hours. Read the full article on Seeking Alpha.  Disclosure: Long IBM. Please read the disclaimer page for more details. 

Allergan recently missed Q3 estimates that should mostly be ignored. The growth pharma has a huge capital return plan that overrides current earnings weakness. The net payout yield will push into one of the top yields in the current market. Allergan  (NYSE: AGN ) hit our radar screen due to the combination of two key signals: plunging stock price and massive capital return plans. The market typically runs away from a stock at the wrong time and these contrary positions can signal the market has the situation wrong. The stock closed last week around multi-year lows of $195. With politicians increasingly attacking drug pricing and the costs in the healthcare system, are the capital return plans enough to consider buying the massive dips in Allergan from a high near $340 back in 2015. Read the full article on Seeking Alpha.  Disclosure: No position. Please review the disclaimer page for more details. 

United Airlines continues to post massive profits in relation to the market cap. Even at a slower pace, the airline is still repurchasing a large amount of outstanding shares. The recent rally only brings the stock up to more normal levels from which to launch another rally. Amazingly, the recent rally in  United Airlines (NYSE: UAL )  only brings the stock back up to levels from late 2015. In general, the airlines is seen in a better light now after strong results and new CEO Oscar Munoz gains momentum. Read a full article on Seeking Alpha.  Disclosure: Long UAL. Please review the disclaimer page for more details. 

Yum Brands recently announced a huge increase to the capital return plan. The details of the stock repurchase plan are highly misleading considering the purchases of stock prior to the split of the Yum China business. Once the split takes place, yield investors can better evaluate the deal offered to investors. In the midst of plans to split the China business into a separate company,  Yum Brands (NYSE: YUM )  plans massive capital returns to shareholders. Unlike other typical large-scale capital return plans, the stock actually trades near all-time highs. Read the full article on Seeking Alpha.  Disclosure: No position. Please review the disclaimer page for more details.

Pfizer is down sharply over the last couple of months culminating with a decision to not split into two companies. The company has a stock buyback plan, but chooses to use larger amounts of cash on making acquisitions such as paying $14 billion for Medivation. Pfizer isn't a horrible stock to own, but the signals don't suggest outperformance for the next year. At first glance, the multi-month drop in  Pfizer (NYSE: PFE )  appears to offer an opportunity. After all, the dividend is back to a respectable 3.5%. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details. 

Microsoft announced new capital return plans including an 8% dividend hike. The new stock buyback plan has limited ability to impact the stock considering the surging stock over the last few years. The net payout yield is average for the current market. After the close, Microsoft (NASDAQ: MSFT )  released  that the company will add to the existing capital return program. The total of the share repurchase program is attention grabbing, but investors need to consider whether the amount is actual impactful to the stock. Read the full article on Seeking Alpha.  Disclosure: No position 

Boeing has an order issue that most manufacturing firms would gladly accept. The massive backlog over rides any concerns regarding short-term order issues. The large capital returns suggest the stock remains undervalued. Any manufacturing firm lives off of orders so obsessing over monthly and quarterly numbers has some validity. A problem though occurs when investors don't view the big picture of the magnitude of the backlog. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details. 

Citigroup passes the 2016 stress test with flying colors. The bank stock took a huge hit due to Brexit. The bank is perfectly aligned to announce a big capital return increase as the stock hits recent lows. Despite strong CCAR results,  Citigroup  (NYSE: C ) ended down over 9% and is trading near recent lows around $40 due to Brexit. In essence, the bank is doing what it can but external events continue hammering the stock whether justified or not. Read the full article on Seeking Alpha.  Disclosure: Long C

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. 

The top 10 net payout yields had a larger loss than the benchmark index in December. The top 10 net payout yield stocks average yields of 19.2% to start January. Motorola Solutions continues to hold the highest yield at 37.6%. This article is a continuation of a monthly series, highlighting the top net payout yield (NPY) 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 utilized in part to make investment decisions for the Covestor model that has beaten the S&P 500 for four out of the last five years. Please review the original articles for more information on the NPY concept. Read the full article on Seeking Alpha.  Disclosure: Long AAL, GM, KSS, M, MSI, NTAP, QCOM. 

General Motors continues trading in a small range below $35. The fundamentals of the company continue to improve allowing for large capital returns in comparison to the market cap. The stock remains a solid buy providing a dividend yield over 4% to pay investors while waiting for the stock to bounce higher. For the last two years, the stock of General Motors (NYSE: GM ) has flatlined. The market has worried endlessly about waning demand in China and liabilities from the ignition switch issue amongst others. Read the full article on Seeking Alpha. Disclosure: Long GM. Please review the disclaimer page for more details. 

Macy's trades at multi-year lows following weak holiday guidance and other strategic decisions that disappointed investors. The stock offers surging yields with a huge stock buyback plan. The highly profitable department store offers a compelling investment after the recent disaster. It is rare for a stock with a market cap in excess of $15 billion to lose 14% in one day. Macy's (NYSE: M ) managed to accomplish that on Monday, following a huge guide down for the seasonally important Q4. The department store operator provided two key data points that disappointed investors and traders alike.          Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details.