The Motley Fool's Weekly Editors' Picks
Fools were out and about this week in an investing world jampacked with actions and ideas. Here are three articles you might find useful as you decide how to invest your money.
5 Signs of a Questionable Dividend
"Gone are the days when you could buy a dividend-paying stock simply because it's a blue chip and then forget about it until retirement." So said Todd Wenning, advisor of Motley Fool (UK) Dividend Edge. Bummer. That means investors will have to do more research to determine which stocks will help them best take advantage of the money-making power of dividends.
Todd talked about five red flags to watch for: an abnormally high yield, declining sales, a weak balance sheet, stalled dividend growth, and lack of dividend cover.
He uses Eastman Kodak (NYS: EK) as "a classic example of declining sales leading to dividend cuts," while Pfizer (NYS: PFE) had what proved to be an unsustainably high dividend yield well above the market and industry averages.
Read the article to find out more about how these red flags can help you build a strong portfolio.
Throw This Stock Away
Longtime Fool contributor Rick Munarriz has two simple rules for his weekly "Throw This Stock Away" articles. He (1) bashes a stock he thinks is heading lower and then (2) recommends three replacements for your portfolio. Who got tossed out this week? DreamWorks Animation (NAS: DWA) . "Its three marquee franchises are falling out of favor," wrote Rick. "The playing field is just too crowded."
In polling among DreamWorks and Rick's suggested replacements -- Netflix (NAS: NFLX) , Royal Caribbean (NYS: RCL) , and KIT Digital (NAS: KITD) -- Netflix was leading the Foolish pack within the first 24 hours. "As digital distributors replace studios as the true power brokers of Hollywood, Netflix will make out just fine," Rick wrote.
Check out the article to read all of Rick's reasoning, and then vote in the poll or leave a comment on that page.
Rising Star Buy: 5 Contrarian Picks
Motley Fool Rising Star Dan Dzombak put his money (actually, the Fool's money) where his mouth is by buying five big contrarian plays. Microsoft (NAS: MSFT) was the subject of this week's article.
"Microsoft is dominant in its market, is sitting on a boatload of cash (nearly $40 billion in net cash or one-sixth its market cap), and is cheap any way you look at it," Dan wrote.
Read the article to get all of Dan's insight. This Rising Star says his investing style can be called "concentrated value." He concentrates his capital on his best ideas and "counterbalances this concentration by using a large margin of safety."
At the time this article was published Fool online editorKris Eddyowns no shares of any stocks mentioned in this article.The Motley Fool owns shares of KIT Digital and Microsoft.Motley Fool newsletter serviceshave recommended buying shares of Pfizer, Microsoft, DreamWorks Animation, and Netflix; buying puts on Netflix; and creating a covered collar position on Microsoft. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool'sdisclosure policyreads to the end.
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