Connect with us

Business

Growth VS Value Stocks: Which Will Give You A Return?

Avatar

Published

on

Growth VS Value Stocks: Which Will Give You A Return?

A long-standing division

McDonald’s and Starbucks both make incredible amounts of money.

What’s the difference between them, if any?

Well, some analysts would say that McDonald’s should be labeled a value stock.

Conversely, Starbucks would be a growth stock.

 

Growth stocks are self-explanatory.

They’re the ones that are growing like crazy.

Everybody wants in on the action.

Their habitat of choice is the technology industry.

There, you can find an environment rife with speculation to drive up share prices.

Most of the products there are relatively new, meaning no one knows what their limits are.

When things go out of control in the wrong direction, they sometimes call it negative growth.

“People will remember as a stock which grew…right into the ground. Like roots.” Poetic, you might suppose.

[ms_divider style=”normal” align=”left” width=”100%” margin_top=”30″ margin_bottom=”30″ border_size=”5″ border_color=”#f2f2f2″ icon=”” class=”” id=””][/ms_divider]
[ms_featurebox style=”4″ title_font_size=”18″ title_color=”#2b2b2b” icon_circle=”no” icon_size=”46″ title=”Recommended Link” icon=”” alignment=”left” icon_animation_type=”” icon_color=”” icon_background_color=”” icon_border_color=”” icon_border_width=”0″ flip_icon=”none” spinning_icon=”no” icon_image=”” icon_image_width=”0″ icon_image_height=”” link_url=”https://offers.thecapitalist.com/p/warrenbuffet/index” link_target=”_blank” link_text=”Click Here To Find Out What It Said…” link_color=”#4885bf” content_color=”” content_box_background_color=”” class=”” id=””]Warren Buffett Just Told His Heirs What He Wants them To Do With His Fortune When He Dies. [/ms_featurebox]
[ms_divider style=”normal” align=”left” width=”100%” margin_top=”30″ margin_bottom=”30″ border_size=”5″ border_color=”#f2f2f2″ icon=”” class=”” id=””][/ms_divider]

Slow and steady wins the race

In the other corner of the ring, there are the value stocks.

Often, they were the growth stocks of yesterday, but one way or another, their share price has taken a hit. It’s the circle of life.

Let’s say a viral video popped up of a cute puppy getting a stomachache from a brand of dog food.

After that, this stock gets tossed into the DVD bargain bin alongside last year’s B-list romantic comedy.

Whether the value stock is on its way to oblivion or can rebound depends on exactly what dropped the price.

If the scandal was like the puppy and had to do with the real product, you might be in trouble.

A poor choice of words from the CEO, however, is not a deal-breaker. News like that is here today, gone tomorrow.

Hence, tomorrow, it might be nice to own it already.

Don’t all the years I’ve worked here count for anything?

Not to mention, the more stable stocks tend to provide greater dividends.

Remember how in between buying and selling you were pretending to want this thing?

Dividends are the base from which all the stock’s value is theoretically derived, in a way.

Maybe they’re not growing as fast, but the older, more established corporations are big.

That means bigger checks for shareholders.

Businesses do, in fact, try to become significant for a real reason.

How do you tell one from the other?

Here we turn to the all-powerful price ratio for more information.

That said, good luck figuring that one out.

There are at least five versions of it out there.

Almost all of them appear to be designed to test for growth.

Price-to-sales, at least, is nearly impossible to falsify, as are most things at the rounded top of the income statement.

The further down on that piece of paper the numbers are, the more wiggle room accountants have with them.

The P/S ratio will show growth well.

But if a nuclear crisis in China makes getting safe rice more and more expensive, the takeout restaurant’s sales might come at higher supply costs.

Who’s cool now?

Growth has been the favored child of these twins up to now.

It’s the social instinct, to love what everyone else is buying and fear what they’re bailing out.

The crash of ’29 was, to one extent or another, a result of people panicking about other people’s panic.

And value stocks were at an approximate ten-year low when they made a rebound early this year.

A value portfolio is good for uncertain markets, generally speaking. Can you remember the last time the market was sure?

“Oh, yeah, well…Warren Buffett says that’s dumb!”

One of the handful of (sort of) dissenting voices in the mix is Warren Buffett.

And that’s because he seems to float loftily above the difference between the two categories to begin.

Reading between the lines of an old report he gave to his company’s owners; the Buffet strategy would appear to be trying to merge value and growth concepts.

Speculation says that he specifically dislikes debt-driven growth.

He doesn’t want any other form of growth that will spend more now than it can ever make worthwhile in the future.

In other words, he probably wants growth, but like a forest, it has to be sustainably sourced.

Let’s put some names to the faces

The following list shows stocks picked either by Buffett’s company or by someone who purports to apply the same principles:

  • Lubrizol
  • Burlington Northern Santa Fe
  • FactSet Research Systems
  • TJX Companies
  • PetSmart

Disclaimer: Always consult a real financial expert. You know, a guy or gal with a degree. Hopefully liability insurance, too.

If you want something done right, do it yourself

If you’re thinking of following this up with more research, data shouldn’t be hard to find.

Countless websites and programs offer filters which will point out exactly where to find what combination of value/growth traits you want.

Get cracking!

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

IRS, Treasury Department and Department of Labor Give Guidance on Small Business Leave and Tax Credit

Avatar

Published

on

IRS, Treasury Department and Department of Labor give guidance on small business leave and tax credit

The U.S. Treasury Department, Internal Revenue Service (IRS) and the U.S. Department of Labor (Labor) have announced that small and midsize employers can begin taking advantage of two new refundable payroll tax credits, designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees.

This relief to employees and small and midsize businesses is provided under the Families First Coronavirus Response Act (Act), signed by President Trump on March 18, 2020.

The Act will help the United States combat and defeat COVID-19 by giving all American businesses with fewer than 500 employees funds to provide employees with paid leave, either for the employee’s own health needs or to care for family members.

The legislation will enable employers to keep their workers on their payrolls, while at the same time ensuring that workers are not forced to choose between their paychecks and the public health measures needed to combat the virus.

Key Takeaways

* Paid Sick Leave for Workers

* For COVID-19 related reasons, employees receive up to 80 hours of paid sick leave and expanded paid child care leave when employees’ children’s schools are closed or child care providers are unavailable.

* Complete Coverage

* Employers receive 100% reimbursement for paid leave pursuant to the Act.

* Health insurance costs are also included in the credit.

* Employers face no payroll tax liability.

* Self-employed individuals receive an equivalent credit.

* Fast Funds

* Reimbursement will be quick and easy to obtain.

* An immediate dollar-for-dollar tax offset against payroll taxes will be provided

* Where a refund is owed, the IRS will send the refund as quickly as possible.

* Small Business Protection

* Employers with fewer than 50 employees are eligible for an exemption from the requirements to provide leave to care for a child whose school is closed, or child care is unavailable in cases where the viability of the business is threatened.

* Easing Compliance

* Requirements subject to 30-day non-enforcement period for good faith compliance efforts.

To take immediate advantage of the paid leave credits, businesses can retain and access funds that they would otherwise pay to the IRS in payroll taxes. If those amounts are not sufficient to cover the cost of paid leave, employers can seek an expedited advance from the IRS by submitting a streamlined claim form that will be released next week.

Background

The Act provided paid sick leave and expanded family and medical leave for COVID-19 related reasons and created the refundable paid sick leave credit and the paid child care leave credit for eligible employers. Eligible employers are businesses and tax-exempt organizations with fewer than 500 employees that are required to provide emergency paid sick leave and emergency paid family and medical leave under the Act. Eligible employers will be able to claim these credits based on qualifying leave they provide between the effective date and December 31, 2020. Equivalent credits are available to self-employed individuals based on similar circumstances.

Paid Leave

The Act provides that employees of eligible employers can receive two weeks (up to 80 hours) of paid sick leave at 100% of the employee’s pay where the employee is unable to work because the employee is quarantined, and/or experiencing COVID-19 symptoms, and seeking a medical diagnosis. An employee who is unable to work because of a need to care for an individual subject to quarantine, to care for a child whose school is closed or child care provider is unavailable for reasons related to COVID-19, and/or the employee is experiencing substantially similar conditions as specified by the U.S. Department of Health and Human Services can receive two weeks (up to 80 hours) of paid sick leave at 2/3 the employee’s pay. An employee who is unable to work due to a need to care for a child whose school is closed, or child care provider is unavailable for reasons related to COVID-19, may in some instances receive up to an additional ten weeks of expanded paid family and medical leave at 2/3 the employee’s pay.

Paid Sick Leave Credit

For an employee who is unable to work because of Coronavirus quarantine or self-quarantine or has Coronavirus symptoms and is seeking a medical diagnosis, eligible employers may receive a refundable sick leave credit for sick leave at the employee’s regular rate of pay, up to $511 per day and $5,110 in the aggregate, for a total of 10 days. For an employee who is caring for someone with Coronavirus, or is caring for a child because the child’s school or child care facility is closed, or the child care provider is unavailable due to the Coronavirus, eligible employers may claim a credit for two-thirds of the employee’s regular rate of pay, up to $200 per day and $2,000 in the aggregate, for up to 10 days. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.

Child Care Leave Credit

In addition to the sick leave credit, for an employee who is unable to work because of a need to care for a child whose school or child care facility is closed or whose child care provider is unavailable due to the Coronavirus, eligible employers may receive a refundable child care leave credit. This credit is equal to two-thirds of the employee’s regular pay, capped at $200 per day or $10,000 in the aggregate. Up to 10 weeks of qualifying leave can be counted towards the child care leave credit. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.

Prompt Payment for the Cost of Providing Leave

When employers pay their employees, they are required to withhold from their employees’ paychecks federal income taxes and the employees’ share of Social Security and Medicare taxes. The employers then are required to deposit these federal taxes, along with their share of Social Security and Medicare taxes, with the IRS and file quarterly payroll tax returns (Form 941 series) with the IRS.

Under guidance that will be released next week, eligible employers who pay qualifying sick or child care leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and child care leave that they paid, rather than deposit them with the IRS.

The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees.

If there are not sufficient payroll taxes to cover the cost of qualified sick and child care leave paid, employers will be able file a request for an accelerated payment from the IRS. The IRS expects to process these requests in two weeks or less. The details of this new, expedited procedure will be announced next week.

Examples

If an eligible employer paid $5,000 in sick leave and is otherwise required to deposit $8,000 in payroll taxes, including taxes withheld from all its employees, the employer could use up to $5,000 of the $8,000 of taxes it was going to deposit for making qualified leave payments. The employer would only be required under the law to deposit the remaining $3,000 on its next regular deposit date.

If an eligible employer paid $10,000 in sick leave and was required to deposit $8,000 in taxes, the employer could use the entire $8,000 of taxes in order to make qualified leave payments and file a request for an accelerated credit for the remaining $2,000.

Equivalent child care leave and sick leave credit amounts are available to self-employed individuals under similar circumstances. These credits will be claimed on their income tax return and will reduce estimated tax payments.

Small Business Exemption

Small businesses with fewer than 50 employees will be eligible for an exemption from the leave requirements relating to school closings or child care unavailability where the requirements would jeopardize the ability of the business to continue. The exemption will be available on the basis of simple and clear criteria that make it available in circumstances involving jeopardy to the viability of an employer’s business as a going concern. Labor will provide emergency guidance and rulemaking to clearly articulate this standard.

Non-Enforcement Period

Labor will be issuing a temporary non-enforcement policy that provides a period of time for employers to come into compliance with the Act. Under this policy, Labor will not bring an enforcement action against any employer for violations of the Act so long as the employer has acted reasonably and in good faith to comply with the Act. Labor will instead focus on compliance assistance during the 30-day period.

For More Information

For more information about these credits and other relief, visit Coronavirus Tax Relief on IRS.gov. Information regarding the process to receive an advance payment of the credit will be posted next week.

© Copyright 2020, The Courier, All Rights Reserved.

Continue Reading

Business

Stocks Soar During Historic Day For The Dow

Avatar

Published

on

Stocks Soar During Historic Day For The Dow

Stocks soared yesterday on news that the $2 trillion stimulus bill was “on the five yard line” and close to be finalized by both the Democrats and Republicans.

The stimulus package will provide relief for companies that have been caught up in the economic fallout from the coronavirus outbreak.

Delays in the bill’s passage were due to the Democrat’s concerns that the bill favored Wall Street over Main Street.

House Speaker Nancy Pelosi appeared on CNBC and told Jim Cramer that there is “real optimism” of a stimulus deal being reached. “We think the bill has moved sufficiently to the side of workers,” she said.

After news broke of the deal nearing completion, stocks went on to stage a historic rally that lifted all three major indexes.

The Dow Jones Industrial Average climbed 11.37%,  or 2,112 points, for its biggest one-day percentage gain since 1933 and its largest point gain ever. The S&P 500 rallied 9.38% for its best day since October 2008 and the Nasdaq climbed 8.12%.

With the stimulus bill close to passing and the markets staging a historic rally, some were willing to look ahead and predict the end of the bear market.

Michael Novogratz, CEO of Galaxy Digital, was on CNBC’s Squawk Box and said “From a market perspective… it feels like we’re coming to the end of it,” and said he started buying again on Monday.

Far more investors, however, view yesterday’s rally as nothing more than a one-day rebound.

“This was a one-day bull market,” CNBC’s Jim Cramer said on “Closing Bell” on Tuesday. “You had stocks that moved so much they basically moved as if the second half of the year is going to be good. I struggle to find out why the second half of the year should be good …I hate this kind of rally. This was a machine driven rally, just like the sell-offs … I want to wait to see.”

Nikolaos Panigirtzoglou, a managing director at JPMorgan, said the rally could be partly due to short sellers covering their positions to grab profits. He said there could be “considerable short covering from here,” which would temporarily lift equity prices.

Others believe it may be nothing more than a simple bounce due to so many stocks being oversold.

Sam Stovall, chief investment officer at CFRA Research said “Even in bear markets, you can end up being oversold, and I think that this market was stretched like a rubber band that, at least in the near term, was ready to snap back.” 

That “snap back” rally is adding to the market volatility. Last week, the index climbed to 82.69, beating the highest reading during the 2008 financial crisis. The volatility index (VIX) did drop yesterday 1.2%, to 60.85. 

What remains to be seen is if the rally can last for more than a single day, and if buyers will continue showing up before the coronavirus is contained. Many believe that the rally is nothing more than optimism surrounding the stimulus plan, and that a lasting rebound in the markets won’t happen until there’s clear evidence that the coronavirus has slowed.

Continue Reading

Business

HHS Funds Phase 2/3 Clinical Trial for Potential Treatment for COVID-19

Avatar

Published

on

HHS Funds Phase 2/3 Clinical Trial for Potential Treatment for COVID-19

An antibody medicine being evaluated to treat severe cases of coronavirus disease 2019 (COVID-19) will receive additional support from the U.S. Department of Health and Human Services’ Office of the Assistant Secretary for Preparedness and Response (ASPR) under an existing partnership with Regeneron Pharmaceuticals of Tarrytown, New York.

The Biomedical Advanced Research and Development Authority (BARDA) within ASPR will provide support for a U.S. Phase 2/3 clinical trial to evaluate Kevzara as a potential treatment for severely ill COVID-19 patients. Currently, Kevzara is approved by the U.S. Food and Drug Administration for the treatment of rheumatoid arthritis. Kevzara was developed under a collaboration between Regeneron and Sanofi; the companies continue to collaborate on studying Kevzara for COVID-19, with Regeneron leading U.S.-based trials and Sanofi leading trials outside the U.S.

‘We are working at a record pace with our private sector partners to speed development of therapeutic treatments for people with COVID-19,’ said BARDA Director Rick A. Bright, PhD. ‘By repurposing a currently approved product, we may be able to expedite development and make treatments available quickly.’

Patients with COVID-19 are at risk of developing life-threatening respiratory failure, which may be mediated in part by elevated levels of a series of pro-inflammatory molecules, including interleukin-6 (IL-6). Kevzara is a fully-human monoclonal antibody that binds to the IL-6 receptor on normal cells and may improve patient outcomes by decreasing the severe inflammatory response.

The role of IL-6 is supported by preliminary uncontrolled data from a Chinese trial of a different IL-6 agent, which showed rapid reductions in fever in all patients and improvements in oxygenation. The Phase 2/3 clinical trial will determine if Kevzara can be used as a safe and effective therapy to reduce the amount of time that a person infected with the novel coronavirus remains ill. The first part of the trial will evaluate the impact of Kevzara on fever and patients’ need for supplemental oxygen. The second, larger part of the trial will evaluate the improvement in longer-term outcomes, including whether it can prevent death and reduce the need for mechanical ventilation, supplemental oxygen, and/or hospitalization.

This partnership with Regeneron is among the first to be issued by BARDA with funding from the H.R.6074 – Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 that was passed by the U.S. Congress and signed by President Trump on March 6, 2020.

HHS continues to work across the U.S. government, including with the Department of Defense, to review potential products from public and private sectors to identify promising candidates that could detect, protect against, or treat COVID-19 for development and FDA approval/clearance.

In addition to this adaptive Phase 2/3 clinical trial with Kevzara, one other HHS-funded trial of an investigational COVID-19 treatment is ongoing. The National Institute of Allergy and Infectious Diseases (NIAID), part of the National Institutes of Health (NIH), is sponsoring a randomized controlled clinical trial to evaluate the safety and efficacy of the investigational antiviral remdesivir in hospitalized adults.

‘Proven treatment options for COVID-19 are urgently needed. This trial of Kevzara is critical to inform doctors on treatment options for COVID-19,’ said HHS Secretary Alex Azar. ‘The close collaboration between BARDA, the FDA, and Regeneron to initiate this trial as soon as possible again demonstrates the speed at which we are responding to this pandemic.’

HHS divisions, including NIH and ASPR, are supporting the development of multiple diagnostic tests, vaccines, and potential therapeutic treatments for COVID-19. BARDA continues to seek partners for COVID-19 medical countermeasures, and offers multiple ways to submit proposals for potential new products or technologies.

About HHS, ASPR, and BARDA

HHS works to enhance and protect the health and well-being of all Americans, providing for effective health and human services and fostering advances in medicine, public health, and social services. The mission of ASPR is to save lives and protect Americans from 21st century health security threats. Within ASPR, BARDA invests in the innovation, advanced research and development, acquisition, and manufacturing of medical countermeasures – vaccines, drugs, therapeutics, diagnostic tools, and non-pharmaceutical products needed to combat health security threats. To date, 54 BARDA-supported products have achieved regulatory approval, licensure or clearance.

Contact:

Tel: 202-690-6343

Continue Reading

Trending

Copyright © 2019 The Capitalist. his copyrighted material may not be republished without express permission. The information presented here is for general educational purposes only. MATERIAL CONNECTION DISCLOSURE: You should assume that this website has an affiliate relationship and/or another material connection to the persons or businesses mentioned in or linked to from this page and may receive commissions from purchases you make on subsequent web sites. You should not rely solely on information contained in this email to evaluate the product or service being endorsed. Always exercise due diligence before purchasing any product or service. This website contains advertisements.