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While Google’s moves of late may suggest an identity crisis, the Web search giant’s third-quarter results should provide a clear affirmation of what exactly it is.

Namely, Google is a $60 billion-a-year advertising business that is still growing at a double-digit rate, even if it now reports results under the moniker of its new parent company Alphabet [stckqut]GOOGL[/stckqut]. Ad revenues of $16.8 billion in the third quarter were up 13% year over year. Notably, paid clicks jumped by 23%, well ahead of the 18% gain projected by analysts. That’s the best growth shown by that measure in more than a year and was chalked up to strength in mobile search and the company’s YouTube business.

This all drove a 45% surge in net income, which soundly beat Wall Street estimates. The company also threw in a surprise in the form of a $5.1 billion share buyback—its first significant cash return program on record. Alphabet’s shares jumped in response, and built on its 13% gain since its last quarterly report.

Source: What Google’s Alphabet Spells for Investors – WSJ

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Lam Research Corp. [stckqut]LCRX[/stckqut] on Wednesday announced a deal to buy KLA-Tencor Corp. [stckqut]KLAC[/stckqut] for $10.6 billion, the latest sign that consolidation pressures among chip makers have spread to their suppliers.

The two Silicon Valley companies rank among the biggest makers of equipment used in semiconductor manufacturing. Lam has focused on machines that deposit or etch away materials on the silicon wafers used to make computer chips. KLA-Tencor’s machines, by contrast, are used to spot defects in chips once the wafers are processed.

Such equipment makers have long been whipsawed by boom and bust cycles, as chip makers boost or cut back manufacturing capacity in response to demand. Acquisitions have been common over the years, as companies try to assemble a broader list of machines to sell customers.

Source: Chip merger frenzy continues with Lam purchase of KLA-Tencor

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Selim Bassoul, chief executive of Middleby Corp.[stckqut]MIDD[/stckqut], is on a frantic quest to become king of the upscale kitchen range.

Over the past three years, his Elgin, Ill., company has bought three of the world’s most prominent cooking brands: Viking Range, AGA and La Cornue. It also has suffered a bit of indigestion.

“We’re becoming the leading high-end appliance [maker] in the world,” Mr. Bassoul boasted while speed-walking across the floor of his Viking plant here. Long a big supplier of commercial food-processing equipment, Middleby is rapidly expanding to home ovens, refrigerators and other kitchen gear where Mr. Bassoul believes he can add more sophisticated technology and raise profit margins.

Source: Middleby Chases Fame in the Kitchen – WSJ

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Netflix [stckqut]NFLX[/stckqut], had a rough couple of days. The streaming media company met its projected third-quarter $0.07 earnings per share but missed on its projected revenue figures, generating $1.738 billion instead of the estimated $1.743 billion. After-hours trading was impacted negatively by the news, trading down 10% at one point, while investors had a mixed array of thoughts.

Netflix subscriber figures were not promising as well. Domestically, the company added only 880,000 new members, compared to the more promising international addition of 2.74 million. This comes to a total of 3.62 million new Netflix members, which is a marginal increase from the year-to-year figure of 3.02 million combined.

New US subscribers, however, have been on the decline since the company’s 2015 first-quarter and may very well plateau sooner than later, despite their projected 1.65 new members for the 2015 fourth-quarter.

Source: The Netflix Tipping Point

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wall street bull photoI have chosen 15 stocks to finish 2015. These stocks are, in my opinion, some of the best companies to invest your money for the next three months.

I split my portfolio into two parts. I describe the first part in the majority of this site. It is a list of Good Companies that I keep on my Watch List. I invest in these companies using the techniques that I describe in my book, The Confident Investor. I will move my money from companies that are showing bearish tendencies to companies that are currently bullish. You can see my current list of companies on my Watch List and follow this site to watch me add or delete stocks from these companies.

While it is not unusual for my Watch List to not have a certain market segment, the overall list is fairly balanced, and an investor that wants to diversify can do so by using this list. I do not specifically worry about diversification as a strategy only because I believe that an investor should watch the investments like a hawk. If a stock is not doing well: sell it and put your money where it will work for you.

I also keep a certain percentage of this portfolio in index funds. I describe this technique in my book, The Confident Investor, and my current allocation is about 28%. I am only 53, so I need my portfolio to continue to aggressively beat the stock market. The index funds simply give me a bit of a base.

The second part of my portfolio is much more aggressive and is the reason for this post. In this portfolio, I select 15 of the fastest growing and currently best-performing stocks on my Watch List. I evenly divide my investment capital of this portfolio between the 15 stocks. Every three months, I re-analyze the list of 15 stocks, sell the ones that don’t make the new list, buy the new additions, and evenly rebalance the entire group of 15 stocks.

I need to caution the reader that this second portfolio, while easier to manage, is much riskier than the previously described portfolio. Because of this risk, it often returns a higher growth, but it also is susceptible to faster drops. The first portfolio that I described is more cautious simply because I move out of stocks that are dropping. In a general market drop, I will be almost 100% in cash for my principle. This second portfolio doesn’t get touched except for four times per year, so it is open to general downturns as well as stock specific downturns.

The first portfolio that I described above is a “buy to hold” portfolio and I completely describe this portfolio in my book, The Confident Investor. The second portfolio is a “buy and hold for three months” portfolio.

I do not expect that each of these 15 stocks will beat the general market. I do expect that the 15 stocks together will significantly outperform the market. In general, these 15 stocks represent the absolute best 15 stocks on the market today. They are in industries that are doing fairly well. Their management tends to be extremely competent, and each company has a history of being well run.

You can purchase my book wherever books are sold such as Amazon, Barnes and Noble, and Books A Million. It is available in e-book formats for Nook, Kindle, and iPad.

My top 15 stocks for Q4/2015

Symbol Company name
ABMD ABIOMED, Inc.
BWLD Buffalo Wild Wings, Inc.
CBPO China Biologic Products, Inc.
EXR Extra Space Storage Inc
FB Facebook, Inc.
GTN Gray Communications Systems, Inc.
MIDD The Middleby Corporation
MNST Monster Beverage Corporation
NFLX Netflix, Inc.
REGN Regeneron Pharmaceuticals, Inc.
SBUX Starbucks Corporation
STZ Constellation Brands, Inc.
SWKS Skyworks Solutions, Inc.
THRM Gentherm Inc
UA Under Armour, Inc.

 

Photo by Arch_Sam