What Drove the Dow to Record Highs (Again), As Conn's and Melco Crown Soar

Home Depot: best in class stock? Wall Street certainly admires its operations.

Jun 2, 2014 at 6:12PM

For a seventh time in the last eight trading sessions, the Dow Jones Industrial Average (DJINDICES:^DJI) ended higher on Monday. The Institute for Supply Management's highly anticipated May manufacturing data had a bizarre effect on the market today, as the ISM twice misreported May's reading before finally settling on the 55.4 number, which represented a modest acceleration in growth from April. Closing at an all-time high, the Dow added 26 points, or 0.2%, to end at 16,743.

Home Depot's (NYSE:HD) stock tacked on 0.8% Monday, ending as one of the best-performing blue chips in the index. It's hard not to be at least somewhat upbeat on Home Depot, since the $110 billion home improvement retailer is miles ahead of its competition. Paying out a 2.3% annual dividend, the company is growing same-store sales more quickly than its main competitor, Lowe's, and Home Depot is returning billions to shareholders through buybacks this year to boot.

While the Hong Kong-based Melco Crown Entertainment (NASDAQ:MPEL) will never achieve blue-chip status, status is overrated. Returns are what matter to investors, and Melco's 3.3% return today made the stock a standout performer. Interestingly enough, it was impressive Chinese manufacturing numbers that buoyed Melco Crown and other Chinese casinos. Gaming investors are on edge about China's economy, which saw GDP grow at a 7.4% clip in the first quarter, its lowest rate in six quarters.


Conn's realizes that financing its own sales is a lucrative business. Image source: Conn's

But the biggest gainer of the three stocks in focus today was Conn's (NASDAQ:CONN), as shares of the electronics store jumped 6.9% Monday. Conn's isn't your average electronics retailer: it hawks everything from major appliances to mattresses to blu-ray players to lawnmowers. On top of that, it's a savvy financier: Conn's extends credit directly to its customers, double-dipping by earning interest on the very debt that was issued to buy its own products! Earnings and revenue in the first quarter both topped expectations, and same-store sales rallied a remarkable 15.6% in the period. Delinquency rates fell, collection improved, and same-store sales are projected to keep rising through 2015.

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John Divine has no position in any stocks mentioned. You can follow him on Twitter, @divinebizkid, and on Motley Fool CAPS, @TMFDivine.

The Motley Fool recommends Home Depot. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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