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4 Best-Rated Large-Cap Value Mutual Funds For Stable Return

Large-cap funds usually provide a safer option to risk-averse investors when compared to small-cap and mid-cap funds. These funds have exposure to large-cap stocks, with long-term performance history and more stability than what mid-cap or small-caps offer. Companies with market capitalization of more than $10 billion are generally considered large cap. However, due to their significant international exposure, large-cap companies might be affected by a global downturn. Meanwhile, investors looking for a bargain, i.e., stocks at a discount, are mostly interested in investing in value funds, which pick stocks that tend to trade at a price lower than their fundamentals (i.e. earnings, book value, Debt-Equity) and pay out dividends. Value stocks are expected to outperform the growth ones across all asset classes when considered on a long-term investment horizon and are less susceptible to trending markets. However, investors interested in choosing value funds for yield, should check the mutual fund yield as not all value funds comprise solely companies that primarily use their earnings to pay out dividends. Below, we share with you four top-rated, large-cap value mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Vanguard US Value Fund Investor (MUTF: VUVLX ) seeks long-term capital growth and high income. VUVLX invests all of its assets in undervalued companies having low price/earnings (P/E) ratios. VUVLX focuses on acquiring stocks of large and mid-cap companies having impressive growth potential and favorable valuations. The Vanguard US Value Investor fund has a three-year annualized return of 14.7%. VUVLX has an expense ratio of 0.26% compared to the category average of 1.11%. JPMorgan Large Cap Value Fund A (MUTF: OLVAX ) invests a large portion of its assets in securities of large-cap companies that include common stocks, and debt and preferred stocks that can be converted to common stock. Large cap companies are those that have market capitalization equivalent to those listed in the Russell 1000 Value Index at the time of purchase. OLVAX offers dividends quarterly and capital gains annually. The JPMorgan Large Cap Value A fund has a three-year annualized return of 14.8%. Scott Blasdell is the fund manager and has managed OLVAX since 2013. MFS Value Fund A (MUTF: MEIAX ) seeks capital growth over the long run. MEIAX generally invests in equity securities including common stocks, securities of REITs and convertible securities. Though MEIAX primarily invests in value companies having large capitalization, it may also invest in small and mid-cap companies. The MFS Value A fund has a three-year annualized return of 13.7%. As of October 2015, MEIAX held 98 issues with 4.46% of its assets invested in JPMorgan Chase & Co. (NYSE: JPM ). Fidelity Large Cap Value Enhanced Index Fund (MUTF: FLVEX ) invests the majority of its assets in companies included in the Russell 1000 Value Index, which consists of large cap companies. FLVEX uses a quantitative analysis of factors including historical valuation, growth and profitability to select companies that are believed to provide more return than the index. FLVEX focuses on acquiring common stocks of companies across the world. The Fidelity Large Cap Value Enhanced Index fund has a three-year annualized return of 13.8%. FLVEX has an expense ratio of 0.45% compared to the category average of 1.11%. Original Post

3 High Momentum Stocks And ETFs For The Santa Rally

A consensus carried out from 1950 to 2013 has revealed that December has ended up offering positive returns in 49 years and negative returns in 16 years, with an average return of 1.59%, as per moneychimp.com , the best in a year. But U.S. stocks have defied the seasonal trend this time around. The first Fed rate hike in almost a decade and possibilities of four more hikes next year along with horribly low oil prices might make Christmas a little dull this year, curbing the natural progression of the end-of-season ascent, commonly known as the Santa Clause rally. What is Santa Rally? Santa Claus rally refers to the jump in stock prices in the week between Christmas and New Year’s Day. There are several reasons behind this surge including ‘tax considerations, happiness around Wall Street, people investing their Christmas bonuses and the fact that the pessimists are usually on vacation this week’ as per investopedia. In fact, some even believe that investors buy stocks during this period to cash in on another strong equity event, known as the January Effect, which takes place soon after. As per the 2016 Stock Trader’s Almanac, in the last 45 holiday seasons, the Santa Claus rally has delivered positive returns 34 times with the average cumulative return being 1.4%. If we go a little deeper, the consistency of this rally would be more visible. The Dow Jones Industrial Average has returned about 1.7% (on an average) since 1896. However, the Santa Claus rally failed to live up to investors’ expectation several times including in 1990, 1999, 2004, 2007, and 2014, per Business Insider . Will 2015 See a Santa Rally? With just three days to go for Christmas, there are hardly any indications of such a surge. Global stocks were at great health last week with the S&P 500 recording its ‘ best week since October 24, 2014’. But stocks lost their steam at the start of this week. All in all, the situation is shaky, but thanks to compelling valuation (after the latest sell-off), one can’t ignore the prospect of a Santa rally this year as well. Currently, the U.S. economy appears to be the lone star in a tottering global backdrop. This fact, along with compelling valuation brings about bright opportunities for some U.S.-based momentum stocks and ETFs in the coming days, especially in a market rebound. After all, no storm lasts forever. Thus, momentum investing might be an intriguing idea for those seeking higher returns in a short spell. Momentum investing looks to reflect profits from buying stocks, which are sizzling on the market. Below we highlight three momentum stocks and ETFs to watch out for in the coming trading sessions. Stock Picks For stocks, we have chosen top picks using the Zacks Screener that fits our three criteria: momentum score of ‘A’, stock Zacks Rank #1 (Strong Buy) and positive estimate revision for the current quarter. Here are the three recommended stocks. American Eagle Outfitters Inc. (NYSE: AEO ) Based in Pennsylvania, this retailer of apparel and accessories has delivered an average positive earnings surprise of 16.7% over the trailing four quarters. The consensus estimate for the current quarter has risen from 40 cents to 42 cents per share in the last 30 days as six analysts raised their forecast, while just one cut its estimate. Along with Momentum score of ‘A’, the stock also has a Growth and Value score of ‘A’. This Zacks Rank #1 stock is up 8.9% so far this year (as of December 21, 2015). B&G Foods Inc. (NYSE: BGS ) The company makes and markets packed and easy-to-store food and household products. Its products basket carries hot cereals, fruit spreads, canned meats and beans and many more. B&G has a Zacks Rank #1 and is up over 16.6% so far this year. The stock currently has a solid Zacks Industry Rank in the top 37%. The consensus estimate for the current quarter has risen from 42 cents to 44 cents per share . Caesars Entertainment Corporation (NASDAQ: CZR ) The Nevada-based company offers casino-entertainment and hospitality services in the U.S. and abroad. The stock currently has a Value score of ‘A’ and the solid Zacks Industry Rank in the top 15%. In the last 30 days, its projection of losses contracted from 27 cents to 14 cents. No analyst cut their estimate in the last 7, 30 and 60 days period, though there were positive revisions. Though this Zacks Rank #1 and high-momentum stock is down 50.9% so far this year, it added over 4.3% in the last one month. ETF Picks iShares MSCI USA Momentum Factor ETF (NYSEARCA: MTUM ) This ETF seeks to track the performance of large- and mid-cap U.S. stocks exhibiting relatively higher momentum characteristics. The fund has attracted about $1.1 billion is assets so far. With an expense ratio of just 15 basis points, this is one of the cheapest options in the high momentum ETFs space. The ETF is tilted toward the Consumer Discretionary and Information Technology sectors. Each of these takes over 25% of the basket. The next two spots are occupied by Consumer Staples and Health Care, each with double-digit weight. Amazon (NASDAQ: AMZN ) is currently the top holding of the fund, with Facebook (NASDAQ: FB ), Home Depot (NYSE: HD ), Visa (NYSE: V ) and Starbucks (NASDAQ: SBUX ) rounding out the top five. MTUM is up 7.2% so far this year but lost 1.3% in the last one month, though lesser than SPY (down over 3.5%). SPDR Russell 1000 Momentum Focus ETF (NYSEARCA: ONEO ) This new ETF has amassed about $325.8 million in assets in less than a month. The fund looks to track the performance of a segment of large-capitalization U.S. equity securities demonstrating a combination of core factors with a focus factor comprising high momentum characteristics. This 918-stock ETF is heavy on Consumer Discretionary (20.05%) followed by financial services (16.84%) and producer durables (16.37%). The fund charges 20 bps in fees and added about 3% in the last five trading sessions (as of December 21, 2015). First Trust Dorsey Wright Focus 5 ETF (NASDAQ: FV ) This ETF hovers around technical indicators such as relative strength. The fund is designed to identify the five First Trust sectors and industry-based ETFs that are arguably expected to have the maximum chance of outperforming the other ETFs in the selection universe. Securities with high relative strength scores (strong momentum) are given higher weights. Currently, the fund has the highest exposure to the ETF following Biotech, Internet and Health Care. The fund has already managed to attract more than $4.56 billion in assets. It is a slightly expensive choice thanks to its “enhanced indexing” approach, with an expense ratio of 94 basis points. The fund is up 5.7% so far this year. 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Income Hunters Left Salivating At Dominion Resources’ Future Growth Prospects

Summary On-track, long-term growth-oriented renewable energy generation projects will fuel revenues and earnings growth. Company’s timely and on-budget execution of ongoing projects will create secure and sustainable cash flow base. Strong growth opportunities will bode well for the stock valuation. Sale growth expectation of 5.13% for D is well above the industry median sales growth expectation. Utility stocks have remained a popular investment option for investors, as utilities usually have large exposure to regulated business operations. Additionally, the predictable cash flow base allows utilities to make healthy cash returns, and makes them attractive dividend stocks. Dominion Resources (NYSE: D ) is one of the largest utilities in the U.S., which serves a broader U.S. area with its wider portfolio of energy generation assets. Owing to the company’s on-track, growth-centric projects like regular expansion of renewable energy generation asset portfolio through acquisitions and construction projects, and steady growth of midstream business will drive its future financial growth. Moreover, D’s on time and on budget Cove Point Facility and Atlantic Coast Pipeline (ACP) project will support its long-term growth. The company’s dividend growth has also remained strong, as it generates strong and sustainable cash flows. Additionally, D’s strong balance sheet position supports its dividend growth plan and future growth ventures. The company’s policy of allocating a decent portion of its cash flows for funding growth plans has been helping it apply for constant rate hikes, thereby adding well towards D’s financial numbers. As per the company’s long-term growth plans, average annual capital spending over the next five years will be $3.2 billion , which signals at a bright outlook for the stock. Of all its targeted growth areas, renewables remain most attractive. Over the years, the company has developed itself as a leader in renewables space, with its wider portfolio of renewable energy generation portfolio. To keep its solar energy generation portfolio strong, D is still making solar energy generation deals; the company acquired an 80MW solar energy generation portfolio in VA, which is expected to start construction by the end of 2015, whereas operation of the project will begin in fall 2016. Therefore, this acquisition will help D achieve its target of having established total 425MW of solar energy generation capacity set-up by the end of 2015. Additionally, plans to build a 400MW solar plant in Virginia has been announced, which is expected to begin operations in the next five years. Given the fact that the company will be able to recover the cost of these ongoing hefty solar energy generation-based projects by rate case increases, I think D will witness a boost in its future sales and earnings growth. Moreover, the construction of the company’s Cove Point facility is on track. By the end of 3Q’15, the Cove Point Terminal facility was 47% complete, and remains on time and on budget. After its completion by the end of 2017, the Cove Point Terminal will expand the company’s operations; D will be able to export 5.75 million metric tons of LNG, at its full capacity, every year after its completion in 2017. Furthermore, the company’s another important project, ACP, which is expected to come in operation in 2018, is well on track thus far. Additionally, there are 13 ongoing projects worth $1.2 billion, which will move more than 2 billion cubic feet per day for customers by the end of 2018. Given their ability to expand D’s operations; I believe these 13 ongoing projects combined with Cove Point and ACP projects will aid the company in meeting its long-term earnings growth target and will augur well to improve its profit margins. Furthermore, the company’s investments for the expansion of its Midstream business are on track to supplement its long-term earnings growth plan. Lately, D’s Midstream business acquired a 25.9% stake in the Iroquois pipeline, in order to issue 8.6 million limited partnership units to New Jersey Resources and National Grid. Also, the company’s board has authorized $50 million investment over a period of the next 12 months to buy LP units of Dominion Midstream Partners in open markets. I believe D’s sizeable investments in Midstream business will unlock a substantial return on the entering service. D’s operations have been providing a stable source of cash flows to help it fund its hefty dividend payment plan. The company offers a healthy yield of 3.85% . Given the strong strategic growth prospects of its long-term energy generation projects, well-headed for witnessing earnings and profit margin growth, I believe D’s dividend growth outlook is pretty impressive. Additionally, the expected continuation in the company’s balance sheet strength, shown in the graph below, supports my view about its ability to meet dividend commitments in the longer run without any stress of deterioration in the balance sheet position. And I think D’s management’s targeted dividend growth rate of 8%, from 2015 to 2020, looks highly achievable. Source: 4-traders.com Summation D’s on-track, long-term growth-oriented renewable energy generation projects are rightly headed to fueling its revenues and earnings growth, and to boost its free cash flows in the years ahead. The company’s timely and on-budget execution of ongoing projects like ACP and Cove Point indicate that its efforts to create a secure and sustainable cash flow base will positively affect its stock price by enabling it to meet its dividend commitments in the longer run. Also, strong growth opportunities will bode well for the stock valuation. D is currently trading at a higher forward PE ratio of 17.46x , in contrast to its peers’ forward P/Es (American Electric Power Inc. (NYSE: AEP ) has a forward P/E of 15.04x and Exelon (NYSE: EXC ) has a forward P/E of 10.83x ). D’s higher forward P/E is justified I think, because it has a higher future growth potential than its peers. D’s earnings in the future are expected to grow at an average annual rate of 6.23% . Moreover, the sale growth expectation of 5.13% for D is also well above the industry median sales growth expectation of 1.04% . Therefore, I think D stays a good investment prospect for income hunting investors.