Rising sales, profit may not help stock

Q: What could be going on with a company I’m considering investing in? It seems to be doing everything right, as its sales and earnings have been growing at doubledigit rates, and it’s carrying no debt. Yet the stock keeps falling. — H.P., Norwalk, Connecticut

A: Study it more closely. Even steep growth rates might be lower than previous levels. Check out expectations, too. If the company and/or Wall Street analysts expect slower growth in the future, that can dampen enthusiasm for the stock, with many people selling shares and thereby depressing its price.

Perhaps competitors are fast advancing on the company, or questions have been raised about its management or offerings. Remember that investors need to focus on any company’s future more than its past.

Then there’s the stock price itself. Because the company has been growing briskly, investors might have bid up the stock to lofty heights, well above its intrinsic value, and the price might be settling back to more reasonable levels. Always look at a company’s big picture. Fool’s School:

Life and taxes

After celebrating or mourning life changes, you need to tend to the tax changes they might bring about. Failing to do so could cost you.

With any new job, fill out that W-4 form carefully, lest you end up having too much or too little money withheld from your paycheck. If you have substantial other income, such as interest and dividends, adjust the withholding accordingly. If you’re paying off a mortgage or student loans, or are otherwise able to itemize deductions, you might adjust your withholding allowances upward to reflect your lower expected taxes.

If you’re changing jobs, try not to cash out of your 401(k) account. Instead, you can transfer those retirement assets to a traditional or Roth IRA, where they can keep growing for you and where you can control the investments.

When you get married, revise your W-4 withholding status immediately. Many couples get whacked with the “marriage penalty,” meaning that if both spouses work, they might pay more in taxes than two single people with the same incomes. Come tax time, run the numbers to see if it’s best to file your returns separately or jointly.

Divorcing? Again, adjust your withholding to reflect your new filing status. With the splitting of marital assets, your other income (such as interest and dividends) might change, and you might have less or no mortgage interest to deduct. Assets will also be divided, and the tax impact will follow the person who retains the property. Forced sales of assets might generate capital gains. Alimony is generally taxable to the person receiving it, and deductible by the person paying it, but child support is neither taxable to the recipient nor deductible by the payer. Your filing status is based on your status on the last day of the tax year.

Foolish trivia: Name that company

I’m the product of a 2015 megamerger between two companies that trace their roots to the late 1800s and earlier. Today, headquartered in Pittsburgh and Chicago, I’m the world’s fifth-largest food and beverage company, with a market value recently near $100 billion. I rake in more than $26 billion annually, with the help of eight brands that generate more than $1 billion annually. I sport more than 200 brands, including Jell-O, Velveeta, Grey Poupon, Lunchables, Kool-Aid, Smart Ones, OreIda, Oscar Mayer, Planters, Classico and Maxwell House. I employ people in more than 40 nations. Who am I?

Last week’s trivia answer

Few people know my name, but my chips are probably in your smartphone, cable box and other devices. I’m the product of mergers and spinoffs, and for more than 50 years, I have been tied to Hewlett-Packard, Agilent, AT&T, Bell Labs and Lucent, and I’m the product of a 2016 acquisition by Avago Technologies. Who am I? (Answer: Broadcom Ltd.)