Today we’re sharing an attractive investment opportunity for your consideration. It’s the type of investment that generally only works when market volatility is high. However, despite the VIX being at historically low levels, there are still pockets of high volatility in the market where the premium is attractive for selling insurance (puts) on stocks we’d like to own anyway.
A Brief Update on our Mortgage REIT Holding
Ventas: Big Safe Dividend or Dangerous Value Trap?
Ventas (VTR) is a healthcare REIT that pays a big 5.1% dividend yield. But its share price has declined dramatically since last summer (and particularly since the election). And considering the huge demographic healthcare tailwinds at its back, it might seem like now is a great time to “buy low.” This article reviews VTR's future prospects, and provides our strong views on whether it’s an attractive income opportunity or a dangerous value trap.
New Trades: Income Equity Strategy
The purpose of this post is to provide an update on several new trades in the Blue Harbinger Income Equity strategy. Specifically, we have added several new attractive closed-end funds (CEFs) that offer very healthy yields. We also sold one of our biggest yielding individual stocks, and we provide a rationale for the sale.
7.6% Yield CEF, Superior Management, Big Discount to NAV
This particular closed-end fund (CEF) offers an attractive 7.6% yield, an amazing track record of top-notch management, and currently trades at an exceptionally attractive discount to its net asset value (NAV). We are also very comfortable with its holdings, particularly its sector exposures, and believe it’s poised to deliver very strong future returns.
Attractive CEF Pays 7%, Big Discount to NAV
This morning we highlight an attractive “style-specific” Closed-End Fund (CEF) that offers a big 7.7% yield and trades at a compelling discount to its Net Asset Value (NAV). Importantly, this particular “style exposure” is extremely powerful over the long-term (it tends to outperform, by a lot), and it’s missing from many investors portfolios.
This 8% Yield Small Cap CEF Is Attractive
Small cap stocks provide significant long-term price appreciation potential, but a perennial problem for income-investors is they pay very little in terms of dividends. However, the small cap CEF we review in this article offers a very attractive 8.0% annual yield (paid quarterly). It also offers a great management team, an impressive long-term track record, and it currently trades at a compelling 16% discount to its NAV suggesting it has strong price appreciation potential ahead.
This 11% Yield CEF Has Big Upside Potential
If you like big yield and significant price appreciation potential, then this particular closed-end fund (CEF) is worth considering. It’s a sector-specific CEF that yields nearly 11% (paid monthly). And not only is the sector an attractive contrarian play for multiple reasons right now, the fund is trading at a double-digit discount to its NAV which suggests it may have even more upside rebound potential ahead.
High Income: CEF Quick Screen Ideas
If you like to generate steady high income, Closed End Funds (CEFs) may be on your radar. For example, equity CEFs often generate steady quarterly distributions in excess of 7%. If you are a young person saving for retirement, it’s generally a good idea to NOT invest in CEFs, but if you’re already retired (or semi-retired) then CEFs can be worth considering. This article highlights 30 equity CEFs (many trading at attractive discounts), and we also share our views on how CEFs can be valuable if used correctly.
5 Exchange Traded Funds (ETFs) for 2017
The following table shows the performance of 40 sector and industry ETFs sorted by year-to-date total returns. And not surprisingly, given the high political uncertainty this year, health care (and biopharmaceuticals, in particular) have performed very poorly, especially versus the S&P 500 which is up 13% this year. This article details five specific ETFs (across markets, sectors and industries) that we believe are particularly attractive headed into 2017...
A Small Cap Software Company with Big Upside
This week’s members-only investment idea is a small cap Software as a Service (SaaS) company with very significant price appreciation potential. The stock fell after the November election, but for all the wrong reasons. The stock price still hasn’t recovered yet, and we believe it has big upside potential in 2017 and beyond because it offers a better product with little competition and a very big total addressable market. This stock has room to run!
Apple: Will Trump Extend an Olive Branch?
During Wednesday’s “Tech Summit,” President-Elect Trump will likely extend an olive branch to Apple whereby he’ll offer a tax-break so companies (like Apple) can bring large overseas cash balances back to the US. However, of course there will be strings attached (for example, Trump wants iPhones manufactured in the US, despite daunting economics). This article reviews Apple’s current valuation, its healthy dividend, some of the possible results of the Tech Summit, and our views on whether now is a good time to buy Apple or jump ship!
Facebook: On Sale for Christmas?
Facebook shares are down more than 10% since late October while the market is up. Arguably, Facebook is down because of slowing growth fears, the incoming administration’s hostility to West Coast tech companies, and renewed concerns (and lawsuits) over unfriendly shareholder voting rights. However, this one-trick-pony (online advertising) may still have a lot of room to run. So do the negatives justify the lower share price, or is now a great time to “buy low” just in time for Christmas!?
This Country ETF has Room to Rebound & Run!
In sticking with this week’s ETF/Smart-Beta theme, our members-only investment idea is a country-specific ETF. It’s one that’s been beat up politically and in the market, but remains stronger than many investors give it credit for. It’s a diversified, relatively low-cost, way to benefit from a rebound and continued long-term production and growth.
Paylocity: Hyper-Growth in 5 Charts
Paylocity (PCTY) has negative net income, and a forward price-to-earnings ratio (91.4x) that would make most value investors shriek! However, it has also been experiencing “hyper” revenue growth that is hard to ignore. This article reviews Paylocity’s hyper-growth in five charts, and then provides our views on whether this Arlington-Heights-Illinois-based, zero-dividend-paying company, is worth considering...
Johnson & Johnson: Dividend Powerhouse, New ACA Risks
JNJ is an absolute dividend powerhouse having increased its dividend for more than 50 years straight. However, the company faces new and increased uncertainty risk in light of a Republican House, Senate and President-elect that seem determined to repeal the Affordable Care Act (ACA). In addition to its attractive growing dividend payment, significant long-term capital appreciation potential, and reduced risk via its large and diverse revenue base, we believe JNJ could eventually benefit from reduced regulatory burden under a modified ACA, but is now the right time to buy?
IBM: Has Big Blue Lost Its Way? Or Not?
IBM offers an attractive (3.5%) dividend yield, but the dividend alone is not enough if the stock can’t provide some long-term capital appreciation. In this article, we review IBM’s shrinking legacy business, its attempt at growth via “strategic imperatives,” its dividend, share buybacks, valuation, and risks. And we also provide our strong views on whether it’s time to buy or sell Big Blue.
Triangle Capital: Amazing Dividend or Dangerous Trap?
Triangle Capital is a Business Development Company (BDC) with an enormous 9.3% dividend yield. The share price has barely budged this year starting out at $19.11 and currently sitting at $19.32. However, the company cut its regular quarterly dividend by $0.09 per share back in May. The big question for income-focused investors: Is this amazing 9.3% dividend yield safe, or is it a dangerous trap to avoid?
Omega Healthcare: Big Dividend, Big Evolving Risks
Omega Healthcare (OHI) pays a big growing dividend (7.2%), and it has recently underperformed many of its healthcare REIT peers. Some investors are quick to sing its praises as a “value play,” but it is most certainly exposed to very real risks. Specifically, the evolving skilled nursing facilities industry calls into question the source of Omega’s future revenues particularly with regards to entitlement reform. This article provides our views on Omega, and addresses the all-important question: Is Omega worth the risk?
New Residential: Huge Profits as Banks De-Risk—But is it Safe?
If you like big dividends and discounted prices, you may have noticed that mortgage REIT New Residential (NRZ) pays an enormous 13.5% dividend and its shares have declined nearly 8% in the last two months. NRZ emerged following the financial crisis as banks had to shed risk. NRZ continues to generate big profits with its mortgage servicing rights business, its heavy use of leverage, and its expanding call rights securities strategy. But the big question… is it safe?