AGNC preannounced a significant decline to its book value for the third quarter, and is now a very tempting 17% yield. Especially considering some uncertainty has been removed and higher interest rates will benefit the net interest income going forward. However, there are massive market cycle risks (and opportunities) that AGNC investors need to navigate. In this report, we review AGNC’s business model, its new book value, price appreciation potential, dividend safety and long-term fundamentals. We conclude with our strong opinion about investing.
Clean Energy Solutions: Buy the Dip, If You Can Call It That
What started out as a microinverter technology (to help efficiently transform sunlight into energy) is rapidly growing into a one-stop-shop home-energy-solutions and technology company. Specifically, as the company’s microinverter business continues to grow rapidly (and gain market share from the other main industry competitor’s inferior technology), the product line continues to expand (now including batteries, EV charging, and impressive industry-leading smart software) into a massive secular trend (cleaner energy) opportunity (the SAM, or “serviceable addressable market,” is estimated to be $23 billion by 2025, versus the company’s $1.7 billion in total revenue over the last 12 months).
Attractive High-Growth BDC: 12.0% Yield, Compelling Price
If you are an income-focused investor, the BDC we review in this report may be interesting to you. It has a unique business strategy and a compelling 12.0% distribution yield. We dig into the details (including the nuances of the strategy, valuation, the current market environment, dividend safety and risks), and then conclude with our strong opinion on investing.
Income Equity Portfolio: 3 New Buys, 2 Positions Trimmed
Attractive Cybersecurity Stock: High Growth, Profitable, On Sale
The cybersecurity business we review in this report is attractive for a variety of reasons, including its high growth, large total addressable market and attractive valuation. In particular, the shares have sold off hard as the low-interest-rate bubble has burst, but unlike other “pandemic darlings” this one is actually very profitable and generates powerful cash flow (therefore it won’t face the same growth-capital-raising challenges as others that will be paralyzed by higher borrowing rates, lower stock prices for new share issuances, and a slowed economy). Its valuation multiple has been crushed, but its business and earnings keep growing—and likely will for many years to come. We currently own shares.
No, US Treasuries Do Not Still Yield Close to 0.0%
An almost constant refrain from frustrated income-focused investors and savers alike over the last few years is that interest rates have been close to zero. And now with all the talk of inflation and rising rates, some investors have failed to notice that shorter-term US treasury bills and notes (which are guaranteed by the US government) are now offering somewhat compelling yields. This quick note shares a few important details.
S&P 500: Blood In The Streets, 3 Big Risks, 3 Dividend-Growth Stocks
Rarely has there been a market where both stocks and bonds have fallen so hard at the same time. And if you’ve tried to hide in cash, well inflation is crushing you too. From an investor standpoint, there is blood in the streets, and things can still get much worse, especially considering the precipitous technical level of the S&P 500, the rising S&P 500 Fear Index, the dangerous S&P 500 style reversion trend and the Fed’s extreme focus on battling inflation. In this report, we share our take on the current unsettling position of the S&P 500, three big risks to be aware of, and three dividend-growth stocks worth considering. We conclude with an important takeaway and our strong opinion on investing in this market.
10 Top Dividend-Growth Stocks: REITs, Blue Chips and BDCs
As the market selloff intensifies, one strategy that helps many investors cope is dividend-growth investing. By owning stocks that pay steady growing dividends, it becomes psychologically easier for some investors to avoid the panicked selling that ends up hurting them so badly in the long term. Afterall, long-term compound growth is where the real money is made when it comes to investing. Nonetheless, steady growing dividends can help investors cope with high volatility (like right now), so we have included 10 top dividend growth ideas below. They all pay growing dividends and trade at attractively discounted prices if you are a disciplined long-term investor.
The Dow Enters Bear Market Territory
Testing the June Lows
Futures are pointing to a lower market open today, as the S&P 500 is set to re-test the June low of 3,636. Having closed Friday at 3,693, and with pre-market futures trading around 3,688, technical analysts are left wondering if the market will take out the prior lows—and does that mean there is more pain ahead?
Stay Focused: An Update on The Fed and The Market
On Wednesday, the Fed made clear it will continue to aggressively fight the high inflation that it previously ignored and dismissed as “transitory.” Specifically, the Fed just raised rates by 75bps for the third FOMC meeting in a row, and these hikes continue to harshly punish investment accounts holding both stocks and bonds.
High-Growth, Mid-Cap, Cloud-Data Company, Attractively Priced
The company we review in this report provides high-capacity storage for data centers using software and hardware technologies that are extremely well rated by customers. What’s more, the company is growing rapidly, and will continue to do so, as the digital revolution and migration to the cloud (data centers) are the biggest secular trends in the world today. We like the shares because they are positioned to benefit from many years of high growth and because they currently trade at an attractive price.
Long-Term Investors: Attractive, Electrical Components, Smid-Cap Stock, On Sale
There is a lot to like about this attractive electrical components stock that we first wrote about back in 2015. For example, it is highly profitable, growing rapidly, has a large Total Addressable Market (“TAM”) opportunity and the shares are currently on sale because short-minded investors are incorrectly extrapolating short-term revenue growth estimates (due to a tough comp and the market cycle) and not seeing the long-term secular trend remains firmly intact.
Fed Rate Hikes To Impact Top Big-Dividend BDCs
With the Fed set to raise interest rates another 75 basis points on Wednesday (following its 2-day open market committee meeting which kicks off today), it’s worthwhile to revisit big-dividend BDC and how they are impacted by rising rates. This note shares data on how many of the most popular publicly-traded BDCs are impacted differently by rising rates depending on the structure of their balance sheets (floating-versus-fixed-rate assets and liabilities, as well as leverage levels). We also highlight a few of our favorite BDCs (two we own and one we are considering) that yield 9.1%, 10.0% and 10.2%, respectively.
When the Market Falls, Just Keep Buying More (Of This Attractive +6% Yielder)
When the market falls, just keep buying more. That’s one of the best strategies a long-term investor can follow, and one of the best ways to implement it is through the attractive closed-end fund (“CEF”) we review in this report. It currently trades at a compelling 14% discount to its net asset value (“NAV”), and it guarantees at least a 6% distribution yield each year. What’s more, it has been paying big distributions to investors for over 80 years straight, and it has an impressive long-term track record of outperforming the S&P 500 (net of fees). We review all the details in this report, and then conclude with our strong opinion on investing.
150 High-Income CEFs: Ranking Our Top 7
Closed-End Funds, or CEFs, can be an income-focused investor favorite because of their big steady distribution payments to investors (often yielding in excess of 6% to 10%, frequently paid monthly). However, not all CEFs are created equally (in fact they can be widely different). In this report, we offer up a quick review of what a CEFs is, we share current data on over 150 high-income CEFs (including strategies, leverage, yield, distribution frequency and discount/ premium versus net asset value), and then finally conclude with a ranking of our top 7 CEFs that are particularly attractive right now and worth considering for investment (if you are an income-focused investor).
Adobe to Acquire Figma for $20 Billion
So the highly-profitable multimedia and creativity software company, Adobe, has agreed to acquire web-first collaboration design platform, Figma, for $20 billion (half cash, half shares). At roughly 50 times next years revenues, and considering Adobe’s current total market cap is only around $173 billion, this is a hefty price tag, especially at a time when the market is down and economic growth is slowing. We share our thoughts on the acquisition and the future of Adobe in this quick note.
Attractive Industrial REIT: 4.4% Yield, Discounted Price
Industrial REITs have sold off particularly hard this year, but one name in particular is attractive if you can handle its strategy and risks relative to industrial REIT peers. In this report, we review this particular REIT’s business, industry outlook, valuation, dividend and risks. We conclude with our opinion on investing in this 4.4% dividend yielder.
A Quick Note on Deflation
Yesterday (Tuesday) was the worst day for stocks since mid 2020 (when Covid lockdowns were being announced) because a higher than expected inflation number (CPI) spooked investors. And as the Fed fights aggressively to battle inflation (with interest rate hikes) some pundits believe the Fed is going WAY too far, and deflation is now the bigger risk.
Are You Panicking Over This Morning's CPI Number?
So the much anticipated monthly Consumer Price Index (CPI) inflation number was released this morning. The year-over-year number ticked slightly higher (even though gas prices are down) and the market is selling off hard. Here are four ways to keep the media’s unrelenting sensationalized fearmongering in check as you stay focused on your investment goals.