January 26, 2011
ARMH Long at $25 - Emerging Technology
After my initial quick profit in ARMH turned out to be a lesson in sticking with my emerging technology bets, I decided to get back in again during the recent retrenchment. Not that I resented making nearly 10% profit in 15 days, it's just that 30% profit in 30 days would have been better.
All those iPads and phones need ARM processors, so I think this may see some volatility, but I'll try and stick with it a big longer this time.
All those iPads and phones need ARM processors, so I think this may see some volatility, but I'll try and stick with it a big longer this time.
AREX Long at $25 - Trade the trend
The 4 month trend says it all. Notwithstanding the trend, when we pay $3 at the pump, it's time to buy gas and oil stocks. I'm looking at XTEX as well for my income portfolio as they pay a $0.26 dividend in Feb to shareholders on record 1/31.
NVEC Long on Technology to Win the Future with...
I entered this trade on Monday and promptly got walloped. I've given up on with stops with TD Ameritrade, so decided to stick it out, as this was really an emerging technology play not an active trade. I only closed my previous position because of TDAmeritrades dishonest brokers selling my position for under what it was trading at. They still haven't got back to me on that one.
Fortunately after the week in the doldrums and way too far into the red from my point of view, it bounced up on strong earnings and good volume. Maybe it was the State of Union speech last night that gave the market the boost today. NVE Corp is the sort of company that if they get their technology off the ground, it will become a decade dominating game changer and let the USA 'win the future'.
Fortunately after the week in the doldrums and way too far into the red from my point of view, it bounced up on strong earnings and good volume. Maybe it was the State of Union speech last night that gave the market the boost today. NVE Corp is the sort of company that if they get their technology off the ground, it will become a decade dominating game changer and let the USA 'win the future'.
Great recovery day
Some days you wish you had just bought all of these yesterday...
Most of these I mistimed and bought on Monday before they all dropped 4-6% on some weak big corporate earnings reports. However after todays excitement things are looking positive again and I think these stocks all have lots of upside.
FACE I should have sold all when the volume was higher and I took the 5% 1 day gain. It's so thinly traded its more like gambling.
Most of these I mistimed and bought on Monday before they all dropped 4-6% on some weak big corporate earnings reports. However after todays excitement things are looking positive again and I think these stocks all have lots of upside.
FACE I should have sold all when the volume was higher and I took the 5% 1 day gain. It's so thinly traded its more like gambling.
XTEX Long at 15.24 in time for Jan 31 dividend
This is not the ideal technical entry point in CrossTex Energy LP (XTEX), as my long entry at $15.24 was above the upper bollinger band. However I wanted to ensure I got the 26c dividend payable to shareholders of record on January 31.
XTEX runs gas pipelines across Texas, where there is a lot of activity drilling new wells to extract oil using new methods. They've been in a huge uptrend ever since being hugely sold off at the end of 2008.
The monthly chart is very similar to AREX. XTEX is my longer term dividend and capital gain play. Target $30 in 12 months. AREX for shorter term trades, but both show huge potential, if oil prices keep rising and middle east democracy movements mean increased uncertainty regarding US energy interests.
XTEX runs gas pipelines across Texas, where there is a lot of activity drilling new wells to extract oil using new methods. They've been in a huge uptrend ever since being hugely sold off at the end of 2008.
The monthly chart is very similar to AREX. XTEX is my longer term dividend and capital gain play. Target $30 in 12 months. AREX for shorter term trades, but both show huge potential, if oil prices keep rising and middle east democracy movements mean increased uncertainty regarding US energy interests.
January 21, 2011
FACE quick 5% 1 day profit
Physicians Formula Holdings Inc (FACE) is a small cosmetics company whose stock price shows large price swings on occasion for apparently no reason. Basically, an awful stock to trade in a controlled way. However, this high volatility does seem to be bound within approximate trends, and I wanted to take advantage of the volatility.
I'd had this order sitting in a queue to buy at $3.55, which I calculated would be an entry point with a high probability of a bounce back to $3.90 - $4.10 (10%) within 15 days. Basically I had forgot about the order until it got triggered yesterday after the volatility this week. FACE then jumped back 8% today along with the big jump in the indexes on the open, then promptly dropped back 3%.
So I closed half the position for a 1 day 5% gain.
The other 50% I'll hold on to for and see if it reaches my original target profit and target duration of $3.90 within 15 trading days.
I'd had this order sitting in a queue to buy at $3.55, which I calculated would be an entry point with a high probability of a bounce back to $3.90 - $4.10 (10%) within 15 days. Basically I had forgot about the order until it got triggered yesterday after the volatility this week. FACE then jumped back 8% today along with the big jump in the indexes on the open, then promptly dropped back 3%.
So I closed half the position for a 1 day 5% gain.
The other 50% I'll hold on to for and see if it reaches my original target profit and target duration of $3.90 within 15 trading days.
January 3, 2011
5 Small Stocks That Pay Big Dividend
This article first appeared in Street Authority
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As an income investor, I occasionally feel forced to choose between growth and a heftydividend. Finding a high yielding stock that also has good growth potential is a rarity. One reason for that may be that fast-growing companies often don’t pay a dividend. Instead, these companies re-invest their cash flow in the business and only begin paying a dividend when internal growth prospects diminish.
While it is generally difficult to find income and growth in the same investment, there are a handful of exceptional stocks that manage to combine both. These rare gems do exist, but the trick is knowing where to look.
A good place to start is in the universe of small cap stocks. That is because small companies typically grow faster than big companies. They also perform better coming out of a recession. That pattern is evident in this economic recovery. The S&P 600 Index of small cap stocks is up about 28% in 2010 after returning 25.6% in 2009. That’s more than triple this year’s 13% gain of the well-known S&P 500 Index of large companies.
Small cap outperformance didn’t suddenly begin with the current bull market. In fact, small cap stocks have led the market for more than a decade. Since the end of 1999, small cap stocks have delivered annualized gains of 3.9%, compared with losses of 0.5% for large stocks.
A screen for small cap stocks was my starting point for finding high yielders that are still growing. I then screened this group for names with generous yields and above-average income growth. Here are the top results from my search.
1. Fifth Street Finance Corporation (NYSE: FSC)
Yield: 11%Business development companies (BDCs) like Fifth Street make loans to small companies, often taking an equity stake as well. More importantly, BDCs pass along the majority of income earned from these investments to shareholders, allowing them to pay great yields for aggressive investors -- many currentlyyield 8% to 11%.
Yield: 11%Business development companies (BDCs) like Fifth Street make loans to small companies, often taking an equity stake as well. More importantly, BDCs pass along the majority of income earned from these investments to shareholders, allowing them to pay great yields for aggressive investors -- many currentlyyield 8% to 11%.
Fifth Street is benefiting from renewed merger and acquisition activity this year and has signed a record level of new deals totaling $211 million in the December quarter. Per share earnings doubled in the fiscal year ended in September. Income from investments rose by 31%. Fifth Street pays dividends monthly at an annualized rate of $1.28. The stock is up 15% in 2010 and has outperformed the S&P's 13% return.
2. Martin Mainstream Partners LP (Nasdaq: MMLP)
Yield: 8%Martin provides natural gas gathering, storage and transportation services for independent oil and gas producers. This limited partnership recently recorded one of its best quarters ever for its transportation business, which is involved in cleanup efforts in the Gulf of Mexico following the BP (NYSE: BP) oil spill. Martin has hiked cash distributions every year since 2003 and currently pays a $3.00 dividend. Cash flow of nearly $44 million so far this year has amply covered $42 million in dividend payments.
Yield: 8%Martin provides natural gas gathering, storage and transportation services for independent oil and gas producers. This limited partnership recently recorded one of its best quarters ever for its transportation business, which is involved in cleanup efforts in the Gulf of Mexico following the BP (NYSE: BP) oil spill. Martin has hiked cash distributions every year since 2003 and currently pays a $3.00 dividend. Cash flow of nearly $44 million so far this year has amply covered $42 million in dividend payments.
Martin's shares have returned 26.7% this year -- more than twice the S&P's return. Consensus analyst estimates look for earnings to improve about 55% in 2011.
3. Great Northern Iron Ore Properties (NYSE: GNI)
Yield: 11%Great Northern owns more than 67,000 acres of mineral leases on the Mesabi Iron Range in northeastern Minnesota. This royalty trust is benefiting from increased mining of its leases due to rising steel demand and higher royalty rates. Net income for the September quarter jumped nearly five fold year-over-year, from $1.3 million to $5.2 million.
Yield: 11%Great Northern owns more than 67,000 acres of mineral leases on the Mesabi Iron Range in northeastern Minnesota. This royalty trust is benefiting from increased mining of its leases due to rising steel demand and higher royalty rates. Net income for the September quarter jumped nearly five fold year-over-year, from $1.3 million to $5.2 million.
Great Northern’s 11% yield is among the highest in the mineral trust segment. Annualized distributions have increased from $10.25 five years ago to $12.25 today. Cash flow more than covers dividendpayments.
Great Northern's shares have returned an average of 9.1% annually in the past five years, but are up 47% in 2010. Investors should note, however, that the trust has a finite lifespan and dissolves in April 2015. On that date, investors will receive a final distribution amounting to the liquidated value of the trust.
4. Triangle Capital Corporation (Nasdaq: TCAP)
Yield: 9%This BDC specializes in the low end of middle market lending, typically investing in businesses with annual revenue of less than $100 million. Triangle has enjoyed a steady stream of new portfolio investments, which has produced a 40% gain in investment income this year. Consensus analyst estimates target 8% earnings growth next year.
Yield: 9%This BDC specializes in the low end of middle market lending, typically investing in businesses with annual revenue of less than $100 million. Triangle has enjoyed a steady stream of new portfolio investments, which has produced a 40% gain in investment income this year. Consensus analyst estimates target 8% earnings growth next year.
Triangle has paid 16 consecutive quarterly dividends since its public offering in 2007. The company also raised quarterly dividends 2.4% in December to a $1.68 annualized rate. Triangle's dividend payout is comfortable, at 82% of earnings. The stock has also been a stellar performer this year -- shares are up nearly 57%, more than four times the S&P's return.
5. Knightsbridge Tankers, Limited (Nasdaq: VLCCF)
Yield: 10%Bermuda-based Knightsbridge owns supersized, ocean-going cargo vessels that transport oil and bulk commodities. This company’s operating cash flow has doubled this year and it recently raised $88 million through a public offering, which will be used to pay down debt and acquire more ships. Cash flow of $49.6 million this year easily covered $21.2 million in dividend payments. These dividend last year, but payments have been consistent and rising in 2010. Knightbridge paid quarterly dividends of $0.40 in March and $0.50 in June and September.
Yield: 10%Bermuda-based Knightsbridge owns supersized, ocean-going cargo vessels that transport oil and bulk commodities. This company’s operating cash flow has doubled this year and it recently raised $88 million through a public offering, which will be used to pay down debt and acquire more ships. Cash flow of $49.6 million this year easily covered $21.2 million in dividend payments. These dividend last year, but payments have been consistent and rising in 2010. Knightbridge paid quarterly dividends of $0.40 in March and $0.50 in June and September.
Action to take--> My top pick for conservative investors is Great Northern Ore Properties. These shares offer safety combined with an attractive 11% yield. Aggressive investors may want to look more closely at Fifth Street Finance. Fifth Street has more risk, but carries a strong yield and has appreciation potential if earnings hit analyst targets next year.
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