Daily Archives: February 26, 2019

IPOs

Get In on the Next Big IPO Without the Volatility

For the most part, initial public offerings are a sucker’s game.

IPOs, especially for name-brand tech companies, generate lots of hype. And even if the company is solid, it often can’t justify its debut stock price – let alone any surges in its first few days on the market.

But that doesn’t mean you can’t get in on some of the most exciting upcoming IPOs – like Uber, Lyft, Slack, Pinterest, or Airbnb – and still limit your risk.

In fact, we’ve got a pick today that gives you some of the hottest IPOs while taking all the guesswork (and grunt work) out of trying to pick winners.

Plus, we’ll also give you the opportunity to grab multiple upcoming IPO picks in a red-hot industry that are ready to hit the market in 2019. Each of these is capable of unleashing millions of dollars into the market, so you won’t want to miss these opportunities.

But first up, one of best ways to approach the IPO market – especially if you don’t have the time or patience to research every new offering individually – is through a well-managed ETF.

Well-managed doesn’t just mean selecting the most promising public offerings. It also means holding onto the ones that still have room to grow. That way you both minimize your risk and maximize your gains.

That’s why we like one particular ETF that gives you access to the broad IPO market while blending both new offerings and older ones.

Have 28 Seconds? You could make $2,353 – and you won’t need to buy a single share of stock up front to collect this cash, or spend a nickel on anything. Click here to learn more…

And before you worry that an ETF is going to dilute your gains too much, keep in mind that this pick has beaten the S&P 500 by more than 50% over the last two years.

So if you’ve always wanted to get into the IPO game but were (rightly) concerned about volatility and overhyped offerings, this is your ticket to cutting edge of the stock market.

And you can get there without sweating endlessly over a new offering’s financials…

Your Quickest, Easiest Entry Point into Venture Capitalism

First Trust US Equity Opportunities ETF Fund (NYSE: FPX) is an ETF with roughly 100 holdings. These include some of the biggest companies to go public in the last few years. They include Match Group Inc. (NASDAQ: MTCH), Coupa Software Inc. (NASDAQ: COUP), and Wayfair Inc. (NYSE: W).

Because most of the stocks in FPX only make up about 1% each of the portfolio, no one stock is going to sink the fund. And First Trust balances out those young startups with some big names that have been around for a while, like Hewlett Packard Enterprise Co. (NYSE: HPE), Tyson Foods Inc. (NYSE: TSN), and Kraft Heinz Co. (NASDAQ: KHC), which provide an extra layer of protection.

The principle in play here is that it’s foolish to invest in IPOs and then drop them once they’re no longer new. So FPX holds on to select stocks for the long haul. That way the fund doesn’t get burned by selling stocks before the initial volatility has settled down.

Just Revealed: The Secret to Potentially Growing Incredibly Wealthy Buying Straight-Up Stocks

One great feature of FPX is how diversified it is. It’s not just grabbing tech stocks – though there are certainly plenty of them – but includes offerings across the finance, auto, retail, and energy industries.

And because the fund’s managers are researching every IPO before they decide to include it in the fund, you can rest assured that your money isn’t going into every overhyped offering that hits the market.

Let’s take a look at some of the winners this fund has chosen over the years…

  • Square Inc. (NYSE: SQ) is probably best known for the adapters people can attach to their smartphones to accept credit cards, leveling the playing field for artists and small startups. It now offers a wide range of products for financial transactions, including the popular Cash App for consumer-to-consumer transactions. That app can now also be used to purchase Bitcoin, and we can no doubt expect even more functionality in the future. Now at more than eight and a half times its debut price in November 2016, this stock likely still has room to run.
  • SailPoint Technologies Holdings Inc. (NYSE: SAIL) is a provider of identity governance services for more than 1,000 global customers. Identity governance is one of those less exciting, but critical services, allowing enterprises to manage their cloud-based and on-site applications and data effectively, efficiently, and safely. SailPoint stock is up 162% since its November 2017 debut, and the need for its services is only growing.
  • Etsy Inc. (NASDAQ: ETSY) brings e-commerce to the arts, crafts, and vintage items market. Its earnings per share (EPS) soared into the black in the 2017 fiscal year, and according to FactSet, is projected to triple between now and 2021. Despite a rough start to its appearance on the market, Etsy has now doubled since its November 2015 debut.
  • ZenDesk Inc. (NYSE: ZEN) is bringing customer service into the 21st century, providing software solutions to make the process run quickly and efficiently. Like Etsy, ZenDesk’s EPS went sharply positive within the last couple years. More impressively, it is expected to multiply nearly seven times by 2022. Those rising fortunes have boosted the stock 768% since it debuted in May 2014.

That said, if you want to up your game and grab a potential rocket stock on the IPO market, we’ve got an opportunity – a whole series of opportunities, in fact – you won’t want to miss.

Source: Money Morning

Dividends

I’ve Kept My 2 Top Dividend Stock Tips Secret—Until Now

Let’s face it: this frothy market has made it much tougher to uncover the big, cheap dividends you need to fill out your retirement portfolio. So today we’re going to fight back with my top 2 “off-the-record” strategies for honing in on 7.4%+ dividends that still have a lot of upside ahead.

First, to get a sense of the vice the rebound has locked income investors in, check out this chart:

Stock Bounce Crushes Yields

That amounts to an 18% bounce since Christmas Eve, which has sliced 15% off the S&P 500’s dividend yield (because yields fall as prices rise). As I write, the average S&P 500 name dribbles out a 1.9% payout—less than inflation!

Which brings me to the first strategy I’ll show you today.

Contrarian Tip No. 1: When They Go Short, We Go Long

Short interest is one of my favorite ways to “time” stock buys.

If you’re unfamiliar, short selling involves selling a stock you’ve borrowed, with a commitment to buy it back later, hopefully at a lower price. Your profit lies in the difference between the selling price and the price at which you have to buy it back.

It’s a dangerous path that can expose you to unlimited losses (because there’s no limit on how high a stock can rise, while your “regular” buys can only go to zero).

But don’t worry—we’re not going to “short” stocks ourselves. Instead, we’re going to sit back and cash in on the short sellers’ greed.

Here’s how: if a stock attracts a lot of short interest and the price moves up, the “shorts” will scramble to buy and cover their positions. That’s great for us because it can create a “feedback loop” where the rising price triggers short covering, driving the price higher, triggering more short covering, and so on.

All we have to do is relax, let the chaos unfold, and watch our stock rocket higher! And these “squeezes” can be truly epic, like the one that caused Volkswagen to explode 82% in a single day in 2008.

So how do we find our own Volkswagen (and better yet, one with a 7%+ dividend)?

A good rule is that short sellers tend to be the most wrong at the extremes, so we’ll look for short interest that’s wayhigher than usual, then jump in. You can see this in action with Omega Healthcare Investors (OHI), a real estate investment trust (REIT) I’ve recommended in my Contrarian Income Report service:

Short Covering Sends OHI Ripping Higher

Notice how rising short interest kept a lid on OHI’s price, until it peaked in January 2018? If you’d jumped in then, you would have bagged a 35% price gain in just over a year, as short covering helped pry the stock higher.

And that’s just in price gains! Never mind that OHI pays a 7.4% dividend now (and would have paid nearly 10% when short interest peaked). Throw the payout in, and your gain jumps to 48% in just one year.

So much for the common “wisdom” that you can’t get big gains and big dividends from a single stock!

Now let’s move on to our next contrarian buy signal.

Contrarian Tip No. 2: Check In as Analysts Check Out

You can catch another big windfall by paying close attention to analyst ratings—but not the way most people think.

Remember, everyone loves to follow the herd, and analysts are often the lead lemmings. That’s why, when most folks research a stock, they look for those with a lot of buy ratings from Wall Street—if they look at these ratings at all.

But they’ve got it backwards! Because if every analyst already has a buy rating on a company, there’s no hope of upgrades, which can send shares stair-stepping higher.

That’s what happened with self-storage REIT CubeSmart (CUBE), payer of a 4.2% dividend that’s skyrocketed in the last five years. As you can see below, CUBE’s shares nearly doubled from June 2014 to March 2016, as the number of analysts recommending it also nearly doubled, from four to seven.

Wall Street Optimism Drives an Easy Double …

Fast-forward to today, and just one analyst has a “buy” on CUBE, even though the Federal Reserve has halted further rate hikes, a big plus for the entire REIT sector. That sets the stock up for another strong run as analysts climb back aboard.

21 Cash-Spinning Buys for 7.5% Payouts and BIG Gains

Here’s the roadblock most regular folks slam into with “second level” indicators like these: the big brokerages keep ALL of this powerful research to themselves!

Free services, like Yahoo Finance, give us crumbs, with buy recommendations limited to just the last four months. Basing a buy decision on that tiny slice of data could send you straight off a cliff.

Don’t Buy ANY Stock Based on This!

Source: Yahoo! Finance

Finding short interest is even harder. Your only real option here is a paid service like Ycharts, but that will set you back hundreds of dollars a year!

Source: Contrarian Outlook