An Analyst’s Bullish $10 Trillion Case for Crypto

Dear Early Investor,

A broker from a big bank just did something I’d never do…

He put a number on the potential value of the blockchain market.

If you think, as I do, that blockchain technology will expand from dozens of uses to hundreds and then thousands, how can you calculate a precise market value for that?

It’s like Thomas Edison trying to predict in the late 1800s how much the electricity market would be worth a few decades into the 20th century.

Did he realize at the time that almost everything we now make and use, not just lights, would be electrified?

Probably not. How could he?

(And the one thing he thought would be electrified – vehicles – didn’t catch on until more than 100 years later!)

I believe at some point in the future (10 years? 20 years?), most of the services we’ll be using on a daily basis will be enabled by the blockchain.

Again, how can you put a price on such a ubiquitous technology?

Is it in the tens of billions? Hundreds of billions? More?

A Report From Deep Inside Wall Street

Here’s the best thing about the report this broker put together…

It doesn’t come from crypto investors talking their own book… initial coin offering companies hyping their future growth… or blockchain evangelists espousing best-case scenarios as a given.

Mitch Steves, the author of this report, is a traditional Wall Street equity analyst. He works for the RBC Capital Markets subsidiary.

His only connection to blockchain and crypto?

Among the companies in his bailiwick is NVIDIA because it makes graphics processing units for mining cryptocurrency.

By the way, he says the $4 billion-plus market for mining cryptocurrency is here to stay.

Steves says that blockchain technology is misunderstood – that store of value and payment use cases are the most commonly cited but “the least interesting.”

The single most “positive technology” breakthrough is the one staring us in the face: The blockchain, the underlying technology, HAS NEVER BEEN HACKED.

(And, in my opinion, it WILL NEVER be hacked.)

This is no small thing. Steves compares Box, a content management platform, with Filecoin, a decentralized blockchain equivalent, to highlight the differences…

With Box, your data is owned and controlled by a third party that has access to your information (a photo loaded can be retrieved by anyone with access to Box servers – employees). With Filecoin, your storage is distributed and decentralized, making the holders unable to retrieve your photo (they would need to hack every computer on the decentralized network – blockchain). Your information is now secure, and without your private keys, it cannot be accessed.

This is an early case of how a globally decentralized network of computers can work using the blockchain. Steves calls this network of computers the “World Computer.”

He says that same concept can be applied to a “wide variety of decentralized applications (aka ‘dapps’).”

I completely agree.

Rose-Colored Glasses?

What Steves is saying is reasonable and, frankly speaking, not entirely novel. People who aren’t paying close attention may be confusing hacks of exchanges and individual wallets (which has happened) with hacks of the blockchain itself (which has never happened).

But insiders have well understood the security benefits of putting data, transactions, assets, documents and sensitive information on the blockchain… and how the blockchain makes it fasteasy and secure to track these things.

But it’s nice hearing this confirmed by a big bank with no vested interest in the crypto or blockchain markets.

And because Steves hails from outside the crypto community, he openly acknowledges the “many risks to crypto.” No rose-colored glasses on him.

Among the risks, he lists the possibility of an attack if a single entity were to garner more than 50% of the computing power (which, I should add, would be near impossible).

Other risks mentioned? Coordinated attacks to manipulate prices… and the potential for smartphone wallet hacking.

The Worth of the Market?

How he arrives at this big round number turns out to be the most disappointing part of his 38-page report.

He basically took a third of the roughly $30 trillion in assets held in offshore funds and gold. Just a rough stab, in other words.

But perhaps that’s as it should be. At this early stage, trying to do anything more would be a reach.

We simply don’t know how big this number will be. Anybody who says differently is lying to themselves or everybody else.

However, I believe it will be a big number. Blockchain technology is driving a surge of innovation in the development of new protocols and blockchains.

There’s a long way to go. And nothing is a given at this point. But decentralized computer technology has the potential to reinvent huge swaths of the global economy.

With that kind of upside, even a modest investment could yield quite a large return.

Good investing,

Andy Gordon
Co-Founder, Early Investing

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Source: Early Investing 

5 Great Stocks to Take a Bite Out of China

Source: Maher Najm via Flickr

The fears of a trade war have sent the markets into a bit of a panic mode lately. Volatility has spiked and we’ve seen some pretty nasty intraday swings. But it’s not just U.S. firms that have felt the effects of the tariffs. Chinese stocks have also been hurt.

Since the war of words and tariffs, Chinese stocks have felt many of the same pressures as their U.S. counterparts and have sunk by pretty big amounts. But in those drops, Chinese stocks could be big bargains.

The long-term picture for China is still rosy. The nation’s huge and growing consumer class is spending, while its importance in the world’s economic picture is assured — with China becoming less and less reliant on the U.S. For investors, the key emerging market is a must own and now could be a great time to buy them.

With that, here are five great ways to load up on Chinese stocks.

The Best Ways To Buy Chinese Stocks Now #1: iShares MSCI China Index Fund (MCHI)

The simplest and quickest way to add a hefty dose of Chinese stocks is the iShares MSCI China Index Fund (NYSEArca:MCHI). The index ETF has grown more than $3.5 billion in assets as it represents one of the broadest takes on the nation.

As its name implies, MCHI tracks the benchmark MSCI China Index. That index covers a wide spectrum of Chinese equities, including both large- and mid-caps. In fact, MCHI’s 154 stocks provide exposure to roughly 85% of the entire Chinese market available to international investors. And that number is getting bigger as index provider MSCI has begun to gradually add exclusive A-shares. This boosts its holdings to over 375 when the transition is finally done.

That broad exposure to China’s equities makes MCHI one of the best ETFs for investors looking to profit from the nation’s continued rise. And it certainly has delivered in the returns department. MCHI has managed to post an average annual return of 10.76% over the last 5 years and was up an astonishing 53% in 2017.

And as a core holding, MCHI is also a pretty cheap option as well. Expenses for the Chinese stocks ETF only costs 0.62%- or $62 per $10,000 invested.

The Best Ways To Buy Chinese Stocks Now #2: Guggenheim China Small Cap ETF (HAO)

Small-caps have long been the way to play any nation’s domestic economy. After all, smaller firms usually don’t have the global reach of their larger sisters. And when it comes to China, that fact is no different. Smaller is a direct bet on the Asian Dragon’s domestic growth.

The way to play that growth is the Guggenheim China Small Cap ETF (NYSEARCA:HAO).

HAO follows the AlphaShares China Small Cap Index- which tracks the performance of Chinese stocks with market caps under $1.5 billion. HAO’s 319 stocks only include publicly-traded mainland stocks. So, no A-shares. Even without them, the ETFs diversification is broad with no sector accounting for more than 17% of assets.

Performance for HAO has been ok- with a 5-year average return of 7.17%. However, the fund has had periods over double-digit performance based on reactions to the Chinese economy. It’s a volatile play that could pay-off big time for investors looking for a leveraged play on the nation’s growth.

Expenses for HAO clock in at 0.75%.

The Best Ways To Buy Chinese Stocks Now #3: Matthews China Dividend Fund (MCDFX)

Source: Shutterstock

For investors looking for an active way to play Chinese stocks, the Matthews China Dividend Fund (MUTF:MCDFX) could be a great choice.

Matthews’ sole focus is investing in Asia and as a result, the firm’s mutual funds have had plenty of outperformance vs. traditional index funds. This includes MCDFX. The fund has managed to beat the previously mentioned MSCI China Index by nearly double annually since its inception in 2009.

The key is the mutual fund’s focus. MCDFX bets on dividend payers in China. That provides a less volatile ride for shareholders and also provides plenty of income. While most view Chinese stocks as pure growth elements, they also can be great dividend payers. The fund’s 52 holdings throw off a healthy 2.59% dividend yield. That’s more than the S&P 500.

Perhaps the only downside to MCDFX is its expense ratio at 1.22%. in the world of low-cost investing, that’s very high. However, given its outperformance and dividend-focus, it could be worth paying for those investors looking for an active route into China.

The Best Ways To Buy Chinese Stocks Now #4: Global X China Consumer ETF (CHIQ)

One of the biggest reasons to own Chinese stocks in the first place is its growing middle class. With a population of around 1.4 billion, China’s story is very much a consumer one. As the nation’s wealth has expanded, consumer demand in the country has only exploded. The best part is the story is still only in the first couple innings of a very long ballgame.

To that end, betting directly on China’s growing consumerism makes a tone of sense. And the Global X China Consumer ETF (NYSEARCA:CHIQ) is the way to do it.

CHIQ tracks the Solactive China Consumer Total Return Index -which is a measure of all the consumer discretionary and staple stocks that operate in China. The fund’s 40 holdings read like a who’s who of retail, beverage, media, apparel and personal and household products companies in the nation. All in all, it’s a broad-bet on a quickly growing segment of the Chinese economy.

Much like previously mentioned HAO, CHIQ’s returns have been mixed- with periods of significant outperformance and underperformance. Over the last five years, however, CHIQ has averaged a 7.96% annual return. That’s not too shabby and considering the long-term projection for consumer growth, performance should pick-up over the upcoming decades.

Expenses run at 0.65%.

The Best Ways to Buy Chinese Stocks Now #5: Alibaba Group Holding Ltd (BABA)

The ‘New’ Alibaba Group Holding Ltd (BABA) Stock Looks a Lot Like the Old One

Source: Shutterstock

If you were going to own just one Chinese stock, it would have to be Alibaba Group Holdings Ltd (NYSE: BABA). Heck, if you were going own any tech stock- from any country- it might just have to be BABA. That’s because the stock has become a conglomerate of the some of the best takes in the technology sector.

For starters, BABA’s main bread-n-butter is its retail business. But unlike Amazon.com, Inc. (NASDAQ:AMZN), BABA only serves as the marketplace and doesn’t actually hold inventory. That provides higher margins than its rival.

Founder Jack Ma has used the hefty cash flows from this business to fund expansions into everything from peer-to-peer lending, social media, and even tablets/mobile devices. These moves, as well as deals into other parts of Asia, have only cemented Alibaba’s stance as one of China’s most important stocks and technology firms.

Meanwhile, the recent downturn in Chinese stocks has made BABA pretty attractive. Toward, the firm can be had for a forward P/E of just 24. That’s pretty cheap considering the potential, long-term growth and dominance of Chinese tech.

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Source: Investor Place 

7 Monster Market Trends and 7 Ways to Invest

Source: Shutterstock

It’s been a treacherous few months for investors. As of this writing, stocks remain range bound between two major technical support levels. On the upside, the S&P 500 is contending with its 50-day moving average. Last week, the 200-day average provided critical support.

What happens throughout the rest of the year depends in large part on how the market resolves this stalemate.

But from this vantage of volatility and uncertainty, a few major trends are clear. And for investors trying to cut through the noise, here are seven monster trends and seven ways to ride these catalysts toward a better 2019:

Monster Market Trends: Amazon (AMZN) Eats the World

Source: Shutterstock

Multiple Amazon.com, Inc. (NASDAQ:AMZN) related headlines have crossed in recent days, serving as a reminder just how quickly and aggressively the company is diversifying into new business areas.

Like shipping logistics. And meal boxes. And possible initiatives in the healthcare space.

The company will next report results on April 26 after the close. Analysts are looking for earnings of $1.30 per share on revenues of nearly $50 billion.

When the company last reported on Feb. 1, earnings of 36 cents per share beat estimates by 36 cents on a 38.2% rise in revenues.

Monster Market Trends: Combat Syria With Lockheed (LMT)

lmt stock

Source: Shutterstock

President Trump’s decision late Friday to launch cruise missiles into Syria for the second straight year is lifting a bid into defense stocks amid a realization this is likely the first stage of a multi-part escalation involving Russia, Iran, Saudi Arabia and Israel.

As a result, Lockheed Martin Corporation (NYSE:LMT) shares are breaking up and out of a multi-month consolidation range ahead of a possible rally to the late February highs near $360, which would be worth a 4% gain from here.

The company will next report results on April 24 before the bell. Analysts are looking for earnings of $3.35 on revenues of $11.3 billion.

Monster Market Trends: Volatility Is Here to Stay With the iPath Short-Term VIX (VXX)

Source: Shutterstock

After one of the quietest rallies in market history in 2017, investors have been rudely awakened by the reappearance of dynamism in the markets.

Bespoke Investment Group notes that compared to 2017 when there were just eight moves of 1% or more, so far in 2018 there have been 28 with 11% just over the last month.

Yet despite the volatility, actual price movement has been subdued: At 3 pm Friday, the S&P was trading at the exact same price that it was on Feb. 5.

Watch for this short-term volatility to continue until some medium-term volatility manifests into a major repositioning of the major market averages. That’ll be a boon to the VXX.

Monster Market Trends: Uncertain Bull Market Helps SPDR Gold Shares (GLD)

Source: Shutterstock

Precious metals and the related exchange-traded funs like the SPDR Gold Trust ETF (NYSEARCA:GLD) have been in the doldrums for years amid low volatility and calm conditions.

But that could be set to change thanks to a number of tailwinds, including higher inflation pressures, geopolitical tension, a deepening trade rift, and the ongoing Russia collusion probe involving President Trump, his administration and his 2016 campaign.

Any developments on these fronts should send investors into safe havens like gold. Which, in turn, should lift the GLD out of its three-year trading range to levels not seen since early 2014.

Monster Market Trends: iPhone Notches for Everyone With Apple (AAPL)

 

Apple Stock Is Still One of the Best Long-Term Picks Out There

Source: Shutterstock

Apple Inc. (NASDAQ:AAPL) shares have been treading water since the iPhone X with its $1,000 price tag and iconic screen “notch” was unveiled.

Shares have stalled on underwhelming demand, production woes, and a surprisingly warm reception for the iPhone 8. But this year’s models, according to reports, will replicate the iPhone X’s notch screen across three new handsets including an entry-level model with an LCD screen instead of the more expensive OLED option.

The company will next report results on May 1 after the close. Analysts are looking for earnings of $2.70 per share on revenues of $61.2 billion.

When the company last reported on Feb. 1, earnings of $3.89 beat estimates by four cents on a 12.7% rise in revenues.

Monster Market Trends: Merck (MRK) Takes the Fight to Cancer

merck stock

Source: Shutterstock

Merck & Co., Inc. (NYSE:MRK) shares jumped 2.4% on Monday, popping back over its 200-day moving average, after the company announced positive clinical results from its Keytruda treatment for lung cancer and melanoma.

Immunotherapies like Keytruda are enjoying increased clinical success and set to play a larger and more lucrative role in the healthcare market.

The company will next report results on May 1 before the bell. Analysts are looking for earnings of $1 per share on revenues of $10.10 billion.

When the company last reported on Feb. 2, earnings of 98 cents per share beat estimates by four cents on a 3.1% rise in revenues.

Monster Market Trends: U.S. Shale Returns to Form, Boosting Kinder Morgan (KMI)

Energy pipeline stocks like Kinder Morgan Inc (NYSE:KMI) have been hit by the post-2014 weakness in energy prices. But a recent strengthening, with crude oil pushing back towards the $70-a-barrel threshold, has reinvigorated interest as U.S. shale producers ramp up production in response.

The company will next report results on April 18 after the close. Analysts are looking for earnings of 21 cents per share on revenues of $3.5 billion. When the company last reported on Jan. 17, earnings of 21 cents per share beat estimates by three cents on a 7.2% rise in revenues.

Get up to 14 dividend paychecks per month from safe, reliable stocks with The Monthly Dividend Paycheck Calendar, an easy-to-use system that shows you which dividend stocks to pick, when to buy them, when you get paid your dividends, and how much.  All you have to do is buy the stocks you like and tell them where to send your dividend payments. For more information Click Here.


Source: Investor Place

3 Stocks for Profits from People Playing Video Games All Day

The definition of sports is changing. For those people who have never known a world without the internet, sports can mean something quite different than for us a wee bit older. For those people, sports are just as likely to be played sitting in a comfy chair with headphones, a keyboard and a mouse.

Welcome to the brave new world of e-sports!

This new realm for sports still requires quick thinking, lightning reflexes and dedication to the sport. And like traditional sports, these athletes are playing for substantial money. Here is a list of the top 10 purses for e-sports in 2017:

 

The e-Sports Market

According to PricewaterhouseCooper (PwC), the global e-sports market was worth $327 million in 2016. One reason for its smallish size compared to say the NFL is that e-sports is a collection of different game titles across different game genres, with different intellectual property holders that, to date, have not bargained together for TV (and streaming) rights and sponsorship deals.

But now e-sports is moving into the ‘major league’ of sports. They will be added as a medal event in the 2022 Asian Games. That’s not surprising considering that South Korea is the hot spot for these sports, with other Asian countries also joining in. The backers of e-sports are pushing too for it to be added as an official event in future Olympics too.

Any future Olympics boost will only add to the growth already occurring. PwC estimates that the e-sports market will expand at a compound annual growth rate (CAGR) of 21.7% through 2021 into an $874 million market. Other forecasts are even more bullish. For example, the Dutch research firm Newzoo says e-sports will be a $1.6 billion industry by 2021.

Whatever forecast you believe, the bottom line is that the e-sports industry is growing in leaps and bounds. Especially in certain countries… here are the projected growth rates for the three top e-sports countries – South Korea, China and the United States – according to PwC…

China is set to be the fastest grower with a 26.3% CAGR, with its industry set to hit $182 million in 2021. The growth there is being spearheaded by its two tech titans – Tencent Holdings (OTC: TCEHY) and Alibaba Group (NYSE: BABA). Tencent, which is a major games developer, agreed last May with the city of Wuhu to transform it into an e-sports hub, with a dedicated stadium to host international tournaments and with an e-sports university to train the next generation of players.

The next-fastest growth is forecast to come from the U.S. with a CAGR of 22.6% though 2021, while South Korea is expanded to expand at a 13.9 rate though 2021.

Eyeballs = Revenues

I believe these projected growth rates may even be conservative. The reason is because e-sports is becoming a major spectator sport.

Goldman Sachs estimates that the global monthly audience for e-sports will reach 385 million by 2022. That’s more than the NFL, folks.

That will give Amazon another boost, as if it needed it. It got into the ‘game’ early when it bought Twitch, a very popular live streaming platform for gamers, for $970 million in 2014.

Others have followed Amazon. BAMTech, Major League Baseball’s streaming company, is a subsidiary of Disney. In 2016, it agreed to pay video game developer Riot Games (owned by Tencent) $300 million over six years for the “exclusive rights to stream and monetize” League of Legends tournaments.

These viewer eyeballs will turn into revenues for the industry. You see, there are three main areas where e-sports can produce revenues. First is direct payments from live streaming services – some live tournaments have tens of millions of viewers. Last year, there were 11.1 billion e-sports videos streamed in China and 2.7 billion in North America, where about one-third of gamers reside.

The next source of revenue is the sale of content rights to broadcasters. Finally, advertising revenues, which today come largely from the gaming industry. But it isn’t hard to imagine a whole raft of companies looking to get their message in front of millions of viewers.

Goldman Sachs analyst Christopher Merwin said in a note to clients, “We expect sponsorship will be one of the largest revenue opportunities for e-sports.” He pointed to the fact that nearly 80% of the viewers are between the ages of 10 and 35, which is a very coveted demographic for advertisers.

Importantly, the backers of e-sports are being smart and adapting what works for traditional sports and applying it to e-sports. Such as creating a league and having permanent teams in many of the major cities. The parent companies of the New England Patriots, Los Angeles Rams and the New York Mets now own franchises (at a cost $20 million) in the first attempt to create an actual league.

The teams were sold by the world’s largest publisher of video games, Activision Blizzard (Nasdaq: ATVI), which came up with the idea of a 12-team Overwatch League. Unlike traditional U.S. sports leagues, this league also has teams from London and Shanghai.

Related: 5 Growth Stocks to Ride the Semiconductor Supercycle

The Overwatch League is not the only e-sports league in existence. There is a similar venture from Riot Games, which charged $10 million for franchises in the North American League of Legends Championship Series. Over 43 million people watched last year’s League of Legends World Championship online, up from just 8 million in 2012. Major venues such as Seoul, South Korea’s Olympic Stadium were sold out to watch the event.

The build-out of leagues is already attracting sponsors, as I hinted at before. Both Intel and HP are lead sponsors for the Overwatch League. And Geico and Nissan are among the sponsors of the North American League of Legends league while Coca-Cola sponsored the finals for the league.

e-Sports Investments

So how can you invest into this e-sports phenomena?

At the top of my buy list is the aforementioned Activision Blizzard, which also has a live streaming channel called Major League Gaming, which it acquired in 2016 for $46 million. It currently has many popular franchises including Call of Duty, Destiny, Skylanders, World of WarcraftCandy Crush and, of course, Overwatch.

Management believes the release of new titles, its expanding mobile pipeline and increasing initiatives in advertising and e-sports will drive growth. In-game net bookings are anticipated to show a double-digit percentage growth in 2018. The release of World of Warcraft’s Battle for Azeroth this summer should also boost growth this year as will Destiny 2. Activision also anticipates Overwatch League to be profitable this year. The company also plans to ramp up ad business by rolling out more video-based ad products.

For 2018, Activision expects GAAP revenues of $7.35 billion and earnings per share of $1.78. On a non-GAAP basis, revenues and earnings are expected to be $7.35 billion and $2.45 per share. Its stock, up about 30% over the past year, should enjoy another good year in 2018.

Next on the list is a rival of Activision, Take Two Interactive Software (Nasdaq: TTWO), which is best known for its Grand Theft Auto, Red Dead and NBA 2K franchises.

While trailing in the e-sports business, the company is finally moving ahead now. It inked a deal with the NBA to launch a NBA eLeague. Take Two had conducted an NBA e-sports tournament the last two years. The NBA will be the only major professional sports league to have its own e-sports league. The league will begin in May 2018 with so far 17 of the 30 NBA teams saying they will play for at least three years. The NBA eLeague recently held its initial draft.

Take Two is also expanding rapidly into mobile games. It strengthened this area of the company with its acquisition of Barcelona-based Social Point for $250 million in 2017. Social Point is one of the most prolific mobile game developers.

Take Two’s for fiscal 2018 centered on strength in its franchises like Grand Theft Auto, NBA 2K and WWE 2K, which should boost the top line in the fiscal year. GAAP net revenues are likely to be in the range of $1.80–$1.85 billion, above the earlier projection of $1.74–$1.84 billion. The company forecasts earnings per share in the range of $1.40–$1.60, well above the 55–80 cents projected earlier. Once again, that should keep the stock, up about 66% over the past year, moving forward.

Finally is a bit of a dark horse since it has yet to really move into e-sports, Japan’s Nintendo (OTC: NTDOY). The company has already enjoyed a major change in fortunes thanks to its launch of the record-breaking Switch console, causing its stock to nearly double.

 

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7 More of the Best Retirement Stocks No One Talks About

Source: Shutterstock

Are you having a hard time selecting the best retirement stocks for your portfolio? If so, you’re not alone.

Last April, I recommended seven of the best retirement stocks no one talks about. These were companies with market caps greater than $2 billion yielding 1.5% or more delivering five consecutive years of operating profits and thinly traded at 500,000 shares in average daily volume.

Some of them you’re familiar with and some you might haven’t a clue what they do.

Together, the seven stocks averaged a one-year total return of 7.7% with just two stocks in negative territory; all of them I’d have no problem owning today, including EPR Properties (NYSE:EPR), which has lost one-fifth of its value over the past year.

Unfortunately, the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) nearly doubled the group’s performance at 14.8%.

Undeterred, I’ve selected seven more of the best retirement stocks no one talks about. Only this time, I’m going to up the average daily volume ceiling to a million shares instead of 500,000 to see if we can’t come up with some even better options.

Best Retirement Stocks: Honda (HMC)

Source: Shutterstock

Yield: 2.5%

Even though car and truck sales have begun to slow after several years at a torrid pace, Honda Motor Co Ltd (ADR) (NYSE:HMC) is a great long-term buy because its vehicles remain with car-buying consumers.

The company set record U.S. sales in March despite both the Accord and CRV, which generated 43% of its volume overall, were down 13.1% and 6.5% respectively.

Not to worry, the Acura redesigns of both the TLX and RLX helped save the day; Acura’s March sales increased by 15.7% to 13,537 vehicles with over half from its SUVs.

Fear not, the Accord and CRV aren’t losing their popularity with consumers. The company chose to offer very little in the way of incentives in March on both vehicles. As we head into summer, Honda’s U.S. business will pile on the incentives and sales will come as a result.

In the third quarter ended December 31, 2017, Honda’s revenues increased 13.0% to $35.1 billion, while operating profits increased 37.0% to $2.5 billion.

For the entire fiscal year, Honda expects revenues to increase by 8.6%, while operating profits will decline by 7.8% as a result of pension plan changes and the settlement of its airbag class action suit. Take those out and it should make $913 million, an increase of 8.6% over last year.

Year-to-date it’s outperforming its peers by 215 basis points through April 10.

Best Retirement Stocks: Diageo (DEO)

Dividend Yield: 2.4%

Last year, I had the opportunity to trash a certain ETF only to change my mind less than eight months later.

The ETF in question?

The Spirited Funds/ETFMG Whiskey & Spirits ETF (NYSEARCA:WSKY), a collection of global companies manufacturing alcoholic drinks, including Diageo plc (ADR) (NYSE:DEO), the fund’s largest holding with a weighting of 17.5%.

Originally, I thought it was an expensive way to invest in the global trend to premium liquor brands, suggesting an investment in Diageo would do the same thing without having to pay a management fee.

Over the past year, the ETF generated an annualized total return of 29.6% compared to 25.1% for Diageo and 15% for the S&P 500.

Although I still believe an investment in Diageo is a great way to bet on the future success of premium spirits, you could make a lot worse investment decisions over the next few years than buying the WSKY ETF.

For those of you that care about the issue of gender pay equality, which I do, Diageo’s Great Britain unit has a gender pay gap of –9.8%, which means women at the company on average earn more than men. It is not, however, a reflection of equal pay for similar work.

Cheers!

Best Retirement Stocks: Canadian Imperial Bank of Commerce (CM)

Dividend Yield: 4.7%

The five big Canadian banks have long been regarded as some of the best-run financial institutions in the world, in large part a result of escaping the 2008 economic crisis relatively unscathed.

As risk-takers, Canadian banks rank well down the list, but for investors seeking juicy dividend yields, they’ve made wonderful investments.

In May 2012, I wrote Canada’s Banks: Better Than Most in which I took a quick look at the Canadian Imperial Bank of Commerce (NYSE:CM) and how it fared in comparison to JPMorgan Chase & Co. (NYSE:JPM), two banks that ranked highly in Bloomberg Markets’ second-annual rating of the World’s Strongest Banks.

CIBC was third; Jamie Dimon was 13th.

Also, in that piece, I highlighted three Canadian banks doing a lot of business in the U.S. — CIBC wasn’t one of them.

Well, that has changed in a big way in the past two years.

First, it paid $5 billion to acquire Chicago-based Private Bancorp in June 2017, a move that ups CIBCs U.S. profits to 10% of its overall profits. Eventually, the bank hopes to generate 25% of its annual profits in the U.S.

As Canadian banks go, CIBC is my favorite, and not just because it yields the most.

Best Retirement Stocks: Equity Lifestyle Properties (ELS)

Best Retirement Stocks: Equity Lifestyle Properties (ELS)

Source: Shutterstock

Dividend Yield: 2.5%

Of the seven best retirement stocks I’m recommending in this article, Equity Lifestyles Properties, Inc. (NYSE:ELS) would have to be the most boring, yet enticing option of the bunch.

Over the past decade, ELS stock has seen just one negative annual return, and that was a 14% drop in 2008. That year, the S&P 500 lost 37% and its residential REIT peers were off 23%.

All of this from owning land for manufactured home communities, RV resorts and campgrounds across North America. The company was founded in 1969, but it was only after billionaire Sam Zell and partners got involved in 1983, did business really begin to cook.

Since 2008, revenues have doubled to $912 million; operating earnings have more than doubled to $297 million, and dividends have increased five-fold to $1.95 a share.

It has got a wide-moat so large I suggested Warren Buffett should buy it last August.

ELS is the stock you put in a drawer and marvel at how it has grown ten years from now.

Best Retirement Stocks: Grupo Aeroportuario Del Pacifico (PAC)

Dividend Yield: 4.5%

Another stock I recommended Warren Buffett should buy is Grupo Aeroportuario Del Pacifico (NYSE:PAC), an owner and operator of airports based in Guadalajara, Mexico.

Heck, Buffett owns four airline stocks worth almost $10 billion, so a natural extension of that from an infrastructure standpoint would be to buy some of the airports these airlines fly in and out of.

PAC has a little of everything in terms of the types of airports it owns. Guadalajara and Tijuana serve the people living in those major Mexican cities; smaller airports in places like Mexicali and Morelia serve medium-sized Mexican cities; and airports such as Puerto Vallarta and Las Cabos service the tourist trade.

It’s a nicely diversified customer mix that keeps the company and stock moving higher. Over the past five years, PAC delivered an annual total return of 14% to shareholders.

In early January, PAC announced it had obtained long-term financing to make improvements at its Montego Bay airport in Jamaica, one of only two outside Mexico.

Like a lot of the airlines, Mexican airlines continue to grow the number of planes and flights they operate. In conjunction with a number of U.S. low-cost carriers adding flights into Mexico, the company’s future prospects look very good.

However, given the U.S. immigration policy combined with the negative effects of a renegotiated NAFTA agreement, PAC is not without some risk.

Best Retirement Stocks: Wyndham Worldwide (WYN)

Best Retirement Stocks: Wyndham Worldwide (WYN)

Source: Shutterstock

Dividend Yield: 2.4%

Operating one of the largest networks of hotel rooms in the world, Wyndham Worldwide Corporation (NYSE:WYNannounced in 2017 that it would spinoff the hotel group from its vacation ownership and vacation rental business, to create two independent publicly traded companies.

The separation is expected to happen any day now. Shareholders of WYN will get a pro rata distribution of the new hotel company’s stock.

As part of this move, it announced more of its hotel brands will get the “by Wyndham” moniker added to their nameplates. A total of 12 hotel brands are receiving the change including Super 8, Days Inn and the more upscale Dolce brand.

Why am I recommending a stock set to split in two?

Empirical evidence suggests that spinoffs often before better post-spin than pre-spin. In this case, Wyndham is taking a risk by adding its name to some of its value brands, but the company is boosting its franchise operations by 20% to ensure that all of its hotels are meeting the Wyndham standard.

InvestorPlace’s Lawrence Meyers recently commented that Wyndham’s hotels have occupancy rates of 60-64% compared to 75% for its peers.

By separating the hotel group into its own independent company, you can expect Wyndham to have a laser-like focus in the future on higher standards.

That bodes well for both stocks, post-split.   

Best Retirement Stocks: Snap-on (SNA)

Dividend Yield: 2.3%

Last August, I recommended that investors forget about Snap Inc (NYSE:SNAP) stock and buy Snap-on Incorporated (NYSE:SNA) instead.

Before I get into why I like the hand and power tools, let me just say that both stocks have been on a wild ride since my article.

SNAP, which I recommended you stay away from, was trading around $14.50 on August 22, 2017, the date of the article. It bounced around this price until February when it spiked to almost $21 on news it was adding users. It has since come back to where it was trading last August.

Nothing’s changed. I still don’t like the stock.

As for SNA, it basically did the same, going from $142 in August all the way to $184 in mid-January, only to be felled by a weak fourth-quarter earnings report. Now, it too is back where it was last August.

The biggest concern from analysts is that the company’s non-financed tool purchases are slowing meaning the company’s financial services business is propping up sales, something I recommended investors keep an eye on.

Why do I still recommend it as one of the best retirement stocks to own?

Because every company goes through cycles where business is booming. Now isn’t one of those times but it also isn’t terrible either.

The automotive repair business isn’t sexy, I’ll grant you. But given the average age of cars on the road is still pretty high, the company’s customers (tool buyers) are going to have plenty of cars to fix in the years ahead.

Five years ago, I might have been concerned that its tool business was losing a few sales. However, its three operating businesses provide the company with a much greater balance to see its way through the hiccups every business goes through.

Snap-on hasn’t traded this low very often over the last few years. Buy now and ride them to retirement.

Buffett just went all-in on THIS new asset. Will you?
Buffett could see this new asset run 2,524% in 2018. And he's not the only one... Mark Cuban says "it's the most exciting thing I've ever seen." Mark Zuckerberg threw down $19 billion to get a piece... Bill Gates wagered $26 billion trying to control it...
What is it?
It's not gold, crypto or any mainstream investment. But these mega-billionaires have bet the farm it's about to be the most valuable asset on Earth. Wall Street and the financial media have no clue what's about to happen...And if you act fast, you could earn as much as 2,524% before the year is up.
Click here to find out what it is.

Source: Investor Place 

How to Profit from Solving the World’s Water Shortage

Water is seemingly everywhere, covering about 70% of our planet. Yet, fresh water is extremely scarce – accounting for a mere 3% of the world’s supply. Of that amount, the vast majority is either locked up in glaciers or reside in inaccessible subterranean pockets.

And the fresh water that is accessible is not evenly distributed around the planet. For example, there is plenty of water in Siberia. But few people live there.

Of the amount of fresh water that is available, roughly 70% of that goes to agriculture to feed the world’s population. The enormous amount of water needed to grow the crops and livestock needed to feed and clothe the world’s growing population is creating a dire global situation.

The U.S. media tends to ignore events in the rest of the world, but there is a scary situation developing in South Africa’s second-largest city, Cape Town, with its four million residents.

Countdown to Day Zero

Cape Town is best known as a tourist haven and the center of South Africa’s wine industry. But now population growth and a record drought in the region have combined to push the city to the brink – to being very close to ‘Day Zero’ when its water reservoirs run dry.

Historically, despite the arid climate, Cape Town’s Table Mountain had trapped onshore breezes coming from warm ocean waters, creating rain locally that powered rivers and filled underground aquifers. But that has not happened the past two years thanks to unusually low rainfall – only 153.5mm (about 6 inches) of rainfall was recorded at Cape Town’s airport in 2017. That compared to more than 500mm in 2014. Climatologists say that another year of drought cannot be ruled out.

Of course, people acting stupid are to blame also. The well-to-do suburbs with water-hungry lawns and swimming pools are not conserving water despite pleas from local government officials. City officials asked residents to consume only 50 liters (about 13 gallons) a day of water, which is less than one-sixth what a typical American family uses.

And it’s not like city officials were sitting on their hands doing nothing… they were proactive. Over the last 20 years, the city made strides in reducing water use from its six major reservoirs, which hold up to 230 billion gallons of water. Per capita consumption declined, the city reduced leaks from water pipes, it forced large users to pay more, and generally promoted water efficiency. Cape Town even won several international water management awards. And currently, they are building their first water desalination plants.

But those efforts have not been enough. In 2014, its six dams were full. But then came three straight years of drought—the worst in more than a century. Now, according to data from NASA satellites, the reservoirs stand at 26% of capacity, with the single largest reservoir (it provides half the city’s water) in the worst shape. City officials plan to cut off the taps when the reservoirs hit 13.5%, which is known as ‘Day Zero’.

Residents of Cape Town are finding out the truth contained in this quote from Benjamin Franklin: “When the well is dry, we know the worth of water.”

Other Major Cities at Risk Too

Up until now, a shutdown of such a major metropolitan city would have been unthinkable. But as over-development, population growth and climate change have changed the balance between water supply and demand, urban centers all over the world may face the threat of severe water shortages.

In other words, other of humankind’s major cities are also at risk of severe water shortages.

Already, many of the 21 million residents of Mexico City only have running water part of the day, while one in five get just a few hours from their taps each week. Several major cities in India don’t have enough as poorer regions cut off the water flowing downstream to the ‘rich’ cities. Water managers in Melbourne, Australia, reported last summer that they could run out of water in about a decade. And Jakarta is actually running so dry that the city is literally sinking as residents suck up groundwater from below the surface.

In 2015, Sao Paolo Brazil faced a crisis similar to Cape Town with only 20 days’ worth of water left in its reservoirs. They were so low that pipes drew in mud instead of water, emergency water trucks were looted and homes only had access to water for a few hours twice a week. Only last-minute rains salvaged the situation there.

In Barcelona, Spain in 2008 tankers full of fresh water from France had to be imported into the city.

The bottom line is that 14 of the world’s 20 megacities are now experiencing water scarcity. And as many as 4 billion people (half of which are located in India and China) are living in areas where there is water stress for at least one month a year, according to a 2016 study in the journal Science Advances.

The Water Investment Opportunity

The current water crisis is driven both by climate and poor water infrastructure. In Jakarta Indonesia, for instance, water management is very poor with unsanitary water, lots of leaky pipes, heavy metals pollution and an inadequate number of pipes.

Even from an economic perspective, water is critical. As Pictet fund manager Arnaud Bisschop told Bloomberg, “There is a 100% correlation between water availability and GDP growth. If there’s no water, there’s no growth.”

That means there needs to be trillions of dollars spent on water and water infrastructure projects around the world in the coming decades. Even here in the U.S., estimates are than a trillion dollars needs to be spent over the next two decades to upgrade our deteriorating water infrastructure.

Water is emerging as an investment class. So much so that the CEO of the French water services firm Suez (OTC: SZEVY), Jean-Louis Chaussade, says it will be more valuable than oil someday. Even if that doesn’t happen, water should be a must-own part of your portfolio.

So how can you invest in water? The broadest way is through an exchange traded fund. There are five such ETFs that are available to you. The one I like the most is the former Guggenheim S&P Global Water Index ETF, which is now controlled by Invesco and is called the PowerShares S&P Global Water Index Portfolio (NYSE: CGW).

This is nicely balanced geographically with about 43% in the U.S. and the rest overseas. However, Wall Street is apparently still unaware of the water problem because this fund gained only 11.5% over the past year.

Its top five positions are all well-known names: American Water Works (NYSE: AWK)Xylem (NYSE: XYL)Danaher (NYSE: DHR)Veolia Environnement SA (OTC: VEOEY) and Pentair PLC (NYSE: PNR). One of these stocks is my top water recommendation and is available to subscribers of my Growth Stock Advisor newsletter. It is up more than 10% since the November 29 recommendation date despite the turbulent stock market we’ve had in 2018. And I expect much more upside in the years ahead due to the water situation globally.

Buffett just went all-in on THIS new asset. Will you?
Buffett could see this new asset run 2,524% in 2018. And he's not the only one... Mark Cuban says "it's the most exciting thing I've ever seen." Mark Zuckerberg threw down $19 billion to get a piece... Bill Gates wagered $26 billion trying to control it...
What is it?
It's not gold, crypto or any mainstream investment. But these mega-billionaires have bet the farm it's about to be the most valuable asset on Earth. Wall Street and the financial media have no clue what's about to happen...And if you act fast, you could earn as much as 2,524% before the year is up.
Click here to find out what it is.

Source: Investors Alley 

The Blockchain Can Advance a More Efficient and Honest World

I have good reason NOT to trust the government.

It stole something from me.

It did it in such a brazen manner that even now – 20 years later – I get mad whenever I think of it.

It involved a public bid. A big tank cleaning job. My company, based in Jakarta, had been eyeing it for a while.

We won the bid – a good feeling. The story should have ended there.

In most countries, it would have.

But Indonesia isn’t most countries.

Its economy is run according to a set of unwritten rules that can be summed up this way…

If you’re not taking a bribe, you should be giving one.

It’s rated 96 out of 180 countries in Transparency International’s Corruption Perceptions Index.

Fifteen years ago it was much worse. I’m sure it rated well above 100.

So let me tell you what happened.

Gone, Contract, Gone

After winning this project, we received a signed, sealed and stamped letter from the government agency whose project it was.

And that happened to be Pertamina, Indonesia’s big, bloated and corrupt state agency involved in the country’s oil production and trading.

The vice president who ran our Jakarta office – James T. – was summoned to a meeting by a Pertamina official. This is how he described it to me…

I entered this enormous boardroom at Pertamina headquarters. At the far end of a long table sat an official whom I had met once or twice but did not know very well. He greeted me like we were old friends.

He then told me there was a small problem. He had found a small error in the approval letter sent to us. He asked for the letter, explaining he’ll fix it and return it in five minutes. He returned 20 minutes later and said he found a couple more errors. He said he needed to keep the letter and I could pick it up the next day. As I left the room, he said he’d call me in the morning.

James never saw or heard from him again.

Nor did he ever see the letter again.

Two weeks later, Pertamina issued a new letter to another company. We learned that the copy James had made carried no legal standing because it was not the original.

We were, in a word, screwed.

Later on, we found out that the Pertamina official James had met was given a generous bribe by the new winner of the project. Surprise, surprise.

Of course, I’m not the only one this stuff happens to. You and I know… IT HAPPENS ALL THE TIME.

Just recently, for example, countries from Peru to Mexico were rocked by a big scandalinvolving the Brazilian construction company Construtora Norberto Odebrecht. It had paid bribes to a number of government oil officials (of course).

Kickbacks at Brazil’s Petrobras and Mexico’s Pemex were unearthed. Ecuador’s vice president was put behind bars.

According to Reuters, the company has paid $3.5 billion in settlements in the U.S., Brazil and Switzerland.

Here, There, Everywhere

For every company that’s caught (like Odebrecht), I bet there are 100 running around handing out gifts to their favorite officials.

Based on my global business experience, I’d say that in a good 50 countries, it’s impossible to do a sustainable level of business without handing out bribes.

The U.S. isn’t one of those countries. Here it’s a little subtler…

A network built on mutual back-scratching at the highest levels of government, business and entertainment exerts a nefarious influence on how deals get done.

If you’re on the outside looking in, it stinks.

Dumping the Toll Takers

Just a couple of years ago, I would have said to those outsiders, “Deal with it.”

It’s the way of the world. Nothing you can do.

With the advent of trustless blockchain technology, I’ve changed my tune.

The blockchain itself confirms a transaction. No middleman (like a bank) is needed.

And you can put all kinds of things on the blockchain, not just payments.

For example, you can put government projects and public bids on the blockchain. Hmmm…

The blockchain applied to public contracts – what a great idea!

It’s turning into a reality, thanks to a team of university graduates from Mexico who initially developed it.

The blockchain would track bids and store records of the bidding process. It would allow audits to review every step of the bidding process.

Imagine if government officials knew this was in place.

Such a technology wouldn’t stop bribery altogether, but it could make a serious dent.

For example, I’m not sure how it could expose one subtle form of favoritism – structuring a bid to play to a particular company’s strengths.

(Confession: I’ve played this card myself back in the day. It’s very effective.)

It’s definitely a step in the right direction.

Mexico’s national digital strategy coordinator said it would eliminate the “easily corruptible” human element and introduce transparency to the public tender process.

What the Future Could Look Like

I would love to see public projects won based on sophisticated algorithms embedded in the blockchain. No human intervention.

It would empty out hundreds of buildings around the world filled with government pencil pushers.

That’s the beauty of the blockchain. It gets rid of the middlemen, the gatekeepers, the toll takers.

And it eliminates the rent – that also can take the form of bribes – for the users.

Massive adoption of blockchain technology would make the world not only more efficient but also more honest.

How great would that be?

Good investing,

Andy Gordon
Co-Founder, Early Investing

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Source: Early Investing 

10 Stocks Hedge Funds Are Buying

Source: Shutterstock

It is widely believed that everyday investors can glean valuable insight from Wall Street titans. While following big-name investors into various stocks is not a guarantee of a winning investment, investors love following icons, such as Warren Buffett.

Perhaps due to the notions that hedge funds are “sexy” and hard to access for many regular investors, many investors also like to follow the buys and sells of various hedge funds. The rub with this strategy is that hedge fund managers, no matter how long they have been around or how much money they run, are not infallible. In fact, data suggest many hedge funds have not beaten the S&P 500 in recent years.

Of course, there are hedge fund managers who perform well and charge their clients a pretty penny for the privilege. Here are some of hedge funds’ favorite stocks at the moment, a group that includes predictable fare as well as some more obscure names.

Apple Inc. (NASDAQ:AAPL) is the largest U.S. company by market value, so perhaps it is not surprising that the iPhone maker is usually a hedge fund favorite. While not a hedge fund, Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK-A) is a major Apple shareholder. In fact, Apple is Berkshire’s top holding, even exceeding the likes of The Coca-Cola Co (NYSE:KO) and Wells Fargo & Co (NYSE:WFC).

The company, shares of which are up nearly 21% over the past year, recently launched a red iPhone 8 and the iPhone 8 Plus. While Apple is a story stock, there are some near-term issues to consider.

Recently Goldman Sachs said of iPhone sales it “ expects sales of 53 million units in the calendar first quarter. For the three months to June, Goldman said it expects sales of 40.3 million units, a reduction of 3.2 million from its previous forecast,” according to CNBC.

Stocks Hedge Funds Are Buying: Amazon (AMZN)

This one probably is not a surprise, either. Not when Amazon.com, Inc. (NASDAQ:AMZN) is one of just four U.S. companies with a market capitalization north of $700 billion. Recent data indicate that Amazon, the largest consumer discretionary company in the U.S., is a top 10 holding at 80 hedge funds, more than any other stock.

Although shares of Amazon are up 60.5% over the past year, analysts are exceedingly bullish on the stock. The average analyst price target on the stock is around $1,670, implying significant upside potential from recent closes around $1,440.At least two analysts have $2,000 price targets on Amazon.

Amazon is mostly known as a retailer, but much of the long-term allure comes from its cloud computing business, Amazon Web Services (AWS). That could be a $60 billion unit in just a few years.

Stocks Hedge Funds Are Buying: Alphabet (GOOGL)

Stocks Hedge Funds Are Buying: Alphabet Inc. (GOOGL)

Source: Shutterstock

Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL), the parent company of Google, is another hedge fund favorite. In fact, more than 50 hedge funds feature Alphabet among their top 10 holdings. Like Apple and Amazon, Alphabet is one of the U.S. companies with a market value north of $700 billion.

The three stocks highlighted here thus far cement at least one notion: Hedge funds love tech. Data confirm as much.

“Net exposures remain higher than the beginning of the year at 51 percent. The technology sector is still 37 percent of that total. Data shows that there has been some aggregate selling of technology stocks since the middle of March, but the magnitude has been relatively in line with other sectors,” Bloomberg reported, citing Morgan Stanley research.

Stocks Hedge Funds Are Buying: Bank Of America (BAC)

Stocks Hedge Funds Are Buying: Bank Of America (BAC)

Source: Shutterstock

Among financial services stocks, Bank of America Corp. (NYSE:BAC) is one of the hedge fund faves. This could be a combination of hedge funds betting on banks in a rising-interest-rate environment, betting the Donald Trump Administration’s more favorable regulatory stance on the financial services sector will be a tailwind for the group or that financials are a credible play.

Shares of Bank of America are up more than 30% over the past year, putting the stock ahead of the Financial Select Sector SPDR (NYSEARCA:XLF) by more than 1,300 basis points.

The stock resides in the low $30’s at this writing, but some market observers believe it could jump to the low $40’s over the next 12 to 24 months.

Stocks Hedge Funds Are Buying: United States Steel (X)

United States Steel Corporation (NYSE:X) is not necessarily widely held by hundreds and hundreds of hedge funds, but what is notable about the largest U.S. steelmaker is that it is a favorite of some the best-performing stock-picking hedge funds.

Ordinary investors may want to be cautious with shares of U.S. Steel. The stock rallied earlier this year after the Trump Administration unveiled tariffs aimed at protecting domestic aluminum and steel producers. However, the White House subsequently announced diluted versions of those tariffs, including exemptions for several countries that are among the largest importers of steel to the U.S.

This stock is down nearly 18% over the past month.

Stocks Hedge Funds Are Buying: Caesars Entertainment (CZR)

Stocks Hedge Funds Are Buying: Caesars Entertainment (CZR)

Source: Shutterstock

Caesars Entertainment Corporation (NASDAQ:CZR), the owner of Caesars Palace among other casinos, is another widely held hedge fund stock. Thanks to a tax benefit, Caesars posted fourth-quarter earnings of $2.48 per share, well above the 8 cents Wall Street expected.

Caesars is out of bankruptcy, something the company appears to be celebrating with some nice compensation for its executives.

The stock surged almost 50% last year, but could be succumbing to profit-taking this year as it is down more than 13% year-to-date.

Stocks Hedge Funds Are Buying: SPDR Gold Shares (GLD)

Let’s change things up a bit and added an exchange-traded fund (ETF) to the list of hedge fund favorites. The SPDR Gold Shares(NYSEARCA:GLD) is the world’s largest gold-backed ETF and also a favorite ETF in the hedge fund community. Among non-equity ETFs, GLD is one of the most widely held by professional investors.

Historically, gold prices are challenged by rising interest rates because bullion does not pay a dividend. However, the dollar has not been responsive to the Federal Reserve’s recent rate hikes, which is good news for dollar-denominated commodities like gold.

Investors are responding as GLD has taken in over $1 billion in new assets this year. Near-term catalysts include a possible upside break of $1,400 and the belief by many in the gold industry that supply will be declining because most of the world’s easy-to-access gold has already been mined.

Stocks Hedge Funds Are Buying: NXP Semiconductors (NXPI)

Stocks Hedge Funds Are Buying: NXP Semiconductors (NXPI)

Source: Shutterstock

The status of NXP Semiconductors NV (NASDAQ:NXPI) as a hedge fund fave is probably attributable to Qualcomm Corp.’s (NASDAQ:QCOM) desire to acquire the remainder of NXP it does not already own. Qualcomm has recently extended the deadline on that offer multiple times.

NXP makes mixed signal and standard product solutions for radio frequency (RF), analog, power management, interface, security, and digital processing products.

Qualcomm’s interest in NXP could be its way of fending off Broacom’s (NASDAQ:AVGO) acquisition overtures.

Stocks Hedge Funds Are Buying: Allergan (AGN)

With hedge funds so enamored by tech stocks, that does not leave a lot of room for significant exposure to other sectors. Just three healthcare stocks are considered widely held by hedge funds and Allergan Plc (NYSE:AGN) is one of them.

Allergan has been a healthcare laggard over the past year, shedding more than 30% over that period while the S&P 500 Health Care Index is up 10.24%. Hedge funds could be wagering that Allergan, which makes specialty pharmaceuticals, could shed non-performing units to boost shareholder value or perhaps become a takeover target itself.

Still, Allergan has a market value of $58 billion, making the likelihood of it being acquired somewhat small. The company could regain investors’ faith by doing some smart shopping of its own at a time when rivals are expected to do the same.

Stocks Hedge Funds Are Buying:  Microsoft (MSFT)

Stocks Hedge Funds Are Buying:  Microsoft (MSFT)

Source: Shutterstock

Along with Alphabet, Amazon and Apple, Microsoft Corporation (NASDAQ:MSFT) is a member of the $700 billion club and another hedge fund fave. The stock is up more than 41% over the past year, which is an exciting growth trajectory for a company of Microsoft’s size and age. Speaking of growth, Microsoft has become a venerable tech dividend growth name and yields an admirable (compared to the broader tech space) 1.8%.

Microsoft joins Alphabet and Amazon on Morgan Stanley’s list of 15 prime beneficiaries of the big data era.

“We expect the best performing stocks in the technology sector could broaden from consumer- to enterprise-oriented technology providers, challenging the consensus view and positioning that exists in the market today,” according to Morgan Stanley.

Buffett just went all-in on THIS new asset. Will you?
Buffett could see this new asset run 2,524% in 2018. And he's not the only one... Mark Cuban says "it's the most exciting thing I've ever seen." Mark Zuckerberg threw down $19 billion to get a piece... Bill Gates wagered $26 billion trying to control it...
What is it?
It's not gold, crypto or any mainstream investment. But these mega-billionaires have bet the farm it's about to be the most valuable asset on Earth. Wall Street and the financial media have no clue what's about to happen...And if you act fast, you could earn as much as 2,524% before the year is up.
Click here to find out what it is.

Source: Investor Place 

7 REITs (Paying Up to 8%) With Big Dividend Raises Coming

“First-level” investors – those who buy and sell on headlines – mistakenly believe that real estate investment trust (REIT) profits will suffer if rates continue to rise. They’re wrong. This is actually an ideal time to buy the strongest names in the sector.

Note that I said strongest. The sector’s popular proxy is something you should avoid, despite its popularity. I’ll call it out in a moment.

Overall, rising rates are actually good for the best REITs because it signals a rolling economy. These landlords have no problem raising their rents when their tenants are making money.

Unfortunately, the business world is increasingly becoming a neighborhood of “haves” and “have nots.” And some REITs are not doing well, despite the broader tailwinds.

Take the Vanguard REIT ETF (VNQ), which is now paying its highest current yield  since 2009. Buy the dip? No way. Its annual payout actually declined in 2017 year-over-year!

VNQ’s Disappearing Dividend

Source: Contrarian Outlook

One year of Amazon-powered disruption, and VNQ’s dividends are back to their 2013 levels. Yikes.

But VNQ is, of course, a flawed index. It’s “low cost” – but so what? Investors who buy it are getting what they pay for.

A better idea is to cherry pick the firms who do have booming businesses that are not being eaten alive by Jeff Bezos & Co. Here are seven landlords who own their respective property niches. These stocks pay up to 8%. All have dividend upside to boot.

American Tower (AMT)
Dividend Yield: 1.8%

American Tower (AMT) may have one of the smallest yields in the REIT space, but it also has one of the most impressive dividend growth streaks in the entire real estate sector.

Namely, AMT has increased its quarterly payout for 25 consecutive quarters.

Not years. Quarters.

American Tower is at the attractive crossroads of technology and real estate, owning and operating wireless and broadcast towers, as well as other telecommunications infrastructure, in the U.S. and abroad. In short, it helps companies such as Verizon (VZ) and AT&T (T) connect tens of millions of Americans with voice and internet service.

But unlike Verizon and AT&T, American Tower is very much a growth story. The company’s revenues and funds from operations (FFO) have been consistently climbing for years, and 2017 saw another blowout performance from this telecom REIT. The top line exploded by 15.2% to $6.7 billion, while consolidated adjusted FFO jumped 16.5% to $2.9 billion. That allowed the company to grow its dividend by nearly 20% across four separate increases.

And with deals such as an agreement with Vodafone (VOD) and Idea Cellular to widen its exposure in India by roughly a third, that growth path should continue.

American Tower (AMT) Keeps Building a Fundamental Bull Case

Alexandria Real Estate Equities (ARE)
Dividend Yield: 2.8%

Alexandria Real Estate Equities (ARE) is one of the most niche but intriguing office REITs on the market. This company focuses on life sciences real estate, specifically focusing its efforts on industry business clusters.

It owns a portfolio of 213 properties across North America totaling 29.6 million square feet, clustered in seven major regions: Seattle, San Francisco, San Diego, Greater Boston, New York City, Maryland and Research Triangle Park in North Carolina.

Like American Tower, Alexandria Real Estate is sitting on a growth geyser, with the company building its top line by 22.4% to $1.1 billion in 2017. Same-property net operating income grew 3.1% year-over-year, and FFO shot up 31.6% to $554.5 million.

Better still, the company has grown its payout for years, sometimes multiple times within the same year, including a 7% bump across two hikes in 2017. And the below chart shows exactly what you should expect – that is, dividend growth being rewarded by share-price growth almost identically over time.

As Alexandria Real Estate’s (ARE) Dividend Goes, So Go Its Shares

Regency Centers (REG)
Dividend Yield: 3.6%

Regency Centers (REG) prides itself as being “The Leading National Shopping Center REIT.” Uh oh.

But Regency has some angles that may help buffer it from Amazon.

Regency’s portfolio consists of 426 properties encompassing 59 million square feet. As of the company’s fourth-quarter 2017 investor presentation, some 96.3% of the properties were leased, with 80% of properties anchored by a grocery store. And REG boasts an average of “138,000 people and $110,000 average incomes in Gateway, 18+ Hour and select growth markets.”

Grocery stores do provide much-needed foot traffic to shopping centers, and Regency’s grocery sales in specific are significantly better than its peers. That hasn’t stopped Wall Street from selling Regency off alongside the narrative. Shares have been hammered by about 30% since mid-2016, roughly doubling the losses of the VNQ.

But Regency is making smart moves, including clipping away at its interest costs via changes to its unsecured revolving credit facility, and it continues to get cheaper by the day, now trading at about 19 times FFO. That’s not exactly cheap for a company that ultimately still plays in the troubled retail space, but REG might be one of the best of a bad breed. Also heartening is a small stretch of consecutive dividend improvements starting in 2014.

Summit Hotel Properties (INN)
Dividend Yield: 5.1%

Summit Hotel Properties (INN), like Regency, has received more than its share of losses, getting knocked down by more than 30% since summer 2017. And also like Regency, Summit is starting to look increasingly appealing as its price is whittled away.

Summit is one of several plays that center around the growing trend of the “experience economy,” in which Americans (especially Millennials) are increasingly valuing experiences such as travel over “stuff.” And importantly, Summit is a play on the wealthier individuals within this economy.

INN owns 83 hotels under the Marriott (MAR)Hilton (HLT) and InterContinental Hotels (IHG) brands, as well as under a Hyatt Hotels (H) affiliate. The portfolio spans 26 states, with 89% located in the top 50 metropolitan statistical areas; 96% is within the top 100. The company is rapidly upgrading its portfolio, too, including a $163 million, five-hotel acquisition from Xenia Hotels & Resorts (XHR) in June 2017, and a $164 million, four-hotel buyout in November of last year spanning Yale, Boston, Cleveland and Tuscon.

While several hotel REITs struggled in 2017, Summit put up an 8.4% improvement in its adjusted FFO for the full 12 months. That served as a springboard for another increase to the quarterly dividend – its fourth since 2016, when it began improving its payout after years of stagnation.

That payout is easily covered, too, at just 54% of its FFO. And shares are cheap, trading for just 10 times FFO.

Summit Hotel Properties (INN) Is a High-Rent Value

One Liberty Properties (OLP)
Dividend Yield: 8.0%

One Liberty Properties (OLP) is a diversified small-cap net-lease REIT that’s primarily retail in nature, but also features a significant chunk of industrial real estate. Its 118 properties across 30 states include name-brand tenants such as FedEx (FDX)Haverty Furniture (HVT), Whole Foods, Walgreens (WBA) and Wendy’s (WEN), not to mention numerous industrial operators that are less familiar to consumers.

Tenant concentration is a little on the high side, with the top five composing more than a fifth of One Liberty’s contractual rental income, but there’s little concentration risk. The same can be said about geography, with Texas the top state holding at 12% of the portfolio.

Again, retail is problematic at present, but many of OLP’s individual tenants aren’t at as much risk from the likes of Amazon as many mall retailers. And operationally speaking, One Liberty has been solid for years, with 2017 serving as no exception. Rental income improved by 6.2% to $68.2 million, and adjusted funds from operations grew 5% to $2.09 per share.

Moreover, the dividend has been increased for a sixth consecutive year, and unlike many other REITs whose yields have been driven higher by large declines, OLP isn’t prone to big swings – in either direction.

OLP provides strong total returns thanks to its massive 8% dividend, but Wall Street has stubbornly refused for years to recognize One Liberty’s business success.

2 Recession-Proof Dividend Growth REITs: 7.5%+ Yields and 25% Upside

My favorite commercial real estate lender lets us play Monopoly from the convenience of our brokerage accounts. They do all the legwork, building a secure, diversified loan portfolio featuring offices, retail space, hotels and multifamily units.

Management then collects the monthly payments, deposits the checks

– and then it sends most of the profits our way as dividends (a requirement of its REIT status).

The stock’s current dividend (a 7.7% yield today) is covered by earnings-per-share (EPS) today. And don’t be fooled by the stagnant dividend (not that stability is bad). The firm continues to originate an increasing number of loans:

37% Loan Growth Today Tees Up Dividend Growth Tomorrow

This firm is a conservative lender with perfect loan performance (100%). Its growing portfolio will drive higher profits, which in turn will inspire the next dividend hike. The best time to buy the stock is right now, as it makes the investments which will drive its payout and share price higher from here.

Plus this firm has also smartly eliminated interest rate risk because it uses floating rates. In fact, it’s actually set up to make more money as interest rates move higher:

More Income as Interest Rates Rise

Same for another REIT favorite of mine, a 7.5% payer backed by an unstoppable demographic trend that will deliver growing dividends for the next 30 years. Interest rates are no problem for this landlord because it will simply continue raising the rents on its “must have” facilities.

Its founder Ed Aldag admitted that, fourteen years ago, he had “zero assets, a dream, and a business plan.”

Well his dream and plan were plenty – Ed parlayed them into $6.7+ billion in assets!

And right now is the best time yet to “bet on Ed” because his growing base of assets is generating higher and higher cash flows, powering an accelerating dividend:

I love dividend increases because they are proof that management is actually making more money, so can afford to pay us shareholders more. And an accelerating payout is a flat out cry for help!

Any management team that raises its dividend faster and faster is clearly making more money than it knows what to do with. This usually happens when it achieves a tipping point where its machine no longer requires as much reinvestment to continue growing. So leadership says: “Please, take a bigger raise, shareholders.”

Meanwhile investors and money managers who spot dividend accelerators lose their minds because, in theory, there is no valuation too high for a company that is increasing its dividend at an accelerating rate. Their spreadsheets literally break, and they buy the stock in a frenzy.

Ed’s stock should be owned by any serious dividend investor for three simple reasons:

  1. It’s recession-proof.
  2. It yields a fat (and secure) 7.5%.
  3. Its dividend increases are actually accelerating.

These two REITs are both “best buys” in my 8% No Withdrawal Portfolio – an 8% dividend paying portfolio that lets retirees live on secure payouts alone. And they can even enjoy price upside to boot, thanks to the bargain prices they’re buying at.

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Source: Contrarian Outlook 

Beat the Investing Public to this New Growth REIT

Have you ever looked at a stock chart that has moved up over a period of years and wish you could have bought shares way back when and participated in those gains?

Typically, individual investors don’t become aware of an attractive income stock growth opportunity until years after the IPO and the early investors have reaped the big gains. Many investors find new investment opportunities when they see reports on individual stocks on the financial websites. Without coverage a stock can stay invisible to most investors. Here is one such stock that has very attractive income plus growth potential.

MGM Growth Properties LLC (NYSE: MGP) is a real estate investment trust that came to market in April 2016. As the name indicates, the new REIT was spun-off by hotel and gaming company MGM Resorts International (NYSE: MGM). At the IPO, MGM Growth Properties received title to seven properties on the Las Vegas Strip:

  1. Mandalay Bay
  2. The Mirage
  3. Monte Carlo
  4. New York-New York
  5. Luxor
  6. Excalibur
  7. The Park, a dining and entertainment complex located between New York-New York and Monte Carlo.

The Las Vegas properties represent about 24% of total rooms on the Strip and approximately 35% of the privately-owned convention and meeting spaces on the Strip. The properties feature over 100 retail outlets, over 200 food and beverage outlets, and approximately 20 entertainment venues.

Outside of Nevada, at the IPO the REIT owned the MGM Grand in Detroit, the Gold Strike in Tunica, Mississippi and the Beau Rivage in Mississippi. Since the IPO, the REIT has purchased interest in one additional property from MGM, bringing the current portfolio total to 12.

All properties are being leased by subsidiaries of MGM under a single, triple-net Master Lease. Under the terms of the Master Lease, MGM paid MGP a starting annual rent of $550 million per year. The rent consists of a Base Rent of $495 million and $55 million of Percentage Rent. The Base Rent has a 2% annual escalator. The Percentage Rent is fixed for six years, and after that will be a percentage of revenue generated by the properties. The Master Lease has an initial lease term of ten years with the potential to extend the term for four additional five-year terms at the option of the tenant. The Master Lease states that any extension of its term must apply to all the properties under the Master Lease at the time of the extension. The lease has a triple-net structure, which requires the tenant MGM subsidiary to pay substantially all costs associated with each property, including real estate taxes, insurance, utilities and routine maintenance. MGM has agreed to provide MGP and its subsidiaries with financial, administrative and operational support services. Costs of these services will be reimbursed back to MGM.

Related: 5 REITs with a Long History of Double Digit Dividend Increases

MGP’s rental income is now projected to be $757 million in 2018, up 38% from the amount at the time of the IPO. The MGP dividend has been increased twice and is now up 10% from the dividend projected in the IPO prospectus. With a pair of recently announced acquisitions, it looks like investors already have a built-in dividend increase or two for 2018. Just last week, on April 5, MGP announced its first outside the MGM family acquisition, with the $1.0 billion purchase of the Hard Rock Rocksino in Northfield Park, Ohio. The operating assets of the casino will be sold and as a REIT, MGP will retain the casino property. MGM is committed to using the REIT as a growth vehicle. With the combination of the master lease, which gives a high level of confidence that MGP will generate cash flow to support the dividend, and the early move into acquisitions to generate growth, I forecast MGP to be a high single digit dividend growth REIT for years to come. Add a 6.4% current yield to that growth and you have an attractive total return stocks.

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Source: Investors Alley 

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