Happy Holidays and Merry Christmas! Here is a look at big-yield CEF data for over 75 top funds. As you can see, the premiums have come down on several popular big-yield bond funds (attractive). Further still, municipal bond funds continue to be attractive, selectively.
Monolithic Power: Very Tempting Post Pullback
Shares of Kirkland Washington based chipmaker, Monolithic Power Systems, are getting very tempting again. We dumped 100% of our shares back in August in the $800’s, and they now trade below $600. The company’s diverse end-market strategy is expected to produce ~+20% revenue growth this year and next, while producing above 20% net margins and trading at only 1.7x forward PEG ratio (price-to-earnings / growth) and with a 5-year expected EPS growth rate estimate of 25%… impressive!
40+ Big-Yield BDCs Compared (Big Dividends Report)
Top 10 Growth Stocks (December Update) + Disciplined Growth Portfolio
The Top 10 Growth Stocks tear sheet has been updated for December, and so has the complete Disciplined Growth Portfolio. As a reminder, these are NOT “swinging for the fences” types of strategies (although the Disciplined Growth Portfolio is up nearly 40% this year). Rather, they are disciplined, long-term, real money strategies, and they are beating the living pants off “Vanguard Target Date funds.”
Top 10 Big Yields (December Update) + High-Income NOW Portfolio
The Blue Harbinger “High Income NOW” portfolio, and the “Top 10 Big Yields” tear sheet have been updated for December. There is one new purchase in the “High Income NOW” portfolio, and two new names on the “Top 10 Big Yields” tear sheet (as well as a handful of rebalancing trades and updates to “buy under” prices). The overall theme this month is that a lot of big-yield opportunities are getting expensive, but not all of them. And we have highlighted our top ideas in these two updated documents for December.
Snowflake Earnings Note: Massive Revenue, Still No Profits
If you are a growth investor, cloud data AI company, Snowflake (SNOW) has massive revenue and massive revenue growth. However, the share price has fallen from extreme highs (in 2021) so that its recent 33%+ pop in share price (following strong quarterly earnings) still leaves a lot to be desired. In this brief note, we review the company’s incredible revenue growth, earnings (still very negative net income), valuation and share dilution. We conclude with our strong opinion on investing.
10.9% Yield CEF: Big NAV Discount, Disciplined Approach
If you like big steady income, the CEF we review in this article has delivered for decades. And it just got better this year after increasing its quarterly distribution meaningfully. Not to mention, it trades at a compelling discount to NAV which basically eliminates the small performance drag of its very reasonable expense ratio. Furthermore, it provides critical exposure to diversified equity (stock) markets that a lot of income investors frequently miss out on (because they’re overly concentrated in bonds and only a small subset of the equity market). And it does all of this in a highly-disciplined quarterly-distribution approach that allows many investors to “set it on auto-pilot” and sleep well at night.
Big Dividends Report: 200+ Closed-End Funds
If you enjoy digging into the universe of data (to help yourself identify attractive opportunities for further research), this report shares updated data on over 200 big-dividend (technically “big-distribution”) Closed-End Funds (“CEFs”). The data includes a variety of CEFs (including taxable bond CEFs, non-taxable municipal bond CEFs, stock CEFs and more), and it is sorted by market cap (you likely recognize several of your favorites near the top). There is also a link to an Excel spreadsheet with all the data (for those of you who like to sort, slice and dice the data your own way). We own several CEFs on this list in our Blue Harbinger “High Income NOW” portfolio.
Steady Income: 8.4% Yield CEF Worth Considering
If you are like a lot of people: (a) you recognize stocks have been very strong and may be due for a pullback, and (b) you don’t need homeruns from your investments at this point in life, just steady high income and a lot less volatility than the overall market. In this report, we review an attractive 8.4% yield “balanced” CEF with a healthy dose of utilities stocks (known for steady dividends and lower volatility), plus a side helping of bonds (also known for steady income) and a prudent amount of leverage (~25%). It also trades at a significantly lower price premium that it has been (compelling entry point) and pays distributions monthly.
Aspen Aerogels: High Growth, Shares Down 50% Since August
Aspen Aerogels (ASPN) recent sell-off (shares down 50% since August) provides a tempting buying opportunity for long-term growth investors. But there are a few things investors need to consider. For starters, investors were disappointed with Q3 results, in large part because the company reported a $13.0 million net loss, which included a $27.5 million one-time charge from the redemption of the company's convertible note (without the one-time charge, net income was $14.5 million, a $27.4 million YoY improvement). Additionally…
SoFi's Big Rally (+90% in the last 6 months)
SoFi Technologies (SOFI) shares are unsurprisingly up significantly post-election considering the new White House and Congress will be less friendly to the idea of student loan forgiveness (SoFi private loans didn’t qualify), but also as the company announced record beating quarterly performance at the end of October.
Post-Election Markets: Are You Ready for What's Next?
It’s been a big week for geopolitics and for the stock market (some sectors more than others). In this note, we review the performance of various stock market styles (eg. Small Caps, International, Large-Cap Tech and more), and then share some insights as to whether your personal investment portfolio is positioned corectly for what is coming next. For starters, here is a look at how various stock categories have performed since the election (obviously some big changes)…
SCHD: Big Win Ahead
The Schwab US Dividend Equity ETF (SCHD) is about to create a lot of stock market winners. In this report, we review five reasons why it is a superior strategy for many investors right now (including its volatility characteristics, current market conditions, dividend flows, tax advantages and clear practicality benefits), plus one critical risk factor investors need to consider. We conclude with our strong opinion investing.
Top 10 Big-Yields (November Update) Members
Despite macroeconomic concerns, the stock market has continued to post strong gains this year thereby leaving some investors wondering if it’s time to take some chips off the table. One popular approach is owning attractive big-yield investments (6% to over 10% yields) that will continue to pay high income regardless of what happens in the broader market. In this report, we provide an overview of “frothy” market conditions (e.g. valuation metrics) and then countdown our top 10 big-yields (including BDCs, stock and bond CEFs, REITs and more). We conclude with a critical takeaway that is sadly overlooked by many.
PDI: The Big ROC Bath, 13.1% "Yield"
They often say “you don’t want to see how the sausage is made,” but in this report we are going to look under the hood at PIMCO’s Dynamic Income Fund (PDI) to see how this popular closed-end fund (“CEF”) really generates that big 13.1% “yield” (paid monthly). We put “yield” in quotes because it’s really an artificially manufactured “distribution” that recently included a massive amount of taxable return of capital (“ROC”) something many investors try to avoid like the plague. After reviewing the fund, the distribution and the risks, we conclude with our strong opinion on investing.
Ares Capital: 25+ Big-Yield BDCs Compared (Earnings Season Edition)
Income-focused investors are frequently attracted to business development companies (“BDCs”) for their large dividend payments. And among BDCs, Ares Capital (ARCC) is the stalwart blue chip that leads the industry (and currently offers a big 9% dividend yield). But before you invest in Ares, let’s take a closer look at what they do and how they compare to peers (especially ahead of this upcoming BDC earnings season). In this report, we review the business, the current market environment (especially fixed-versus-floating interest rate dynamics, plus rising non-accruals), what we like and don’t like (i.e. risks) and then conclude with our strong opinion on investing.
Update: Top 10 Growth Stocks, Disciplined Growth Portfolio
Climbing the Wall of Worry: The S&P 500 was up another 1.5% this week (and now +22% year-to-date) despite major jitters over the US election in just three weeks. We have updated our Top 10 Growth Stocks and our Disciplined Growth Portfolio to reflect new opportunities and continuing confidence in the long-term economy (despite a never-ending drumbeat of short-term naysayers). If you are looking for two minutes of fame, go ahead and hide in cash until the next market correction (which may be in two days, two years or two decades), but if you are looking to keep building long-term wealth, the ideas in this report are absolutely worth considering.
Albemarle: Lithium Supply Cycle
This lithium miner (with a strong tie in to electric vehicle batteries) has gone from “loved” (at over $300 per share in 2022) to “hated” (now trading at around $100). But what many investors may not fully appreciate is the massive lithium supply cycle swing, which now places Albemarle in an interesting position going forward. In this report, we review the business, the lithium supply cycle, current market dynamics and risks. We conclude with our strong opinion on investing.
Eli Lilly: The Bull Case is Compelling
Despite the recent “dip” (shares are trading 20% below recent all time highs), Eli Lilly remains a very attractive company and compelling investment opportunity (e.g. blockbuster weight-loss drugs, wide moat, massive growth, attractive valuation). In this report, we share the bull case (plus a few bear case arguments, for balance). Let’s get into it.
Quick Note: New Purchase (Disciplined Growth Portfolio)
We added a starter position in this high-growth mid-cap stock. The share price has significant momentum and so do the underlying fundamentals of the company. The company’s new AI-powered mobile solution (released ahead of schedule on Thursday 9/26) should keep revenues growing rapidly as it's purpose build for today’s marketers.