After surviving a near-bankruptcy experience in 2015-16, many investors didn’t expect Chesapeake Energy to file Chapter 11 as it just recently announced. And it’s not Chesapeake shares that we are interested in, but rather the shares of a midstream provider that derives 6% of its revenues from Chesapeake. Volatility has spiked, and fear has already caused the shares to sell off a little farther than they should have, in our view. As a result, this attractive high-income options trade opportunity has emerged. We believe this is an attractive trade to place today and potentially over the next few days, as long as the underlying stock price doesn’t move too dramatically before then.
Spirit Realty: High Income Options Trade, Preferred Shares and Common Stock
Spirit Realty Capital (SRC) is a leading self-managed net-lease REIT that owns single-tenant commercial (mostly retail) real estate properties across the US. Investor sentiment turned sharply negative in February due to the Covid-19 outbreak, but the shares have experienced a marginal recovery in recent weeks. In this report, we consider the common shares, the preferred shares and the relative attractiveness of generating upfront income by selling out-of-the-money put options for investors fearing a second wave coronavirus sell off. In particular, we consider the business, Covid-19 impacts, ability to meet financial obligations, dividend and income prospects and finally conclude with our views on investing.
New Options Trade: Mortgage REIT Fear Creates High Income Opportunity
As market fear (as measured by the VIX) has been rising again (as fear of a big second wave of coronavirus rises), so too has the upfront premium income in the options market been rising, particularly for mortgage REITs. This report shares a compelling option trade that generates high upfront income and gives you the chance of owing shares of an outstanding mortgage REIT with attractive agency-backed MBS at a compelling lower price. We believe this is an attractive trade to place today and potentially tomorrow, as long as the underlying stock price doesn’t move too dramatically before then.
E-Commerce REIT: Sturdy 6.4% Yield, Risk May Boost Upside
This small cap industrial REIT is well positioned to keep benefiting from its high exposure to ecommerce logistics. The dividend is very well-covered, and management remains highly confident. However, its relatively high leverage and exposure to one big risk in particular is important to consider. In this article, we review the business, dividend safety, valuation, and conclude with our opinion on why the company’s biggest risk may actually provide an additional boost to the share price as the economy emerges from the most challenges stages of the global coronavirus pandemic.
New Options Trade: Fear Creates High Income REIT Opportunity
As the market fear index (VIX) has been rising again, so too has the upfront premium income in the options market, particularly for property REITs. This particular report shares a compelling option trade that generates high upfront income and gives you the chance of owing shares of an outstanding blue chip property REIT at a compelling lower price. We believe this is an attractive trade to place today and potentially over the next several trading sessions, as long as the underlying stock price doesn’t move too dramatically before then.
New Options Trade: 2nd Wave Fear, Creates High Upfront Income Opportunity
As market narratives continue to focus on “second wave” coronavirus risks, stocks are selling off hard. We’d been enjoying a strengthening rebound up until last week, and this week is starting off down again. However, some businesses will be impacted less than others. This report shares an attractive upfront income-generating options trade on a business that will weather the storm thanks to its critical nature, strong cash position, long-term leases and the fact that it may benefit as many of its peers struggle. We believe this is an attractive trade to place today and potentially over the next several trading sessions, as long as the underlying stock price doesn’t move too dramatically before then.
7 Top BDCs: High Income, Only The Strong Will Thrive
Business Development Companies (“BDCs”) can be an important part of an income-focused investment portfolio. And the latest market nosedive gives investors another attractive bite at the BDC apple. However, not all BDCs are created equally. Specifically, some will thrive in the current environment, while others will struggle mightily. This article provides an overview of the current BDC landscape, explains why some are in much better shape than others, and then shares 7 top high-income BDCs that we believe are worth considering for investment, especially after yesterday's big market sell off.
New Options Trade: Very High Upfront Income, Another Bite at this BDC Apple
Some investors believe the market has rallied back too far, too quickly, and that we’re due for another significant pullback. And now with share prices starting to trade lower in recent sessions, fear is creeping back into investors’ minds. It is this fear and volatility that can increase the upfront premium income available in the options market, and give investors another chance to pick up attractive shares at lower prices. This report shares an income-generating options trade on a highly attractive long-term BDC investment. We believe it’s an attractive trade to place today potentially over the next few trading sessions, as long as the underlying stock price doesn’t move too dramatically before then.
CareTrust: Financially Strong, Despite the Pandemic
For years, investors have chased healthcare REITs with tenants funded by “private pay” because they feared ongoing government pressure on reimbursement rates. However, in this pandemic, it turns out they had it all wrong. CareTrust (CTRE) is a “mostly skilled nursing facilities” healthcare REIT, and it has benefited from generous government support during this pandemic. And on top of that, the CEO claims COVID hasn’t been as economically devastating as narratives suggest. This article reviews the health of the business, valuation, risks, dividend safety (it yields around 4.8%), and concludes with our opinion on investing.
Oaktree BDC: Disproportionate Sell-Off Provides a Window of Opportunity
This particular Oaktree BDC invests primarily in high-yield, first lien, liquid, middle-market debt. And even though its share price has been hit hard by the COVID-19 pandemic (as most BDCs have been), Oaktree has been positioning the portfolio and balance sheet conservatively for multiple years in anticipation of stressed market conditions (such as the current market environment), so it can not only weather the storm, but also so it has the financial wherewithal to be opportunistic when other BDCs cannot. This is also a big part of the reason OCSI recently proactively reduced its dividend—a smart thing for new investors, in our view. This report reviews the business, COVID-19 impacts, dividend prospects, valuation and risks. We conclude with our opinion about the attractiveness of this 8.0% yield BDC.
New Options Trade: Upfront Income, Frothy "Forever Stock"
There are certain blue chip stocks that are basic staples in many investors’ portfolios. These are often safe dividend payers that can be trusted to earn income (and pay dividends) throughout the market’s ups and downs. However, from time-to-time, these stocks can get a bit frothy, and the near-term upside can seem limited. This is our view on the stock covered in this report, and we are sharing an options trade that generates upfront income and adds discipline to your sell decisions. We current own these shares, and we believe this is an attractive trade to place today (and potentially over the next few trading days) as long as the price doesn’t move too dramatically before then.
Where Are the Best Opportunities Now? (Holdings and Performance Review)
In case you’ve been living under a rock, the market has been volatile this year, and income investments have performed extraordinarily poorly. To some, this is an exciting opportunity to look for undervalued gems to add to your portfolio (and we’ll share a variety of attractive opportunities in this report). But it’s also a good time to consider the dramatic ongoing changes to the way businesses operate, and to take a long hard look at where you’re going to invest your nest egg to generate the best income to support your needs going forward.
Owl Rock’s 10% Dividend: Different Than Other BDCs
The negative impacts of COVID-19 have been particularly pronounced for many Business Development Companies (“BDCs”). Owl Rock Capital Corp (ORCC) is one example where the share price has been pushed lower and the dividend yield has mathematically risen to over 10% (over 12.5% if you count the recently declared special dividend). Owl Rock’s strong liquidity position will help it whether the current storm and take on attractive new opportunities once it has addressed the most pressing liquidity needs of its existing portfolio companies. This article reviews the health of Owl Rock’s business, valuation, risks, dividend safety, and concludes with our opinion about why it may be worth considering if you are a long-term income-focused investor.