With the blue chip Dow Jones Industrials Average now down 20% from its recent highs, it’s officially in bear market territory by that popular definition.
Testing the June Lows
Futures are pointing to a lower market open today, as the S&P 500 is set to re-test the June low of 3,636. Having closed Friday at 3,693, and with pre-market futures trading around 3,688, technical analysts are left wondering if the market will take out the prior lows—and does that mean there is more pain ahead?
Stay Focused: An Update on The Fed and The Market
On Wednesday, the Fed made clear it will continue to aggressively fight the high inflation that it previously ignored and dismissed as “transitory.” Specifically, the Fed just raised rates by 75bps for the third FOMC meeting in a row, and these hikes continue to harshly punish investment accounts holding both stocks and bonds.
High-Growth, Mid-Cap, Cloud-Data Company, Attractively Priced
The company we review in this report provides high-capacity storage for data centers using software and hardware technologies that are extremely well rated by customers. What’s more, the company is growing rapidly, and will continue to do so, as the digital revolution and migration to the cloud (data centers) are the biggest secular trends in the world today. We like the shares because they are positioned to benefit from many years of high growth and because they currently trade at an attractive price.
Long-Term Investors: Attractive, Electrical Components, Smid-Cap Stock, On Sale
There is a lot to like about this attractive electrical components stock that we first wrote about back in 2015. For example, it is highly profitable, growing rapidly, has a large Total Addressable Market (“TAM”) opportunity and the shares are currently on sale because short-minded investors are incorrectly extrapolating short-term revenue growth estimates (due to a tough comp and the market cycle) and not seeing the long-term secular trend remains firmly intact.
Fed Rate Hikes To Impact Top Big-Dividend BDCs
With the Fed set to raise interest rates another 75 basis points on Wednesday (following its 2-day open market committee meeting which kicks off today), it’s worthwhile to revisit big-dividend BDC and how they are impacted by rising rates. This note shares data on how many of the most popular publicly-traded BDCs are impacted differently by rising rates depending on the structure of their balance sheets (floating-versus-fixed-rate assets and liabilities, as well as leverage levels). We also highlight a few of our favorite BDCs (two we own and one we are considering) that yield 9.1%, 10.0% and 10.2%, respectively.
When the Market Falls, Just Keep Buying More (Of This Attractive +6% Yielder)
When the market falls, just keep buying more. That’s one of the best strategies a long-term investor can follow, and one of the best ways to implement it is through the attractive closed-end fund (“CEF”) we review in this report. It currently trades at a compelling 14% discount to its net asset value (“NAV”), and it guarantees at least a 6% distribution yield each year. What’s more, it has been paying big distributions to investors for over 80 years straight, and it has an impressive long-term track record of outperforming the S&P 500 (net of fees). We review all the details in this report, and then conclude with our strong opinion on investing.
150 High-Income CEFs: Ranking Our Top 7
Closed-End Funds, or CEFs, can be an income-focused investor favorite because of their big steady distribution payments to investors (often yielding in excess of 6% to 10%, frequently paid monthly). However, not all CEFs are created equally (in fact they can be widely different). In this report, we offer up a quick review of what a CEFs is, we share current data on over 150 high-income CEFs (including strategies, leverage, yield, distribution frequency and discount/ premium versus net asset value), and then finally conclude with a ranking of our top 7 CEFs that are particularly attractive right now and worth considering for investment (if you are an income-focused investor).
Adobe to Acquire Figma for $20 Billion
So the highly-profitable multimedia and creativity software company, Adobe, has agreed to acquire web-first collaboration design platform, Figma, for $20 billion (half cash, half shares). At roughly 50 times next years revenues, and considering Adobe’s current total market cap is only around $173 billion, this is a hefty price tag, especially at a time when the market is down and economic growth is slowing. We share our thoughts on the acquisition and the future of Adobe in this quick note.
Attractive Industrial REIT: 4.4% Yield, Discounted Price
Industrial REITs have sold off particularly hard this year, but one name in particular is attractive if you can handle its strategy and risks relative to industrial REIT peers. In this report, we review this particular REIT’s business, industry outlook, valuation, dividend and risks. We conclude with our opinion on investing in this 4.4% dividend yielder.
A Quick Note on Deflation
Yesterday (Tuesday) was the worst day for stocks since mid 2020 (when Covid lockdowns were being announced) because a higher than expected inflation number (CPI) spooked investors. And as the Fed fights aggressively to battle inflation (with interest rate hikes) some pundits believe the Fed is going WAY too far, and deflation is now the bigger risk.
Are You Panicking Over This Morning's CPI Number?
So the much anticipated monthly Consumer Price Index (CPI) inflation number was released this morning. The year-over-year number ticked slightly higher (even though gas prices are down) and the market is selling off hard. Here are four ways to keep the media’s unrelenting sensationalized fearmongering in check as you stay focused on your investment goals.
Top Software Stocks: Massive Growth, Lower Valuations, Inflation Catalysts Ahead
Here are 85 high-growth software stocks, sorted by market cap. As a group they have performed very badly this year (as the fed raises rates to fight inflation), but as you can see there is a very noticeable difference in valuation between the 10 largest and the 10 smallest. This includes price-to-sales ratios (the large caps have much higher multiples), price versus 52-week range (the large caps have fallen a lot less) and more. In this note, we share a few points about this group, and discuss the upcoming CPI number as a catalyst.
6.1% Yield Blue-Chip Stock: Risks Versus Rewards
As the share price of this large-cap blue-chip stock sits near its 52-week low, its dividend yield (currently 6.1%) sits near a decade-long high. What’s more, the valuation is compelling if you can get comfortable with the big risk factors it currently faces. In this report, we review the business, valuation, dividend safety and risk factors, and then conclude with our strong opinion on investing.
S&P 500: 25 Biggest Yields with 10+ Years Dividend Growth
Exciting Long-Term Opportunities: New Market Paradigm
This month’s Blue Harbinger Thinker is now available. In this report, we share our thoughts on current market conditions and how we believe investors should be playing it. We also share updated performance and holdings for our Income Equity and Disciplined Growth portfolios, a few top investment ideas, and then we conclude with a few important takeaways and links to more investment opportunities that we hope you will find useful.
Top 10 Growth Stocks (That Are Currently Down Big)
Despite all the gloom and doom in the market, and despite the big reasons to stay bearish (as we will review in this report), the market will eventually recover and go much higher. We don’t know if the majority of the selling is over, or if things will continue to get worse in the short-term (no one does). But we do know that over the long-term we expect the market to eventually recover and go much higher. In this report, we review the terrible market environment, including data on 150 top growth stocks that have sold off hard. Then we rank our top 10 long-term growth stocks from the list, starting with #10 and finishing with our top ideas.
50 Hated Pandemic Stocks, These 3 Are Worth Considering
After the initial pandemic shock in 2020, certain high-growth stocks performed well. Extremely well. Bolstered by extraordinarily low interest rates and a new crowd of “work-from-homers” (with newfound time to “invest”) it seemed the sky was the limit. Until it wasn’t. Flash forward to now, the market has fallen sharply this year (especially high-growth stocks), and there is no short supply of reasons to stay bearish. Very bearish. In this report, we share data on 50 high-growth stocks that have crashed, run through a list of compelling reasons (data points) to stay bearish, and then discuss the merits of three interesting high-growth stocks from the list that have crashed particularly hard, with a special focus on pandemic darling, Palantir (PLTR). We conclude with some important takeaways and our very strong opinion about investing in Palantir and investing in this market in general.
40 Big-Dividend Mortgage REITs: Terrible YTD as Spreads Widen, Rates Rise, Fed Unwinds, Housing Risks
In theory, Mortgage REITs (or mREITs) do well when interest rates rise, but so far this year they have done poorly because MBS spreads have risen sharply (an indication of risk). Here is a look at 40 big-dividend mREITs, plus some insights on what is happening to their share prices (mainly courtesy of the Fed’s balance sheet), and then a few mREIT investment ideas worth considering.
Cybersecurity Stock: Revenues Keep Growing Fast, Shares 35.2% Below ATH
This rapidly growing cybersecurity business announced earnings after the close on Tuesday. The results were better than the street’s already lofty expectations, plus the company raised forward guidance (both good things). This brief note is an update and follow up on our previous report, and a reminder to readers on how we feel about investing in this stock, at this time.