Category

Stocks

SeaDrill Ltd. (NYSE: SDRL) Offers High Yield, High Growth

By , Money Morning - • Print | Email

As a high-yield stock with a growing global presence in the oil-and-gas industry, SeaDrill Ltd. (NYSE: SDRL) is just the kind of investment we need in this low interest-rate environment.

Even if investments like U.S. Treasuries and CDs right now offer less risk than stocks, we can't survive on their pathetically low yields. So a company that's reliable, profitable and yielding 10% is quite a find.

Better yet, SeaDrill's share price has dropped significantly due to recent market conditions, making the stock a real bargain. At around $30 it's trading well below its 52-week high of $38.49.

So now's the time to buy SeaDrill Ltd., for a chance to collect cash flow while investing in a growing business model that's already seen substantial global success (**).

SeaDrill Ltd.: A Growing Global Powerhouse

SeaDrill is the world's second-largest ultra-deepwater driller. The company's asset mix is second-to-none, giving investors access to top-of-the-line equipment involved in high yielding contracts.

In addition to its high dividend, SeaDrill Ltd.:

  • Has one of the newest, most diversified drilling equipment fleets in the world.
  • Is headed by famously successful leadership.
  • And has steady cash flow to keep up with debt.

To continue reading, please click here...

Potash Corp. of Saskatchewan Inc. (NYSE: POT) Is Reaping the Rewards of a Global Ag Boom

By , Money Morning - • Print | Email

Potash Corp. of Saskatchewan Inc. (NYSE: POT) is the world's largest fertilizer company by capacity, which means it's perfectly positioned to capitalize on the current global agricultural boom.

Not only are populations growing, but middle class consumers in emerging markets are developing a taste for meat as well. This insatiable hunger for more choices has resulted in greater demand for corn-fed livestock, which is taking a hefty chunk out of crop yields.

And when you include new biofuel demands, crops are now being used for feed, fodder and fuel.

Of course, there's only so much arable land in the world, so fertilizer has become one of the primary drivers of increased crop yields.

When it comes to capitalizing on this evolving trend, Potash Corp. has the size and global diversity to dominate. That was clearly evidenced when the company reported record earnings in the second quarter.

So it's time to buy Potash Corp. of Saskatchewan Inc.(NYSE: POT) (**).

To continue reading, please click here...

Investing in Farmland: How to Turn Healthy Profits From the Heartland

By , Contributing Writer, Money Morning - • Print | Email

If Mark Twain was talking about investing in farmland when he suggested "buy land – they're not making anymore," then he knew more about finance than he's credited with.

The Federal Reserve Bank of Chicago just reported that prime farmland prices in the heart of the U.S. grain belt (Indiana, Illinois, Iowa, Michigan and Wisconsin) – were up 17% in the second quarter compared to 2010, the biggest year-over-year increase since 1977.

That's on top of a 12% jump for all of 2010, the second-largest yearly increase in the past 30 years.

In fact, farmland value since 2000 has appreciated by more than 1,200%, according to the National Council of Real Estate Investment Fiduciaries (NCREIF), and netted nice profits for farmland investors.

Just look at the NCREIF's Farmland Returns Index, which measures the quarterly performance of a large pool of individual agricultural properties acquired in the private market for investment purposes.

The index has posted some incredible quarterly gains over the past decade – most notably 22.78% and 14.63% in the fourth quarters of 2005 and 2004, respectively.

Farmland gains for the first two quarters of 2011 were recently reported at 2.40% and 1.48%.

What's more, negative quarterly returns for farmland are extremely rare. Only once since 1992 has the NCREIF Index fallen period-over-period, and that came in the fourth quarter of 2001 amid post-9/11 economic turmoil.

Given the large value gains since 2000, a lot of potential has been realized, but there's plenty of room for future profit.

"It's not the first inning of the game," Shonda Warner, managing partner at Chess Ag Full Harvest Partners, told CNBC, "but it's not the eighth inning either."

To continue reading, please click here...

Pink Sheets Basics: How To Profit From Pink Sheet Stocks - Without Getting Fleeced

By , Money Morning - • Print | Email

Most investors have heard the term "pink sheets" as a reference to stocks. But how many know what they are?

Pink sheets are companies that are traded over-the-counter and that aren't part of any major stock exchange. But that doesn't mean they are any less valuable than traditional stocks, exchange-traded funds (ETFs) or mutual funds.

In fact, expanding your portfolio with pink sheets can be extremely lucrative, but you have to make the right moves to rake in the big profits.

Let me explain…

Read More…

Get Ready Now for Dismal September Market Performance

By , Associate Editor, Money Morning - • Print | Email

Investors beware – the dismal days of September market performance are here.

September notoriously often leaves markets in negative territory. Since the start of the Dow Jones Industrial Average in 1896, the index has lost an average of 1.07% in September, with a 0.71% average gain for all other months.

That's a 1.78-point spread – enough to be "statistically significant at the 95% confidence level," and be considered a genuine pattern by statisticians.

More discouraging, the market has performed especially poorly in past Septembers when the preceding months were weak.

And that's where we are today.

August took markets on a wild ride. The Standard & Poor's 500 Index fell 5.7% and the Dow 4.4%. The month included two of the top ten worst-performing Dow days ever – a 635-point drop on Aug. 8 and a 513-point drop on Aug. 4.

Now with investors digesting a slew of disappointing economic reports, and the U.S. Federal Reserve unlikely to announce any stimulus measures until the end of the month at the earliest, it doesn't look like this September will buck the trend.

In fact, it could easily be worse.

30 Dismal Days Hath September

Investors tend to misidentify October as the worst month for stocks, but September has had its share of dismal days.

To continue reading, please click here...

The Simple Way to Score Fat Profits From Fast Food Stocks

By , Contributing Writer, Money Morning - • Print | Email

Fast food can be an occasional unhealthy indulgence – but fast food stocks can be a healthy dose of profit for your portfolio.

Imagine you were one of the first to buy shares of McDonald's Corp. (NYSE: MCD), the world's largest publicly traded fast food company.

When the "golden arches" opened its doors in 1960, it offered just six menu items – including a 15-cent burger and five-cent fries – at its 102 locations. Now it operates more than 33,000 restaurants in 118 countries and serves more than 64 million customers a day.

McDonald's went public in 1965, selling its shares for $22.50; now its stock trades around $90 a share.

That means today, after 12 stocks splits, 100 shares of the original McDonald's stock that cost you $2,250 would have grown to 74,360 shares worth roughly $6.7 million – and that doesn't even count dividends paid out by the company.

No other restaurant chain has matched McDonald's success, but others have shown phenomenal growth with impressive profits – and I'm going to show you how to find them.

Four Must-Have Factors for Fast Food Stocks

To find a winning fast food stock we have to look at what will drive growth – and related profits – in the future. There are four dominant themes you need to look for.

To continue reading, please click here...

Five High-Yield Stocks That Are a Safer Bet Than Treasuries

By , Associate Editor, Money Morning • @DavidGZeiler - • Print | Email

If you're trying to maximize return and minimize risk, you can't beat a high-yield stock that is a better credit risk than U.S. Treasuries.

It sounds crazy but it's true. The rate of insuring against the default of the debt of 70 large U.S. companies is lower than that to insure the debt of the U.S. government.

Meanwhile, the record-low yields on U.S. Treasuries – the 10-year note dropped below 2% recently and isn't much higher now – have put them below the yields of several major U.S. companies.

It cost about 50 basis points (bp) to insure U.S. Treasury bonds against default for five years; that translates to a cost of $50,000 annually to insure $10 million of bonds. But the cost to insure the debt of dozens of U.S. companies is less than 50 bp; for some it's as low as 30 bp.

And the United States is far from the riskiest government debt; Germany's credit default swaps were recently trading in the low 80s; Japan's and China's around 110 bp; and France's in the 150 bp range.

"There is no reason why governments should be considered better credit risks than top-quality companies," said Money Morning Global Investing Strategist Martin Hutchinson. "The Proctor & Gamble Co. (NYSE:PG) and The Coca-Cola Co. (NYSE:KO) make tangible products that people want to buy – and they do so at tightly controlled costs. So it's clear that companies like these can repay modest levels of debt under almost any circumstances.

"The same is not true for a government," Hutchinson continued. "Especially one that makes no money itself, produces few goods and services of value, and obtains money only by squeezing its unfortunate taxpayers."

Thanks to U.S. budget deficits that have grown into a massive $14.6 trillion debt, the credit default swap markets have determined that the U.S. government is no longer a risk-free investment.

Meanwhile, some companies have hit upon a magic combination of being a better credit risk than Treasuries while offering high-yield dividends and the potential for capital returns.

Here are five such companies:

To continue reading, please click here...

How to Protect Yourself From the Collapse of Treasury Bonds

By , Money Morning - • Print | Email

By now, you've probably taken note of the growing bubble in Treasury bonds.

The yield on the 10-year Treasury bond fell below 2% for the first time in 50 years in the wake of the U.S. credit rating downgrade.

That's irrational, and more importantly, dangerous.

A Treasury bond bubble is a unique creature. In fact, it's never been seen before, so determining its fate requires some careful thought.

But what's absolutely certain is that U.S. Treasuries are not a safe haven investment – far from it.

Treasury bonds carry five very dangerous risks – including negative yields, higher inflation, panic selling, an outright collapse, and default.

So let's take a closer look at those risks before determining the best way to profit.

First, real yields on Treasuries, after accounting for inflation, are now negative. Not only are nominal Treasury yields below the current inflation rate, but 10-year Treasury Inflation Protected Securities (TIPS) have traded on a yield of less than zero.

That is very unusual and economically distorting. Long-term bond yields in the zero-inflation 19th century never fell below 2.2%, which is to be expected. The guy who provides the money should get paid for doing so. However, any reversion to historical patterns would cause a major bond bear market. Ten-year Treasury yields would rise to the 5% to 6% range – even if inflation gets no faster – giving investors a 27% mark-to-market loss.

Of course, inflation will accelerate.

The consumer price index (CPI) inflation is up 3.6% from last year. And it's likely to rise much further as a result of the Federal Reserve's loose monetary policies.

If inflation were to rise to 10%, which is perfectly plausible, bond yields would have to rise to 12% to 13%, giving investors a 59% mark-to-market loss as well as eroding the value of their principal.

To continue reading, please click here…

To continue reading, please click here...

Alliance Bernstein Holding LP's (NYSE: AB) 9.4% Dividend Yield is Too Juicy to Pass Up

By , Money Morning - • Print | Email

In a market denoted by volatility, stocks with a high dividend payout typically come at a premium, but in the case of AllianceBernstein Holding LP (NYSE: AB) we have a bargain.

This is a company that has broad global exposure, no debt to service, and a 9.4% dividend yield.

Better still, AB stock has been beaten down of late, which means we have the opportunity to snap up this gem at a bargain-basement price.

For patient investors looking for cash flow, it doesn't get any better than this. So it's time to buy AllianceBernstein Holding LP (NYSE: AB) (**).

Why AllianceBernstein Holding LP (NYSE: AB) Is a Buy

AllianceBernstein isn't a household name but it's one of the largest asset managers in the world. The $1.5 billion company is the end result of Alliance Capital Management acquiring Sanford C. Bernstein in 2000.

The company has offices in New York, London, Frankfurt, Tokyo, Hong Kong, Sydney and Chicago, giving the company a truly global reach.

Another great thing about AllianceBernstein is that it pays 100% of its earnings per share to investors. That's why the stock currently sports a yield of 9.4%.

To continue reading, please click here...

The Latest Development With Private Briefing's Mystery Energy Stock

By , Executive Editor, Money Morning - • Print | Email

In last Friday's Private Briefing, former hedge-fund manager Jack Barnes told subscribers about a U.S.-based energy company he believed could be a "high-risk/high-return" profit play.

Just a few days later, the head of a major overseas energy firm announced plans to partner up with the American company and the stock jumped more than 6%.

That's just the beginning, Barnes said.

Read More…