When you're evaluating stocks to buy, and you see the chart heading south, it's not always doom and gloom. In fact, some of my favorite opportunities come from buying beaten-up stocks that I'm confident are going to rebound, especially if they're solid companies with good balance sheets and a large market share in their field. Stocks like that can suffer performance-wise because investors find them boring, but they often do provide reliable gains over time.
Here's the thing, though - those gains are usually gradual, taking years to realize fully. Which means that to get the most out of that kind of investment, you want to pair strong dividend yields with appreciation potential, so you get paid to hold onto the stock while you're waiting for it to move higher.
Well, I've got the perfect pick that fits right into this particular scenario - a communications firm that's a vital provider of wireless networking capability here in the United States. Investors often sleep on it, but it's a consistent workhorse of a company, boasting a $144 billion market cap and a 15.58% profit margin on $135 billion of trailing 12-month revenue.
It's trading at a huge discount right now, and has seen some pain this year, down about -14% year-to-date. But I think it could very well double in the next four years, and while it does, you'll be enjoying a great yield at just shy of 8%, at only a 52% payout ratio with $21 billion available to common shareholders. That means there's plenty of room to expand that dividend over time.
Check out this video for the ticker:
As I said in yesterday's post, communications infrastructure is one of the places you want to be, because one of the biggest growth markets right now - artificial intelligence - is going to depend on networking capacity in order to function.
But that's not the only way to take advantage of the upcoming AI boom. There's another little-known industry (despite the fact that we all use it every day) that's very likely to grow at the same rate as AI will - and AI is a market that's estimated to be worth up to $2 trillion in just seven years.
Companies in this sector are trading right now at a fraction of the cost of expensive tech firms like Microsoft and Nvidia, with many times more growth potential. You want to get in before institutional investors catch on, which is why you need to check out my full briefing on the best way to invest in AI right now.
The post This Wireless Stock Is Ready for a Rebound - Buy It Now appeared first on Total Wealth.
About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.
Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.