After the last few weeks of violent market swings - way up one day, way down the next - you might feel like there are no new moves you can make.
While it can seem a bit scary out there, that's not true.
When volatility hits, as it has since late January, one smart move you can make is to start buying companies that richly reward their investors through dividends and stock buybacks. These are companies that are going to pay off no matter the noise in the markets.
"But!" - I can hear you folks crying - "dividend stocks are boring." You're looking for fast-growing Silicon Valley startups and companies in frontier fields like biotech... legal marijuana... and the blockchain and cryptocurrencies.
As a growth-centric investor, I too used to think of dividend payers as firms that have lost their cutting-edge fervor.
Well, that was then. This is now...
Fact is, tech leaders are generating so much cash these days that they can boost R&D spending on new innovations and pay higher dividends. And thanks to the Trump tax cuts - which encourage the repatriation of cash held overseas - those companies are now piling up even more cash.
So I've been looking hard to find you folks some unstoppable trendsetters that are also big dividend payers.
And I just spotted a biotech leader that - almost immediately after calculating its lower tax rate - announced that it's boosting its dividend by an amazing 35% to a rate of nearly 3.3%. Not only that, but it's also going to start buying back $10 billion of its stock.
As good as that sounds, there's a lot going on here on the innovation/growth side as well.
In fact, on a share-price basis alone, I believe it's going to double your money in just a few years.
All that could be cash in your pocket.
However, there's one more thing you need to know.
To collect that cash, this is a play you need to make by April 13.
The Second Wave
When we spoke on Jan. 26, I told you that a tidal wave of cash was headed directly for the tech sector because of President Donald Trump's corporate tax overhaul. And I said that tech companies would spend much of that cash on dividends and stock buybacks.
So like I said, you folks are going to be a major beneficiary of that surge. In fact, I pointed out that 11 of the top 16 firms that will repatriate foreign cash are in high tech or the life sciences - two of our biggest profit targets at Strategic Tech Investor.
At the time, I said the single biggest winner here would be Apple Inc. (Nasdaq: AAPL) - and its investors.
Silicon Valley Breakthrough: This tiny company's revolutionary new device is expected to "change the world on a scale hardly seen in human history." It could hand early investors a $78,000 windfall in the process. Here's how to get in...
Today, let's address the flip side of that coin with a life sciences firm set to richly reward its investors.
In our twice-weekly chats, I rarely give a hard deadline for making a strategic investment. But with AbbVie Inc. (NYSE: ABBV), I'm departing from that practice.
Like I said, this Chicago-area biopharmaceutical leader is boosting its dividend by 35% - and the first installment on that $3.84-per-share dividend is payable to shareholders on May 15.
But here's the thing...
To qualify, you have to invest no later than the close of business on April 13.
Need one more reason to invest?
Thanks to the Trump tax cuts, AbbVie will have an effective tax rate of just 9% for 2018. That's among the lowest of any major U.S. firm.
And it's a key reason why AbbVie recently upped its earnings guidance for this year - up to a high of $7.33 a share from a previous high-end forecast of $6.55.
Of course, AbbVie is much more than just a great dividend play. We don't do dividend "pure" plays here.
So to get a sense of why this stock can double your money in just a few years, let's run it through the five "filters" of Your Tech Wealth Blueprint.
Take a look...
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Tech Wealth Rule No. 1: Great Companies Have Great Operations
We only invest in well-run firms with top-notch leaders.
And AbbVie CEO Rick Gonzales has deep expertise in the biopharma industry and a long history with this firm. He held a series of top jobs at Abbott Laboratories (NYSE: ABT), from which AbbVie split off from in late 2012, where he served as president and chief operating officer.
His performance since then is simply stellar. AbbVie is now of the world's top drug firms.
Since its Dec. 12, 2012, debut, AbbVie stock has soared 224.2%, while that of its former parent company, Abbott, has risen just 89.3%.
And as I'll show you in a moment, there are plenty of big gains still ahead.
Tech Wealth Rule No. 2: Separate the Signal from the Noise
To create real wealth, you have to ignore the hype and find companies that have rock-solid fundamentals.
Had you listened to Wall Street back in August 2016, you might have been tempted to dump this stock. The company reported earnings a short time earlier that beat forecasts.
However, the stock sold off after analysts expressed concerns about the future of its top drug, Humira. Between Aug. 12 and Oct. 31, the price fell 17%, just short of bear territory. From there, however, it nearly doubled as of the end of January 2018.
Tech Wealth Rule No. 3: Ride the Unstoppable Trends
We look for stocks in red-hot sectors because they offer the best chance for life-changing gains.
AbbVie just announced a $1 billion investment in a small-cap biotech leader that could add billions in new sales. It's collaborating with Voyager Therapeutics Inc. (Nasdaq: VYGR) to create new immunotherapy compounds.
This is cutting-edge science with massive upside. Transparency Market Research says the market size of the cancer portion of immunotherapy will more than triple to $124.9 billion by 2024.
AbbVie has the staff to turn new discoveries into blockbusters. After all, its arthritis fighter Humira is one of the top-selling prescription drugs of all time, with more than $95 billion in revenue since it was launched in 2003.
Tech Wealth Rule No. 4: Focus on Growth
Companies that have the strongest growth rates almost always offer the highest stock returns.
Over the past three years, AbbVie has grown its sales an average of 12%, a very strong rate for a big-cap life sciences firm. At that rate, sales will double every six years.
But that figure is bound to rise on the strength of its new program with Voyager. Fortunately for investors, the costs here are dirt cheap.
AbbVie only has to pony up $69 million in upfront fees to gain access to Voyager's pipeline of drugs to treat such neurological ailments as Alzheimer's and Parkinson's.
Tech Wealth Rule No. 5: Target Stocks That Can Double Your Money
This is where we look at the firm's earnings growth and see how long it will take to double profits. By doing that, we can figure out how long on average it should take for the stock to roughly double.
I've gone through AbbVie's financials in detail and I'm projecting earnings per share will grow by an average 20% over the next three years. Bear in mind, that's a very conservative estimate.
See, over the past three years the firm reported an average 17% earnings growth. But in the most recent quarter, the figure climbed to 23%, and it's expected to hit 37% later this year. So my 20% projection is on the low end of that scale.
Now we use what I call my Doubling Calculator. Divide the compound growth rate of 20 into the number 72. We find that our AbbVie shares should double in just a little more than three and a half years.
The stock trades at roughly $119, giving it a $190.01 billion market cap.
Yes, the stock corrected more than the overall market starting in late January. But since bottoming out on Feb. 5, AbbVie is up close to 10%, a growth rate more than double that of the S&P 500.
So here we've got one of the top life sciences stocks to own... one of the top stocks to own - period.
It's poised for short-term gains and steady profits well into the future. And the dividend will give the stock strong support should we see more market volatility this year.
That potential volatility - that likely turbulence - is why, right now, I'm looking closely at other fast-growing tech stocks that also pay a substantial dividend. I'll share my list of top picks as soon as I finish my research.
Meanwhile, if you are in the mood for a pure "grower," I've got a something for you there, too.
It's a tiny Silicon Valley company that recently reported that it has received Federal Communications Commission approval for a revolutionary new device that does something many people had previously thought impossible. Once this new discovery hits the mainstream... it could be a trillion-dollar business.
This one tiny company has already secured 58 patents so far, with another 200 pending. I expect that's enough to ensure it'll have total domination of this $800 billion or more market - and that its revenue will soar 125,091%.
I lay out my case for this company and this stock right here. I encourage you to check it out before this hits the mainstream.
The post To Make Triple-Digit Gains on This "Volatility Buster," You Must Move by April 13 appeared first on Strategic Tech Investor.
About the Author
Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top tech and biotech financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...
- He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
- He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
- As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.
This all means the entire world is constantly seeking Michael's insight.
In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.
Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.
And even with decades of experience, Michael believes there has never been a moment in time quite like this.
Right now, medical breakthroughs that once took years to develop are moving at a record speed. And that means we are going to see highly lucrative biotech investment opportunities come in fast and furious.
To help you navigate the historic opportunity in biotech, Michael launched the Bio-Tech Profit Alliance.
His other publications include: Strategic Tech Investor, The Nova-X Report, Bio-Technology Profit Alliance and Nexus-9 Network.