The Top 15 Stocks to Buy Now By Dr. Mark Skousen Editor, Forecasts & Strategies
By Doug Fabian Editor, Successful ETF Investing
By Nicholas Vardy Editor, The Alpha Investor Letter
By Chris Versace Editor, Growth & Dividend Report
By Bryan Perry Editor, Cash Machine
Eagle Financial Publications • 300 New Jersey Ave. NW #500 •Washington, DC 20001 Copyright 2015 by Eagle Products, LLC All rights reserved
IMPORTANT NOTE: This special report is for informational and educational purposes only, based on current data as of December 2015. Do not buy or sell these investments until you have read the current issue of the publications written by Dr. Mark Skousen, Doug Fabian, Nicholas Vardy, Chris Versace or Bryan Perry.
The Top 15 Stocks to Buy Now Copyright © 2015, by Eagle Products, LLC. All rights reserved. No quotes or copying permitted without written consent. Published by: Eagle Products, LLC 300 New Jersey Ave. NW #500 Washington, DC 20001 800/211-7661 Websites: www.MarkSkousen.com www.Fabian.com www.NicholasVardy.com www.ChrisVersace.com www.BryanPerryInvesting.com www.EagleDailyInvestor.com
Introduction The Top 15 recommendations offered in this special report give you more than one dozen of the best investment opportunities from our team of experts. Dr. Mark Skousen, Doug Fabian, Nicholas Vardy, Chris Versace and Bryan Perry contribute their substantial individual investment skills as each provides three picks. You will not want to miss out on these potentially highly profitable opportunities.
Dr. Mark Skousen’s Top Three Plays 1) Main Street Capital Corporation (MAIN) 2) Omega Healthcare Investors, Inc. (OHI) 3) Newmont Mining Corporation (NEM)
Top Pick #1: Main Street Capital Corporation (MAIN) Based in Houston, Main Street Capital Corp. (MAIN) is a business development company (BDC) that makes equity investments and loans money to small and mid-sized companies. Typically, these businesses are cash flow positive, with revenue between $10 million and $100 million. Main Street is well diversified. It has investments that exceed its cost basis in each of its three areas of financing, and the company is well positioned to take advantage of new opportunities. Main Street’s dividend is paid monthly. It has only been cut once since the 2008 financial crisis. As investors will recall, Main Street’s management decided in 2013 to pay an extra dividend twice a year. At the current rate, counting its monthly dividend of 18 cents a share, MAIN’s annual total distribution should be $2.71 or more, for an outstanding yield of 9.1%. I agree with Wall Street analysts who consider Main Street Capital the “best dividend stock in America,” due to its top management team, insider buying and rising dividend policy. It is one of my largest positions. Management recently has continued to accumulate more shares of its own stock. Main Street’s management team and directors own nearly a tenth of the company. CEO Vince Foster is the largest shareholder in the company. Foster earns roughly $3.8 million in dividends per year on his holdings. That’s about eight times as much as his salary. The company’s directors, owners or board members execute transactions to acquire additional shares routinely, nearly every month — all of them at market price. That kind of insider buying affirms my confidence in the company’s outlook. The management team’s interests are clearly aligned with shareholders. If the business does well, and management is able to increase the dividend, that puts more money directly back into their pockets, as it should be.
Main Street sells for only 1.5 times book value now. Now is the time to add the shares to your portfolio. It is rare to find a stock with a high yield, growing dividend, a very solid management team, insider buying and bright prospects for the future. But that favorable situation is exactly what Main Street Capital offers. That’s why I still recommend that you pick up shares of MAIN at market, and further updates will be provided in upcoming issues of Forecasts & Strategies.
Data as of 12/09/2015
Source: Stockcharts.com
Top Pick #2: Omega Healthcare Investors, Inc. (OHI) My best bet for real estate this year is Omega Healthcare Investors Inc. (OHI). OHI actually has been my hottest play on this sector for a couple of years now, as I first recommended it to investors back in 2013. Specifically, OHI was added to the F&S portfolio on May 28, 2013. Here’s the reasoning I gave at that time for investing in it: Omega Healthcare Investors (OHI) is a great way to take advantage of the aging of America. This Maryland-based owner of more than 400 nursing and assisted living facilities in 35 states is a real estate investment trust (REIT), and there’s plenty of room for further acquisitions of health-related properties.
Omega offers a healthy balance sheet and bottom line. Revenues rose 20% in the past year to $367 million, and earnings advanced 46% to $133 million. With 36% profit margins, OHI’s return on equity (ROE) is more than 13.5%. Omega has had a rising dividend policy for the past 10 years. Today, Omega pays out a 46-cent-per-share dividend (5.4% annualized yield), the highest of its peers. Despite a rising stock price, Omega sells for 13 times estimated earnings in 2013, and it has been beating estimates. In addition, this company is perfectly set up for continued dividend growth. It collects huge rent payments from hospitals all over the country, then passes 90% of its profits on to shareholders. By paying out 90%, Omega also avoids any income taxes, allowing the company to increase payments at even faster rates. OHI continues to benefit from a booming healthcare industry, which has only added to its gains over the last year. Take a look at the chart below and you’ll notice the shares recently pulled back to provide a reduced price for those who want to buy the stock.
Data as of 12/09/2015
Source: Stockcharts.com
And since Omega’s fundamentals haven’t changed significantly since that original recommendation, OHI still remains a buy at market price. In addition, to limit the effects of a sell-off, place a sell stop 20% below your entry price.
Top Pick #3: Newmont Mining Corporation (NEM) With a market cap of roughly $9.26 billion, Newmont Mining Corporation (NEM) has mining operations in the United States, Australia, Peru, Indonesia, Canada, New Zealand, Ghana and Mexico. It has proven and probable gold reserves of 82.2 million ounces and an aggregate land position of approximately 20,000 square miles. The company also produces silver, copper and zinc, and it runs a merchant banking operation. Newmont doesn’t hedge its gold production, allowing investors to benefit fully from future price rises. If gold rallies from here, the combination of higher sales and earnings and the compelling valuation should cause these shares to sprint higher. Although the U.S. dollar is currently performing strongly due to worldwide quantitative easing programs, when the buck begins to falter, securities should retreat back into the safe haven of gold and gold-related stocks. There also is talk of a merger between Barrick Gold (NYSE: ABX) and Newmont, which would be good news for Newmont.
Data as of 12/09/2015
Source: Stockcharts.com
About Mark Skousen Mark Skousen, Ph. D., is the editor of the monthly investment newsletter, Forecasts & Strategies, as well as three weekly trading services, Skousen High-Income Alert, Private Equity Trader and Fast Money Alert. He also is a professional economist, investment expert, university professor and author of more than 25 books. He earned his Ph. D. in monetary economics at George Washington University in 1977. He has taught economics and finance at Columbia Business School, Columbia University, Grantham University, Barnard College, Mercy College, Rollins College and served as a Presidential Fellow at Chapman University. He also has been a consultant to IBM, Hutchinson Technology and other Fortune 500 companies.
Doug Fabian’s Top Three Plays 4) Deutsche X-trackers Harvest CSI300 China A-shares ETF (ASHR) 5) WisdomTree India Earnings ETF (EPI) 6) BioShares Biotechnology Clinical Trials ETF (BBC)
Top Pick #4: Deutsche X-trackers Harvest CSI300 China A-shares ETF (ASHR) db X-trackers Harvest CSI 300 China A-Shares Fund (ASHR) was the first A-shares ETF to market when it came out in November 2013, and it tracks the Shanghai Shenzhen CSI 300, a benchmark measure of the China market. It is our opinion that there is much more upside potential going forward in Chinese stocks than there is in domestic stocks or in broad-based international stocks. One thing that I think is important to keep in mind with respect to investing in China is the recent shrugging off of the negatives that have plagued the sector for the past several years. The fears include a “hard landing” for China’s economy. Such an event could collapse many segments of its domestic economy, hurt so-called “ghost cities” and cause an accompanying housing bubble in the nation. Other effects could be stress on the “shadow banking system,” lax securities regulation and a lack of transparency on official government data. All are somewhat legitimate issues when investing in China, and all have weighed on Chinese stocks. Yet I suspect these concerns are far more hype than reality. This hype kept the China market down for some time and caused Chinese equities to underperform U.S. markets. Now, however, those trends are beginning to reverse roles, and that means it’s time to be bullish on China. Many of the most widely followed China funds, including what are called the “A-share” funds, have price-to-earnings ratios of about 10. This situation compares favorably to the price/earnings (P/E) ratios found in other markets. So, with many China funds, you’re buying value. The A-shares are basically just Chinese stocks that trade on the Shanghai and other China exchanges. Up until recently, these stocks were essentially available only to domestic Chinese investors. Now, however, the Ashares are available to “foreigners” via exchange-traded funds (ETFs), and that’s a trend we like. Now that the gate is open and global money managers are able to invest in greater volume, this ETF has strong potential in 2015. ASHR has surged upward recently and now trades well above the level it occupied for most of 2014. My recommendation to you, especially if you have money in Chinese stocks, is to not fall for what I consider to be the false narrative that there is a China equity bubble. The smart money is moving into China and bidding up the sector ETFs tied to the Dragon’s fortunes.
Data as of 12/09/2015
Source: Stockcharts.com
Top Pick #5: WisdomTree India Earnings ETF (EPI) India, one of the most populous nations on Earth, is an interesting country for investors because it holds the promise of significant growth potential. Its unique characteristics include a population that is young compared to developed nations, the presence of some world-class universities and the availability of many employable, English-speaking people. But the country has been mired in regulatory obstacles and other problems that have held it back from achieving higher growth rates in the past. However, 2014’s election of a new, pro-business prime minister makes now a good time to consider investing in funds such as the WisdomTree India Earnings ETF (EPI). The election of conservative Bharatiya Janata Party (BJP) leader Narendra Modi as prime minister set the stage for this BRIC (Brazil, Russia, India and China) country to grow rapidly. Some observers anticipated that this economic expansion would occur relatively quickly, as it had in some other Asian countries that modernized and adopted business-friendly policies. Indeed, India has been a world market leader of late, thanks to Modi’s business-friendly policies. EPI is an exchange-traded fund (ETF) that replicates the holdings and results of an index that tracks companies that are profitable based on their earnings in the previous calendar year and either are headquartered in India or generate most of their revenues in the country. If you are risk averse, keep in mind that this country-specific ETF is not diversified.
In addition, not only is EPI a way to invest in India, which seems poised to prosper, but this ETF has an earnings-focused investment strategy. When a company has strong earnings and is very profitable, it seems reasonable to assume that its business model is strong and worthy of investment. Applying this lens to the Indian situation can make investing in WisdomTree India Earnings ETF (EPI) potentially even more appealing. One thing that makes a sector hot, especially when it comes to country-specific funds, is some type of major political change or policy reforms. In the case of India, the gains really started when it became clear that the Indian people were about to elect the pro-business Modi to the post of prime minister. The market loved this development, hence the big gains in this very position at that time. The election marked the first real party leadership change in more than six decades, and things are still looking up.
Data as of 12/09/2015
Source: Stockcharts.com
Top Pick #6: BioShares Biotechnology Clinical Trials ETF BioShares Biotechnology Clinical Trials Fund (BBC) is somewhat unique in its space as the only ETF that specifically focuses on biotech and pharmaceutical companies whose primary point of promise is a drug or therapy that is still in Phase 1, 2 or 3 trials. In other words, BBC’s holdings have strong product pipelines. This fund has only existed since November 2014. As such, its net assets are low. Because of the nature of these companies, the majority of those included are small-cap stocks.
Companies still in this nascent stage can be very volatile. One piece of good or bad news from trials can cause a company to plummet or skyrocket with ease, since their hopes are pinned on therapies that have not yet been proven and might not be approved for treatment. The benefit of tackling this sort of investment in ETF form is that a single company in the index can take a nosedive without ruining an investor’s day. In many ways, an ETF is the only prudent way to invest in these companies. I find this investment more interesting than a general biotech fund or BBC’s counterpart fund, BBP, which focuses on companies with major products already on shelves. The companies included in this ETF’s portfolio are promising. One example is Prothena Corp. PLC (PRTA). This company has no products on the market yet at all, but it is developing prospective immunotherapies (using the antibodies to fight diseases), including a possible treatment for Parkinson’s disease. This treatment is exciting enough that Roche Holding AG, a much larger pharmaceutical company, is already listed as having some of the commercialization rights, even though the treatment is only in Phase 2 trials. Successes for these companies could result in large appreciations in share price, but I advise using a broader perspective to minimize the large risk posed by these companies.
Data as of 12/09/2015
Source: Stockcharts.com
About Doug Fabian Doug Fabian is the editor of the monthly investment newsletter Successful ETF Investing and online ETF resource ETF University, or ETFU.com, as well as the host of the syndicated radio show, "Doug Fabian's Wealth Strategies" and the weekly podcast “ETF Success with Doug Fabian.” Taking over the reins from his dad, Dick Fabian, back in 1992, Doug has continued to uphold the reputation of the newsletter as a top-ranked riskadjusted market timer as ranked by Hulbert’s Investment Digest. Doug published the book "Maverick Investing" in 2002 and has appeared as a commentator on CNBC, Fox News and CNN. He also has been quoted in the Wall Street Journal, USA Today, Barron's and other publications.
Nicholas Vardy’s Top Three Plays 7) Skyworks Solutions Inc. (SWKS) 8) Direxion Daily Russia Bull 3X ETF (RUSL) 9) Illumina Inc. (ILMN)
Top Pick #7: Skyworks Solutions Inc. (SWKS) Skyworks Solutions, Inc. (SWKS) is my single best recommendation on how to profit from one of the most compelling technology trends of today — “The Internet of Everything.” Nicknamed “IoE,” the “Internet of Everything” is the connection of people, data and objects to the Internet, as well as to other smaller, more local networks. Headquartered in Woburn, Massachusetts, Skyworks is a leading supplier of radio frequency (“RF”) chips to smartphone makers and other electronics manufacturers. Skyworks focuses on high-end smartphones, which require higher RF dollar content per phone. Skyworks’ customers are mostly large smartphone and tablet manufacturers such as Apple and Samsung. And as a primary supplier of complex chips for Apple mobile devices, Skyworks is particularly set to benefit from the continued launch of more advanced smartphones. As it turns out, smartphones will end up being only a small part of the total number of connected devices in our lives. In 2012, only 8.7 billion devices (including smartphones) were connected to the Internet. By 2020, Morgan Stanley estimates that number will rise to more than 70 billion. That’s 10 connected devices for every man, woman and child on planet earth — each with a potential Skyworks chip in it. And that day may come even sooner than expected. In a recent interview, Skyworks CEO David Aldrich suggested the 70 billion could be reached as soon as 2017. Once you really “get” the implication of IoE, you realize that just about every device you use — including your car, appliances, television, alarm system and thermostat — is destined to be connected to the Internet. Devices are becoming cheaper and user interfaces more usable. As homes become wired, your smartphone will track your location, turn on your coffee machine, turn off your alarm system and turn on your heat or air conditioning — all just prior to your arrival home. The biggest beneficiaries of the IoE trend will be the “nuts and bolts” companies like Skyworks. Today, you already can find Skyworks chips in everything from Fitbit fitness bands to Google’s newly acquired smart-home development subsidiary, Nest.
And Skyworks is better positioned than larger rivals like Cisco and Qualcomm, which are latecomers to the game. After all, Skyworks cut its teeth on cell-phone chips and then used that experience to move into Internet devices. Given its experience, Skyworks is uniquely positioned to capitalize on emerging opportunities with IoE. Skyworks has the size and scale to manufacture hundreds of millions of chips per year. That gives it an advantage over new entrants as a relatively large player in this niche space.
Data as of 12/09/2015
Source: Stockcharts.com
Top Pick #8: Direxion Daily Russia Bull 3X ETF (RUSL) Russia is a mess. Plunging oil prices, a ruptured ruble, years of a corrosive “kleptocracy,” Western economic sanctions and an unprecedented flight of capital teamed up to wrestle the Russian bear to its back in 2014. No wonder President Putin’s bellicose blustering and military muscle flexing in East Ukraine via the annexation of Crimea rendered Russia an investment outcast. Or has it? You’re likely already familiar with the concept of “buying when there’s blood in the streets,” attributed to 18th-century British nobleman and banking magnate Baron Rothschild. The idea here is to buy into a stock market when that market is getting both literally and figuratively slaughtered. One interesting
way to do so is with an exchange-traded fund (ETF) that leverages its picks for increased volatility — the Direxion Daily Russia Bull 3X ETF (RUSL). Sure enough, a buy-when-there’s-blood-in-the-streets rebound took shape that vaulted the shares back above key resistance levels. That’s a rebound subscribers to my Bull Market Alert trading service profited from when I had the audacity to recommend Russian stocks. Those gains faded as another round of tensions in the region, after the downing of a Malaysian passenger jet by pro-Russian separatists, resulted in an even deeper sell-off. For blood-in-the-streets investors who like the idea of a contrarian setup, Russia is a compelling example right now. Furthermore, Russia is both hated and cheap. In fact, as of early 2015, Russia was the second-cheapest market in the world on a long-term Cyclically Adjusted Price Earnings (“CAPE”) basis. (Greece was the cheapest.) The Russian market trades at about half of the level of the broader MSCI Emerging Markets Index. So what’s my recommendation to you? Ignore all the negative news on Russia, hold your nose and consider an investment in Russia through the Direxion Daily Russia Bull 3X ETF (RUSL).
Data as of 12/09/2015
Source: Stockcharts.com
Top Pick #9: Illumina Inc. (ILMN) While the doom-and-gloom crowd obsesses about the dysfunctionality of politics in Washington, D.C., a whole new generation of (usually Silicon Valley-based) hyper-optimists are focused on developing the next generation of companies set to change the world. They’re called “disruptive” companies. “Disruptive” has become the new buzzword in business. Although companies focusing on disruptive technologies may target different problems and industries, what these initiatives all have in common is “exponential growth” when they succeed. This opportunity is about as pure a play on exponential growth as you’ll find in the biotech sector. Illumina, Inc. (ILMN) is a global biotechnology company that produces gene-sequencing technology and solutions that analyze a person’s genetic code. Its systems are used in drug development, genetic research and diagnostics. Customers include the federal government, research centers, public laboratories, hospitals, pharmaceutical companies and genomics companies. In addition to gene sequencing, Illumina also has business in non-invasive prenatal testing and instrument making. The current market for gene sequencing is large and growing. These market opportunities cross the boundaries between fields, such as oncology, life sciences, reproductive and genetic health and new and emerging markets. Illumina currently makes up most of the genome-sequencing machine market and accounts for more than 90% of all DNA data produced. The company enjoys high barriers to entry and patent-protected technology. It also boasts hard-to-replicate technical processes, cutting-edge services and huge customer mind share. Illumina’s leading position in a growing market, solid execution, high margins and high revenue growth make it an exciting bet on a revolutionary shift in medical treatment.
Data as of 12/09/2015
Source: Stockcharts.com
About Nicholas Vardy Nicholas Vardy is currently editor of The Global Guru, a free weekly e-newsletter, and a monthly investment newsletter, The Alpha Investor Letter, which provides longer-term global investments. He also writes two weekly trading services, Triple Digit Trader and Bull Market Alert, which focus on making short-term profits in the hottest markets in the world. A former mutual fund money manager, he is also chief investment officer of Global Guru Capital LLC, where he manages separate accounts for high net worth individuals. A graduate of Stanford University and the Harvard University Law School, he has a unique background that has proven his knack for making money in different markets around the world. He also is a chartered financial analyst.
Chris Versace’s Top Three Plays 10) United Natural Foods, Inc. (UNFI) 11) Mueller Water Products, Inc. (MWA) 12) USA Technologies, Inc. (USAT)
Top Pick #10: United Natural Foods, Inc. (UNFI) United Natural Foods (UNFI) is poised to benefit from the continued shift toward organic, nongenetically modified organisms (GMO) and gluten-free foods. The quick takeaway is the company serves more than 31,000 customer locations, including Whole Foods (WFM), Safeway (SWY), Giant, Kroger (KR), Wegmans, Costco (COST) and many others with more than 65,000 different products. The shift toward a healthier way of eating is no fad, but rather a PowerTrend that we can use to profit. One question that is sure to bubble up is whether the continued consolidation in the grocery industry will lead to higher prices. It may. But then again, companies like Costco, Trader Joe’s and others are also helping keep a lid on prices. Rather than get caught up in that speculation, I would argue that a better way to think about it is to focus on areas in which grocery chains are seemingly all expanding. Restaurant chains are focusing on gluten-free and low-calorie meals, while grocery chains have seen an increase in gluten-free and nonGMO products. According to the 2014 Market LOHAS (lifestyle of health and sustainability) MamboTrack annual consumer research study, more than 80% of participants claim to seek out nonGMO products, and seven in 10 buyers searched for gluten-free products. It is not just a shift in the way we eat at home, but also at restaurants. Findings from the National Restaurant Association’s Restaurant Trends Survey reveal that gluten-free items and healthier meals are some of the top menu trends. While you may be tempted to think of buying a supermarket company that caters to this trend, my recommendation would be to buy a “bullet” company that serves a number of supermarkets and other companies that are capitalizing on this trend. The quick response from many will likely be Whole Foods, but I am more of a food-chain (no pun intended) kind of investor. Again, buy the bullet, not the gun. There are many companies that are shifting their product lines into healthier territories, cutting back on sugar, snacks and salt, but the company that has a very strong position in this shift is United Natural Foods (UNFI). Not only is it in the right place with the right customers, but it also is growing its profits faster than its revenue. The company is realizing financial leverage in its business. Part of that situation comes from wringing costs from the acquisitions it has completed during the last few years. With earnings expected
to grow faster than revenues again this year, it sounds like the management team has more efficiencies to put in place. While all the data points to the continued explosive growth in healthy eating, boots-on-the-ground research trips to several supermarkets, including Safeway, Giant, Wegmans, Harris Teeter, Food Lion and others, confirms the steady expansion of natural, organic, gluten-free and similar products. Just look for yourself the next time you are in your supermarket. Rather than sit on the sidelines and watch the shift occur around you, be sure to add United Natural Foods (UNFI) to your portfolio.
Data as of 12/09/2015
Source: Stockcharts.com
Top Pick #11: Mueller Water Products, Inc. (MWA) There’s an old investment saying that you should buy what you know. If we did that, it surely would limit the number of companies in which we invest. Maybe that wouldn’t be such a bad thing, but perhaps a better strategy would be to buy things you understand. That would open the gates to a number of companies, particularly if you understand the tailwinds that may be driving the business. One of the pitfalls of buying what you understand is that you may miss hot opportunities. My response is if that were the case, my subscribers and I would have missed out on plenty of opportunities that
ultimately produced solid profits for us — but we didn’t. I’d remind you that what tends to burn white hot also tends to flame out rather quickly. Instead, by letting the data guide us — mobile and monetization, falling input prices, braking mandates and the growing water shortage — and recognizing the opportunities for what they were, we scooped up each of them, and a number of others, in the process. Of course, it only gets better when the data continues to confirm our initial thesis. The headlines we continue to get regarding California’s drought situation, while painful to read, are a great example of this reality. Going below the headlines, I’ve found the magnitude of the situation is far greater than the mainstream media is portraying. Per the U.S. Drought Monitor, easily more than half of the continental United States is in some stage of drought conditions. This compares to just under half only a few months ago. As we move through the summer months, this situation is bound to get worse before it gets better. It is for this reason that I recommend you add shares of Mueller Water Products (MWA) to your holdings. The company manufactures and markets products and services for use in transmission, distribution and measurement of water in the United States, Canada and internationally. Mueller has roughly a 40% share of the market for valves used in water distribution and about a 50% share for fire hydrants. The company derives close to 90% of its revenue from the United States, which means little to no dollar impact. In addition to the California drought situation, MWA should also benefit from the United States’ poor existing water infrastructure, which desperately needs improvement. I see plenty of upside for this stock during the coming 12-24 months. If the market gets a bit bumpy and MWA shares experience some weakness, you should be buying the shares aggressively.
Data as of 12/09/2015
Source: Stockcharts.com
Top Pick #12: USA Technologies, Inc. (USAT) As you may know, one of my Great 8 PowerTrends is the growing trend toward Cashless Consumption. My subscribers and I have profited handsomely from companies in this arena in the past, but as we have moved into 2015, a new form of payment has taken hold — mobile payments. While Apple Pay is garnering the bulk of the attention, Google, Samsung, PayPal and others are positioning themselves as well. Recently, Samsung purchased LoopPay, while PayPal scooped up privately held Paydient. And the recent launch of Android Pay has been another big step. If you’re still not sure about Apple Pay or mobile payments, in total, more than 100 banks, credit unions and other institutions are now supporting Apple Pay. Even Twitter (TWTR) is also reportedly testing a buy button on its site that will support Apple Pay. Meanwhile, millions of Apple Pay accounts have been activated at various banks. It was recently announced that Apple Pay will be “available for many transactions with the federal government,” including paying for admission at national parks. This means the federal government will need to outfit various locations — national parks, museums, gift shops, passport offices and so on — with near-field communication (NFC) point of sale (POS) systems. It may be a slow-moving creature, but when the federal government adopts a new product, service or technology, it means a pronounced pickup in overall adoption. When the federal government gets behind something, it can make or break it.
This situation leads me to my sleeper recommendation on Apple Pay. It’s a far more speculative recommendation than I generally make. But when I look at this sea change, as well as what has happened to other companies, like Synaptics (SYNA) and Skyworks (SWKS) that have been anointed by the Apple halo effect, it’s a risk worth taking. In connecting those dots, the company I’m talking about is USA Technologies (USAT), which has been working in cashless transactions for years. If you’ve paid using a credit or debit card at a vending machine, odds are high that transaction occurred because of products offered by USA Technologies. During the last decade, USA Technologies has been developing its mobile payment capabilities and, recently, the company entered into a partnership with Apple that will expand the availability of Apple Pay to “self-service retail locations.” The initial rollout will be to around 200,000 self-serve payment terminals that its customers use for everything from coffee brewers to vending machines, kiosks, laundry equipment and pay parking terminals. This puts USA Technologies on the path to its goal of doubling its revenue to $100 million during the next three to four years. From my perch, that growth will drive a big move in earnings, cash flow and book value. Moreover, as the number of companies offering Apple Pay grows, so too will USA Technologies’ customer base. Prior to the deal with Apple, that base was roughly 8,500 in size and growing both in terms of customer count and the number of transaction connections across the customer base. The fact that USA’s solutions work with credit and debit cards, as well as contactless mobile payments, makes it an easy solution for its customers to adopt.
Data as of 12/09/2015
Source: Stockcharts.com
About Chris Versace Chris Versace is the editor of PowerTrend Bulletin -- a free, weekly electronic newsletter. He also writes Growth & Dividend Report (formerly PowerTrend Profits), a paid monthly newsletter that helps individual investors profit through buying shares of companies poised to win big in the 8 PowerTrends. In addition, Chris writes two trading services: PowerTrader, which seeks to deliver short-term gains using stocks, exchange-traded funds and options, and PowerOptions Trader, a fast-paced, options-only trading service that combines the advantages of options with the profit potential of PowerTrends to deliver quick gains. Chris has been ranked an All Star Analyst by Zacks Investment Research. He appears regularly on radio and has been quoted in The Wall Street Journal, Investor's Business Daily and many other publications.
Bryan Perry’s Top Three Plays 13) Teekay LNG Partners LP (TGP) 14) New York Community Bancorp, Inc. (NYCB) 15) First Trust Dorsey Wright Focus 5 ETF (FV)
Top Pick #13: Teekay LNG Partners LP (TGP) Given the current status of the liquid natural gas (LNG) market, I want to own the sourcing of LNG — that would be Cheniere Energy Partners (CQP) — and I also want to own the leading transport shipping company that delivers LNG to global end markets. That would be Teekay LNG Partners, L.P. (TGP). This partnership is the purest play in the future of LNG transport, with its strategy to expand its operations in both the LNG and the liquefied petroleum gas (LPG) shipping sectors. As a complete energy shipping company, Teekay LNG provides LNG, LPG and crude oil marine transportation services under long-term, fixed-rate charter contracts with major energy and utility companies through its fleet of 27 LNG carriers, five LPG carriers, 10 Suezmax class crude oil tankers and one Handymax product tanker. In Q1 2015, TGP posted earnings of $0.62 versus estimates of $0.45, a 37% upside surprise. Its forward annual earnings forecast has jumped more than 10% — a trend that is truly a shareholder's friend. The partnership came to market recently with a 4.6 million share spot secondary offering. We've had pretty good success buying into these secondary offerings in the past in Cash Machine, where the stock takes a 4-5% hit and then rebounds smartly in the days ahead, providing an easy entry point. And the smart money is building positions in the long-term LNG theme. Looking at the one-year chart, I‘ve been waiting for the chance to buy TGP relatively cheaply. If you see a chance to do so, then I recommend it highly. The stock sports a high single-digit yield and will make a fine addition to any conservative, high-yield portfolio. This is a master limited partnership (MLP) and investors will be issued a K-1 year-end report for taxes. When its price is attractive, it is a good time to pounce on this bullish name in what is one of the most exciting sector themes offered to income and growth investors alike.
Data as of 12/09/2015
Source: Stockcharts.com
Top Pick #14: New York Community Bancorp, Inc. (NYCB) As the perception of the Fed raising short-term rates has become more pronounced, there are increased hopes of higher earnings for bank profits based on net interest income, which provides the bread and butter for bottom-line results. Within the mid-cap banks that pay a juicy dividend, the highest in the sector is New York Community Bank (NYCB). The company has reported favorable earnings results of late, posting strong profits above analysts’ expectations on strong revenues. New York Community Bancorp CEO Joseph Ficalora says his company's strong earnings reflect its disciplined approach to multi-family mortgage lending and the ongoing benefits of its acquisitions strategy. Non-performing, non-covered assets have fallen substantially, indicating a continued improvement in its asset quality. NYCB is one of the few major bank holding companies not to have experienced any significant mortgage write-offs during the subprime crisis. Ficalora further cited the company’s prudent lending practices to explain the company’s resilience in troubled markets. With a market capitalization of approximately $8 billion, New York Community Bancorp offers banking products and financial services in New York, New Jersey, Florida, Ohio and Arizona. Its shares trade at 1.4 times book value, and the company pays a consistent annual dividend of $1.00 per share for a yield that tends to range from 5.5-6.5% depending on the share price.
The following chart shows the stock emerging from a long base. My one-year price target offers a substantial potential return in addition to its dividends.
Data as of 12/09/2015
Source: Stockcharts.com
Top Pick #15: First Trust Dorsey Wright Focus 5 ETF (FV) Oftentimes, stocks in a particular subsection of the market have a tendency to move together as prevailing market conditions affect the prospects of those similar companies in a uniform manner. The market can lose or gain confidence in a sector for any number of different reasons, including government regulation changes, shifts in consumer desires and more. There are many ETFs on the market that offer a selection of companies focused in a particular sector. Investors could easily construct a portfolio of these funds, based on their own opinion as to which industries are currently in favor, then constantly do appropriate research to reassess their holdings. However, it is simpler and can be more effective to follow the lead of financial experts and objective market metrics. First Trust Dorsey Wright Focus 5 ETF (FV) is a fund that alters its holdings to always consist of five other ETFs, choosing from a selection of industry and sector ETFs also offered by First Trust. First Trust uses a relative strength ranking system to determine the five industries or sectors that are best to invest in at a given time, and FV holds those five corresponding funds. Investing in the right industries at the right time can be the key to success for an investor or a portfolio.
With this fund, investors conveniently and easily can choose industries. With parameters like these, it’s easy to explain the recent performance of FV. While sharp declines are visible, FV has consistently recovered over the past year, and its smart rebalancing scheme is a strong strategy.
Data as of 12/09/2015
Source: Stockcharts.com
About Bryan Perry Bryan Perry serves as the editor of Cash Machine, as well as Premium Income, a supplementary service that uses covered calls as a unique way to generate additional income. He also writes Dividend Investing Weekly, a free weekly e-letter. Before launching Cash Machine, Bryan spent more than 20 years working as a financial adviser for major Wall Street firms, including Bear Stearns, Paine Webber and Lehman Brothers. He is frequently quoted by Forbes, Business Week and
CBS’ Marketwatch, and he often participates as a guest speaker on numerous investment forums and regional money shows around the nation.
Conclusion The Top 15 recommendations highlighted in this report are intended to tap ripe opportunities to help you to profit. You can choose Dr. Mark Skousen’s use of economic indicators to make his picks, the focus on international markets by “The Global Guru” Nicholas Vardy, Doug Fabian’s time-tested, moving stock average investment approach, Chris Versace’s innovative use of potent PowerTrends or Bryan Perry’s yield-centered investment focus. The five unique perspectives of our seasoned investment professionals give you the opportunity to assemble a well-diversified portfolio. Sincerely,
Roger Michalski Publisher, Eagle Financial Publications www.EagleDailyInvestor.com
Eagle Financial Publications • 300 New Jersey Ave. NW #500 • Washington, DC 20001 800/211-7661 • www.eaglepub.com/eagle-financial-publications/
TOP15-1215
