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I’m looking at the chart of a commodity that’s been beaten down for almost 15 years. However… The tide has turned… and the chart shows it’s starting to turn upwards potentially signaling a new bull market. If that’s the case, it could be one of the biggest investment opportunities of the 2020s. Every week, I […]
This commodity just broke a 15-year downtrend Read More »
Amid high inflation, consecutive rate hikes, and rising recession odds, market volatility is rife, as is evident from the CBOE Volatility Index’s 54% year-to-date gains. Moreover, consumer confidence has sunk below the Global Financial Crisis (GFC) levels. The Westpac-Melbourne Institute Consumer Sentiment Index dropped 6.9% in November. Westpac’s chief economist Bill Evans, said, “This point
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Last week, I made several presentations at the MoneyShow conference in Orlando. For one talk, I covered the pros and cons of covered call ETFs. These high-yield ETFs can bring a lot of income into your portfolio.
This week, two of my recommendations announced surprisingly large distributions. I’ll take the money!
Let’s take a look at both…
Covered call ETFs employ an options selling strategy to generate income and dividends from an underlying portfolio. You can find these ETFs based on the major stock market indexes and also commodity ETFs such as crude oil, gold, and silver.
These ETFs pay monthly dividends. The dividends are variable but typically provide yields in the low teens for the index tracking funds, and the commodity funds sometimes yield up into the high teens.
During my MoneyShow presentation, I covered the details of 13 different covered call ETFs. Three of those are recommended investments in my Dividend Hunter service. Last week, two of the three made their monthly dividend announcements, and I was very happily shocked.
The JPMorgan Equity Premium Income ETF (JEPI) announced a $0.60627 distribution paid on November 4. The October dividend was $0.48084. This year, the distributions ranged from $0.38181 to $0.62102. Based on the trailing three dividends, JEPI yields 12.2%. The JP Morgan website shows a 30-day SEC yield of 12.51%.
The JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) declared a $0.68125 distribution, also paid on November 4. The October dividend was $0.37954. JEPQ is a new ETF and has only paid dividends since June. The current yield, based on trailing dividends, is 15.1%. The SEC yield shows an eye-popping 17.51%.
I have no idea how they calculate the SEC yields for a covered call fund, so take those with a very large grain of salt.
Also, these funds pay variable dividends, and a big one this month foretells nothing about next month. If you invest in these funds, be prepared for some monthly payouts to be lower and some, like this month, to be higher.
With my Dividend Hunter recommendations list, I have a balance of stable dividend investments, variable dividend investments, and some dividend growth investments. The goal is to earn a high yield with predictable income.
What’s the one thing you need to stay retired? That’s right… cash. Money to pay the bills. Money to weather any financial crisis like the one we’re in now and whatever comes next. I’ve located three stocks that if you buy and hold them forever, they could serve as the backbone to your retirement. Click here for details.
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Tech giant Microsoft Corporation (MSFT) is facing a European Union (EU) probe in its proposed $69 billion deal to acquire gaming company Activision Blizzard, Inc. (ATVI). On the other hand, MSFT has accused the U.K. Competition and Markets Authority of relying on “self-serving” input from rival Sony Group Corp. (SONY) in its deliberations. Moreover, the
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With fast and furious rate hikes yet to succeed in bringing inflation under control, the stock market is expected to witness further volatility. However, the energy sector remains well-positioned to thrive with tight supply and rising global demand pushing oil prices higher.
While OPEC+’s decision to cut oil production by 2 million barrels/day and limited availability of Russian oil will keep supply tight, OPEC expects global oil demand to increase to 103 million barrels per day (BPD) next year.
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Besides being the relatively cleaner alternative among fossil fuels, the natural gas liquid market is set to grow at 5.7% CAGR to reach $29 billion by 2030. Hence, it would be opportune to capitalize on the industry tailwinds and load up on oil and gas stocks Diamondback Energy, Inc (FANG) and Baker Hughes Company (BKR) as some technical indicators point to solid upsides.
Diamondback Energy, Inc (FANG)
FANG is an independent oil and gas company with a market capitalization of $34.89 billion. The company is involved in acquiring, developing, exploring, and exploiting unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. It operates through two segments: the upstream segment and the midstream operations segment.
Over the last three years, FANG’s revenue grew at a 44% CAGR, while its EBITDA grew at 41.7% CAGR. Over the same time horizon, the company’s net income grew at a 67.2% CAGR.
During the third quarter of the fiscal year 2022, ended September 30, FANG’s total revenues increased 27.6% year-over-year to $2.44 billion. During the same period, the company’s income from operations increased 38.7% year-over-year to $1.61 billion, while its adjusted EBITDA increased 68.2% year-over-year to $1.91 billion.
FANG’s adjusted net income for the quarter came in at $1.14 billion or $6.48 per share. Due to high cash margins, and best-in-class well costs, the company generated nearly $1.2 billion in free cash flow, of which it returned around 75% to shareholders through share repurchases and dividend payouts.
Analysts expect FANG’s revenue and EPS for the fiscal year ending December 2022 to increase 42.4% and 120.1% year-over-year to $9.68 billion and $24.80. The company has surpassed consensus EPS estimates in each of the trailing four quarters.
FANG is trading at a discount compared to its peers, indicating further upside potential for the stock. In terms of forward P/E, FANG is presently trading at 6.51x, 18.7% lower than the industry average of 8x. Also, it is trading at a forward EV/EBITDA multiple of 4.9, compared to the industry average of 5.81.
The stock is currently trading above its 50-day and 200-day moving averages of $138.32 and $133.16, respectively, indicating an uptrend. It has gained 15.3% over the past month and 48.9% year-to-date to close the last trading session at $163.49.
MarketClub’s Trade Triangles show that FANG has been trending UP for all three time horizons. The long-term and intermediate-term trends for FANG have been UP since October 6, 2022, while its short-term trends have been UP since October 31, 2022.
Source: MarketClub
The Trade Triangles are our proprietary indicators, comprised of weighted factors that include (but are not necessarily limited to) price change, percentage change, moving averages, and new highs/lows. The Trade Triangles point in the direction of short-term, intermediate, and long-term trends, looking for periods of alignment and, therefore, strong swings in price.
In terms of the Chart Analysis Score, another MarketClub proprietary tool, FANG scored +90 on a scale from -100 (strong downtrend) to +100 (strong uptrend), indicating that the uptrend is likely to continue. While FANG shows intraday weakness, it remains in the confines of a bullish trend. Traders should use caution and utilize a stop order.
The Chart Analysis Score measures trend strength and direction based on five different timing thresholds. This tool takes into account intraday price action, new daily, weekly, and monthly highs and lows, and moving averages.
Click here to see the latest Score and Signals for FANG.
Baker Hughes Company (BKR)
BKR is an energy technology company with a market capitalization of $29.36 billion. The company operates through three segments: Oilfield Services (OFS); Oilfield Equipment (OFE); Turbomachinery & Process Solutions (TPS); and Digital Solutions (DS). BKR’s revenue grew at a 6.8% CAGR over the past five years.
For the fiscal 2022 third quarter, ended September 30, 2022, BKR’s revenue increased 5.4% year-over-year to $5.37 billion. During the same period, driven by higher volume and pricing with all segments expanding their margins, the company’s adjusted operating income and adjusted EBITDA increased 25.1% and 14.2% year-over-year to $503 million and $758 million, respectively.
The adjusted net income attributable to BKR for the quarter came in at $264 million or $0.26 per share, up 87.2% and 62.5% year-over-year, respectively.
Analysts expect BKR’s revenue and EPS for the fiscal year ending December 2022 to increase 4% and 45.7% year-over-year to $21.36 billion and $0.92, respectively. Both metrics are expected to keep growing over the next two fiscals.
In terms of forward P/E, BKR is currently trading at 31.72x compared to the industry average of 8x. However, its forward Price/Sales multiple of 1.36 compares to the industry average of 1.49.
BKR’s stock is currently trading above its 50-day and 200-day moving averages of $24.48 and $29.35, respectively, indicating a bullish trend. It has gained 32.6% over the past month to close the last trading session at $30.62.
MarketClub’s Trade Triangles show that BKR has been trending UP for all three time horizons. The long-term trend for BKR has been UP since November 1, 2022, while its intermediate and short-term trends have been UP since October 17 and October 13, 2022, respectively.
Source: MarketClub
In terms of the Chart Analysis Score, BKR scored +90 on a scale from -100 (strong downtrend) to +100 (strong uptrend), indicating that the uptrend is likely to continue. While BKR shows intraday weakness, it remains in the confines of a bullish trend. Traders should use caution and utilize a stop order.
Click here to see the latest Score and Signals for BKR.
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It’s earnings season, so there’s been plenty of options action in single stock names. Recently, a strategist purchased what appears to be a very bullish call spread in Disney (DIS). The call spread – buying one call and selling another at a higher price in the same expiration period – doesn’t expire until right after
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It is good to see a Head and Shoulders pattern in the making and to see it in the final stage is great luck. Fortunately, I spotted one such pattern in the chart of the Tesla (NASDAQ:TSLA)Source: TradingView
The stock price of Tesla has been trading in a big range between $180 and $414 after it managed to break above the Y2020 top of $167. Peak points were distributed unevenly as we can see the lower tops on both sides of the all-time high. This has shaped a notorious Head and Shoulders pattern on the weekly chart.
We saw this model in the Ethereum and AMD charts this year.
The model is clear; it has slightly up-sloping angle as the Right Shoulder is located higher than the Left Shoulder. A Neckline has been built through the valleys of the Head. The stock price has been hovering here for some time.
Last week, the market closed below the Neckline triggering the bearish signal.
The target of this pattern is located in the negative numbers area so I skipped it. Instead, I highlighted three potential supports that could stop the upcoming collapse.
The first support is located at the peak of August 2020 at $120. It was broken to the upside and then it was retested by a huge consolidation.
The next support comes from the top of February 2020 at $65. The price has been struggling to overcome it for a long time. The book value level of $13 is the ultimate support based on fundamental data.
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The RSI has been bearish for a long time, before the pattern was triggered to the downside.
The invalidation level of this annihilation pattern for Tesla stock is located at the top of the Right Shoulder of $315.
Apple (NASDAQ:AAPL) is the next “Falling Knife”.
Source: TradingView
Last time I examined the Apple chart for you a year ago. It was a warning alert as I thought the stock price had been near the top. I set the bearish trigger on the red dotted vertical support.
The price action in the chart is so precise, it could be added as a sample to the textbook. Indeed, AAPL spiked to $183 and then collapsed right to that support.
It was broken later, after another smaller bounce this April. The classic throwback to the broken support followed the breakdown to retest it. Afterwards, the collapse resumed and it reached the horizontal support based on the top of 2020 at $138. That drop was highlighted with the left red down arrow.
The price bounced off the black support to nearly hit the double barrier of 61.8% Fibonacci retracement and the purple moving average around $160. The failure there hammered the price back down to the black support.
The RSI failed to overcome the crucial 50 level as it collapsed in-sync with the price.
The right red down arrow shows the path for the second leg down. The price should drill down through a large volume area first to hit the equal distance of the first drop as it is located at $117.
There are two supports highlighted in red in the chart. The nearest one is set at $103 (September 2020 valley). The price would travel 1.272x of the first leg down there. It is located in the volume gap area that starts at $110 and finishes at $80, where the next support (January 2020 top) is located. That is also a next target as 1.618x distance falls there.
Only the breakup of the double barrier beyond $160 could change this bearish outlook.
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Intelligent trades!
Aibek BurabayevINO.com Contributor
Disclosure: This contributor has no positions in any stocks mentioned in this article. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.
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Last week I made several presentations at the MoneyShow in Orlando. I enjoy shows like this, where I can meet you, my subscribers, and get information on other investment ideas. With the stock bear market this year, many investors wanted information about alternate investment ideas.
Investing in whiskey barrels or casks has become a hot idea, so I spent time with experts in the field, learning the pros and cons.
While it sounds interesting – and I’m doing it myself – there are some things to look out for…
Let’s start with the good stuff (not including the fact you get to invest in whiskey). You can buy a cask of bourbon, Irish whiskey, or Scotch whisky for roughly $3,000 to $10,000, a reachable amount for many investors. Whiskey is a hot commodity, producing annual returns in the mid-to-high teens, which means a double of your investment in three to five years.
I was surprised to learn about the potential for bourbon. Bourbon whiskey can only be produced in the U.S.; however, it has become a worldwide hit, with drinkers around the globe eager to try our bourbons. Whiskey distillers are working hard to satisfy domestic, let alone international, demand, so the demand curve for barrel investors looks very attractive.
I like to say “barrels,” but the whiskey experts I talked to insist the correct term is “casks.” I think that applies more to Irish whiskey and Scotch whisky.
Overall, it appears that whiskey casks offer excellent investment opportunities. So let’s look at the negatives.
For one thing, the whiskey investment market is scorching and unregulated. As a result, a lot of new sellers are jumping into the whiskey-selling business to make a quick buck.
When you buy a cask, you get a certificate of ownership with the number and location of the barrel. That will be your barrel. A couple of things could turn your investment sour. (And not the good kind, like a whiskey sour). If the seller disappears after a few years, you may have a lot of trouble selling to realize your profits—even though you are the owner of record of some whiskey in the barrel. Even worse, you may be scammed into buying a non-existent barrel. In that case, you would be out of your entire investment.
Don’t jump into whiskey investing through an email ad or telemarketing call. You need to verify that the seller is legitimate and committed to the whiskey trading game for the long term.
At the MoneyShow, I spent time with the CEO of OENO Futures, the company I use for fine wine investing. I spent several hours getting information about the whiskey house they partner with and recommend.
I hope that by this week, I will have my first couple of casks purchased. I will go for a bourbon barrel and an Irish whiskey cask.
If you want to retire comfortably, stop what you’re doing.There’s a better way. A way to stop buying stocks and bonds – like anyone’s doing that these days, and start buying the income you need to live the retirement of your dreams.Click here to learn what I’ve uncovered.
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