Tag Archives: TWX

10 Dividend Stocks You Can Set and Forget

Tired of keeping a close eye on financial news and popping in and out of positions in an effort to get the most out of an increasingly volatile market?

If so, you’re not alone. There is a solution, however, for investors who’ve become mentally exhausted thanks to a bull market that has now persisted for a stunning nine years — just buy some dividend stocks and stop watching the market every day. Go find a new hobby instead. With some stocks, you really are better off just leaving them alone and letting time do the hard work for you.

With that as the backdrop, if you don’t know how or where to start a hunt for new income-oriented holdings, here’s a look at ten great dividend stocks that would at home in almost any investor’s portfolio. They’re all more reliable than average, and represent companies that can weather almost any storm.

In no certain order…

Dividend Stocks to Buy: AT&T (T) Dividend Stocks to Buy: AT&T (T)investorplace.com/wp-content/uploads/2016/04/tmsn2-300×165.jpg 300w, investorplace.com/wp-content/uploads/2016/04/tmsn2-73×40.jpg 73w, investorplace.com/wp-content/uploads/2016/04/tmsn2-55×30.jpg 55w, investorplace.com/wp-content/uploads/2016/04/tmsn2-250×137.jpg 250w, investorplace.com/wp-content/uploads/2016/04/tmsn2-200×110.jpg 200w, investorplace.com/wp-content/uploads/2016/04/tmsn2-162×88.jpg 162w, investorplace.com/wp-content/uploads/2016/04/tmsn2-160×88.jpg 160w, investorplace.com/wp-content/uploads/2016/04/tmsn2-65×36.jpg 65w, investorplace.com/wp-content/uploads/2016/04/tmsn2-100×55.jpg 100w,https://investorplace.com/wp-content/uploads/2016/04/tmsn2-91×50.jpg 91w, investorplace.com/wp-content/uploads/2016/04/tmsn2-78×43.jpg 78w, investorplace.com/wp-content/uploads/2016/04/tmsn2-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Mike Mozart via Flickr

Dividend Yield: 5.3%

Telecom giant AT&T Inc. (NYSE:T) is an oldie but a goodie, and with uncharacteristic weakness from the stock since the middle of 2016, the dividend yield has been pumped up to an impressive 5.3%. That’s a dividend that has been paid every quarter for the past few decades, by the way, and raised like clockwork every year since 1984.

Sure, AT&T has got headaches right now, even beyond its usual competition. The deal to pair up with Time Warner Inc (NYSE:TWX) hasn’t exactly been smooth sailing. Industry insiders are relatively certain it’s going to happen despite the DOJ’s interference though, and in that AT&T is leading the race to make 5G connectivity a reality, it should be able to keep its wireless competitors in check at the same time it ramps up enrollments in its streaming cable service DirecTV Now.

AT&T looks to be firing on all cylinders.

Dividend Stocks to Buy: Blackstone Group (BX) Dividend Stocks to Buy: Blackstone Group (BX)investorplace.com/wp-content/uploads/2017/05/bxmsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2017/05/bxmsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2017/05/bxmsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2017/05/bxmsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2017/05/bxmsn-400×220.jpg 400w, investorplace.com/wp-content/uploads/2017/05/bxmsn-116×64.jpg 116w, investorplace.com/wp-content/uploads/2017/05/bxmsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2017/05/bxmsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2017/05/bxmsn-78×43.jpg 78w,https://investorplace.com/wp-content/uploads/2017/05/bxmsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Shutterstock

Dividend Yield: 6.9% over the past 12 months

Blackstone Group LP (NYSE:BX) isn’t a traditional company. In fact, it’s not a company at all. It’s an organization that owns and financially supports a variety of other companies, and in some cases gets involved in the management of them. It’s a private equity firm, but it’s so much more than just that.

Additionally, it’s good at what it does, and that’s good for income-seeking investors. While the dividend payout can vary unpredictably from one quarter to the next, broadly speaking it has been on the rise for quite some time, and a dividend of some sort has always been dished out. And if the economy heats and up in interest rates rise, much like a bank, that’s very good for Blackstone’s bottom line as it will eventually makes its way back into the pocket of shareholders.

The dividend yield of 6.8% over the last year, in the meantime, isn’t too shabby either.

Dividend Stocks to Buy: AmTrust Financial Services (AFSI) Dividend Stocks to Buy: AmTrust Financial Services (AFSI)investorplace.com/wp-content/uploads/2016/05/cashmsn2-300×165.jpg 300w, investorplace.com/wp-content/uploads/2016/05/cashmsn2-55×30.jpg 55w, investorplace.com/wp-content/uploads/2016/05/cashmsn2-200×110.jpg 200w, investorplace.com/wp-content/uploads/2016/05/cashmsn2-162×88.jpg 162w, investorplace.com/wp-content/uploads/2016/05/cashmsn2-65×36.jpg 65w, investorplace.com/wp-content/uploads/2016/05/cashmsn2-100×55.jpg 100w, investorplace.com/wp-content/uploads/2016/05/cashmsn2-91×50.jpg 91w, investorplace.com/wp-content/uploads/2016/05/cashmsn2-78×43.jpg 78w, investorplace.com/wp-content/uploads/2016/05/cashmsn2-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: 401(K) 2012 via Flickr (Modified)

Dividend Yield: 6.6%

There aren’t any kinds of insurance AmTrust Financial Services Inc (NASDAQ:AFSI) doesn’t offer. In fact, life and health insurance are the only two major insurance markets AmTrust doesn’t dabble in.

That’s a two-edged sword, mind you. While the company has sidestepped the debacle of the ramifications of the Affordable Care Act and now the (more or less) end of it, Amtrust’s heavy reliance on catastrophic insurance policies meant it took a big hit when hurricanes Harvey and Irma took aim at the United States during the fall of last year. All told, the insurer swung from a profit of 61 cents per share in the same quarter a year ago to a loss of four cents per share in Q3 of 2017.

The resulting beat-down wasn’t necessary though, as it founded on a catastrophe the likes of which are rarely seen. The strong selloff from AFSI, however, has cranked its dividend yield up to a still-sustainable 6.6%.

Dividend Stocks to Buy: UBS Group (UBS) Dividend Stocks to Buy: UBS Group (UBS)investorplace.com/wp-content/uploads/2017/05/ubsmsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2017/05/ubsmsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2017/05/ubsmsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2017/05/ubsmsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2017/05/ubsmsn-400×220.jpg 400w, investorplace.com/wp-content/uploads/2017/05/ubsmsn-116×64.jpg 116w, investorplace.com/wp-content/uploads/2017/05/ubsmsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2017/05/ubsmsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2017/05/ubsmsn-78×43.jpg 78w,https://investorplace.com/wp-content/uploads/2017/05/ubsmsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Shutterstock

Dividend Yield: 3.2%

When investors go on the hunt for dividend stocks within the financial sector, Zurich-based UBS Group AG (USA) (NYSE:UBS) usually isn’t a top-of-mind name. It should be though, now more than ever … It not only had a 3.2% yield, but also a 26-cent special dividend paid out in the past year.

There’s room for dividend growth too. Analysts are looking for 2017 earnings of $1.28 per share, up from 2016’s $1.17, which is projected to grow to $1.50 in 2018. And, only about 57% of its profits are currently being passed along to shareholders as dividends.

Dividend Stocks to Buy: Two Harbors (TWO) Dividend Stocks to Buy: Two Harbors (TWO)investorplace.com/wp-content/uploads/2017/10/mortgagemsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2017/10/mortgagemsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2017/10/mortgagemsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2017/10/mortgagemsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2017/10/mortgagemsn-400×220.jpg 400w, investorplace.com/wp-content/uploads/2017/10/mortgagemsn-116×64.jpg 116w, investorplace.com/wp-content/uploads/2017/10/mortgagemsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2017/10/mortgagemsn-91×50.jpg 91w,https://investorplace.com/wp-content/uploads/2017/10/mortgagemsn-78×43.jpg 78w, investorplace.com/wp-content/uploads/2017/10/mortgagemsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: House Buy Fast via Flickr

Dividend Yield: 11.9%

Two Harbors Investment Corp (NYSE:TWO) is anything but a household name. It’s not even a company. It’s an investment company, organized as a REIT, and is an obscure one at that. Don’t let the obscurity fool you though. There’s a lot of reliability packed into this obscure mortgage REIT package too, all the way back to 2010.

More important, things could heat up for this outfit sooner than most people are expecting. As Chief Investment Officer Bill Roth commented within the last quarterly report, “We are very excited about the opportunities we see emerging for our business. With the Fed reducing their reinvestments in Agency RMBS and mortgage spreads likely to widen, owning MSR is a significant benefit to our portfolio. Yet, at wider spreads, we believe there could be a tremendous investment opportunity to add Agencies.”

It’s currently yielding 11.9%.

Dividend Stocks to Buy: Iron Mountain (IRM) Dividend Stocks to Buy: Iron Mountain (IRM)investorplace.com/wp-content/uploads/2016/06/irmmsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2016/06/irmmsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2016/06/irmmsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2016/06/irmmsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2016/06/irmmsn-65×36.jpg 65w, investorplace.com/wp-content/uploads/2016/06/irmmsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2016/06/irmmsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2016/06/irmmsn-78×43.jpg 78w, investorplace.com/wp-content/uploads/2016/06/irmmsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw,728px” />Source: Orin Zebest via Flickr

Dividend Yield: 6.3%

In a world that’s increasingly centered on the digital cloud, one would think the printed documents and literal signatures on forms would be a thing of the past. And to a large degree, things are moving in that direction. If you think paper is a thing of the past though, think again. The world is still printing like crazy, and organizations still need to store it all for a myriad of reasons.

Enter Iron Mountain Incorporated (Delaware) REIT (NYSE:IRM), which as its name implies, offers secure storage of physical files for organizations that are legally required to retain them. Iron Mountain helps companies make the move from physical to digital document management, helping them solve tricky compliance problems along the way.

It even offers document shredding solutions. In all cases though, it’s a wonderful recurring revenue business, easily supporting the dividend yield of 6.3%. That dividend grows pretty regularly too.

Dividend Stocks to Buy: BP (BP) Dividend Stocks to Buy: BP (BP)investorplace.com/wp-content/uploads/2017/05/bpmsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2017/05/bpmsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2017/05/bpmsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2017/05/bpmsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2017/05/bpmsn-400×220.jpg 400w, investorplace.com/wp-content/uploads/2017/05/bpmsn-116×64.jpg 116w, investorplace.com/wp-content/uploads/2017/05/bpmsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2017/05/bpmsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2017/05/bpmsn-78×43.jpg 78w,https://investorplace.com/wp-content/uploads/2017/05/bpmsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Shutterstock

Dividend Yield: 5.6%

The future of BP Plc (ADR) (NYSE:BP) has more to do with the price of oil than how well the company itself is managed. But, both bode well for the company. Oil prices have rallied from less than $30 per barrel in early 2016 to a current price near $60 now, and though a little profit-taking is in the cards, the broad undertow remains a bullish one.

Crude’s rebound couldn’t have come at a better time for BP either. As of October, the dividend was and was expected to remain above per-share earnings. With crude well above BP’s breakeven price of around $47 as of August though, margins should start to widen quite nicely and leave decent-sized profit cushion for that dividend yield of 5.6%.

Dividend Stocks to Buy: Southern (SO) Dividend Stocks to Buy: Southern (SO)investorplace.com/wp-content/uploads/2016/04/somsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2016/04/somsn-73×40.jpg 73w, investorplace.com/wp-content/uploads/2016/04/somsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2016/04/somsn-250×137.jpg 250w, investorplace.com/wp-content/uploads/2016/04/somsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2016/04/somsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2016/04/somsn-160×88.jpg 160w, investorplace.com/wp-content/uploads/2016/04/somsn-65×36.jpg 65w, investorplace.com/wp-content/uploads/2016/04/somsn-100×55.jpg 100w,https://investorplace.com/wp-content/uploads/2016/04/somsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2016/04/somsn-78×43.jpg 78w, investorplace.com/wp-content/uploads/2016/04/somsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Desiree Kane via Flickr

Dividend Yield: 5%

No list of dividend stocks to buy would be complete without a utility stock, and no list of ownership-worthy utility stocks would omit Southern Co (NYSE:SO).

As to the former, utility stocks are cash-flow machines. In good economic times as well as bad, at a very minimum consumers keep their lights on by forking money over to their power supplier every month. As to the latter, Southern serves a total of 9 million customers peppered all across the nation, with plenty of exposure in the south and along the east coast. That kind of scale means a lot in the utility business.

It also smooths out any bumps and rough patches that could otherwise jeopardize its yield of 5%. It’s been reliably paid and steadily rising since 1948.

Dividend Stocks to Buy: Park Hotels & Resorts (PK) Dividend Stocks to Buy: Park Hotels & Resorts (PK)investorplace.com/wp-content/uploads/2016/09/officereitmsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2016/09/officereitmsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2016/09/officereitmsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2016/09/officereitmsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2016/09/officereitmsn-65×36.jpg 65w, investorplace.com/wp-content/uploads/2016/09/officereitmsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2016/09/officereitmsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2016/09/officereitmsn-78×43.jpg 78w,https://investorplace.com/wp-content/uploads/2016/09/officereitmsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Anders Jildén via Unsplash

Dividend Yield: 7.7%

The name Park Hotels & Resorts Inc (NYSE:PK) may not ring a bell, but some of the hotels owned by this REIT will. It owns and operates, among others, several Hiltons, boasting 67 locales and 35,000 rooms… most aimed at the upper-scale traveler.

It doesn’t necessarily seem like the steadiest market to be in, but it’s more stable than one might imagine. A huge chunk of its hotels are in important business districts, and if the economy takes off the way it looks like it’s going to take off, that will keep Park Hotels & Resorts plenty busy for some time. Even if the economy doesn’t quite turn red-hot though, the yield of 7.7% is relatively well protected.

Dividend Stocks to Buy: Pfizer (PFE) Dividend Stocks to Buy: Pfizer (PFE)investorplace.com/wp-content/uploads/2017/10/pfemsn-300×150.jpg 300w, investorplace.com/wp-content/uploads/2017/10/pfemsn-768×384.jpg 768w, investorplace.com/wp-content/uploads/2017/10/pfemsn-60×30.jpg 60w, investorplace.com/wp-content/uploads/2017/10/pfemsn-200×100.jpg 200w, investorplace.com/wp-content/uploads/2017/10/pfemsn-400×200.jpg 400w, investorplace.com/wp-content/uploads/2017/10/pfemsn-116×58.jpg 116w, investorplace.com/wp-content/uploads/2017/10/pfemsn-100×50.jpg 100w, investorplace.com/wp-content/uploads/2017/10/pfemsn-78×39.jpg 78w, investorplace.com/wp-content/uploads/2017/10/pfemsn-800×400.jpg 800w,https://investorplace.com/wp-content/uploads/2017/10/pfemsn-170×85.jpg 170w” sizes=”(max-width: 950px) 100vw, 950px” />Source: Shutterstock

Dividend Yield: 3.7%

Last but not least, the 3.7% yield Pfizer Inc. (NYSE:PFE) currently offers doesn’t necessarily put it in the top echelon of dividend stocks, but what it lacks in income-producing potential it balances out with lots of growth potential.

One of those growth engines is Eucrisa. As Chris Lau pointed out last month, 60% of eczema patients using the treatment are repeat buyers. It could be a $2 billion drug at its peak pace. Meanwhile, arthritis drug Xeljanz is slated for an approval decision in March. Both offer new revenue stream potential.

In the meantime, its existing portfolio of products will continue to drive cash flow that funds what it pays back out to shareholders. This is the same company that owns staples like Advil as well as Lyrica, for the treatment of diabetic nerve pain and fibromyalgia.

Pfizer’s going to be fine.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter, at @jbrumley.

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SA Interview: Merger Arb Investing With Uncorrelated Returns

Uncorrelated Returns manages a global long/short equity hedge fund with particular focus on special situations. We emailed with Uncorrelated Returns about bitcoin, the AT&T (NYSE:T)/Time Warner (NYSE:TWX) deal and an emerging markets internet pair trade.

Seeking Alpha: You focus on special situations in your long/short fund – as special situations investing has been discussed a lot recently in the PRO Weekly Digest, what are examples of the special situations you focus on and more importantly how do you identify and evaluate them?

Uncorrelated Returns: I define special situations in my fund as stocks where mispricing exists because of a specific catalyst or company specific complexity. That means I look at things like merger arbitrage, spin-offs, post-merger integration plays and holding company arbitrage. My mandate is global, so I invest in situations in Europe and Asia as well as the U.S. Given the defined parameters of what Im looking for, I get a steady flow of new ideas from the sell-side, my Bloomberg terminal, Seeking Alpha and a variety of Google alerts.

For merger arbitrage, the potential upside is typically known, so Im evaluating primarily the likelihood of a deal closing, and the downside risk in the event it doesnt. For the former, my starting point is historical precedent, but that is augmented by research into the specific risks (e.g., regulators, CFIUS, shareholder votes) and an assessment of what the potential decision algorithm for each stakeholder is likely to be. Without trying to be overly specific, I try and translate this qualitative judgement into a quantitative probability of closure.

In determining the downside risk (and I follow a similar process with spin-offs etc.), Im really trying to answer the question of what the business is worth on a standalone basis. So I do as much reading as I can on each business to develop a mental model of the economics of the business, its competitive positioning and earnings power. Based on my expectation of earnings, I assign an appropriate valuation multiple to get to a target price. For shorter horizon trades, I tend to lean towards peer valuation multiples, while for longer horizons I might augment this with DCF-type models.

The market is generally pretty efficient, so Ill pull the trigger on an idea only when Im comfortable that there is sufficient reward on offer relative to the risk Im assuming.

SA: Prior to managing a hedge fund you were a highly rated sell-side analyst – how is the buy-side different than the sell-side? What were the best lessons you learned on the sell-side? What do you not miss about it?

UR: The core discipline of researching and valuing a business is the same. However, on the buy-side I have a much greater breadth of coverage (vs. a single sector to follow as an analyst), which by implication means that I cant have the depth of knowledge on every situation that I would have had on the sell-side. Possibly the biggest difference is the level of emotional investment required – as a fund manager I am living and breathing my portfolio constantly, and in my experience its a lot more difficult to switch off than when I was on the sell-side. The upside is I dont have to deal with some of the drudgery of working for a large bank, and dont have to spend as much of my day on the phone marketing my views. I miss writing though, so Seeking Alpha is a bit of an outlet for me!

SA: You made an excellent call on Brocade (NASDAQ:BRCD) – can you discuss your approach to merger arb? How do you narrow down the entire universe of pending deals to a smaller number that you look at more in-depth and finally to a few that you actually act on? How do you evaluate/reduce risk and size positions?

UR: I look at a global universe of announced mergers and acquisitions as my starting point, and quite simply prioritize my research according to the absolute and annualized return embedded in the spread (i.e. the difference between the market price and the transaction price). Typically I gravitate towards deals with double-digit annualized returns. Im happy to trade off duration for higher absolute returns, because the smaller the absolute return the more sensitive the trade is to execution risks.

For most of the deals Im invested in its pretty clear exactly what the key risk is – for instance, for Brocade it was obtaining CFIUS clearance. It would be na茂ve to think one could underwrite these risks with decimal point specificity, so one approach I often take is to back what the market is implying the probability of closure to be, and then subjectively test that for reasonableness. In the Brocade example, I estimated that the market was assigning less that a 2/3rds chance of the deal being completed, which intuitively felt too low to me given all the facts at hand.

Using my own estimates for downside risk and likelihood of deal completion, I calculate an expected value, or probability weighted price. If the expected value is sufficiently higher than the market price, Im happy to invest.

I size my positions using a proprietary formula that primarily uses the expected downside on a deal break to cap my potential loss per position but weighted for the likelihood of the deal closing.

SA: As a follow up, does the DoJ suit create an opportunity in the AT&T/Time Warner deal or is this a legitimate threat to it closing?

UR: It would be na茂ve to suggest a suit by the DoJ is not a material threat to any deal! Nevertheless, I like the risk/reward on TWX. At current levels there is about 18% upside if the deal closes, or 37% annualized if it closes in the middle of the year. The downside risk in my view is hardly overwhelming – TWX will likely earn around $6.50 in 2018; peers like DIS, FOX, CBS and CMCSA trade between 12x and 19x P/E multiples. While not a perfect comparison, putting TWX on a fairly conservative 13x multiple puts the break price at $85, around 6% lower than today. The market is therefore assigning a 1 in 4 chance of the deal completing. Despite its size and political angle, this is a vertical merger with no precedent for being blocked. Im not a lawyer, but my laymans view is that AT&T has a very strong case, and the likelihood of prevailing is significantly higher than 25%. I am long TWX.

SA: Can you walk us through your emerging markets internet pair trade involving Naspers (OTCPK:NPSNY) and Tencent (OTCPK:TCEHY) and how it could generate superior risk-adjusted returns?

UR: Naspers owns 33% of Tencent, the Chinese internet juggernaut. With the massive rally in large cap tech stocks this year, the Naspers share price has struggled to keep up with the gain in Tencent, and as a result trades at close to a 40% discount to the value of its Tencent stake. The rest of the business – a high-quality portfolio of media and internet assets that I believe are worth around $18bn – is valued at negative $40bn. Unlike Altabas (NASDAQ:AABA) holding of Alibaba (NYSE:BABA), there is no material tax leakage to consider for Naspers, so the discount is wildly excessive. The key driver for the discount is technical in nature – a combination of capital outflows from South Africa and significant index reweighting has weighed on Naspers relative to Tencent this year; looking ahead these technical flows should dissipate at a time when the stub assets start to deliver earnings growth ahead of Tencent. I believe this combination of factors should drive a relative rerating of Naspers over the next year. While Im a believer in Tencent, clearly its share performance is correlated with the FANG stocks, and hence the market; a pair trade is likely to be uncorrelated, and should the FANGs roll over, will likely do even better.

SA: What are your thoughts on Bitcoin, especially as now investors can trade futures (and more efficiently express a long or short view)?

UR: With the exception of illicit trade and circumventing foreign exchange controls in emerging markets, Bitcoin strikes me as a solution in search of a problem. The futures market may help dampen some of the volatility weve seen, but its early days. There are a lot of new buyers of Bitcoin purchasing purely on the fear of missing out. I have no view on when the bubble will burst or how high it will soar before it does, but certainly I see no fundamental reason to own any.

SA: Whats one of your highest conviction ideas right now?

UR: I still like Sky (OTCQX:SKYAY), the British satellite TV operator that is being bought by Fox. The stock has appreciated by 10% since I first wrote about it, but still offers a double-digit IRR. The deal is being reviewed by the Competition and Markets Authority in the UK to determine firstly whether Fox would be a fit and proper holder of a broadcast license, and secondly whether ownership limits in the news media would be compromised (given the Murdochs ownership of UK newspapers through News Corporation (NASDAQ:NWS) (NASDAQ:NWSA). On both of these points we remain confident that the deal will clear.

Whats changed since my article is Disneys announced acquisition of Fox. Foxs offer for Sky is unaffected, but should it fail (and Disney completes the Fox deal), a mandatory offer from Disney for Sky will be triggered. So either way, the deal gets done. While the CMA will review the current deal on its existing merits, having Disney in the background removes much of the political heat for the Culture Secretary, so reduces the likelihood of political interference in the process. So the original deal is still attractive, and the presence of Disney provides a credible backstop.

***

Thanks to Uncorrelated Returns for the interview. If you’d like to check out or follow their work, you can find the profile here.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Check with individual articles or authors mentioned for their positions. Uncorrelated Returns is long Sky and TWX.

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Hot Undervalued Stocks For 2018

Willamette Valley Vineyards (NASDAQ: WVVI) is a nano-cap winery located in Turner, Oregon. The company produces various mid end, premium, and ultra-premium wines including the Pinot Noir, Chardonnay, Pinot Gris, Ros茅 and Riesling varieties. We usually cover tech stocks but we are big fans of wine and even bigger fans of undervalued stocks; WVVI certainly fits the bill for both. WVVI has enjoyed tremendous average sales and EBITDA growth of 12.8% and 16% respectively for the past 3 years. During the same time period, investors have been met with a modest stock growth of 23.75% from $6.10 to $8 currently. With a market cap of only $40 million and a fair P/E of 22, we believe there is still undiscovered potential for this profitable company and its drought-free wine business.

The Economy of Wine

In the past 6 years, United States wine consumption has seen healthy growth from 336.3 million 9 liter cases in 2010 to 383.9 million 9 liter cases in 2015, This resulted in the total retail value of wine increasing from $46.5 billion in 2010 to $55.8 billion in 2015, a significant 20% growth rate. According to a recent report by goodfruits.com, this growth trend continued in 2016 as “September U.S. wine sales rose from $3.3 billion to $3.7 billion, helping set an annual pace to boost the industry’s overall retail value for the 11th consecutive year”. The prior three 5 year periods has seen total retail value increase by 8.8 billion (2001-2005), 5 billion (2006-2010) and 7.2 (2011-2015). We expect the wine market retail value to grow 1.5% (average growth of the last 3 years) in 2017 and surpass $62 billion by 2020. This growth in wine consumption is further fueled by the inauguration of Donald Trump, whose victory has left many oppositions drinking to a stupor. Under these conditions, we believe specialize vineyards like WVVI are going to earn steady and growing profits for years to come.

Hot Undervalued Stocks For 2018: Roadrunner Transportation Systems, Inc(RRTS)

Advisors’ Opinion:

  • [By Dan Caplinger]

    Tuesday was another down day for the Dow Jones Industrials, which fell more than 100 points to drop further below the 20,000 level. But broader market measures were mixed, and the Nasdaq Composite even managed to gain ground. Continued uncertainty about the impact of new policies from the U.S. federal government have kept markets a bit turbulent, and the beginning of a two-day meeting of the Federal Reserve’s Open Market Committee could set the tone for monetary policy in 2017. Some stocks had bad news that sent them lower today, and among the worst performers were Seadrill (NYSE:SDRL), Roadrunner Transportation Systems (NYSE:RRTS), and Tempur Sealy International (NYSE:TPX). Below, we’ll look more closely at these stocks to tell you why they did so poorly.

Hot Undervalued Stocks For 2018: Time Warner Inc.(TWX)

Advisors’ Opinion:

  • [By Benzinga News Desk]

    It took a “Wonder Woman” not only to jump-start the summer box office, but end Time Warner Inc (NYSE: TWX)'s critically maligned skid as it tries to approximate the success of the rival Marvel Cinematic Universe franchise run by Walt Disney Co (NYSE: DIS): Link

  • [By Jeremy Bowman]

    For years, Netflix has been one of the biggest battleground stocks in the market, and along the way, it’s attracted plenty of naysayers.Time Warner(NYSE:TWX) CEO Jeff Bewkes famously compared the streamer to “the Albanian army” in 2010 when asked if it posed a challenge to HBO. Wall Street analysts have regularly bashed the stock. Some have since admitted they were wrong, while others continue to throw shade at the company even after its blockbuster earnings report last night. Let’s take a look at a few of the biggest myths that have circulated about Netflix in recent years and how the company just disproved them.

  • [By Lisa Levin]

    AT&T Inc. (NYSE: T) disclosed that the European Commission has approved its $85 billion acquisition deal with Time Warner Inc (NYSE: TWX).

    The deal is expected to close by the end of the year.

  • [By Brian Stoffel]

    It’s important to remember that AT&T (NYSE:T) is more than just the namesake brand. The company also owns DirecTV, and it may soon acquireTime Warner (NYSE:TWX)if regulators approve the deal.

  • [By WWW.THESTREET.COM]

    That’s old-fashioned TV mated with born-again 2017 e-commerce. And then the almost-circular question of where that aging behemoth — television — may fit in. It’s the same digital/TV puzzle being worked at Comcast’s (CMCSA) NBCUniversal, with its BuzzFeed/Vox investments, and at Time Warner’s (TWX) Turner through its Mashable investment.

Hot Undervalued Stocks For 2018: Wal-Mart Stores, Inc.(WMT)

Advisors’ Opinion:

  • [By Paul Ausick]

    For the month of November, Boeing stock added about $13.00, a gain of 5%. The Dow’s big gainer last month was Wal-Mart Stores Inc. (NYSE: WMT), up nearly 11% after posting solid earnings and raising fourth-quarter and full-year guidance.

  • [By Paul Ausick]

    Wal-Mart Stores Inc. (NYSE: WMT) traded up 1.11% at $78.90. The stock’s 52-week range is $65.28 to $81.99. Volume was about 35% below the daily average of around 9.2 million shares. The company had no specific news.

  • [By Paul Ausick]

    The DJIA stock posting the largest daily percentage gain ahead of the close Tuesday was Wal-Mart Stores Inc. (NYSE: WMT) which traded up 4.86% at $84.44. The stock’s 52-week range is $65.28 to $84.88 and the high was set this afternoon. Volume was more than 3 times the daily average of around 8.2 million shares. The company boosted guidance and revealed a $20 billion share buyback program at its investors’ day program today.

  • [By Peter Graham]

    A long term performance chart shows Dollar General Corp and Dollar Tree, Inc (NASDAQ: DLTR) both giving roughly the same performance and outperforming (until last August) while the performance of Wal-Mart Stores, Inc (NYSE: WMT) began to suffer in early 2015, but has been trending up since then:

  • [By Sreekanth Anasa]

    Coming toanalyst estimates, theretailer has a mixed track record when it comes to beating analyst estimates. Kroger Co has delivered an earnings beat in 5 out of the last 8 quarters as per estimize database and hasbeaten revenue estimates in only 4 out of the previous 8 quarters, with the revenue beat coming in the last four quarters.On thetop line front, Wall Street expects Kroger to report revenues of $27.46 billion, 3.4% higher than what the company had reported last year. Analysts expect the company to report an EPS of 40 cents per share, whilethe company had reported a similar EPS of 41 cents in the third quarter last year. With brick and mortar retail behemoth Walmart (NYSE:WMT) delivering strong results, there are also high expectations from the Cincinnati, Ohio based supermarket chain. The guidance will be crucial with the holiday season around. Kroger stock is on a steady uptrend and investors would be hoping for a post-earnings pop. The earnings whisper number is at 43 cents per share, which suggests a 3 cents beat. However, investors need to be cautious as the KR stock technical chartsuggests the stock is overbought zone. Both popular momentum indicators Relative Strength Index (RSI) and Bollinger Bands suggest that Kroger shares are overbought. Generlly, the combination of the above two indicators is considered as a strong signal. This could mean the upside from here could be limited.

Hot Undervalued Stocks For 2018: Papa Murphy's Holdings, Inc.(FRSH)

Advisors’ Opinion:

  • [By Jim Robertson]

    On Friday, our Under the Radar Moversnewsletter suggested shorting small cap Take ‘N’ Bake pizza chain stock Papa Murphy’s Holdings (NASDAQ: FRSH):

  • [By Peter Graham]

    The Q4 earnings report forsmall cap Take ‘N’ Bake pizza chain stock Papa Murphy’s Holdings (NASDAQ: FRSH) is scheduled for after the market closes on Wednesday (March 15th). In February, our Under the Radar Moversnewsletter suggested shorting the stock by saying:

Hot Undervalued Stocks For 2018: MINDBODY, Inc.(MB)

Advisors’ Opinion:

  • [By Joe Tenebruso]

    Mindbody (NASDAQ:MB) provides cloud-based software solutions to the health and wellness industry: Think spas, yoga studios, and fitness classes. It’s a massive market that’s gone largely underserved — and Mindbody is working to address that need.

  • [By Peter Graham]

    Small cap online wellness services stock MINDBODY Inc (NASDAQ: MB) reportedQ2 2017 earnings after the market closed Wednesday with results beating expectations. Total revenue was up 31% to $44.1 million as subscription and services revenue rose 29% to $26.0 million and payments revenue rose 37% to $17.6 million. End of period subscribers increased 6% year over year to 59,345, end of period High Value Subscribers increased 13% year over year, average monthly revenue per subscriber (ARPS) grew 21% year over year to approximately $244 and payments volume increased 22% year over year to over $1.9 billion. The GAAP net losswas $4.4 million versus a GAAP net loss of $6.6 million. Rick Stollmeyer, Co-founder and CEO of MINDBODY, commented:

  • [By Peter Graham]

    The Q3 2016 earnings report for small cap online wellness services stock MINDBODY Inc (NASDAQ: MB) is scheduled for after the market closes onWednesday (October 26th). MINDBODY Inc along withmid cap fitnessdevice stockFitbit Inc (NYSE: FIT) and small cap fitness center operator Planet Fitness Inc (NYSE: PLNT)allhad IPOsin the summer of 2015 raisingtalk of a fitness stock bubble brewing.

  • [By Peter Graham]

    A long term performance chart shows Fitbit initially surging after its IPO before loosing most of its value while large capGarmin Ltd (NASDAQ: GRMN) (which hasa fitness segment)has been range bound for over a year and small cap online wellness services stockMINDBODY Inc (NASDAQ: MB) has taken off with performance starting to moderate:

  • [By Peter Graham]

    A long term performance chart shows Fitbit Inc initially surging after its IPO before loosing most of its value while large capGarmin Ltd (NASDAQ: GRMN) (which hasa fitness segment)has moved back and forth from positive to negative territory and small cap online wellness services stockMINDBODY Inc (NASDAQ: MB) has taken off for the past year:

best shares to invest in today

About 5% of American elderly now live in senior living communities. Floridas The Villages is the countrys fastest-growing and largest retirement destination. Marketed as a community for active seniors, most subcommunities in The Villages require at least one 55-year-old in each residence; anyone under 19 (of school age) must limit visits to 30 days a year.

The housing stock and considerable leisure activities appeal to and reflect middle-American tastes. Residents organize and participate in hundreds of clubs and hobbies. They use numerous recreation centers, swimming pools, and golf courses, some of which are available to all residents with no additional charge. The infrastructure, landscaping, radio, newsletters, and advertising might best be described as upbeat or chirpy. There are plenty of classes and educational opportunities, though most focus on self-help and spirituality, with occasional historical re-enactors and other popular, rather than highbrow, programs. The same is true for music and other entertainment; there are heavy doses of dated pop music, and classical pieces are often abridged.

best shares to invest in today: Time Warner Inc.(TWX)

Advisors’ Opinion:

  • [By WWW.THESTREET.COM]

    In early 2018, Viacom plans to change the name of Spike to the Paramount Network to better link its film studio with its cable TV business and expand its programming to reach a wider audience, something that Time Warner (TWX) has done over the past two years with TNT and TBS. Bakish also said that half of Paramount’s film slate would originate from Viacom’s television properties.

  • [By JJ Kinahan]

    Shares of AT&T Inc. (NYSE: T) were moderately lower while shares of Time Warner Inc (NYSE: TWX) headed to the upside in early trading today. Late yesterday, the Department of Justice (DoJ) surprised market observers by filing an antitrust lawsuit to block T’s $85.4 billion takeover of TWX. In the complaint, DoJ said the merger would harm competition, stifle innovation and drive up prices.

  • [By Benzinga News Desk]

    It took a “Wonder Woman” not only to jump-start the summer box office, but end Time Warner Inc (NYSE: TWX)'s critically maligned skid as it tries to approximate the success of the rival Marvel Cinematic Universe franchise run by Walt Disney Co (NYSE: DIS): Link

  • [By WWW.KIPLINGER.COM]

    Like its No. 1 competitors, T dealing with the telco growth conundrum by branching out. Thats why it acquired DirecTV. And now, AT&T is going back to the M&A well by offering to buy Time Warner Inc. (TWX).

best shares to invest in today: Home Federal Bancorp Inc.(HOME)

Advisors’ Opinion:

  • [By Sofia Horta e Costa]

    Sanofi fell 2.6 percent after withdrawing a U.S. application for a diabetes drug. Cie. Financiere Richemont (CFR) SA dropped 2.3 percent as revenue missed analysts estimates. Vivendi SA advanced 2.7 percent after saying it will begin a formal study to separate its French phone unit from its media businesses. Home Retail Group Plc (HOME) surged 5.4 percent to a two-year high as sales exceeded projections.

  • [By Lisa Levin]

    Shares of At Home Group Inc (NYSE: HOME) were down 10 percent to $23.19. At Home Group reported Q2 adjusted earnings of $0.18 per share on revenue of $232.1 million.

best shares to invest in today: Scana Corporation(SCG)

Advisors’ Opinion:

  • [By Lisa Levin]

    In trading on Tuesday, utilities shares rose by just 0.1 percent. Meanwhile, top losers in the sector included Atlantic Power Corp (NYSE: AT), down 2 percent, and SCANA Corporation (NYSE: SCG) down 1 percent.

  • [By Lisa Levin]

    In trading on Monday, utilities shares were relative laggards, down on the day by about 0.43 percent. Meanwhile, top losers in the sector included SCANA Corporation (NYSE: SCG), down 2 percent, and FirstEnergy Corp. (NYSE: FE), down 2 percent.

  • [By Lisa Levin]

    In trading on Friday, utilities shares were relative laggards, down on the day by about 0.32 percent. Meanwhile, top losers in the sector included Genie Energy Ltd (NYSE: GNE), down 3 percent, and SCANA Corporation (NYSE: SCG), down 3 percent.

  • [By Chris Lange]

    The S&P 500 stock posting the largest daily percentage loss ahead of the close Monday was SCANA Corp. (NYSE: SCG) which traded down over 6% at $42.38. The stocks 52-week range is $41.15 to $74.99. Volume was over 3.5 million versus the daily average of 2.2 million shares.

best shares to invest in today: Ameresco, Inc.(AMRC)

Advisors’ Opinion:

  • [By Jason Hall]

    WhenAmeresco Inc(NYSE:AMRC) reported financial and operating results for its fourth quarter and fiscal year 2016 on March 2, the market was ecstatic, pushing shares up more than 17% on a combination of beating analyst expectations for profits, a solid order backlog for future business, and continued optimism around infrastructure investment in coming years.

  • [By Manikandan Raman]

    There also some lesser known clean energy stocks that may witness downward movement on potential Trump win on negative sentiment. They include Pattern Energy Group Inc (NASDAQ: PEGI), Enviva Partners LP (NYSE: EVA), TerraForm Global Inc (NASDAQ: GLBL), Renewable Energy Group Inc (NASDAQ: REGI) and Ameresco Inc (NYSE: AMRC).

  • [By Lisa Levin]

    Shares of Ameresco Inc (NYSE: AMRC) got a boost, shooting up 16 percent to $6.05 after the company reported strong Q4 results.

    Navigator Holdings Ltd (NYSE: NVGS) shares were also up, gaining 23 percent to $13.50 on better-than-expected quarterly earnings.

best shares to invest in today: BIG YELLOW GROUP PLC (BYLOF)

Advisors’ Opinion:

  • [By SEEKINGALPHA.COM]

    The Big Yellow Group (OTC:BYLOF) recognized this opportunity back in 1998 when it was founded and has ever since been working towards bringing new supply of self-storage properties to the UK market. The strategy resulted in the following performance:

best shares to invest in today: Triple-S Management Corporation(GTS)

Advisors’ Opinion:

  • [By Peter Graham]

    Small cap Triple-S Management Corp (NYSE: GTS) is an independent licensee of the Blue Cross Blue Shield Association. It is one of the leading players in the managed care industry in Puerto Rico. Triple-S Management has the exclusive right to use the Blue Cross Blue Shield name and mark throughout Puerto Rico, the U.S. Virgin Islands, and Costa Rica. With more than 50 years of experience in the industry, Triple-S Management offers a broad portfolio of managed care and related products in the Commercial, Medicare Advantage, and Medicaid markets under the Blue Cross Blue Shield marks. It also provides non-Blue Cross Blue Shield branded life and property and casualty insurance in Puerto Rico.

Fridays Vital Data: Time Warner Inc. (TWX), Wells Fargo & Co (WFC) and Vale S.A. (ADR) (VALE

U.S. stock futures are headed for record territory in the last day of trading before Christmas. Wall Street is continuing to cheer the passage of the Republican tax plan, which only needs President Donald Trump’s signature to become law. Already, AT&T Inc. (NYSE:T) and Wells Fargo & Co (NYSE:WFC) have pledged to raise wages and pay out bonuses if the legislation is signed this year.

Friday’s Vital Data: Time Warner Inc. (TWX), Wells Fargo & Co (WFC) and Vale S.A. (ADR) (VALE)Meanwhile, traders will be flooded with data before leaving to spend time with their families. Economic reports today include durable goods orders, core capital orders, personal income, and consumer spending and core inflation for November, as well as November new-home sales and the December consumer sentiment reading.

Heading into the open, futures on the Dow Jones Industrial Average are down 0.01%, S&P 500 futures have added 0.02% and Nasdaq-100 futures have lost 0.02%.

Options volume was below average on Thursday, as many traders appear to have already left for home. Overall, about 15.6 million calls and 11.7 million puts changed hands on the session. The CBOE single-session equity put/call volume ratio heald at 0.56 and the 10-day moving average ticked lower to 0.56, yet another 52-week low.

Drilling down on Thursday’s options activity, Time Warner Inc (NYSE:TWX) attracted several large call blocks yesterday, with one spread betting heavily on a successful buyout from AT&T. Meanwhile, options traders are signaling that Wells Fargo may be an underdog banking stock following the passage of the Republican tax plan, and Vale S.A. (ADR) (NYSE:VALE) trades ex-dividend today.

Friday’s Vital Options Data: Time Warner Inc. (TWX), Wells Fargo & Company (WFC) and Vale S.A. (VALE)investorplace.com/wp-content/uploads/2017/12/12-22-2017-Top-Ten-Options-300×138.png 300w, investorplace.com/wp-content/uploads/2017/12/12-22-2017-Top-Ten-Options-65×30.png 65w, investorplace.com/wp-content/uploads/2017/12/12-22-2017-Top-Ten-Options-200×92.png 200w, investorplace.com/wp-content/uploads/2017/12/12-22-2017-Top-Ten-Options-400×184.png 400w, investorplace.com/wp-content/uploads/2017/12/12-22-2017-Top-Ten-Options-116×53.png 116w, investorplace.com/wp-content/uploads/2017/12/12-22-2017-Top-Ten-Options-100×46.png 100w,https://investorplace.com/wp-content/uploads/2017/12/12-22-2017-Top-Ten-Options-109×50.png 109w, investorplace.com/wp-content/uploads/2017/12/12-22-2017-Top-Ten-Options-78×36.png 78w, investorplace.com/wp-content/uploads/2017/12/12-22-2017-Top-Ten-Options-170×78.png 170w” sizes=”(max-width: 546px) 100vw, 546px” />

Time Warner Inc. (TWX)

Since the deal was announced last year, TWX stock has bounced around well below AT&T’s proposed purchase price of $107.50 per share. Uncertainty is the main reason for TWX not rallying to within reach of AT&T’s offer, with Justice Department scrutiny and the current lawsuit remaining a cloud over the deal.

However, optimism that the deal will go through has risen in recent weeks, and TWX options traders are beginning to bet on a positive outcome. TWX volume yesterday rose to over 193,000 contracts, or more than four times the stock’s daily average. Calls gobbled up 73% of the day’s take.

One trader took that optimism to another level, however. According to Trade-Alert.com, blocks totaling 30,000 contracts and marked “spread” traded on each of TWX’s July $82.50 put, $95 call and $105 call. The $95 calls purchased, while both the other contracts were sold. The total outlay for this spread was $1.34, or $134 per trio of contracts.

Assuming these contracts crossed as marked, and were a spread, the trader could pocket $866 per contract if TWX trades at or above $105 when July options expire — a strike that is just below AT&T’s purchase price.

Wells Fargo & Company (WFC)

WFC stock was left behind in the banking sector’s tax-plan driven run higher this year. The shares have added a mere 15% compared to the Financial Select Sector SPDR ETF’s (NYSE:XLF) gain of roughly 30%. But WFC stock traders are beginning to finally come around as the tax plan heads toward implementation. In fact, analysts at Buckingham upgraded WFC to “buy” from “neutral” on the news, lifting WFC’s price target to $75 from $57.

Options traders were also in a bullish mood yesterday. Volume on WFC rose to 145,000 contracts, with calls making up 81% of the day’s take. There is still some acceptance to be had among speculative traders, as the January 2018 put/call open interest ratio rests at an elevated reading of 0.81 for WFC. That reading should drop sharply in the coming weeks, however, as more traders realize the potential upside for WFC stock following the tax plan’s passage.

Vale S.A. (VALE)

It’s ex-dividend day for Vale. The Brazilian mining company is set to pay out a quarterly dividend of 9.8 cents per share on March 22, 2018. Shareholders of record by the close last night are eligible for the dividend payout.

As a result, VALE stock was flooded with call activity yesterday, as options traders sought to capture the quarterly payout. Volume topped 163,000 contracts, and calls accounted for 93% of the overall activity. Options traders typically buy in-the-money calls as a way to gain control of a stock ahead of its ex-dividend date, resulting in heavy dividend-capture activity the day prior.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.

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