- Dividend yield of 10.09%
- Revenues have increased since Q2 2009 (currently $9.8 million) and are expected to continue increasing including an estimated increase of $2.5 million by Q4 2011 which supports and will increase the dividend
- Payout ratio of around 42%, a comfortable percentage that provides room for dividend increases or allows for flexibility should the company require funds immediately.
- Dividend growth rate for past 5 years of 2.3%, not especially exciting however with an already high yield I like a more sustainable growth rate.
- ROE and ROA around 20%, showing that TICC is able to utilize it's shareholders equity and assets effectively
- No debt
- Conservative payout ratio, dividend growth rate and no debt means they have cash on hand for expansion which could lead to the potential for growth and stock price appreciation in the future.
Wednesday, June 8, 2011
6/7
TICC Capital Corp (TICC: NASDAQ) - TICC is a closed end non-diversified management investment company. It invests in tech companies with market caps >$300 million in a variety of sectors including software, hardware, telecommunications and medical devices. This is why I like them, starting off with their (and most BCD's) most attractive element.
Monday, March 7, 2011
Picks 3/7
Who: Potash Corporation (NYSE: POT)
Why: Potash is the world's largest fertilizer company by capacity. They produce the nutrients potash (K), Phosphate (P) and Nitrogen (N) which are all essential for crop growth. At the turn of 2011-12 the world is going to reach a population of 7 billion. Simply put, we will need more food. Agricultural commodities are experiencing increasing prices which means farmers will be planting more crops to take advantage of the trend. More crops means more fertilizer. They have a gross margin of 40.15%, the highest out of companies in the non metallic mining industry meaning its has a lot of extra cash on hand for operations or expansion. In 2010 BHP Billiton Limited, a diversified resources company, offered to buy Pot for $139 a share, for a total of 39 billion dollars only to have Potash deny the offer. That kind of interest indicates Potash could have some serious value. It trades today at $59.12. I don't own Potash Currently, but am looking to buy shares in the near future.
Why: Potash is the world's largest fertilizer company by capacity. They produce the nutrients potash (K), Phosphate (P) and Nitrogen (N) which are all essential for crop growth. At the turn of 2011-12 the world is going to reach a population of 7 billion. Simply put, we will need more food. Agricultural commodities are experiencing increasing prices which means farmers will be planting more crops to take advantage of the trend. More crops means more fertilizer. They have a gross margin of 40.15%, the highest out of companies in the non metallic mining industry meaning its has a lot of extra cash on hand for operations or expansion. In 2010 BHP Billiton Limited, a diversified resources company, offered to buy Pot for $139 a share, for a total of 39 billion dollars only to have Potash deny the offer. That kind of interest indicates Potash could have some serious value. It trades today at $59.12. I don't own Potash Currently, but am looking to buy shares in the near future.
Wednesday, February 16, 2011
First Round Picks
As I mentioned the stocks I select will vary for both short and long term using fundamental analysis, technical analysis or some combination of the two. That said, here are a few of the stocks I think that are poised to do well.
I think one smart sector worth researching is energy, primarily from Canada.
Why: The United States Energy Information Administration expects the average of oil to rise to $93 in 2011 (up $14) and then to $98 in 2012. The EIA is also predicting the production of US oil to decrease, which means we will have a larger reliance on foreign oil. The website at the U.S. Department of State states that "CCanada is the single largest foreign supplier of energy to the United States--providing 20% of U.S. oil imports and 18% of U.S. natural gas import". 20% is a considerable number and with oil production decreasing, it can only grow larger. That said, I think Canadian oil stocks are going to be key in a winning portfolio. Here are some of my picks for some major players in 2011+.
Who: Pengrowth Energy Corp (NYSE: PGH) $12.39
Pengrowth was part of several other Canadian royalty trusts (CANROYS) that switched over from being trusts to corporations in late 2010 and early 2011. This is because trusts don't pay federal income taxes if they distribute it to shareholders. However, the Canadian government was losing around $500,000,000 in revenue due to this structure, and so consequently made trusts pay the same for taxes as corporation did. This resulted in a lot of these old trusts ditching a percentage of their dividend to make up for the loss. While this companies dividend fell as well, its currently yielding 7.40% annually. Its also currently holding a P/E ratio of 14.30 which is a lot lower then most other Canadian oil companies. The dividend dropped in October of 2009 but has essentially maintained or slightly risen since at around $.0700. This gives me confidence that the stream of monthly dividends this stock provides wont just disappear on me, and the fact that its located in Canadian Energy which is becoming such a hot spot for equity trading recently, I have even less reason to believe in any drop in dividend payment.
Suncor Energy (NYSE: SU)
Suncor recently completed their acquisition of Petro-Canada a former large integrated oil company and I think it will have a large impact on their role in the Canadian oil industry. Their revenue has increased over the last several years with annual rev in 2009 of $22.3B, $30.5B in 2010 and a projected $36.4B and $41.0B in 2011 and 12 respectively. Their cash flow per share has increased as well, giving me confidence that this company is pretty healthy financially. Additionally, their EPS growth rate is at 414.9 greater then 98% of its oil industry peers. I feel like the combination of increased demand for crude oil driving up prices with the increased value in Canadian tar sands in Alberta (where Suncor's oil sands business is located) supports these revenue projections and will lead to a nice increase in stock price over the next year+. Their dividend is nothing to get excited about yielding only 1.20% compared to Pengrowth, but I am in this company for growth as I think they have a strong potential to hit around $50.00 within the next few months.
I currently hold SU in my portfolio.
There are plenty of other Canadian energy stocks poised to blow up in the near future, but I have firm belief Suncor will continue to rise in price and that Pengrowth will continue paying its steady dividends.
Additionally, another stock in my portfolio that I was holding primarily for the dividend but has experienced a recent jump in price, most likely catalyzed by the turmoil in Libya, is Genesis Energy (NYSE: GEL). Genesis is a MLP that supplies crude oil, refined products and pipeline transportation services for oil, natural gas and C02 in the Gulf Coast region of the US. They are fairly new, formed in 1996 but are dedicated to being a major energy player through growth from construction and expansion projects combined with strategic acquisitions. They bring a 5.46% div yield with a payout ratio of 266.63% which is slightly intimidating as a ratio like that can be hard to support, however a high payout ratio is a sign of higher earnings growth (There is a chart posted on another stock blog that you can find here that supports my reasoning). While Revenue dipped in '09 it has increased since, and is projected to steadily increase into 2012.
I currently hold GEL in my portfolio.
The world is always in need of oil, and a barrel of crude oil is currently going for $98.23. After the situation in Libya dies down, I expect a slight decrease in these stocks price, however longterm I see no way how this oil can dip too low, and as long as this commodity is high, these stocks will be high and if you look at US oil consumption levels over the last decade, you would see that there is no sign of ending our oil obsession anytime soon...or later.
I think one smart sector worth researching is energy, primarily from Canada.
Why: The United States Energy Information Administration expects the average of oil to rise to $93 in 2011 (up $14) and then to $98 in 2012. The EIA is also predicting the production of US oil to decrease, which means we will have a larger reliance on foreign oil. The website at the U.S. Department of State states that "CCanada is the single largest foreign supplier of energy to the United States--providing 20% of U.S. oil imports and 18% of U.S. natural gas import". 20% is a considerable number and with oil production decreasing, it can only grow larger. That said, I think Canadian oil stocks are going to be key in a winning portfolio. Here are some of my picks for some major players in 2011+.
Who: Pengrowth Energy Corp (NYSE: PGH) $12.39
Pengrowth was part of several other Canadian royalty trusts (CANROYS) that switched over from being trusts to corporations in late 2010 and early 2011. This is because trusts don't pay federal income taxes if they distribute it to shareholders. However, the Canadian government was losing around $500,000,000 in revenue due to this structure, and so consequently made trusts pay the same for taxes as corporation did. This resulted in a lot of these old trusts ditching a percentage of their dividend to make up for the loss. While this companies dividend fell as well, its currently yielding 7.40% annually. Its also currently holding a P/E ratio of 14.30 which is a lot lower then most other Canadian oil companies. The dividend dropped in October of 2009 but has essentially maintained or slightly risen since at around $.0700. This gives me confidence that the stream of monthly dividends this stock provides wont just disappear on me, and the fact that its located in Canadian Energy which is becoming such a hot spot for equity trading recently, I have even less reason to believe in any drop in dividend payment.
Suncor Energy (NYSE: SU)
Suncor recently completed their acquisition of Petro-Canada a former large integrated oil company and I think it will have a large impact on their role in the Canadian oil industry. Their revenue has increased over the last several years with annual rev in 2009 of $22.3B, $30.5B in 2010 and a projected $36.4B and $41.0B in 2011 and 12 respectively. Their cash flow per share has increased as well, giving me confidence that this company is pretty healthy financially. Additionally, their EPS growth rate is at 414.9 greater then 98% of its oil industry peers. I feel like the combination of increased demand for crude oil driving up prices with the increased value in Canadian tar sands in Alberta (where Suncor's oil sands business is located) supports these revenue projections and will lead to a nice increase in stock price over the next year+. Their dividend is nothing to get excited about yielding only 1.20% compared to Pengrowth, but I am in this company for growth as I think they have a strong potential to hit around $50.00 within the next few months.
I currently hold SU in my portfolio.
There are plenty of other Canadian energy stocks poised to blow up in the near future, but I have firm belief Suncor will continue to rise in price and that Pengrowth will continue paying its steady dividends.
Additionally, another stock in my portfolio that I was holding primarily for the dividend but has experienced a recent jump in price, most likely catalyzed by the turmoil in Libya, is Genesis Energy (NYSE: GEL). Genesis is a MLP that supplies crude oil, refined products and pipeline transportation services for oil, natural gas and C02 in the Gulf Coast region of the US. They are fairly new, formed in 1996 but are dedicated to being a major energy player through growth from construction and expansion projects combined with strategic acquisitions. They bring a 5.46% div yield with a payout ratio of 266.63% which is slightly intimidating as a ratio like that can be hard to support, however a high payout ratio is a sign of higher earnings growth (There is a chart posted on another stock blog that you can find here that supports my reasoning). While Revenue dipped in '09 it has increased since, and is projected to steadily increase into 2012.
I currently hold GEL in my portfolio.
The world is always in need of oil, and a barrel of crude oil is currently going for $98.23. After the situation in Libya dies down, I expect a slight decrease in these stocks price, however longterm I see no way how this oil can dip too low, and as long as this commodity is high, these stocks will be high and if you look at US oil consumption levels over the last decade, you would see that there is no sign of ending our oil obsession anytime soon...or later.
Monday, January 17, 2011
Bosses of the Market
Unemployment has been recorded at 9.4% according to the report from the US Department of Labor in December, thats slightly scary. They calculate this number by analyzing a monthly survey (known as the Current Population Survey) sent to households that includes people who have been looking for work within the last 4 months...and only those people. This figure ignores those who have some sort of job but are paid much less then an amount to live comfortably, and those people who have flat out given up looking for work in such a down economy. Now technically you cant call these people unemployed due to legislation, however because there is such a large discrepancy between adding these people to the unemployment rate and the unemployment itself, in 1995 The Bureau of Labor Statistics at the demand of several economists began tracking this alternative rate and called it the U-6. The rate for unemployment including the U-6 is 16.7% according to the December report, thats really scary, at least for me it is.
With numbers like this, it can be discouraging looking for some sort of job to produce income. Some people may look for odd jobs to make money on the side. Others may create startups and run the risk of winning big or losing it all. Some might look to gambling to cover monthly bills. However the method, people are looking (frantically) to find way to make income and are wondering what they can do to make money. This blogs intention is to answer that question with the answer of smart investing.
Stocks can be intimidating as fortunes can be won with the right picks, but they can also be lost with the wrong ones (or at the wrong time). The estimates of the percentage of people who lose money in the stock market has ranged from 60-95% depending on where you look for the data. Either way, its essentially universally agreed more people loose money than make money. That said, 1/175,711,536 or about .000000006% of people win the mega millions lottery, depending on the industry start ups have around a 30% success rate and relying on odd jobs is essentially the same as gambling your income on the hopes that some work eventually pops up. With investing you cant control the market or any exogenous factors that may affect it, but you can make informed decisions that will leave your losses buried by your winnings.
In this blog, we will discuss potential profitable investments with in depth research to help each other make the best decisions possible. Through the scrutiny and feedback of our colleagues we can use each other to create a greater amount of money for ourselves. Each stock pick will be backed with research supporting reasons to buy and then a discussion on the given evidence and whether the stock really is a winner, or if perhaps something slipped by the initial person to post the stock that someone else caught. This type of analysis will include both technical and fundamental, and it will be a learning experience to find what works best with what and when. With the ability to have others review our decisions we can combine our intellects and make smart profitable investments.
With numbers like this, it can be discouraging looking for some sort of job to produce income. Some people may look for odd jobs to make money on the side. Others may create startups and run the risk of winning big or losing it all. Some might look to gambling to cover monthly bills. However the method, people are looking (frantically) to find way to make income and are wondering what they can do to make money. This blogs intention is to answer that question with the answer of smart investing.
Stocks can be intimidating as fortunes can be won with the right picks, but they can also be lost with the wrong ones (or at the wrong time). The estimates of the percentage of people who lose money in the stock market has ranged from 60-95% depending on where you look for the data. Either way, its essentially universally agreed more people loose money than make money. That said, 1/175,711,536 or about .000000006% of people win the mega millions lottery, depending on the industry start ups have around a 30% success rate and relying on odd jobs is essentially the same as gambling your income on the hopes that some work eventually pops up. With investing you cant control the market or any exogenous factors that may affect it, but you can make informed decisions that will leave your losses buried by your winnings.
In this blog, we will discuss potential profitable investments with in depth research to help each other make the best decisions possible. Through the scrutiny and feedback of our colleagues we can use each other to create a greater amount of money for ourselves. Each stock pick will be backed with research supporting reasons to buy and then a discussion on the given evidence and whether the stock really is a winner, or if perhaps something slipped by the initial person to post the stock that someone else caught. This type of analysis will include both technical and fundamental, and it will be a learning experience to find what works best with what and when. With the ability to have others review our decisions we can combine our intellects and make smart profitable investments.
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