Revealed: My Top Energy Stock for 2012
January 7, 2012 by stanh
Filed under Misc. Articles
It's one of the most unique companies on the planet. In fact, I count only two other business that do the same work.
Still, the demand for its product is volatile. This company can earn ,000 a day or 0,000, depending on the market. When times are good (like they were in 2011), this company can make investors money hand over first.
And as you'll see below, all the signs are pointing to 2012 being a banner year for this company. As the chief strategist of StreetAuthority's Energy & Income advisory, I've tabbed it as my top energy stock for this year.
Golar LNG (Nasdaq: GLNG) simply has that much potential for the coming year.
Golar shareholders will have fond memories of 2011 — the stock delivered an impressive 212% return last year. But this rally isn't over yet, because the same tailwinds that led to this gain will continue blowing through at least 2014.
Golar is a play on the burgeoning global trade of liquefied natural gas (LNG). LNG is natural gas that is super-chilled until it becomes liquid, which can then be transported by ship anywhere in the world.
This company operates a fleet of modern LNG tankers, as well as floating storage and regasification units (FSRU). These retrofitted vessels park offshore, warm the chilled liquid gas back into ordinary natural gas, and then offload the cargo directly to pipelines for delivery to its final destination. Golar is one of only three FSRU operators worldwide.
Global LNG demand is in the early stages of a powerful growth spurt. Annual production has already spiked 60% since 2005 and currently stands at 230 million tons. And energy companies such as Chevron (NYSE: CVX) are plowing 0 billion into new projects — investments that mirror import growth from gas-hungry nations such as Japan and South Korea.
As with anything else, LNG shipping rates are a function of supply and demand. From 2007 through 2009 more than 120 new ships entered service, and the glut of capacity caused daily spot market shipping rates to sink below ,000 per day, down from more than ,000 a day in 2006. Predictably, most companies stopped ordering new ships.
So now, only a handful of new vessels are trickling onto the market. And customers come knocking quickly. Last spring, when the tragic earthquake forced Japan to step up its LNG imports, there were no tankers available for hire — not a single one. Golar's average daily charter rates surged to ,000 per day last quarter. And shippers will probably be willing to pay even more in 2012.
Shipping capacity is expected to inch up only about 3% next year (just 10 new vessels will be added to the current global fleet of 359). Yet, global LNG production is projected to climb 47 million tons, or 21%. In other words, additional LNG production around the world will outpace new delivery capacity by a seven-to-one margin, tightening the shipping market even further.
Sensing what's on the horizon, charterers have been scrambling to secure freight tonnage up to two years before the voyages actually take place, just to avoid being left out. Golar just chartered the Golar Grand ship to a major energy firm at the robust price of 0,000 to 0,000 per day. And the company has ambitious plans to add eight new fuel-efficient carriers that will be booked solid under multi-year contracts.
Action to Take–> Yes, this is a cyclical business — but nobody minds that during an upcycle. And with global production of LNGs sure to grow for years to come, I think Golar will prove to be a profitable investment in 2012.
– Nathan Slaughter
P.S. — We recently uncovered America's 21 best-performing income stocks. This select group of 21 stocks all yield 6% or more and are up 312%… 404%… and even 2,320%. But it's the hidden common thread that ties so many of these stocks together that's so surprising. It's a finding that we hope will make you a more profitable investor in 2012. For more information… and to see the full list of the 21 best-performing dividend stocks… visit this link.
This article originally appeared on StreetAuthority
Author: Nathan Slaughter
Revealed: My Top Energy Stock for 2012
Revealed: A Top 10 Stock for 2012 Yielding 11.1%
December 28, 2011 by stanh
Filed under Misc. Articles
Without a doubt, it's our most popular piece of research. Each year we publish our annual "Top 10 Stocks" list. Put simply, these are the 10 stocks my research staff and I think have the best chance of beating the market in the coming year.
We've published this annual list since 2003. And over the years, literally tens of thousands of investors have read — and profited — from the advice.
There's a good reason why this research is so popular year-in and year-out.
In our inaugural edition in 2003 our top picks ideas beat the S&P 500 by 12.0 percentage points in the course of the year. And then came 2004… 2005… 2006… 2007… 2009… and 2010 — our Top 10 Stocks trounced the overall market in those years as well.
In fact, through 2010 (2011 results haven't been finalized yet) this annual list has returned 16.8% on average each year… compared to 7.8% for the S&P 500. And if you look at the compounded returns, then we're beating the S&P 157.1% to 55.5%. That's more than 101 percentage points.
With this performance in mind, I wanted to share a sneak peek into our Top 10 Stocks for 2012. And as a thank you for being a Dividend Opportunities subscriber, I've selected one of the many high-yielders that made our list this year to share with you…
A stake in dozens of oil wells… and a double-digit yield
SandRidge Mississippian Trust (NYSE: SDT) has only one mission — take in royalties and pay them out to investors.
As a royalty trust, SDT owns a stake in dozens of wells run by its parent company, SandRidge Energy (NYSE: SD). SandRidge Energy takes care of the drilling, production, marketing, and selling of the oil and gas produced (production is split roughly 50/50 between oil and gas). The royalty trust — SDT — is passive in the relationship. It doesn't have to do a thing. In return for the initial investment when it went public, its investors get a cut of all the oil and natural gas sold from the wells.
For the Mississippian Trust, SandRidge Energy packaged a 90% interest in 37 of its oil and natural gas wells in Oklahoma. In other words, for every dollar in oil or gas pumped by these more than three dozen wells, owners of the royalty trust are now entitle
d to 90 cents in royalties.
But that's just the start…
That's because in addition to the 37 wells it owned at its inception, the trust also gets a bonus. Between its inception in December 2010 and December 2015, parent company SandRidge must drill an additional 123 wells, of which SDT will own a 50% stake.
In other words, in the next several years, each unit of this trust will have a stake in an increasing number of wells. And there is a powerful incentive in place for the parent company to get those wells drilled… and increase distributions… sooner rather than later.
As is common practice, SandRidge Energy retained ownership of over 10 million of the 28 million outstanding units of SDT. But most of those (7 million units) are subordinated shares. Unlike the shares we're investing in, those subordinated shares don't receive dividends unless regular common unitholders get a predetermined minimum payment each quarter. If the distribution falls below that threshold, then the payments to the subordinated shares will be reduced to make up the difference to the regular units.
That means these shares have a built-in buffer to ensure we see strong distributions going forward.
In the latest quarter, SDT paid a distribution of .82 per unit, giving a forward yield of 11.1% at today's price.
Action to Take –> Shares of SDT have run-up in the past few weeks, but I think the high yield still makes the shares attractive at these levels. But if you're a more conservative investor, then waiting for a pullback before buying isn't a bad idea.
[Note: One stock has raised dividends 110% in five years... another has .25 per share in cash (45% of its share price)... another yields 8.0% while it has nearly doubled its net income year-over-year. These are the type of investments that make up my Top 10 Stocks for 2012 report.
To learn more about these top picks for the coming year, visit this link.]
– Paul Tracy
This article originally appeared on StreetAuthority
Author: Paul Tracy
Revealed: A Top 10 Stock for 2012 Yielding 11.1%
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ECB: Debt crisis revealed weaknesses of eurozone
The chief of the European Central Bank says Europe’s debt crisis has revealed the weaknesses of the eurozone but that it has created a will to keep spending in check.
Yahoo! Finance: Currencies News
Day traders’ role in volatile oil markets revealed
Long-term bets on price direction contribute less to overall volume and volatility than previously thought, data from the CFTC has revealed
Revealed: Nathan Slaughter’s Top Stock for 2011
January 5, 2011 by stanh
Filed under Misc. Articles
It never ceases to amaze me. Each January, my staff and I breath a collective sigh of relief with the start of each new year. It's not because we're glad the holidays are over, but rather because it means that the exhaustive research we put into our annual Top 10 issue for my Market Advisor newsletter is finally over.
You see, my staff and I put in countless hours, starting months in advance to ensure that the annual Top 10 issue has only the absolute best picks that we think will pummel the market in the coming year.
After all, we've got a lot to live up to. StreetAuthority co-founder Paul Tracy started this tradition for Market Advisor back in December 2002. Incidentally, that inaugural list of recommendations went on to deliver an impressive return of 38.4% in the next 12 months. And every December since, my team and I have presented readers with a fresh batch of our best and brightest ideas for the year ahead.
Aside from the crash of 2008, these picks have outpaced the benchmark S&P 500 every single year — and by no small margin.
For those of you keeping score, Market Advisor's annual "Top-10 Stocks" have posted a cumulative return of 99%, easily besting the 45% return of the overall market.
Along the way, we have dug up some real gems for readers. In 2009, we flagged Grupo Aeroportuario del Pacific (NYSE: PAC), which went on to gain 45.8%. Last year's list included Skyworks Solutions (Nasdaq: SWKS), which is currently up more than 83%.
And those stellar performers were far from being the only winners of the bunch.
With all this in mind, my readers have been clammoring to know what I've got in store for 2011. And if you're not one of my subscribers, well, you're in luck. Last year, I decided to share the name of one finalist with the public. That pick, Silver Wheaton (NYSE: SLW), has soared 139% since January 1.
I'm expecting even bigger things out of one of my top picks for this year, a small company called Augme Technologies (OTC: AUGT). Simply put, I think it could be one of Market Advisor's best picks ever.
Here's why…
Google has built a 0 billion empire on the back of online advertising. But consider this: nobody hauls their PC around to the bank or the supermarket. By contrast, we are inseparable from our mobile phones — so demand to reach consumers through wireless devices could be just as explosive.
There's an avalanche of cash plowing into this sector — and Augme is right in its path. The company has developed innovative marketing platforms and video content delivery systems that "connect brands to consumers" across all wireless networks.
The firm is revolutionizing ways for businesses to communicate and interact with potential customers. For example, pasta maker Delverde is using Augme's platform in a clever way that lets shoppers at certain grocery stores scan a barcode or text a keyword to unlock fine Italian recipes and wine pairings.
These digital, point-of-sale marketing strategies are highly targeted and reach responsive customers — attributes for which advertisers are usually willing to pay a premium. Augme has a first-mover advantage protected by valuable patents and its growing customer base includes deep-pocketed clients like HBO, Ralph Lauren (NYSE: RL), Colgate Palmolive (NYSE: CL) and Johnson & Johnson (NYSE: JNJ).
At this point, the company is still in the nascent growth stage. Last quarter, it generated just 8,717 in revenue — about what Google probably spent on postage. But that small size can be an asset…
Investors love double-digit growth and salivate over triple-digits. But almost never do you see quadruple-digit growth. Yet, the revenue I just mentioned represented a jaw-dropping 1,700% increase compared with the same quarter last year.
It's pretty easy to move the needle when you're raking in less than million per quarter and you're at the vanguard of a briskly growing niche. From nothing a few years ago, mobile advertising is projected to be a billion market by 2012.
Action to Take –> Right now, Augme already has million in signed bookings and commitments in the sales pipeline. Even if just half of that is converted, the company could still take in million in the next year. That type of potential makes it much easier to swallow the dilution that comes with a young company issuing stock to raise capital (the share base has swelled from 13 million to 56 million in the past four years).
The stock is best suited for aggressive investors willing to shoulder some volatility. But the rewards could be huge — Augme has "multi-bagger" written all over it.
[Note: While I think Agume may turn out to be one of our best picks ever, it's just the beginning of what my Market Advisor newsletter has in store for 2011. A leading "green agriculture" firm in China... a way to profit from my "shocking" predicion for a jobs recovery... a "dirt-cheap" blue chip that could deliver 40% gains and pay a generous dividend to boot -- these are just a few of the picks I've singeld out for 2010. If you'd like to find out more about my picks for 2011, please read this memo.]
– Nathan Slaughter
Nathan Slaughter's previous experience includes tenures at AXA/Equitable Advisors and Morgan Keegan. In addition, he's earned Series 6, 7, 63, & 65 certifications. Read more…
This article originally appeared on StreetAuthority
Author: Nathan Slaughter
Revealed: Nathan Slaughter's Top Stock for 2011
What My 336-Day Income Test Revealed
November 26, 2010 by stanh
Filed under Misc. Articles
Spend five minutes researching most investment strategies, and you'll run across something called "backtesting."
Backtesting is when you look at historical data, apply your potential strategy, and see what sort of performance it would have had in the past. Basically, it's one way to hunt for a strategy that could work without putting anything on the line.
Therein lies the problem. There's no skin in the game. You can backtest anything and everything with no risk. That's why you sometimes run across off-the-wall claims like the length of women's hemlines has a bearing on winning stocks. (Don't believe me? Read this note from Barron's.)
Don't get me wrong; backtesting has its place. But a lot of strategies look good on paper and in hindsight. Shouldn't you be much more interested in the results of a test done with actual cash… and in real time?
Most retail investors can't test like this. If the test fails, it's their hard-earned money at stake, and many investors just can't afford any more risk right now. Luckily, I enjoy a luxury most retail investors don't — I have the backing of an entire company for my investment research.
And so in December of last year, I began what amounts to my biggest test to date. With 0,000 in actual cash fronted by StreetAuthority, I was given the go-ahead to build a portfolio using the "Daily Paycheck" strategy.
The strategy is straightforward. I'm building a portfolio of income stocks that pays me a dividend for every day of the month. And because I want to make those dividends grow as large as possible, I'm also reinvesting every cent of the payments.
It's a simple way to invest and many investors have heard about it before. But until now, most have only seen this sort of strategy backtested — not put in place in real life.
The good news is that while we all know being paid dividends regularly — and reinvesting those payments — is "supposed" to work, the actual results have been much more exciting than even I expected:
To the right are the actual stats of the 0,000 real-money portfolio within my Daily Paycheck advisory, where I'm conducting the test. This isn't backtested data or what "could" have happened. It's actual cash and real dividend payments.
So what does this 336-day (so far) test tell us about the "Daily Paycheck" strategy? Put simply, it works, and the results should only improve with time.
You might scoff. After all, during the first year of this experiment the total return of the portfolio is roughly in line with the performance of the S&P. How can that be a winning strategy?
It's because that performance comes with the equivalent of one hand tied behind my portfolio's back.
Remember, this test started out with 0,000 in cash at the start. It took several months to get even the majority of that cash invested in the right dividend payers. The good news is that now I'm fully invested, and the dividends are coming in hand over fist and helping add to all my positions.
In October alone the portfolio earned — and reinvested — more than ,090 in dividends, marking my third straight month with more than ,000 paid.
Action to Take –> So what can you take away from this test?
First and foremost, it proves what you've always heard, but perhaps took with a grain of salt. Investing in dividend-paying securities — and reinvesting those dividends — can be a very lucrative strategy. And even if you knew that, you may have thought it a strategy only for those with a focus on the extremely long-term.
But in less than a year, the dividends have ramped up to more than ,000 a month. (Even if you had only ,000 invest, it would still mean an extra 0 a month in your pocket, or in more shares.) That's some serious cash.
– Amy Calistri
P.S. — My "Daily Paycheck" test isn't finished yet. As the cornerstone of my Daily Paycheck advisory, it's just getting started. But I can't take full credit — it was actually the idea of StreetAuthority's co-founder (and my boss) Paul Tracy. He's been following this strategy for years. In fact, he's already earning more than ,000 a month in dividends. To learn how you can get started on the same path, I invite you to read this memo.
A graduate of both Columbia University and The University of Texas, Amy's experience includes managing million in trust funds, economic consulting and financial risk management. Read more…
This article originally appeared on StreetAuthority
Author: Amy Calistri
What My 336-Day Income Test Revealed
Yen nears highs as Swiss purchases revealed
The yen remained within touching distance of a 15-year high against the dollar on Friday as figures revealed that Switzerland had been aggressively adding the Japanese currency to its foreign exchange reserves in the third quarter.
