Wednesday, April 22, 2009

Volume 3, Issue #30

One stock that fits the bill is currently yielding a hefty 7.9% and is profiled in detail by Timothy Lutts --publisher of Cabot Wealth Advisory -- in today's issue of TopStockAnalysts Digest. (Full Story Below)

Also in Today's Issue...

Still, that doesn't mean these three stocks (and other big beaten-down financials) have begun new uptrends.  History tells us, plain and simple, that a stock--or a group of stocks--that has experienced a huge damaging move will take a long time to build a base--perhaps years--before a new uptrend begins.  So the odds are against these stocks climbing much higher in the weeks and months ahead.

Certainly, there will be movement.  Institutional ownership of these stocks is widespread, and we think many institutions will be using this bounce to trim their positions in these stocks as they move into sectors with better growth characteristics.  Traders will happily jump in and out of these stocks in their short-term gyrations.  But I think your prospects are far better in other sectors, and I discuss a few below.
 

One of the reasons for holding falling financial stocks like BAC, WFC and UBS so long was their dividends. And I understand--regular dividends often cushion the blow from falling prices. But just last month, Wells Fargo chopped its quarterly dividend from 34 cents to five cents. Bank of America's quarterly dividend has been slashed from 64 cents to a penny. And UBS has suspended its dividend entirely!

Bottom line: you can't even justify holding these stocks for their dividends any more!

So what do you do if you want regular income? What do you do if you're retired and looking for a new source of quarterly checks? Where do you go to find investments that are safe and pay regular, dependable dividends?

I suggest you look at Dick Davis Income Digest, our monthly publication that's chock full of investing ideas culled from the experts at the best investment newsletters. Every issue brings you dozens of ideas (some new, some follow-ups) on the best income-producing investments that are available to individual investors.

Interestingly, most of these investments are not as well known as Bank of America and Wells Fargo, and that doesn't surprise me a bit. I learned long ago that the popular, well known investments are not the best ones; if everyone knows about them, they're often priced too high. Contrarily, if most investors don't know about an investment, it may be priced too low. And that's terrific; it means that as more people learn about the investment, they'll bid its price up!

But it takes a sharp-eyed analyst to uncover these investments in their early days, and that's why Dick Davis Income Digest is such a great value--because it's full of expert advice culled from the best minds on Wall Street.

For example, the latest issue of Dick Davis Income Digest featured a company called Magellan Midstream Holdings (MGG), the general partner (GP) of Magellan Partners (MMP), one of the nation's largest midstream energy companies. Its holdings encompass more than 80 petroleum terminals and 10,000 miles of pipeline. And its dividend is a hefty 7.9%. Nathan Slaughter, of Half-Priced Stocks, wrote, "As long as the country needs gasoline and other refined products, the cash generated by these assets is virtually untouchable. But here's the best part. As the general partner, MGG owns valuable incentive distribution rights that give it an ever-growing slice of the pie. So every time the limited partner raises dividends, the effect on MGG is amplified. Since the general partnership shares went public in February 2006, quarterly distributions have spiked 82%."

I look at this investment and note that not only is the dividend high, but the chart is trending higher, telling me investors (some of whom have sold their Bank of America or UBS shares) are discovering this and other up-and-comers and climbing on board.

Yours in pursuit of wisdom and wealth,

--Timothy Lutts
Publisher
Cabot Wealth Advisory
 
P.S. So, if you're looking for dividends, you could buy the stock mentioned above. Better yet, you could take a no-risk trial subscription to Dick Davis Income Digest and get dozens of first-rate recommendations on a regular basis, so you can structure your own portfolio to bring in a steady flow of dividends, safely and dependably. If your portfolio has been damaged by the bear market of 2008, Dick Davis Income Digest may be just what you need to nurse your portfolio back to health. Click here to get started today!

About Timothy Lutts

Timothy Lutts heads Cabot Heritage Corporation, one of America's most respected independent investment advisory services, publishing 10 newsletters--including Dick Davis Income Digest--to more than 160,000 subscribers around the world. Under his leadership, Cabot advisories have been honored numerous times by Timer Digest, Hulbert Financial Digest and MarketWatch as the top investment newsletters in the industry. In 2007, Cabot was the only publisher with two investment advisories, Cabot Market Letter and Cabot China & Emerging Markets Report, ranked among the top 10 investment newsletters by Hulbert.

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