суббота, 30 ноября 2019 г.
Buy This 1 Cheap Dividend Stock in December That Yields 6.45%
These are very interesting times to be an investor, because stock market valuations are at all-time highs, and there is not much value out there, especially in the large-cap, blue-chip space. This means that smart investors have to search harder to find small-cap or mid-cap blue-chip stocks to invest in.
Now, I completely realize that to find stable, blue-chip but small-cap or mid-cap stocks is like trying to find a tiny needle in a giant haystack, but have no fear. I have a tremendous investment opportunity for you today in a REIT stock that is not super well-known today, but I guarantee it will be a core portfolio holding for many Canadians in the next few years.
Global healthcare real estate play
The stock I am so excited about is Northwest Healthcare Properties REIT (TSX:NWH.UN), a REIT that provides investors with access to a portfolio of high-quality healthcare real estate comprised of interests in a diversified portfolio of 149 income-producing properties.
The company has 10.1 million square feet of gross leasable area and $6.2 billion of high-quality assets spread out throughout major markets in Canada, Brazil, Germany, Australia, and New Zealand.
In Canada, the REIT is the largest non-government owner and manager of medical office buildings and healthcare facilities, including major concentrations in Calgary, Edmonton, Toronto, Montreal, Quebec City, and Halifax.
On the international front, Northwest partners with the region’s leading healthcare operators and has built leading management platforms globally, comprising of quality healthcare real estate assets with a significant runway for future growth.
Northwest has a market cap of $1.6 billion, which is the perfect size for investors like you and me, because this type of company flies under the radar of big institutional investors until it reaches a size of about $5 billion.
Monster 6.45% dividend yield
At its current price of $12.40, Northwest has a dividend yield of 6.45%, and the best part of all is that this distribution is paid out on a monthly basis.
My regular readers know that I am a big fan of monthly dividends, because I reinvest dividends into new shares, and monthly dividends mean that I get to reinvest every month, and the compounded growth on those reinvested dividends is that much greater over the long term.
The company just increased the dividend from $0.67 per year in 2018 to $0.80 per year in 2019, representing a monster 19% year-over-year increase.
The company has shown that it is willing to reward shareholders, as it continues to grow its financial firepower, and there is every indication that they will start considering an annual increase strategy going forward.
Tremendous financial results
Northwest has been a supremely consistent steward of shareholder money over the last few years, and the third-quarter results continued to build on that theme.
Top-line revenue increased by 4.7% to $91.1 million from $87 million in Q3 of last year, primarily driven by acquisition activities, which translated into a net income of $17.7 million, up significantly from a loss of $28.5 million in Q3 of last year.
In addition to delivering strong operating results, Northwest also advanced its strategic agenda, including integrating the $1.2 billion Healthscope hospital portfolio acquisition.
Healthscope was a transformative acquisition for the company, because it gives Northwest a firm toe-hold in Australia with a portfolio of 43 private hospitals concentrated in large metropolitan centres throughout the country.
Investor takeaway
Northwest stock is changing hands at $12.40 a share at the time of writing, which is a touch above its net asset value of $12. This means that the stock is trading cheaply, and investors haven’t recognized the significant embedded future growth yet.
While the world realizes Northwest’s value, smart investors that buy the stock today will be rewarded with a top-tier dividend yield while they wait for the share price to double, as institutional investors start getting into the stock in the next couple of years.
5 TSX Stocks for Building Wealth After 50
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Canadian Retirees: How the Rail Strike Impacts Your Income
The eight-day Canadian National Railway (TSX:CNR)(NYSE:CNI) strike may not be over yet for Canadian retirees. Canadian retirees should understand how the national rail strike impacts their income from retirement portfolio investments.
The tentative agreement between the union and the railway may not last if Teamsters members do not ratify the terms in a union vote.
Already, the union strike where 3,200 conductors and yard operators at Canadian National Railway refused to work may require weeks to catch up on shipments. Shipments of grain, oil, propane, and metal could not reach their intended destinations last week, causing national shortages.
What’s worse is that another strike may be on the horizon if the Teamsters members vote “nay” to the terms of the agreement.
Logistics network rule over prices
Changes in prices do not only affect your shopping receipts. Your income-generating assets are also heavily influenced by prices on propane, grain, and metal. Even more important, without a functioning logistics network, the stocks in your portfolio cannot deliver goods to customers, reducing revenue.
Reduced revenue means two things. First, the stocks in your portfolio are likely to dip in price temporarily. Second, if you have any spare cash to invest, now is the time to do it — while prices are lower.
Experienced Canadian savers know that the best time to save is when the prices are low and returns are high; the lower cost to buy translates into higher potential profits to add to your monthly retirement income. Thus, retirees should never be scared away by a down market; but, instead, excited to buy (at a discount) dependable dividend stocks with stable price histories.
CN Railway investors should support the union
Underscoring the importance of the union is a recently released recording of the Canadian National Railway pressuring an exhausted employee to move a train, which would endanger himself and the public. The decision to record the call required foresight on the part of the train operator, indicating that the company might frequently disregard necessary safety protocols to avoid accidents.
Fatal train accidents are all too common, and they tend to rock the stock market as well. That means shareholders in CN Railway should care about the number of safety incidents reported at the railway if not for the lives at stake, then for the sake of shareholder value, at least.
Safety issues like the one depicted in the recording can be costly for shareholders. CN Railway stock only pays out a dividend of $0.5375 per share, amounting to a yield of 1.76% at the current stock price of $121.93. A reduction in income from expensive lawsuits or remuneration could quickly turn CN Railway from a stock to buy to stock to sell.
Foolish takeaway
The railway stocks are popular because, as an oligopolistic market in Canada, the railroads have a lot of market power. The railroads can afford to set market prices above marginal cost. Canadian National Railway, for instance, reports an operating margin of 40.76% and a profit margin of 29.63%, according to Yahoo Finance.
The drawback to an oligopoly, however, is the disparate power the employer has over workers. The business can quickly become cutthroat with ineffective management and complacent safety standards. Hence, the crucial role unions play in protecting not only employee interests but also shareholder concerns about minimizing unnecessary legal problems.
Canadian retirees need to pay attention to news impacting the Canadian logistics system. Railways, shipyards, and trucking undoubtedly affect more than just your grocery bill. Delayed shipments and union negotiations also influence your level of comfort during retirement.
5 TSX Stocks for Building Wealth After 50
BRAND NEW! For a limited time, The Motley Fool Canada is giving away an urgent new investment report outlining our 5 favourite stocks for investors over 50.
So if you’re looking to get your finances on track and you’re in or near retirement – we’ve got you covered!
You’re invited. Simply click the link below to discover all 5 shares we’re expressly recommending for INVESTORS 50 and OVER. To scoop up your FREE copy, simply click the link below right now. But you will want to hurry – this free report is available for a brief time only.
Fool contributor Debra Ray has no position in any of the stocks mentioned. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of and recommends Canadian National Railway. The Motley Fool recommends Canadian National Railway.
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Blockchain, Power and Politics: How Decentralization Engenders Freedom
The 21st century world is connected, but not centered. These are both good things. Connections link people, cultures and ideas. Indeed, all the great advances in human history have been the result of social and economic networks.
Without the trade routes of the Indian Ocean, the Islamic world would never have acquired the numerals of India that now form the foundation of our mathematics of science. Without the coffeehouses of 17th- and 18th-century Britain, the Enlightenment probably wouldn’t have materialized. Genius dies in isolation; connection is the engine that drives human progress.
By contrast, the centralization of power is highly correlated with disaster and suffering. Some say that this is the iron law of oligarchy — i.e., as any institution, private or public, becomes larger and more complex, power will inevitably become concentrated in the hands of a small elite. It’s also inevitable that we’ll experience earthquakes and hurricanes, but this doesn’t stop us from trying to mitigate the damage of such natural disasters.
The incentives of our traditional economies have made oligarchies a practical certainty. We are now at a technological crossroads, however, which will allow us to change these incentives, keeping power in the hands of the people. And blockchain could be a key component of this process.
Blockchain should be anti-bloc. What does this mean? Simply put, that a truly decentralized blockchain will, by its very nature, resist the centralizing and homogenizing forces that tend to form into power blocs. We must not forget that blockchain is also a means to an idealistic end. When Satoshi Nakamoto mined the Bitcoin genesis block, he embedded a reference to an article in London’s newspaper The Times about the 2008 financial crash. The gesture was not subtle: Satoshi believed that centralized banks and central governments had failed their constituents.
It’s increasingly difficult to distinguish between our “online” and “offline” lives, so it’s hardly a surprise that regimes that wish to control their citizens — or even transform their citizens into “subjects” — do so by controlling the internet. It’s a scandal that even a single country is unfree, but across the world, governments are growing more restrictive and more repressive. These regimes actively ban services, put up firewalls, gather data, monitor critics and mass-produce lies.
Blockchain represents an alternative to this shift toward authoritarianism by enabling ad-hoc, censorship-resistant, peer-to-peer connections. An authoritarian state cannot seize a blockchain’s distributed P2P servers, nor can it flood the market with counterfeit cryptocurrency. The perfect blockchain doesn’t destroy economic, political or financial power, it merely distributes that power by using consensus to hold each other accountable to the truth of history.
We shouldn’t assume that all political power is wielded by explicitly political entities. Some of the largest blocs today are major tech companies and other multinational corporations, which often rival nation-states in influence and power. Where does their power come from? In many cases, it depends on the user data stored in their central servers, as well as the analysis of that data. Privacy and data-gathering scandals have been near-weekly occurrences for the past several years, and they show no signs of stopping.
After all, the biggest companies have more knowledge of their users than ever before. Google already has staggering amounts of personal data for most of its billions of users; after spending billions to acquire Fitbit, it will soon have even more. Netflix doesn’t just track what its viewers watch, it even auto-generates content thumbnails for individual users. Facebook is perhaps the most controversial data-gatherer: Mark Zuckerberg and his associates have received congressional summons to discuss just how grievously the company has abused public trust.
Although blockchain has genuine political potential, truly decentralized blockchains will require deviation from today’s practices. When the first Bitcoin (BTC) was mined in 2009 and 2010, just about any internet-ready computer could participate. The first Bitcoin found its way into dorm room laptops, aging internet cafe machines and PCs in rented studios. Anyone, anywhere — provided they were online — could mine Bitcoin.
As difficulty increased and Bitcoin’s value appreciated, however, centralization became a fact of mining. No longer could anyone with a computer successfully mine. Now, the miners were specialized machines in anonymous server farms clustered near cheap power sources. The technology became ever more powerful, but decentralization broke down.
Related: The Land of the Free: Why Decentralization Matters in the Crypto Republic
Let me be clear: Bitcoin still has a vital role to play in bringing blockchain technology to the masses. And the work it has done in providing a currency to people afflicted by authoritarian oppression and hyperinflation cannot be understated. But the limitations described above are real nonetheless, and future entries into the crypto landscape must strive to overcome them.
Blockchain and decentralization can serve as essential countermeasures to growing political and corporate authoritarianism. In countries that are already free, decentralizing tools grant greater freedom. They permit their users to opt out of systems that they believe are unjust — or even merely inconvenient. In authoritarian regimes, blockchain and related technology provide a way to evade injustice and to organize against it. These are the first steps in reclaiming the freedom that has degraded since the dawn of the 21st century.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Tomer Afek is the CEO and co-founder of Spacemesh, a fair and distributed blockmesh operating system powered by a unique proof-of-space-time consensus protocol. A serial entrepreneur, Tomer has more than 20 years of experience across the tech, digital and finance industries, having co-founded and held C-level roles with ShowBox, ConvertMedia and Sanctum Inc. With Spacemesh, Tomer is on a mission to build the fairest possible decentralized economic infrastructure.
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Your 3 Top Profit-Making Mega Trends Revealed!
First, thanks for participating in our Thanksgiving survey!
We asked you to share your favorite mega trends for delivering big profits — and how you plan to spend those gains.
We got a flood of responses. And it’s clear that our readers know the best way to make the big gains.
Based on your responses, the top three 2019 mega trends were:
- The Internet of Things.
- Robotics/artificial intelligence.
- Precision medicine.
So many of you also had great plans for your profits.
Not surprisingly, most of you would use them to invest for even bigger gains. We feel the same way!
But James B. wants to buy a Tesla with his gains.
Melford A. is taking his entire family — children and grandchildren — on a cruise.
And Guy P. said: “Buy better wine in 2020.” Cheers to that!
Thanks everyone for your responses! And keep an eye out for future surveys so you can be featured in Bold Profits Daily.
This week, our gurus kept the opportunities coming. Even with the Thanksgiving holiday, they revealed huge mega trend profit plays you can take straight to the bank.
Week in Review
Monday, November 25: This week, Paul Mampilly, Amber Lancaster and Hudson Cashdan discuss Tesla and Takeovers: Signs of a Secret Boom. All signs point to a secret economic boom. And here’s the exciting thing: It’s already in progress! Last week, Tesla announced the brand-new Cybertruck, which led to over 200,000 preorders within the first three days of its reveal — including Paul’s! Click here to find out more.
Also, Amber’s Macro Monday: Tesla Does It Again — Move Over, BMW was released. This month, Amber covers how 2019 has been a boon year for home mortgage applications and the staying power of new single-family home construction, among other topics. Click here to watch this month’s report.
Tuesday, November 26: Paul wants you to Jump-Start Your Portfolio in This Secret Bull Market. What is this secret bull market? Well, it’s led by superstar stocks — that are generating returns in the HUNDREDS of percent — that you’ve probably never considered! Click here to find out more.
Wednesday, November 27: Amber updates you on cloud kitchen tech by asking: Cloud Kitchen-Catered Thanksgiving? — UPDATE. Cloud kitchens are sweeping the nation and disrupting old-world kitchens. Could this be the death of restaurants? This industry is set to grow from $35 billion in 2018 to $365 billion by 2030. Click here to find out the best way to play this rising trend before the market takes off.
Thursday, November 28: Nick Tate asks the question: Beyond Turkey? Take Home Triple-Digit Gains This Holiday. With the meatless foods market currently at $4.2 million, with projected growth to $5.8 billion by 2022, it’s safe to say there’s value in investing in the meatless food industry. Click here to find out how you can get triple-digit gains in just one year.
Friday, November 29: Ian Dyer and Paul are together on video to Fill Your Pockets — $150 Billion Alt-Money Boom Is Here. Bitcoin is on track to hit $50,000 as early as next year, and there’s an exchange-traded fund that’s your best opportunity to buy into the cryptocurrency mega trend that’s already trading 27% above bitcoin’s price. Click here to learn more.
Regards,
Your Bold Profits Team
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Thanksgiving 2019: You Donated $200,000 to Project Chance
Story highlights:
- Project Chance provides service dogs to aid individuals diagnosed with autism and other disabilities.
- Since 2017, you’ve donated more than $200,000 to this organization. Thank you!
- Read on to find out about Project Chance’s ambitious new venture — and how you can get involved.
“You can keep it if you can match it,” a generous man named Don told Matt Badiali.
You know Matt as the editor of Real Wealth Strategist.
At the 2019 Total Wealth Symposium, Don presented Matt with a check for $1,000 for a nonprofit organization called Project Chance.
Matt held up the check to the audience during his presentation and told them about Don’s offer. It set off a chain reaction.
“I’ll match it!”
“I want to help.”
I wasn’t surprised. I’d been with the company for four years, and I knew how generous our readers are.
When Matt joined Banyan Hill in 2017, I learned two things right away:
- He’s a natural resources expert.
- He’s passionate about Project Chance — so much so that he’s a board member!
Matt with a Project Chance puppy.
Project Chance is a nonprofit organization whose mission is to provide service dogs to aid individuals diagnosed with autism and other disabilities.
So, I took a look at Project Chance’s website and made a donation.
Many of you did the same.
Since 2017, our readers have donated more than $200,000 to Project Chance!
Banyan is the name of the first dog you helped Project Chance place.
Your donations helped place Banyan in a school for children with special needs.
She works for a school for children with special needs in Jacksonville, Florida.
Project Chance has placed dozens of other dogs too…
Dogs like Harper, a PTSD-support dog for a former Marine medic who’s now an EMT and firefighter.
And Summit, who provides support for a young girl with autism.
This is all thanks to you.
This Thanksgiving weekend, Matt and all of us at Winning Investor Daily want to make sure you know how grateful we are for your generosity.
A New Venture for Project Chance
The good folks at Project Chance were so overwhelmed by your generous donations, they set an ambitious, exciting new goal: an all-inclusive playground in Northern Florida.
Poe’s Playground will be the only one of its kind in the region. You can learn more here.
Right now, families who have children with and without special needs struggle to find a place where everyone can have fun.
This playground will change that.
Project Chance has secured seven acres of land and raised $30,000 toward this cause so far.
If you’d like to donate $5, $10, $20 or $50, you can do that here.
To donate a toy or show your support by adding your name to a brick or bench at Poe’s Playground, email info@projectchance.com. You can also visit the website, www.projectchance.com, for more information.
Thanks again for your support.
We’re humbled.
We hope each of you had a great holiday with your loved ones.
Good investing,
Kristen
Senior Managing Editor, Winning Investor Daily
Watch Our 2 YouTube Videos!
We have more great content to share this week!
- Chartered Market Technician Chad Shoop’s five-minute video, “Santa Claus Rally 2019: What You Need to Know.”
- Pot stock guru Anthony Planas’ eight-minute Marijuana Markets Update, “The TRUTH About the More Act, Charlotte’s Web: Cash Crunch’s Latest Victim.”
Check out the articles below if you missed any of our experts’ advice this week.
***
Matt Badiali knows how to play natural resource cycles. Back in June 2017, Matt wrote about this battery metal’s bull market. When that changed, Matt advised caution before the metal’s largest miner’s stock topped out. Today, the demand for electric car batteries and grid-scale storage could create an opportunity. (2-minute read)
The Santa Claus Rally is a seasonal pattern that starts the day after Christmas and continues for six trading days into January. Chad Shoop calls it the first piece of the trifecta that tells you what to expect in the stock market. He shares what he expects from the upcoming rally — and what could make him change his outlook for 2020. (3-minute read)
The average gas price in the U.S. this Thanksgiving shouldn’t change much from the past two years. But a pattern on John’s Chart of the Week shows a 27% climb in gas prices over the next six weeks. He shares a way you can use that climb to pocket triple-digit gains. (3-minute read)
Wall Street’s ignoring the mining sector. But a new kind of investment is filling in the void. Anthony Planas shares one way you can take advantage now and for decades to come. (2-minute read)
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3 Stocks on My 2020 Christmas Wish List
The year 2020 is just around the corner, and what better time to go shopping for new investments?
With the new year comes many big milestones for investors, not the least of which being the final few months to make your RRSP contributions for the prior year.
In late 2019, we have a stock market that’s hitting all-time highs corresponding with abysmal GDP growth of 0.1%. This party won’t last long, but there are a handful of stocks that are positioned to thrive in a future recession–which WILL happen sooner or later.
With that in mind, here are three stocks on my Christmas Wish List for 2020.
Alimentation Couche-Tard
Alimentation Couche-Tard (TSX:ATD.B) is Canada’s largest convenience store company. It spent most of the 2010s rapidly rebranding Irving gas stations as Circle K stores, which became extremely popular in Canada.
That story is probably familiar to most Canadian readers. What many don’t know is that Alimentation is making huge inroads in the U.S. as well.
According to CSP Daily News–a convenience store industry publication–Circle K has a 6.4% market share in fuels the United States, putting it ahead of the most “famous” U.S. convenience store 7-11 and other market leaders like Speedway.
Granted, we’re talking about convenience store gas stations here; if we’re talking about gas stations as a whole, its market share drops to 2.1%.
However, this is heady progress that Alimentation is making south of the border, and the company’s earnings are growing at an incredible pace (24.4% in Q2) as a result.
Algonquin Power & Utilities
Algonquin Power & Utilities Corp (TSX:AQN)(NYSE:AQN) is one of Canada’s fastest-growing utility companies, with a huge presence in the United States.
Over the past five years, its shares have massively outpaced both the TSX and the TSX Utilities Sub-Index. In fact, the stock has even outpaced Fortis, a market-beater in its own right.
Why is Algonquin a good buy heading into 2020?
Recall what I said earlier:
We have a stock market hitting all-time highs while at the same time GDP growth is stalling out. This suggests that a bear market could be on the horizon and in these types of situations, utility stocks tend to fare better than other classes of equities.
Canadian Pacific Railway
Canadian Pacific Railway Ltd (TSX:CP)(NYSE:CP) is Canada’s second-largest railway after the behemoth CN Rail, and a massive player in the Canadian transportation industry.
CP’s earnings history is much more volatile than CNs, with many dramatic upswings and downswings. However, in good quarters, it can grow by extremely impressive amounts.
Since 2001, we’ve seen Canadian Pacific massively outperform CN, although the former has given investors a more volatile ride along the way.
Right now, railways are seeing slowing revenue thanks to a softening of the economy. Accordingly, there may be a good buying opportunity for CP in the not-too-distant future, after which it will recover as the economy slowly but surely regains its footing.
5 TSX Stocks for Building Wealth After 50
BRAND NEW! For a limited time, The Motley Fool Canada is giving away an urgent new investment report outlining our 5 favourite stocks for investors over 50.
So if you’re looking to get your finances on track and you’re in or near retirement – we’ve got you covered!
You’re invited. Simply click the link below to discover all 5 shares we’re expressly recommending for INVESTORS 50 and OVER. To scoop up your FREE copy, simply click the link below right now. But you will want to hurry – this free report is available for a brief time only.
Fool contributor Andrew Button owns shares of Canadian National Railway. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of and recommends Canadian National Railway. The Motley Fool recommends ALIMENTATION COUCHE-TARD INC and Canadian National Railway. Alimentation Couche-Tard is a recommendation of Stock Advisor Canada.
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Alert: TD Bank (TSX:TD) Could Be Ready to Break Out!
Due to a less favourable macro environment and the recent bump in the road caused by the brokerage wars, Toronto-Dominion Bank (TSX:TD)(NYSE:TD) stock has been trailing some of its peers in the Big Six club of late despite still being arguably the most premier bank stock in Canada.
With fourth-quarter earnings results on tap December 5, TD stock could finally get the jolt it needs to finally break out of its consolidation channel and join some of its peers in the all-time high club.
And although fading headwinds in the Canadian banking scene are encouraging for investors looking to buy before Q4 earnings, it may be management’s 2020 guidance that ultimately dictates the trajectory of the stock.
There’s no question that investors don’t want to hear a continuation of 2019, which has been a sluggish year for the Canadian banks.
With various pressures still facing the Canadian banks (net interest margins (NIMs) are likely to decline for Q4), investors shouldn’t go into the quarter expecting a 180-degree reversal of sentiment, especially since the big banks aren’t entirely out of the woods yet when it comes to the normalization of the credit cycle.
Many analysts still aren’t sanguine on the Canadian banks and are calling for a cautious forward-looking commentary with regards to the guidance for 2020.
Given that TD Bank is trading at a nice discount relative to historical averages and is now no longer the most expensive bank stock according to traditional valuation metrics, I believe that TD Bank stock has the most room to run relative to most of its peers that have rallied substantially in recent months.
As Canada’s most American bank, TD Bank provides Canadians with meaningful exposure to the hotter U.S. banking market while still offering a lower degree of earnings volatility thanks to its stable retail banking business.
The stock rightfully deserves to trade at a hefty premium relative to its peers for these reasons, but the recent developments going on in the discount brokerage scene have knocked TD Bank stock a bit lower than where it ought to be.
Big developments in the brokerage arena
As you may remember, TD Bank stock got slammed after TD Ameritrade followed in the footsteps of Charles Schwab by bringing commissions to $0.
Shortly after, TD Ameritrade was scooped up by Schwab and will create a brokerage behemoth that looks chock-full of synergistic potential.
TD Bank will own a nearly 14% stake in what I see as a much stronger company in Schwab, which bodes well for TD Bank over the long haul as the brokerage scene continues its evolution.
As I mentioned in a prior piece, the future of brokerages will be all about services that go above and beyond just the execution of trades. It’s a pretty big deal, and TD Bank has a front-row seat with its Schwab stake.
You’d expect that the Ameritrade-Schwab deal would cause TD Bank to surge higher, but the reaction from the Street was muted. As a result, TD Bank stock is still dirt cheap at just 11 times forward earnings and 1.74 times book.
I think the name is misunderstood after the recent developments in the brokerage space and I believe that an upside correction could be in order, potentially after a decent fourth quarter alongside some cautiously optimistic commentary from management.
TD Bank is a premium bank at a not so premium price. So, if you’re in the market for a 3.9% dividend yield at a Black Friday discount, look no further than TD Bank!
Stay hungry. Stay Foolish.
Fool contributor Joey Frenette owns shares of TORONTO-DOMINION BANK.
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Why Eurasian Debt, Economic Uncertainty Make a Bull Case for Bitcoin
Bitcoin (BTC) bulls will no doubt keenly watch talk of the need for “a new, neutral global reserve asset” at the heart of the traditional financial sphere.
Financial Times business columnist and associate editor Rana Foroohar published an opinion piece on Nov. 25, pointing to the renewed, half-justified “paranoia” of the “gold bugs,” which has only been compounded by comments from investors and central bankers in recent weeks.
“You have to really believe the sky is falling in order to hoard physical bars in a digital age,” Foroohor writes.
And while she does not put her faith in gold itself, the very talk of gold points to a systemically fragile post-2008 horizon and the new urgencies ushered in by an era of acute geopolitical uncertainties.
Need for an asset “that’s not somebody else’s liability”
Foroohar points to the Dutch Central Bank’s (DCB) October warning — one that shocked many — that in the event of a monetary reset and “if the system collapses”:
“The gold stock can serve as a basis to build it up again. Gold bolsters confidence in the stability of the central bank’s balance sheet and creates a sense of security.”
The world’s 58th wealthiest person — billionaire investor and hedge fund manager Ray Dalio — echoed this at the Institute for International Finance conference this fall, raising the possibility of a potential flight to gold should America’s global creditors betray any signs of jitteriness.
As early as at least 2016, Foroohar notes, prominent voices like JPMorgan chief Jamie Dimon and hedge fund manager Stanley Druckenmiller have alleged there is an “unsustainable” fiscal situation, pointing to unfunded pension and healthcare entitlements in the United States.
To offset the fiscal imbalance, the U.S. remains locked into inflating its own balance sheet, keeping interest rates low — or even negative. Pushed to the extreme — in this view — this could depreciate the dollar, creating a situation in which investors no longer want to hold federal debt nor the currency itself, Foorohar notes.
The need for an asset “that’s not somebody else’s liability” — in Dalio’s words — points to gold or something else altogether.
Eurasia’s move away from the dollar?
With China recently issuing its first euro-denominated bonds in 15 years, deepening ties with European firms and edging away from the petrodollar, the gradual de-dollarization of Eurasia is another unfolding factor that could force America to sell dollars in order to settle its balance of payments “in a new, neutral reserve asset,” as Foroohar writes.
Parallel to Dalio and the DCB this October, Cameron Winklevoss — one half of the eponymous family office Winklevoss Capital and co-founder of the Gemini crypto exchange — argued that, in serving as a “Source of Truth,” Bitcoin can offer benefits that aren’t confined to being a safe-haven asset or mere “digital gold.”
The twins have also previously forecast the cryptocurrency will ultimately surpass the ~$7 trillion market cap of the precious metal.
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$150 Billion Cryptocurrency Boom Is Here – Buy This ETF to Profit
Story Highlights:
- Bitcoin is on track to hit $50,000 as early as next year.
- This exchange-traded fund is your best opportunity to buy into the cryptocurrency mega trend that is already trading 27% above the price of bitcoin.
- Tesla’s new “Cybertruck” is giving the Ford F-150 pickup a run for its money.
- How high will pot stocks rise, now that they’ve hit bottom?
Gold. Silver. Coins. Paper dollars.
If you could line your pockets with any of these valuables, which would be the best choice?
The surprising answer: None of the above.
In fact, blockchain-based cryptocurrencies are becoming the new-world digital money — with bitcoin on track to hit $50,000 to $100,000 by the end of next year.
In today’s Bold Profits video, Paul Mampilly joins me to explain why. And to tell you about the best way you can start investing in this mega trend today before bitcoin surges higher in 2020.
Bold Profits Daily
November 29, 2019
Paul Mampilly: It’s Paul on the Iancast again. I’m hijacking this permanently.
Ian Dyer: Fine with me. We have good discussions.
Paul: With Market Talk I’m always trying to keep it tight down to three to five minutes. I have a lot of competition between Hudson and Amber. On this one, we’re going to do it long. How about that?
Ian: Sounds good.
Paul: Let’s start with dramatic news. You and I never sleep. I know you were up watching Bitcoin hit $6,500.
Ian: The whole time, yes. It bounced. The Bakkt futures we talked about last week, the expiration date came into play there. Bitcoin fell to below $7,000, then it bounced and went a little lower.
Again, around these expiration dates in the futures, all these new Bitcoins are being sent out from the actual futures company to all the investors. It creates an immediate supply that can have an effect on price.
Paul: Long term, I don’t know anybody who would ever want to be short those futures. You’d have to deliver something of a fixed quantity. I remember seeing analysis that something like 30-40% of Bitcoin are being HODLed. Hold on for dear life, that’s what HODL means.
The crypto world has its own language. We have HODL. We have FUD.
Ian: That’s fear, uncertainty and doubt, right?
Paul: Time to lambo for time to move. So 40% of all Bitcoin approximately is being HODLed. I read analysis on The Block, which is a website where they do crypto analysis, that hedge funds are short Bitcoin. This sounds crazy to me.
Ian: Me too. There’s a lot of questions around it. When you look at all these hedge fund managers that are into traditional investments like 60% stock and 40% bonds. Bitcoin doesn’t fit anywhere in there and they don’t know what to do with it. They don’t’ think it will ever overtake gold as a safe haven asset.
There’s a lot of naysayers out there still which is surprising considering it’s survived for 10 years now — almost 11 — and it started out as a fraction of a penny and has grown into a $150 billion asset class all on its own with no promotion other than word of mouth. It’s amazing what it has done so far. It’s an alternative currency.
Paul: Exactly. Both Ian and I are on the record of seeing Bitcoin at much higher numbers. Ian has a $50,000 by end of 2020. Is that right?
Ian: Yes, $50,000 next year and somewhere around $100,000 in 2021.
Paul: I think that’s conservative. I think we might hit $100,000 maybe even by the end of 2020. Here’s why. To me, Bitcoin is the first exponential asset. It runs off a digital mechanism rather than a lineal mechanism which is the stock market, the bond market. In other words, it requires human intervention.
If you think about gold, you have to go dig it out of the ground. There’s a whole process. Bitcoin is completely digital. There’s no physical element to it. It can exponentially grow and it’s already done that. This is why it has so much skepticism because there’s never been an exponential asset in history — this is asset number one. It’s going to be the most valuable.
Ian: There’s never been something like these halving events in any asset before. When the supply is limited by this much on one specific day, that day has a lot of say in the future of Bitcoin. We’ve seen that because after the past few halving events, there’s a gigantic rally by thousands of percent after the supply is cut.
Paul: I went back and modeled the Litecoin halving event to Bitcoin. For sure, it’s setting up to be a minimum of $25,000 to $30,000 the way it models. Most of the people who believe in Bitcoin largely never bat an eye at the volatility. It’s the disbelievers who come to really give us a lot of grief about it.
Ian and I believe in Bitcoin. We think Bitcoin is going to the moon. Everyone can make their own judgment. There is that one indicator that we both track. We should tell people about it.
Ian: A company called Grayscale has their own Bitcoin trust. They own a lot of Bitcoin and sell it as a fraction on the stock market. You can buy shares of the trust backed by Bitcoin. It’s a way of buying Bitcoin on the stock market, which is really interesting and not a lot of people know it exists.
We’ve seen all these headlines and rumors of a Bitcoin ETF, but there already is one and it doesn’t get that much press. It gives us a good indicator because when there’s a lot of bullish or bearish sentiment on Bitcoin you will see the premium of this ETF start to go up or down. Right now it’s trading about 27% above the price of Bitcoin.
The stock market is giving Bitcoin a premium even though it fell 50% in just a few months. That’s a really bullish indicator to me. It’s been as low as 10% and then it bounced from there. Now, like I said, it’s up almost 30% and people are paying a lot more for Bitcoin in the stock market because as of right now more people have stock accounts than crypto accounts.
Paul: It’s a pain to get a crypto account. I have a coin-based account and you probably have one as well, but most people don’t want to deal with that. I can tell you from tracking the Grayscale Bitcoin Trust, at the peak in 2017 the premium was something like 130-140%.
Ian: It was more than double.
Paul: At the low about this time last year I believe the premium was something like 3-4%. Right now it’s nowhere near as pessimistic as it was back then so there’s no reason to expect the premium to be as low. I don’t believe it has traded at a discount any time recently.
All signs point to Bitcoin going higher sooner rather than later. I feel like we can leave that one right there and move to the next one. I think we should name the Iancast, “Tesla, Bitcoin and Pot.”
Ian: That’s what we talk about. It’s the fastest growing things out there.
Paul: It’s also what most millennials like to trade and are invested in. When I did a Tesla, Bitcoin and pot video for my Tuesday Bold Profits, I got 30 comments. I don’t think I’ve ever received 30 comments on anything before. That’s where people are at.
So let’s deal with Tesla. Cybertruck.
Ian: Yea. Cybertruck. Just to start off, Tesla has never had an advertisement before. They’ve never spent on marketing. It’s crazy the publicity this stuff is getting. Literally everybody was talking about the Cybertruck over the weekend. We both pre-ordered one.
I personally love it. I know a lot of people are really skeptical of the design. I think it’s going to grow on people. It’s a steel truck that’s supposedly bulletproof, although the window did break during the promo.
If you throw a steel ball at any other car window it’s going to go right through the car window. Bulletproof glass breaks. It doesn’t shatter but it breaks like that.
Paul: I follow Elon’s tweets. It turns out, when they hit the sledgehammer against the Cybertruck it cracked the window. That’s why when they threw the ball, it shattered the window. Elon said what they should have done is first throw the ball and then hit the Cybertruck with a sledgehammer.
Then the demo would have worked out fine. But, you know, that’s how it is in life. I think they got $100 million worth of free publicity as a result of the windows breaking because everybody felt like they had to show it.
Ian: Yes. And they have more than 200,000 orders already in the first few days for this truck.
Paul: I feel like the truck makers depend on trucks and SUVs. Between the Model Y coming out and now with this, it’s really time. Those companies are going to struggle. Maybe some of the others will end up being a competitor, but for now there’s no competition of any kind for Tesla.
Ian: It even blows the gas-powered pickup trucks out of the water. I drive a pretty good truck and the Tesla can tow more, carry more, has a bigger truck bed and it faster. It’s a super powerful truck. I’ve heard a lot of people say it doesn’t appeal to the kind of market that drives pickup trucks.
They want more power. What doesn’t appeal? I guess the design? I think it will grow on people and I don’t see it as a reason not to buy it.
Paul: My reaction was pretty much what everyone else’s was. I didn’t stay up for the launch, but I woke up and looked at it and then I thought, “Whoa, that’s different.” Then about a minute later I thought, “I really like it.” Then five minutes later I thought, “I need to order one.”
Ian: Same here. I woke up and saw it and thought, “That’s weird. That’s actually what it looks like?” But then it grew on me. It’s going to take time. It’s what everyone imagined future cars would look like 20 years ago and now it’s finally here. I think it’s going to grow on people. It’s kind of iconic.
Paul: I’m watching the reaction on Twitter and people are having a slightly slower version of what we went through. It came out and now they think it’s kind of cool. I think this might be as fast selling as the Model 3. People say it’s only a $100 deposit and it doesn’t mean anything. But 200,000 is a lot of people.
Ian: Even if 90% of them cancel that’s more than $1 billion they’re getting from this already.
Paul: You looked this up before we got on. What’s the short position in Tesla?
Ian: It’s down. It was just 25% a few weeks ago. It’s down to 16% now.
Paul: I have to tell you, in my entire 25 years of being on Wall Street I have never known a company as large as Tesla carry such a large short position. This is insane.
Ian: They’re different. Different doesn’t appeal on Wall Street. Everyone wants to think the same way, be safe, not get fired for liking some company that everyone else hates.
Paul: They talk about Tesla stock owners and car owners being a cult, but the people who hate Tesla are also a cult.
Ian: Pretty much. They do have a lot of haters — millions.
Paul: They do. I always keep my Sentry Mode on when I drive my car because I don’t want to run across someone who wants to do something to my car. We like Tesla at Bold Profits. You can also see we had a Tesla at our last franchise meeting and it was a super big hit. Amber gunned it and she loved it. We’re trying to persuade everyone to get one.
We’ve done Bitcoin, we’ve done Tesla, what about pot? I was on last week and the stocks all sold off. Then, boom.
Ian: They’re back. It’s going to be a ride, for sure. That’s how bottoms are. It goes up and down fast. Some of these stocks in the pot sector doubled from their bottom and went up 100% in a couple days. You don’t see that when there’s not some big buyer looming in the background.
There’s going to be buying in these stocks. They are bottoming out right now and they’re going to come back up. It’s going to be great. The market is so bearish on these stocks right now because they’ve gone down so much for months. It’s the classic selloff we’ve seen where the end is the worst part. It’s like that with anything in the stock market.
Paul: This is so true, Ian. You are absolutely right. Most people — I’m included in this, I’ve never had perfect timing — start buying probably a month too early. Then they underestimate how much that last drop is going to be. That’s where they get shaken out and they sell.
It’s also where they get emotionally blown out. They are not going to come back. Then they end up missing it.
Ian: They are the ones who push it up at the end toward the bubble phase.
Paul: That’s right. Then they come at the end and signal the very top. I’m going to guess just by the sharpness of the move in the ETF MJ, Canopy, Cronos and Aurora, that there’s a combination of short covering as well as actual long buying going on.
Ian: Yes. Some of these went up 100% in a couple days and a lot of them went up at least 40% in the first initial bounce.
Paul: In my experience, when you have the sharp, off-the-bottom jump of 40-50% it means there’s actually a big buyer. A strong hands buyer that is going to own and is signaling they are going to buy more. This is why market makers keep lifting the price up to find sellers who are willing to sell.
In my experience that’s a good sign. We’re bullish on pot and we have it across a ton of our services. Did you end up putting on that trade for the pot company?
Ian: We did. In Rebound Profit Trader we have a pot trade. We’re probably going to do another one very soon. We’re bullish on that. In Rebound Profit Trader the goal is to get stocks at the bottom and buy call options on them, which go up faster than the stock. You can make hundreds of percent in just a few days by doing that if you time it right.
Here at the bottom of the pot crash we think it’s a really good time to buy calls on these beaten down pot companies.
Paul: We were chatting before on Slack and you said we had eight 60% winners in Rebound Profit Trader? I forget the numbers.
Ian: We’ve had 10 winners in the past month.
Paul: 40%, 60%, something in that range?
Ian: Yes, a lot of them are more than 40%. Biotech has been very strong. We just closed our fourth biotech gain of more than 50% — all four have come within the past week. It’s been a good run. Biotech is looking like a good place to be too.
In our other options service — Rapid Profit Trader — we just closed a biotech gain of about 45%. We only held it for three days. You can make money really fast when you’re in the right place in the market.
Paul: They say biotech is the poor man’s lottery. It’s been true. I have traded a ton of biotech in my life because you can have incredible, fast gains. You put options on top of that and we’re talking about a 12-engine rocket that can zoom up instantly. 45% in three days is just wow.
If you’re interested in any of Ian’s services, he runs two phenomenal options services: Rebound Profit Trader and Rapid Profit Trader. They have slightly different strategies but they have a common goal to make you money really fast. Check into the description below.
A little market update. What are we seeing?
Ian: We’re recording this Monday. Today the market is making all-time highs. I saw the ETF we track for biotech — XBI — is up 4% today. Biotech is still moving higher. S&P 500 is making all-time highs. The Russell 2000, which is the small- and mid-cap stocks is breaking out. It’s at a 52-week high as well.
It’s looking really good right now. It’s looking really good to close the year out.
Paul: Remember, the way we look at the world 52-week highs are important because it shows confidence, it shows people are pushing money in and they’re willing to pay higher prices for it.
If you like the content you are seeing here on the Iancast, subscribe to the channel, give this video a thumbs up, share it with your friends and comment below on what you’ve been experiencing during this bull market. You can also follow me on Twitter @MampillyGuru.
What’s your Twitter, Ian?
Ian: It’s @IanDyerGuru. Give me a follow.
Paul: That’s what we have for this Iancast for today. Ian, we’ll have another one next week.
Ian: Yeah. See everyone next week. Have a great weekend and hope you had a good Thanksgiving.
Paul: Same here. This is Paul saying bye.
Regards,
Ian Dyer
Editor, Rapid Profit Trader
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Mining Royalty and Streaming Companies: Follow the New Smart Money
Story Highlights
- After the bear market in metals in 2016, Wall Street ignored the mining sector.
- But there’s a new kind of investment filling the void.
- Anthony Planas shares one way you can tap into steady income for decades to come.
Big money managers are seeking short-term gains.
Investors crave immediate satisfaction. If money managers can’t deliver, investors will take their cash somewhere else.
The mining sector is feeling the effects of this. Following the bear market in metals that ended in 2016, Wall Street’s money has ignored the sector.
At the Prospectors & Developers Association of Canada (PDAC) convention last March, a panel of investment bankers shared their views of the mining sector.
One banker offered a startling figure. Mining companies sourced 80% of their funding from public equity a decade ago.
Today, they get just 15% from public markets. This gives investors like us the opportunity to invest in a new breed of smart money in the mining space.
Generational Wealth: A New Kind of Investment
Royalty and streaming companies are filling the void left by other investors. They provide cash upfront in exchange for a royalty or a stream on a mine.
A royalty is a simple transaction. The royalty holder gets regular checks based on a percent of the production.
A stream earns the holder the right to buy a percentage of a given metal at a significant discount. These discounts can be in excess of 80%!
Royalty and streamers have to be the smart money because they don’t get paid until the mine reaches production.
A loan needs to be paid back regardless of the outcome. An equity stake can easily be sold off. But royalties and streams only pay out with long-term success.
For investors, this offers the opportunity for generational wealth.
Deals signed today could yield a steady income stream from these companies for decades to come.
At the PDAC, royalty and streamers couldn’t be happier. With such little money flowing into the space, they can secure deals on the very best projects.
Consider the US Global GO Gold and Precious Metal Miners exchange-traded fund (NYSE: GOAU).
This exchange-traded fund (ETF) will give you broad exposure to major companies such as Wheaton Precious Metals Corp., Sandstorm Gold Ltd. and Silvercorp Metals Inc. — to name a few.
See, nearly a third of the ETF’s holdings are royalty and streaming companies. The rest are gold miners that provide more immediate leverage to the price of gold.
This fund is up roughly 20% since I first recommended it back in March. That beats out gold’s return of 12.5% since then.
Stay tuned for coming updates on this sector.
Now, I don’t just follow the mining market — I also keep a close eye on marijuana stocks and trends.
If you missed this week’s marijuana market update, you can catch it in the video below.
Good investing,
Anthony Planas
Internal Analyst, Banyan Hill Publishing
P.S. Check out my YouTube channel and hit the subscribe button. That way, you’ll stay up to speed on the latest marijuana market news.
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пятница, 29 ноября 2019 г.
TFSA Pension: 2 Top Dividend Stocks for Reliable Tax-Free Income
Canadian retirees are searching for ways to boost the returns they get on their savings without being bumped into a higher tax bracket or putting their OAS payments at risk of a clawback.
One strategy involves using the Tax-Free Savings Account (TFSA) to hold dividend stocks. The distributions paid by many of Canada’s top companies provide a better yield than fixed-income alternatives, and the best stocks raise the payouts annually.
Let’s take a look at two dividend stocks that might be interesting picks right now for an income-focused TFSA.
TC Energy
TC Energy is a giant in the North American energy infrastructure sector with pipelines, storage facilities, and power generation sites located in Canada, the United States, and Mexico.
In total, the company has $100 billion in assets that primarily consist of regulated businesses. This means the revenue stream and cash flow available for payouts to shareholders should be predictable and reliable.
TC Energy is currently working on $30 billion in development projects that are expected to support ongoing dividend hikes of 8-10% per year through 2021. Management says the company will not issue new stock to help finance the capital plan. This is positive for income investors, as it helps ensure their holdings will not be diluted.
The company is large enough that it can find new tuck-in projects across the asset base and has the financial clout to make strategic acquisitions to drive long-term growth. TC Energy’s current market capitalization is above $60 billion.
Investors who buy the stock today can pick up a 4.4% yield with attractive dividend growth on the horizon.
CIBC
Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM) relies on the Canadian operations for the bulk of its revenue and profits, with a heavy focus on residential housing loans. This has been a point of concern for the market, and a recession in Canada would likely hit CIBC harder than its larger peers.
That said, management has done a good job in the past two years to diversify the revenue stream through more than US$5 billion in acquisitions south of the border. The new businesses provide a good platform for ongoing growth in the United States. CIBC has indicated it would consider additional purchases with an eye on wealth management.
The Canadian economy remains in good shape and the rebound in the housing market over the past few months should start to show up in the results in fiscal 2020. CIBC continues to make good money and has a strong track record of raising the dividend.
The stock appears cheap right now at just 10 times trailing 12-month earnings. Investors who buy today can pick up a yield of 5% while they wait for the market to give CIBC a better multiple.
The bottom line
TC Energy and CIBC are top-quality income stocks that pay attractive and growing dividends. If you only buy one, I would probably make CIBC the first pick right now. The stock appears oversold and offers a very attractive yield.
Diversification is always recommended, and the TSX Index is home to many top dividend stocks that provide reliable distributions for TFSA income portfolio.
5 TSX Stocks for Building Wealth After 50
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So if you’re looking to get your finances on track and you’re in or near retirement – we’ve got you covered!
You’re invited. Simply click the link below to discover all 5 shares we’re expressly recommending for INVESTORS 50 and OVER. To scoop up your FREE copy, simply click the link below right now. But you will want to hurry – this free report is available for a brief time only.
Fool contributor Andrew Walker has no position in any stock mentioned.
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RRSP Investors: Should You Buy Suncor Energy (TSX:SU) or Nutrien (TSX:NTR) Stock in 2020?
Canadians are starting to plan their Registered Retirement Savings Plan (RRSP) investments for the coming year.
The RRSP has been around for a long time and remains an important tool for investors who are setting cash aside to fund expenses in the golden years. The contributions can be used to reduce taxable income, which is helpful for people who find themselves in the higher tax brackets.
Tax is paid when the funds are withdrawn, but the investments can grow tax-free until that point. Ideally, you will pull the money out when you are in a lower marginal tax bracket than when the initial investment was made.
The best stocks to buy tend to be market leaders with strong balance sheets. When possible, it is preferable to add them to the portfolio when they are out of favour with the market.
Let’s take a look at Suncor Energy (TSX:SU)(NYSE:SU) and Nutrien (TSX:NTR)(NYSE:NTR) to see if one deserves to be on your RRSP buy list for 2020.
Suncor
Suncor is a giant in the Canadian energy sector with a market capitalization of $64 billion. The company has a strong balance sheet and is able to take advantage of its size to drive growth through strategic acquisitions and organic developments.
Weak oil prices can hurt margins on the production assets, and Suncor is best known for its oil sands operations. It also produces offshore oil. The downturn that began in 2014 is now in its fifth year, and while oil prices have gone through some ups and downs along the way, they still remain under pressure.
Strong companies can benefit from pullbacks, and Suncor used the rout to add new resources at attractive prices. It was also able to maintain construction on key projects. The completion of Fort Hills and Hebron brought important new production streams and helped Suncor increase output in Q3 2019 compared to the same period last year.
The company’s refining and retail business lines provide a nice hedge against lower oil prices and are a big reason Suncor’s stock tends to hold up better than the pure-play producers when oil prices slide.
Suncor raised the quarterly dividend from $0.36 to $0.42 per share in 2019. It was the 17th straight annual increase. Investors who buy the stock today can pick up a yield of 4%.
Suncor trades at $42 compared to the 2018 high around $55, so there is strong upside potential on the next oil recovery.
Nutrien
Nutrien is a world leader in the supply of potash, nitrogen, and phosphate. These products are used by farmers around the globe to improve crop yields. Urban expansion is reducing the amount of arable land while population growth is boosting demand for food. The trend is expected to continue for decades, and Nutrien is well positioned to benefit.
Commodity sectors go through cycles and 2019 has been a rough year for Nutrien. The company has reduced production to adjust to lower sales as a result of an unusually wet spring in the United States and a dry monsoon season in India. Trade disputes and a recent rail strike have also impacted the company.
Management expects 2020 to be better. In the meantime, investors can pick up the stock for $63 compared to $73 earlier this year. The current dividend offers a 3.8% yield.
Is one more attractive?
Suncor and Nutrien should both be solid buy-and-hold picks for a self-directed RRSP. If you only buy one, I would probably make Nutrien the first choice today.
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BRAND NEW! For a limited time, The Motley Fool Canada is giving away an urgent new investment report outlining our 5 favourite stocks for investors over 50.
So if you’re looking to get your finances on track and you’re in or near retirement – we’ve got you covered!
You’re invited. Simply click the link below to discover all 5 shares we’re expressly recommending for INVESTORS 50 and OVER. To scoop up your FREE copy, simply click the link below right now. But you will want to hurry – this free report is available for a brief time only.
The Motley Fool recommends Nutrien Ltd. Fool contributor Andrew Walker owns shares of Nutrien.
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IBM Files A Blockchain Patent For Fighting Package Theft By Drone
IBM has filed for a patent of a system that uses blockchain technology to prevent drone-enabled package theft.
According to a filing published by the United States Patent and Trademark Office (USPTO) on Nov. 12, IBM will track drone altitude using an Internet of Things (IoT) altimeter, while continuously uploading that data to a blockchain secure platform.
Drones might be a thief’s perfect tool
It might become ordinary for drones to be used for stealing packages in the future. The idea is that packages will be outfitted with an altitude sensor that is set to trigger an alarm if a significant altitude change is measured outside of the preset criteria. Once the alarm is triggered, the GPS-enabled IoT device will transmit its exact location data to a tracking module. It’s like giving your Amazon packages a way to call SOS when something goes wrong en route to your house.
IBM’s patent describes unattended delivery of packages that can leave items vulnerable to theft and other destructive behaviors after the package is delivered and before it is received. The patent goes on:
“The confluence of the increase in drone use and the increase in online shopping provides a situation in which a drone may be used with nefarious intent to anonymously take a package that is left on a doorstep after delivery.”
Blockchain patent to tackle drone privacy and security concerns
IBM filed a related patent in September for a system that would use blockchain technology to tackle privacy and security concerns regarding unmanned aerial vehicles, more commonly known as drones. The filing suggested that blockchain can provide effective techniques for managing data related to drones, particularly when a security risk level is considered to be relatively high.
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Tesla’s Road Map to Becoming a $4,000 Stock – Tesla Stock Price to Soar
Investor Insights:
- Tesla’s stock price dropped 40% this year before doubling to a recent high of $360.
- CEO Elon Musk claims there will be 1 million Tesla robotaxis on the road next year.
- Some bullish Wall Street analysts have a $4,000 price target. Here’s what I think…
Update: Last week, I stayed up way past my 9 p.m. bedtime to watch Tesla CEO Elon Musk reveal the new Tesla pickup truck.
The Cybertruck looks like a Hummer and a DeLorean had a baby. The angles on the car resemble 1990s video games with bad graphics.
The Cybertruck’s body is “literally bulletproof,” as Musk proclaimed. It’s made from the same newly developed stainless steel alloy that’s used for SpaceX rockets.
An associate with a sledgehammer whacked the driver’s door to punctuate Musk’s point. But the test of the Cybertruck’s supposedly unbreakable windows didn’t go so well.
Musk’s associate lobbed a metal ball, which cracked the glass. Musk responded with a few obscenities and: “Well, there’s room for improvement.”
For a minute, I thought I was watching Saturday Night Live. But then I remembered it was only Thursday night.
As Musk continued outlining the (impressive) specs of the Cybertruck, his cheeks were an embarrassed shade of red.
The media focused on the broken glass, but they missed the point.
The Cybertruck is here. And its headlights are focused on the truck market, which made up 17% of all U.S. auto sales last year.
Additionally, Tesla has taken over 200,000 orders for the Cybertruck even though it won’t hit the roads for another two years.
And this all falls in line with something I said midyear about the company…
In fact, since Tesla is back in the news, let’s revisit that article I wrote in June about Tesla’s future.
In it, I explain the bull and the bear cases for Tesla … and what I think is your best bet.
Keep reading below to learn more.
Regards,
P.S. I also took a moment to update the numbers in the below article so you have the most up-to-date information.
Morgan Stanley’s Bear Case
Tesla’s a battleground stock.
Its stock price dropped 40% this year before doubling to a recent high of $360.
The bears think the company could implode into bankruptcy, while some bullish Wall Street analysts have a $4,000 price target.
Analysts at Morgan Stanley worry that demand for Tesla’s electric vehicles (EVs) has reached a plateau.
The main problem, in Morgan Stanley’s eyes, is that “Tesla may have oversaturated the retail market for [electric sedans] outside of China.”
Additionally, the analysts are concerned that Tesla’s kicking off a “hardcore cost-cutting plan,” in the words of Tesla CEO Elon Musk.
Morgan Stanley fears Tesla has grown too big relative to near-term demand. There are signs that things are awry inside the company:
- Key executives are leaving.
- Dealerships are discounting prices.
- Extraordinary cost-cutting efforts.
These aren’t typical behaviors of a healthy company.
After a recent equity and convertible debt raise, Tesla will likely end the year with $14.6 billion in debt, compared to a current market cap of $60 billion.
The share price holds the key to Tesla’s future.
A lower share price could create a downward spiral, as employee morale sinks and executives leave for greener pastures. And both customers and suppliers would worry whether or not the company will be around in the future.
Would you purchase a $75,000 Model S if you thought there was a chance the car company was going the way of the DeLorean?
For the bears, that’s the most important question.
The Bullish Case for Tesla’s Stock Price
The best thing the bulls have going for them is that the bears are all over this stock.
Tesla short interest has spiked in the past year, as the bears are betting on Armageddon.
There are 31.78 million shares sold short, accounting for 23.79% of the float. That’s down from 43.63 million shares sold short for 32.65% of the float just a few months ago.
These high short numbers mean any good news will likely cause a sharp move higher as shorts rush for the exits at the same time.
The bull thesis for Tesla is that the price of battery pack systems is on a declining cost curve. That will eventually make them much cheaper than internal combustion engines, paving the way for a world of EVs.
This thesis assumes that the price of EVs follows a little-known function called Wright’s law. It was named for Theodore Wright (no relation to Wilbur and Orville Wright) after he discovered a consistent cost decline in airplane manufacturing for every doubling of production in the 1920s.
Wright found that the cost to produce the 4,000th airplane was 15% cheaper than the 2,000th plane, which was 15% less than the 1,000th plane.
In 2018, global EV sales totaled 1.45 million. Tesla’s market share was 17%.
Based on Wright’s law, and accounting for increased demand at lower prices, global EV sales could be 20 times higher in the next four years.
If Tesla holds its current market share and EV production takes off, it’ll sell 3 million cars in 2023.
Given gross margins of 25% and an average auto industry multiple of eight times sales, this would result in a stock valued between $500 and $1,000.
However, some analysts are even more bullish.
Musk’s Vision for Tesla
Ark Investment Research has a $4,000 price target on the stock. And it claims it can go even higher if the company’s able to launch a fully autonomous taxi network, charging passengers by the mile and taking a platform fee.
Musk claims this is going to happen. At Tesla’s annual shareholder meeting on Tuesday, he reiterated his claim that there would be 1 million robotaxis on the road as of next year.
He’s not referring to new vehicles. Musk is saying that software upgrades on existing vehicles will make them fully autonomous.
If you own a Tesla, you’d be able to rent your vehicle to the robotaxi platform and make money from your car when you aren’t driving it.
By the end of 2019, Tesla plans to deliver full autonomy, although you’ll still have to supervise the driving.
By 2020, the goal’s to eliminate the need for supervision.
And then sometime after that, pending future regulatory legislation, Teslas will be driving around without anyone on board.
Don’t Bet Against Elon Musk
So what does this all mean for you?
Well, Musk is known for making outlandish claims that he often retracts or fails to back up. On the other hand, outside of his work as Tesla’s CEO, he also builds rocket ships that land themselves at SpaceX.
That makes it difficult to bet against the guy … although there might be a few stumbles and broken windows along the way.
Regards,
Editor, Automatic Fortunes
P.S. I’ve discovered the master technology behind one of the biggest tech trends we’ve seen so far. It’s bigger than artificial intelligence, 5G and the Internet of Things … combined. Even elite investors have personally invested a massive $10 billion in this master technology. And now, you can too. Click here for more details.
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The Odds Are in Your Favor Today!
The Safety Dance
We can shop where we want to, a deal that they will never find.
And we can act like we come from out of this world, leave the real one far behind.
And we can shop.
OK, so those may or may not be the real lyrics … but it doesn’t matter, because today is Black Friday! The biggest celebration of capitalism on the planet! (Singles Day, you stay out of this.)
Great Stuff is on hiatus today. A big “thank you!” to Banyan Hill for giving us a day to recoup after gorging ourselves on tryptophan-filled turkey yesterday.
Still, I’m warm at home, hoping you made it through this morning’s Black Friday carnage intact. It was bedlam out there. Dogs and cats shopping together — mass hysteria!
Or so I would assume. I never go out for Black Friday. I’m more of a Cyber Monday kinda guy. I like people, but I hate gatherings. Ironic, isn’t it?
But I shouldn’t say I never go out for Black Friday. There was that one time about 10 years ago when I waited in line for hours at a Best Buy to get a laptop and a 55-inch TV. Both were sold out by the time I got inside the store.
Lesson No. 1 in Black Friday shopping: Get there early. No, earlier than that. No, even earlier. Listen, just get there the day before and you’ll be good.
Lesson No. 2 in Black Friday shopping: Don’t buy anything you didn’t go in for. That’s how they get you.
This is why I shop at home now. Both to get exactly what I want and to avoid the temptation of buying that bright red George Foreman air fryer with bottle opener and Wi-Fi connectivity. I mean, I can drink beer, make French fries and surf the net, all while standing around waiting in the kitchen? Who wouldn’t love that?
(My God, he’s rambling again!)
Yes, well … let’s get to the point, shall we?
If you’re like me (and I really hope that for your sake, you’re not) and you missed out on getting that ultra discounted laptop today … boy, do I have a deal for you!
Today, I’m giving one away free!
(Wait, free? What’s the catch?)
OK, you got me. The laptop is free … with a subscription to Chad Shoop’s Pure Income service.
No, don’t close this email just yet. Chad Shoop is a Banyan Hill expert for a reason.
For the past five years, a select group of Banyan Hill readers have used his 1-Minute Windfall strategy with surprising, and profitable, results.
This deceptively simple strategy gives individual investors the chance to collect consistent cash payouts — instantly.
No, this isn’t hype. I hate hype.
Look, in just one year, the 1-Minute Windfall strategy could have let you collect 27 unique cash payments, including payments of $4,100 on June 11, $1,300 on June 18, $4,800 on December 3 … et cetera, et cetera.
The list goes on.
Now, these results represent larger-than-normal positions. If you’re an average investor taking smaller positions, you would have collected less.
But there’s clear potential here … and a free laptop! (You didn’t forget about the laptop, did you?)
The thing is, like all Black Friday deals, this one won’t last forever. I know, I know … I hate pressure sales too. But we all must capitulate and appease the Black Friday gods … even Great Stuff.
There aren’t many of these laptops left, and once they’re gone, so too is your chance to get in on 1-Minute Windfall payouts with this special offer.
So, what are you waiting for?
Click here now for the complete details on 1-Minute Windfalls … and to claim your free laptop!
Until next time, good trading!
Regards,
Joseph Hargett
Great Stuff Managing Editor, Banyan Hill Publishing
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Why Canada Tech Stock Open Text (TSX:OTEX) Is the Perfect TFSA Buy!
Acquisitions can be a stock price booster or a drag on shareholder value. The final outcome purchases have depends upon the financing method and the negotiated price.
When shareholders suspect that an acquisition is too costly or requires high leverage, the market value of the stock may decrease. Likewise, if investors believe that the company paid a fair price and can afford to pay the purchase price without taking on too much debt, the cost of shares may increase.
Financing method and price matters because the higher principal and interest payments will dig into shareholder returns. Investors will either project lower or higher ROI (return on investment) going to shareholders depending on these two crucial variables affecting the distribution of company returns between debtholders and shareholders.
Open Text is a solid example of a successful acquisition
In November, a fantastic Canadian technology firm, Open Text (TSX:OTEX)(NASDAQ:OTEX), announced the purchase of Carbonite, a U.S. cybersecurity firm based in Boston, Massachusetts. Open Text will need to temporarily increase its debt to finance the negotiated price of US$1.42 billion.
Shareholders don’t seem too concerned about the temporary increase in debt; in the two weeks since first reporting the acquisition plans, Open Text’s stock price has appreciated by about 4%.
Carbonite is profitable and in a high-margin industry. It sells cloud and endpoint security software, bringing in US$405 million in annual revenue per year, or about 30% of Open Text’s purchase price. In effect, Open Text will pay about 3.5 years of Carbonite’s yearly income in the transaction.
It isn’t uncommon for companies to report the sales price as a multiple of the current annual revenue. Ideally, the premium attached to the deal should represent the net present value of the transaction plus the cost savings and revenue benefits arising from improved economies of scale and scope from the merger.
What’s great about the Carbonite deal
Individual professionals and small- to medium-sized businesses comprise the majority of Carbonite’s current sales pipeline. A multitude of smaller contracts carries the same benefits as diversification. A loss in revenue from many smaller business relationships impacts businesses less than would a single larger deal.
Open Text takes a different approach by focusing on building its enterprise pipeline. Larger contracts are no doubt worth more, which is why Open Text boasts a $58.49 stock price. The addition of Carbonite will expand upon Open Text’s consumer base to key strategic markets.
The strategic market expansion should add to shareholder value. What’s better is Carbonite’s technology complements Open Text’s current artificial intelligence services and products, contributing to more significant economies of scope. The overlap in required skills to create and maintain the products should enhance efficiency.
Past Open Text acquisitions mostly successful
Mergers and acquisitions pose many challenges for corporations. It is not a small task to integrate two companies into one unit. The process of realigning goals between new management and transitioning employees is even more difficult since people tend to resist change.
Luckily, Carbonite is not Open Text’s first acquisition. The experience of Open Text’s leadership team to effectively leverage the organizational knowledge, skills, and technology of purchased businesses will be crucial to ensure the purchase adds optimal shareholder value.
Amazon CEO Shocks Bay Street Investors By Predicting Company “Will Go Bankrupt”
Amazon CEO Jeff Bezos recently warned investors that “Amazon will be disrupted one day” and eventually “will go bankrupt.”
What might be even more alarming is that Bezos has been dumping roughly $1 billion worth of Amazon stock every year…
But Bezos isn’t just cashing out, he’s reinvesting his money into a company utilizing a fast-emerging technology that he believes will “improve every business.”
In fact, this tech opportunity could be bigger than bigger than Amazon, Tesla, and Berkshire Hathaway combined.
Get the full scoop on this opportunity that has billionaire investors like Bezos convinced – before it’s too late…
Fool contributor Debra Ray has no position in any of the stocks mentioned. The Motley Fool recommends Open Text and OPEN TEXT CORP.
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