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Recent Winners: Calling Up +50% Returns |
Published:
June 20,
2007
In the August 2006 issue of
High-Yield Investing, Editor Carla Pasternak profiled a
thinly-traded micro-cap company with a humble pedigree and very
little in the way of analyst coverage. However, Carla put her
analytical magnifying glass to the firm and saw a few things
that most on Wall Street had overlooked -- so she decided to
make the stock her "High-Yield Security of the Month."
The company, Consolidated Communications (Nasdaq: CNSL), was a small local phone company known to few
outside its core base of operations in the Chicago suburbs.
However, the firm had recently digested a major acquisition that
tripled its size and provided a solid foothold in the
fast-growing neighborhoods around Houston, Texas.
At the time, Carla was attracted to the firm's rich 9.6%
dividend yield, which was largely supported by the firm's core
phone business. While local phone service is not exactly a
booming enterprise these days, it still throws off steady cash
flows. Better still, like most other telecom providers, CNSL was
also successfully penetrating its existing customer base with
premium services like digital video and high-speed DSL Internet.
In fact, the number of broadband Internet subscribers had spiked
nearly +60% in the two years leading up to Carla's
recommendation. Yet, less than one-fourth of the firm's existing
customers had signed up for high-speed Internet at that point --
leaving plenty of untapped growth potential.
And given the light population density of the firm's rural
markets, Consolidated faced little threat of outside competition
-- few other providers would find the relatively scattered
customer population worth the hassle or expense of building out
a competing network and fighting an entrenched leader. In other
words, Consolidated's market share, cash flows, and dividend
payments were all relatively safe -- a sound recipe for an
income-producing stock.
Since that time, Carla's readers have been well rewarded. In
addition to the generous dividend distributions, the shares have
climbed from $16.18 to Friday's close of $22.51 -- for a hefty
total return of +50%.
In this month's issue of High-Yield Investing, Carla takes a
different tact, selecting a top-tier closed-end fund as her June
2007 "High-Yield Security of the Month." The fund holds a
hand-picked basket of stocks based in a country whose economy is
growing at more than double the pace of the U.S. -- yet whose
market is still sharply undervalued. This month's pick has
delivered impressive returns of +43% annually over the past
three years, outpacing 94% of its peer group. Best of all, this
powerful run is likely to continue in the years ahead -- and
Carla explains why.
To learn more about High-Yield Investing, including the name of
Carla's latest "High-Yield Security of the Month", please
visit this link.
Good investing!
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Nathan Slaughter
Editor
Half-Priced Stocks, The ETF Authority
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Income Security
of the Month
Our "Income Security of the Month" for July 2008 invests in
a fast-growing overseas market that doesn't get much exposure in the
mainstream financial press. And although it typically makes enormous
annual dividend payments -- it has paid an average dividend of 24.9%
per year over the past five years -- this fund is perhaps most
appealing for its total return potential. Specifically, the fund has
delivered total returns of +263.9% since 2003, and
it ranks in the top 10% of its category over the past decade.
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Ten Stocks for 2008. |
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