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Exelon (EXC) Shines with a +90% Gain
Published:
January 14, 2008
As the
market has retreated in recent weeks, many investors have piled
into historically defensive sectors like healthcare, utilities
and consumer staples -- groups that tend to be somewhat
insulated from economic downturns.
Of course, this pattern is nothing new and has played out time
and again over the years. In fact, Carla Pasternak, editor of
our
High-Yield Investing newsletter, recommended these
same industries to jittery investors in her
February 2005 newsletter. And along with that general
assessment, she also pinpointed a handful of specific companies
that were poised to prosper, including electric utility
Exelon (NYSE: EXC, $84.08).
At the time, many looked at the company and saw a rather dull
power generator with limited growth prospects. However, Carla
saw something entirely different: a dependable firm with
valuable coal, nuclear and hydroelectric power plant assets that
had dished out steady dividends for over a century. The company
was also forecasting healthy earnings growth thanks to a
combination of increasing power demand, improved operating
performance at its plants, and continued cost-cutting
initiatives.
And as Carla pointed out, a stronger bottom line spelled better
total returns for shareholders, considering the company aimed to
distribute 50-60% of its profits as dividends. And since her
initial profile, Exelon has posted dramatic earnings growth and
lifted its annual dividend from $1.60 to $2.00 per share.
Meanwhile, the stock has nearly doubled since Carla's initial
recommendation, climbing from $44.10 to Friday's close of $84.08
-- a gain of more than +90%.
Yet, while defensive stocks can be great, there are also times
when it's worthwhile to go on the offensive. With that in mind,
Carla chased down even bigger game in this month's newsletter.
In fact,
January's "High-Yield Security of the Month" delivered a
whopping gain of +46% last year, on top of gains of +65% in
2006, +59% in 2005, +45% in 2004, and +72% in 2003.
Driven by robust economic expansion and a rising middle class in
its target markets, this top-tier closed-end fund has
outperformed 99% of its peers over the past decade. Better
still, the fund is also positioned to continue posting outsized
gains for years to come. It invests exclusively in one of the
world's most attractive regions -- and fueled by strong global
demand for its crude oil and industrial metals, this area is
expected to see solid economic growth according to the International Monetary
Fund (IMF).
To read Carla's in-depth profile of this proven fund, we invite
you to try a risk-free subscription to
High-Yield Investing. If you decide the newsletter
is not right for you, simply cancel your order within 30 days of
subscribing, and we will refund every cent back to you. To learn
more, please
visit
this link.
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Nathan Slaughter
StreetAuthority Staff Writer
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