Top Picks From Changewave.com
Apollo Investment (AINV)One area that continues to steal the headlines is private equity lending by hedge funds and high-profile private equity pools of capital. The move to go private is sweeping many industries, as many companies simply find it easier to operate more efficiently being private as opposed to being beholden to the rigors of the Sarbanes-Oxley reporting requirements for publicly traded companies. As such, Business Development Companies, or BDCs, like Apollo Investment (NasdaqGS:AINV - News) that invest in mid-size private growth companies are poised to continue their winning ways in 2007.
The stock pays a dividend yield of 9% and is forecasted to grow top-line revenues by 33% in the current year.
Diana Shipping (DSX)Everyone wants a "Chindia" (China plus India) play to leverage on the whole emerging market theme surrounding the Pan-Asian continent. Here I like Diana Shipping (NYSE:DSX - News), a dry-bulk cargo operator throwing off a dividend yield of 10%.
Two thirds of the world's commerce travels by seaborne freight, 60% of that freight is oil and gas, the other 40% dry bulk. Demand from China and India for coal, iron ore, cement, grain, fertilizer, sugar and other commodities are driving strong imports of these raw materials, while finished goods flow out to vast consumer end markets.
Covered Call Fund (BEP)I want a broad market component to my model portfolio, one that pays well yet mimics the broader averages. In this case, I like the S&P 500 Covered Call Fund (NYSE:BEP - News), a closed-end option income fund kicking out a 10.7% dividend yield. The fund returned 29% for us last year against the Standard & Poor's 500 Index (CDNX:SPX.V - News) return of 14%, and I'm looking for the BEP to again outperform the benchmark equity index.
This fund pays dividends only twice a year, which helps to keep down expenses, but by paying a big dividend in December, BEP shares have pulled back about 5% off their December highs, affording investors an attractive entry point during the current market's consolidation phase.
Deerfield Triarc Capital (DFR)Another sector of the market that I expect to perform well is the area of specialty finance, where companies are set up as mortgage REITs, but yet aren't really in the lending business. Companies like Deerfield Triarc Capital (NYSE:DFR - News) targets the following asset classes for investments: real estate-related securities, asset-backed securities, bank loans and related derivatives, and leveraged finance instruments.
Specialty REITs like DFR don't process loans like traditional mortgage REITs. They operate more like an investor, trading in structured notes and loans, while also investing in private commercial real estate deals. In fact, DFR can invest up to 25% of its capital into private deals it finds suitable, which adds a little venture sizzle to an otherwise steady-Eddie business.
As a REIT, the company is required to pay out 90% of its income in the form of dividends and that puts the current yield at 10.28%. What's not to love?
Advent/Claymore Enhanced Growth & Income Fund (LCM)Convertible securities should also outperform most other asset classes in 2007. This class of security has historically done particularly well after the Federal Reserve is done tightening rates. Two things happen when Fed policy goes to neutral as is its current stance; income investors try to lock in yield, and the stock market heads higher on the basis of the Fed pausing. In both cases, convertible stocks and convertible bonds rally smartly. I like the Advent/Claymore Enhanced Growth & Income Fund (NYSE:LCM - News), which is trading at a slight discount to its NAV while paying shareholders a dividend yield of 8.2%.
The stock pays a dividend yield of 9% and is forecasted to grow top-line revenues by 33% in the current year.
Diana Shipping (DSX)Everyone wants a "Chindia" (China plus India) play to leverage on the whole emerging market theme surrounding the Pan-Asian continent. Here I like Diana Shipping (NYSE:DSX - News), a dry-bulk cargo operator throwing off a dividend yield of 10%.
Two thirds of the world's commerce travels by seaborne freight, 60% of that freight is oil and gas, the other 40% dry bulk. Demand from China and India for coal, iron ore, cement, grain, fertilizer, sugar and other commodities are driving strong imports of these raw materials, while finished goods flow out to vast consumer end markets.
Covered Call Fund (BEP)I want a broad market component to my model portfolio, one that pays well yet mimics the broader averages. In this case, I like the S&P 500 Covered Call Fund (NYSE:BEP - News), a closed-end option income fund kicking out a 10.7% dividend yield. The fund returned 29% for us last year against the Standard & Poor's 500 Index (CDNX:SPX.V - News) return of 14%, and I'm looking for the BEP to again outperform the benchmark equity index.
This fund pays dividends only twice a year, which helps to keep down expenses, but by paying a big dividend in December, BEP shares have pulled back about 5% off their December highs, affording investors an attractive entry point during the current market's consolidation phase.
Deerfield Triarc Capital (DFR)Another sector of the market that I expect to perform well is the area of specialty finance, where companies are set up as mortgage REITs, but yet aren't really in the lending business. Companies like Deerfield Triarc Capital (NYSE:DFR - News) targets the following asset classes for investments: real estate-related securities, asset-backed securities, bank loans and related derivatives, and leveraged finance instruments.
Specialty REITs like DFR don't process loans like traditional mortgage REITs. They operate more like an investor, trading in structured notes and loans, while also investing in private commercial real estate deals. In fact, DFR can invest up to 25% of its capital into private deals it finds suitable, which adds a little venture sizzle to an otherwise steady-Eddie business.
As a REIT, the company is required to pay out 90% of its income in the form of dividends and that puts the current yield at 10.28%. What's not to love?
Advent/Claymore Enhanced Growth & Income Fund (LCM)Convertible securities should also outperform most other asset classes in 2007. This class of security has historically done particularly well after the Federal Reserve is done tightening rates. Two things happen when Fed policy goes to neutral as is its current stance; income investors try to lock in yield, and the stock market heads higher on the basis of the Fed pausing. In both cases, convertible stocks and convertible bonds rally smartly. I like the Advent/Claymore Enhanced Growth & Income Fund (NYSE:LCM - News), which is trading at a slight discount to its NAV while paying shareholders a dividend yield of 8.2%.
posted by Stock Administrator @ 7:11 PM
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