Two More High-Yield Recos, and How to Get Them ...

Mike Larson

First things first: Our office, my home, and the homes and families of our employees largely escaped the wrath of Hurricane Irma. I’m very thankful for that.

Unfortunately, I can’t say the same about other parts of Florida, the U.S. Southeast, and the Caribbean. So, if you haven’t already contributed to the many hurricane relief efforts underway related to Irma or Harvey, please consider some of the organizations listed here and here.

As for the markets, we’ve seen them largely shrug off the impact of the hurricanes. All the major averages are either hitting all-time highs or close to doing so, and key sectors like insurance are rallying back just as I predicted.

The construction stocks and home improvement retailers I highlighted several days ago are moving higher, too. Eight out of 10 of the companies in my Top Construction & Engineering Stocks Screener have risen in the past 10 days, with returns as high as 12.1% for Mistras Group (MG, Rated “C”) and 7.8% for Granite Construction (GVA, Rated “A-”).

So where do we go from here? What can you consider buying for the NEXT round of gains?

Well, if you look back at history to see what kills bull markets dead, you inevitably find three main causes: Plummeting earnings, economic recessions, and murderous monetary policy. That was the case in the Tech Wreck in the early 2000s … the Credit Crisis in the late 2000s … the early 1990s recession fueled in part by the S&L Debacle … and the Volcker Fed-led massacre in the late 1970s and early 1980s.

But it’s a whole different environment today. None of those factors are in play right now, nor do they look to be headed our way anytime soon. The second quarter was a blockbuster one for Corporate America, with almost 80% of S&P 500 companies beating profit estimates according to Bloomberg. Analysts also expect profits to rise 4.9% from a year ago in Q3, with eight sectors showing gains versus only three showing declines, according to FactSet Research.

While we aren’t setting any land-speed records for growth, the economic data hasn’t been too shabby either. Retail sales rose 0.6% in July, the most since December. Small business confidence is hovering around 13-year highs. The ISM Manufacturing index jumped to its highest since 2011 last month. And unemployment just fell to a 16-year low of 4.3%.

That’s why I just issued two fresh recommendations in my latest issue of High Yield Investing on Thursday. I’m sure you understand why I can’t share the exact details here; It just wouldn’t be fair to my subscribers. But to give you a general idea of what I like:

One new pick is an insurance play, a company that’s going to get hit with hundreds of millions of dollars in losses related to Harvey and Irma. But it also earned hundreds of millions of dollars in profit in the most recent quarter, and it reported record net written premiums.

Our Weiss Ratings arm tracks 44 of the company’s sub-insurers, and all the major ones have plenty of capital and surplus funds to ride out those losses. Plus, as I wrote recently, buying into storm-related panics has proven highly profitable in the past.

My other new pick is a chemicals and refining giant who had some of its Texas operations curtailed by Harvey. But with 55 sites spread across 17 countries, it has the geographic diversity to ride that out as well. Plus, it’s interested in joining the M&A wave sweeping through its sector – and it pays out a sector-crushing dividend yield.

If you’re interested in getting the details on these and other picks from my letter, I’d love to have you on board. You can sign up for High Yield Investing here or by calling my staff at 877-934-7778.

Or if you’re still not ready to take that step (though I can’t see why that would be the case!) just be sure to stay focused on high-yielding, high-performing ETFs and stocks. Some of my favorite sectors include energy, defense, construction, insurance, and travel and leisure.

Until next time,

Mike

 


Mike Larson, Senior Analyst

ETF Spotlight Edition, by Mike Larson, Senior Analyst

Mike Larson is a Senior Analyst for Weiss Ratings. A graduate of Boston University, Mike Larson formerly worked at Bankrate.com and Bloomberg News, and is regularly featured on CNBC, CNN, Fox Business News and Bloomberg Television as well as many national radio programs. Due to the astonishing accuracy of his forecasts and warnings, Mike Larson is often quoted by the Washington Post, Chicago Tribune, As-sociated Press, Reuters, CNNMoney and many others.

About the Income & Dividend Analyst

In an era of high-risk exuberance, Mike Larson stands out as a leader in conservative investment strategies that outperform the market overall. Using the safety-oriented Weiss Ratings as a guide, he has a proven history of guiding investors to stocks and ETFs that provide asset protection, consistent dividends and excellent growth.

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