“Safe Money” Names Hitting Pay Dirt! Here’s Why ...
Remember what I said a month ago? How investing in “Safe Money” stocks can pay off — not just via raw profit, but also by providing a margin of safety in a wildly overvalued market?
Well, I want to give you a concrete example today: Israel Chemicals Ltd. (ICL, Rated “B-”). I don’t mind sharing the name since my Weiss Ratings’ Safe Money Portfolio subscribers already had the chance to buy it at a much lower level back in August.
You may have never heard of ICL. That’s not your fault. All the pundits ever want to talk about on business media outlets like CNBC is tech, tech, and more tech.
Never mind the fact the latest news out of these overloved, overowned, overhyped names is just plain ridiculous. I mean, who cares that Amazon.com (AMZN, Rated “B”) just rolled out a “smart microwave”? Is saying “Alexa, make popcorn” much more of a world-changing, revolutionary advance than, I don’t know, just pressing the button that says “popcorn?” Sheesh.
But getting back to ICL, it’s exactly the kind of stock I’m still attracted to in a market that faces serious valuation concerns and bubble risk. The Tel Aviv-based chemicals and fertilizer company got crushed in 2016 and 2017 as the price of potash fertilizer tanked. Demand for its clear-brine fluids also sank along with energy prices because they’re used in deep-water energy wells.
But results have begun to turn around. Second-quarter profit surged 77% from a year earlier, topping analyst forecasts. The company also announced further progress in its debt reduction program.
Plus, ICL sports a lower forward price-to-earnings ratio than the S&P 500, and an indicated dividend yield that’s a full percentage point higher than the S&P’s 1.8%.
As for the chart, it speaks for itself. ICL broke out of a trading range that lasted almost three years several weeks ago, and now it’s threatening to take out another layer of significant resistance.
My subscribers (which you can join at a special rate by clicking here) were already sitting on open gains of almost 20% recently, and I expect there are more coming down the pike.
That doesn’t mean I won’t or don’t have the occasional dog in the model portfolio like anybody else. But it does underscore that there are a lot of gains to be had by focusing on higher-yielding, higher-rated, value-laden stocks rather than just buying the same tired old names everyone else is. It sure beats wasting your money on the latest talking microwave!
Until next time,
P.S. My colleague Jon Markman is absolutely killing it with his options trades! His readers are doubling their money each year on average. And the best part: This is an easy to follow, risk-managed strategy accessible even to novice investors. I encourage you to click this link to view Jon's presentation on this remarkable wealth-building tool.