Download the spreadsheet here:Â 2/1/08 52 Week Highs ListÂ
There are a surprising number of stocks moving higher from sound bases within Friday’s list. However, I would like to see a good pullback before getting involved. Assuming we have seen the worst of the sell-off, what are the chances that one or more of the new-leadership names are below?
This list is in order of greatest average volume.
[[HCBK]] [[NLY]] [[TJX]] [[ACI]] [[OI]] [[MFA]] [[RTN]] [[ANR]] [[MEE]] [[ICO]] [[APOL]] [[TNE]] [[ELN]] [[WLT]] [[ACV]] [[SID]] [[DAR]] [[FDG]] [[INCY]] [[CHU]] [[CZZ]] [[FLO]] [[CALM]] [[TUP]] [[MBRK]] [[CLF]] [[IBKR]] [[FCL]] [[CXG]] [[PHRM]] [[KMP]] [[RATE]] [[MC]] [[WMS]] [[CHTT]] [[AUXL]] [[CLHB]] [[HCSG]] [[BOBJ]] [[SMA]]
You might want to think about high dividend paying stocks becoming new leaders. And by high dividend yielding, I don’t mean retardedly high yields because investors have pounded the shares due to perceived financial distress. I mean well capitalized REITs, utilities, select banks, Canadian energy trusts, etc. that pay a healthy dividend.
Fly mentioned CMO, but NLY also invests in agency mortgage paper and it is ripping. RWT doesn’t invest in agency paper, but it is probably one of the best managed mortgage REITs around. Even after almost doubling off the bottom last fall, it yields over 7%, and management has already promised another special dividend at year end (for like the fifth year in a row).
The reason I think the shift into high yielding stocks is going to accelerate is because there is $3.3 trillion sitting in money market funds that Bernanke just fucked. That $3.3 trillion is now earning real (after inflation), after-tax, rates of return that are break even or actually negative depending on what measure of inflation you use. I suspect once the volatility calms down, some portion of that $3.3 trillion will be searching for a new home in high dividend yielding common and preferred stocks and corporate bond funds.
Pud, I was having the same thoughts, but what you said fleshed it out very well for me. Got any other REITs or high-yielding picks?
I’m also wondering if this isn’t why the Banks have been rallying so hard.
The Canadian energy income trust names are among the highest yielding and safest. But there’s some potential tax shit going on up there that will impact them. I haven’t taken the time to try to understand all the tax issues. Some names there are PGH, PVX, and PWE.
Stateside, master limited partnerships are also high yielders. KMP, TPP, MMP, MWE, and BWP are a few names there.
On the mortgage REITS, I’d stick only with the agencies like CMO and NLY. I suggested RWT only because that is one I’ve done a considerable amount of work on and feel I understand it. TMA is also a mortgage REIT that does phenomenal credit work, but their inability to access the short term funding markets nearly bankrupted them this summer. RWT doesn’t have that risk. It got wrongly penalized, but I didn’t understand the name then, so I didn’t take advantage of it.
As I mentioned in a post yesterday or Friday, I absolutely do believe that this phenomenon explains in part what is happening with the banks. I also think managers have been underweight the banks for months, and rightly or wrongly, after the massive FED cuts they want to get back to at least market weight. In fact, I was watching Bloomberg TV today, and I heard one manager say he wants to be overweight financials by the end of the first quarter (which means he’s probably got his whole position on and he’s just trying to talk them higher).