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For the Best Investments, Look Forward, Not Backward

Posted: 30 Aug 2019 11:13 AM PDT

5G Stock CRUSHES Earnings!!

Dear Reader,

Big news today.

Wall Street is on a buying frenzy.

An obscure $3 tech stock just crushed earnings.

Reports are saying that “earnings beat estimates on booming 5G demand.”

And the company is now set to bring in more revenue than IBM, Facebook and even Google.

Yet while those stocks trade for hundreds of dollars, this one company trades for just $3.

Perhaps that’s why Wall Street is loading up on shares.

If there is one stock to buy right now, this is very likely it.

You can access the full breakdown here.

But don’t wait.

A big project is underway that could create 50,000 new jobs in America… and add billions more to the company’s bottom line.

Discover why this is the market's No. 1 “Buy” right here.

Sincerely,

Matthew Benjamin
Editorial Director, The Oxford Club

Insider Activity: Harvest Capital Credit Corp (HCAP)

Posted: 30 Aug 2019 03:00 AM PDT

CEO & 10% owner adds to stake.

On Wednesday, August 28th, Joseph Jolson picked up 6,394 shares of Harvest Capital Credit Corp (HCAP), where he serves as director and already has an ownership stake with more than 10 percent of the shares outstanding.

The purchase came to nearly $63,000, and increased his stake in the company by 0.85 percent. Year-to-date, insiders have been buyers of shares at the company, almost exclusively by Jolson, but there has also been one buy from the company's CEO.

The last insider sales occurred in November 2018, at a price 10 percent higher than where shares trade. Harvest Capital is a business development company that provides structured credit to small businesses, either in the form of loans or equity stakes.

Action to take: Shares look like an attractive buy below $10. As a business development company, the firm is required to pay out the majority of its earnings to its shareholders, much like a REIT. So the company has a high dividend yield, north of 9 percent here.

That high yield also implies limited upside, but with shares down 11 percent over the past year, there is some room for capital gains as well going forward. With a mere $60 million market cap, this is a smaller play, so there are no options trades for speculators.

 

Unusual Options Activity: MetLife (MET)

Posted: 30 Aug 2019 03:00 AM PDT

Traders bet on rally by March.

On Thursday, over 5,000 contracts traded on March 2020 $50 call options on MetLife (MET). With a prior open interest of 224 contracts, the volume was 22 times the prior open interest, making for one of the most active options trades of the day.

With shares around $44, the bet is on a $6 upside by March, about 13.4 percent higher from here, in the next 203 days before expiration.

MetLife provides insurance, annuities, employee benefits, and runs an asset management business for individuals and companies around the world.

Action to take: Insurance companies tend to have stable, long-term growth thanks to their policy of receiving capital up front that can be reinvested while waiting to be paid out as claims. That's a fantastic business for any investor, and a 13 percent rally in shares from here by March seems easily possible from here.

Speculators should also look at the March $50 calls, which trade for around $1.00, or $100 for the full contract, and could move higher than shares on a percentage basis in the next few months.

Long-term investors may want to consider shares, given the long-term advantages insurance companies hold, as well as the company's 4 percent dividend yield at current prices. MetLife just raised its annual dividend from $1.70 to $1.76.

 

Mortgage Rates Steady Near 3.5 Percent

Posted: 30 Aug 2019 03:00 AM PDT

Lower interest rates improve home affordability.

The latest data in the mortgage market from the Freddie Mac Primary Mortgage Market show that 30-year fixed rates remain near 3.5 percent, near historic lows. The combination of a strong labor market and the Fed's first interest rate decline in 11 years are likely to keep rates near this level for some time.

Although rates crept up three basis points in the past week, mortgage rates are generally a full percentage point below rates one year ago.

Low interest rates allow homebuyers to afford a larger home for the cost of their monthly payment, or to have a lower payment on the same sized home. And mortgage activity isn't limited to new home purchases, allowing all homeowners to benefit.

Data shows a surge in refinancing to lock in low interest rates, even as pending home sales have declined in recent months, topped by a 2.5 percent drop in July.

Action to take: Homeowners should take advantage of today's low interest rates to refinance a home, if they can get their payment lower by at least 1 percentage point than their old rate. With the drop in rates in the past year of that level, this applies to most homeowners, and the savings from such a plan can run into the tens of thousands on an average home.

 

Sign of Trade War Tension Easing Fuels Market Rally

Posted: 30 Aug 2019 03:00 AM PDT

Stocks rally on hopeful trade comments.

The stock market posted strong gains on Thursday, following an announcement from a Chinese commerce ministry official who indicated that the Chinese government would not immediately respond to the latest round of tariff hikes from the United States.

The move led investors to conclude that China was looking to ease tensions, rather than escalate the trade war further, following rounds of belligerent comments from both sides in the past.

The comments led to a large move higher in global markets, with trade-sensitive sectors leading the market higher. The market's recent rally has unwound the entire market drop from trade-related issues in the past few weeks, U.S. stocks are once again back near all-time highs. While U.S. stocks are showing little gain over the past year, since the start of 2019, all three major indices are up over 10 percent.

Action to take: There has been a somewhat predictable—and tradable—pattern of harsh tones followed by walking back those harsh tones regarding trade over the past few years.

We continue to expect market volatility on trade issues until a comprehensive agreement is signed. Investors should continue to stay cautious and avoid highly speculative trades, and instead look for great companies to pick up on a pullback, as markets tend to both drop and rally back quickly on these trade-related news headlines.

 
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