There are three components to our research. The most important is the stock recommendation, which we think should serve as the basis for building a world class investment porfolio for the long haul. The other two are specific strategies that are designed to boost current and/or recurring income, while also reducing risk.
Stock Recommendation - Each month, we recommend one specific stock for purchase. We issue a comprehensive, roughly 20 page report that introduces the company, reviews its financial position and business model, and assesses its short- and long-term prospects. Industry fundamentals are reviewed, as are the company's significant rivals. Companies likely to be recommended will typically have very strong finances, be profitable even when the domestic economy isn't doing well, and have a significant international presence since emerging economies have superior growth potential. We will also look for enterprises that both provide a decent dividend and generate cash flow that's sufficient to support the dividend, growth initiatives, and/or stock repurchases. After reading one of our reports, we want the subscriber to know as much about the company as most analysts on Wall Street. This will support a better understanding of company developments and alleviate anxiety over day to day ups and downs in the stock price. A sample report on aerospace and defense concern Boeing is accessible by clicking on the pdf icon below.
Sample Stock Report
03/01/2010 - Boeing Company
Boeing.pdf (176Kb)
Event Driven Special Situation - Each month, we present a special situation that we be believe offers the well-informed investor a comparative advantage. This could include an announced corporate takeover, like the forthcoming acquisition of Alcon by Novartis, a forthcoming review of a new drug application by the Food and Drug Administration, and the rendering of a court ruling. As much as possible, we will outline strategies that offer arbitrage, or very low risk, profit opportunities, using stocks, options, or a combination of both. A sample report on the Alcon deal is accessible by clicking on the pdf icon below. Also below are reports on ways to invest in a forthcoming FDA decision on Human Genome Sciences and Sanofi-Aventis' hostile pursuit of Genzyme.
Sample Report
01/24/2011 - Human Genome Sciences Faces the FDA Shortly
SS012111.pdf (193Kb)01/18/2011 - The Pending Novartis/Alcon Merger
SS061710.pdf (119Kb)12/23/2010 - The Battle for Genzyme
SS111910.pdf (115Kb)
Covered Call Portfolio - There aren't many option strategies that work well for retail investors. Trading options can be exciting and addictive but, factoring in commissions and bid/ask spreads, it's a negative-sum game and most participants end up losing money. One of the few strategies that is actually worthwhile is the regular selling of calls on stocks that are already owned. We manage and maintain a Model Covered Call Portfolio. The most important component in the covered call strategy, in our view, is the underlying stock, so all of the stocks in the portfolio are carefully screened and selected. We also think that the prevailing stock market environment is nearly ideal for writing covered calls. For investors unfamiliar with options, we make every effort in this publication to provide all the information necessary to make our recommendations understandable to all subscribers.