Market corrections are golden for the third prong of Dividend Pro’s “triple-profit” strategy.
Recall that when you bought Hospitality Properties Trust (HPT), I also recommended that you sell the June $25.00 call options for 0.95 cents.
With the recent correction in the price of HPT, these same options are now trading for 0.20 cents. That means you are sitting on a profit of 79% since you sold them.
So today, I am recommending that you buy back your options to lock in these big gains.
In addition, I want to highlight two themes in connection with your Dividend Pro portfolio.
First, almost all of your Dividend Pro positions were up for the week — and pulled back only on yesterday’s sharp sell-off. That said, I believe that the U.S. market is extremely oversold, and that — barring an unexpected “Black Swan” event from Europe — the market will continue its recovery. That means higher prices across the board for your holdings even as you collect your juicy dividends.
Second, your two Mortgage REITs — Two Harbors Investment Corp. (TWO) and American Capital Agency Corp. (AGNC) — continue to hold up even in the face of market turmoil.
The combination of low interest rates and a recovering real estate market is providing terrific price support for Mortgage REITs. And remarkably, each of these REITs yields well over 15%.
The bottom line? U.S. Mortgage REITs are now tops in both yield and capital appreciation.
You can’t ask for much more that…
Portfolio Update
Seadrill (SDRL) was on its way back up until yesterday’s sell-off of 3.51%, and ended the week down 2.5%. With ultra-deepwater rig demand expected to increase dramatically through 2016 and soaring day rates, the fundamental case for SDRL remains strong. SDRL is a HOLD.
Hospitality Properties Trust (HPT) ended the week 2.56% lower. Buy back your June $25 call options to lock in your 79% gains. HPT is a HOLD.
Global X SuperDividend ETF (SDIV) dropped another 0.79% this past week, after selling off yesterday. You will be receiving your monthly dividend on June 12. This monthly dividend payer remains a HOLD.
Two Harbors Investment Corp. (TWO) ended the week 0.20% higher. Mortgage REITs continue to hold up well despite the uncertainty in the markets. With a dividend yield of 15.58%, TWO is a HOLD.
American Capital Agency Corp. (AGNC) rose another 0.68% as mortgage REITs continue their remarkable outperformance. Trading above its 50-day moving average, and boasting a 15.37% yield, AGNC is a BUY.
Prospect Capital Corporation (PSEC) dropped back 1.37% its first week in the Dividend Pro portfolio. The stock went ex-dividend on May 29. You can expect a dividend payment of 10.2 cents per share on June 22. Dropping just below its 50-day moving average, PSEC is now a HOLD.
Nicholas VardyNicholas Vardy has a unique background that has proven his knack for making money in different markets around the world. He was the Editor of The Global Guru, a free weekly e-newsletter, and also edited the trading services Momentum Trader Alert, which focused on making short-term profits in the hottest markets in the world, and The Alpha Algorithm, which was designed specifically to deliver big, fast triple-digit winners, month after month. He was also the editor of Smart Money Masters, a monthly service focused on longer term investments recommended by the brightest minds in the business.
Mr. Vardy has been a regular commentator on CNN International and the Fox Business Network. He has also published articles in The New Republic, The World and I, and The Baker & McKenzie Legal Review. The Global Guru/Nicholas Vardy has been cited in The Wall Street Journal, Newsweek, Fox Business News, CBS MarketWatch, Yahoo! Finance, and MSN Money Central.
Mr. Vardy graduated from Stanford with a B.A. — with honors and distinction — in both Economics and History, and he also earned an M.A in Modern European Intellectual History. After winning a Fulbright Scholarship, he earned a J.D. degree at Harvard Law School where he was an editor of the Harvard International Law Journal.
When not uncovering investment opportunities for his subscribers and investors, Mr. Vardy is a keep-fit enthusiast and an avid student of classical music.