Cleveland-Cliffs Inc. (CLF) | Daily Alert April 21
In the same way that the recent market sell-off likely helped wash out any weak holders still in Bristol-Myers stock following the merger with Celgene, it likely had a similar effect on any holders of Cleveland-Cliffs who had recently become shareholders as a result of the closing of the acquisition of AK Steel and weren’t really sure if they wanted to be part of the new company or not. And when you’re in a “sell anything I don’t love” mode, these “oddly acquired” investments sometimes are the easiest to let go of.
Either way, the good news for those of us in the stock for the long haul is that a sizable percentage of those potential sellers likely got “cleaned up” as part of the sell-off. CLF is now a strong buy under $4 and a buy under $6.
Nate Pile, Nate’s Notes, NotWallStreet.com, 707-433-7903, April 10, 2020
Phillips 66 Partners LP (PSXP) | Daily Alert April 27
Phillips 66 Partners LP engages in the ownership, operation, development, and acquisition of crude oil, refined petroleum product and natural gas liquids pipelines and terminals, and other transportation and midstream assets. It also provides terminals and storages for oil.
Phillips 66 Partners L.P. (PSXP) benefits from stabilization in oil prices and offers a rich distribution. Keep in mind that this is a master limited partnership that will send K-1 statements, and which is subject to limitations when held in individual retirement accounts.
John Dobosz, Forbes Dividend Investor, www.newsletters.forbes.com, 212-367-3388, April 3, 2020
Watsco, Inc. (WSO) | Daily Alert May 18
Watsco is an HVAC company connected to Carrier Global Corporation (CARR) by a large joint venture. WSO is the largest distributor of HVAC equipment in the U.S. and about 61% of its sales are Carrier products. WSO is mostly located in the sunbelt states where it’s about staying cool. The company also does a significant aftermarket business in parts/compressors, coils, motors, etc.
Revenues are about $5 Billion, and WSO has around 32 million shares outstanding. This is a wonderful company with an A+ balance sheet. It has just a sliver of debt, around $370 Million. WSO also sports very strong free-cash flow. With low debt and the-business the way it is, WSO has a bright future ahead of it and a very clean runway.
The Nahad family has controlled the stock for decades and the son and father make for a dynamic duo. They have large skin in the game, and a very solid track record of being good to shareholders. These two guys are focused, quiet, and they deliver the goods.
WSO also pays a nice dividend too.
In 2009 WSO/CARR started a joint-venture for the USA/Latin America and the Caribbean. Carrier helps WSO offer premium level product. This also affords WSO the opportunity to sell parts/supplies, and many other things through its Carrier partnership.
Carrier Enterprise, the joint-venture is structured similar to WSO/other tack-on acquisitions with a de-centralized management structure that has run smoothly for the last 10 years, as WSO has gobbled up partnership/rights from CARR along the way. WSO owns about 80% of the joint venture.
In April 2011, Carrier Enterprise Northeast LLC embarked on another JV to distribute Carrier products in the Northeast. This made WSO a 60% owner of this JV with Carrier owning the other 40%.
In April 2012, Carrier Enterprise Canada L.P started a 3rd JV with UTC/Canada, previously 100% owned by CARR that now has WSO controlling 60% of the JV and Carrier owning the rest.
This has been a definite win for both companies, and I think it’s a win for WSO to own control/of these Joint Ventures.
The company is in the right niche right now and HVAC costs are going to rise, as demand for cleaner/fresher indoor-air is going to be an issue for the future that will demand attention and lots of money too.
Bob Howard, Positive Patterns, P.O. Box 310, Turners, MO 65765, 417-887-4486, March 5, 2020
*Brookfield Property REIT Inc. (BPYU)
Brookfield Property REIT (BPYU) last week reported first quarter earnings. The actual earnings reports were from Brookfield Property Partners (BPY). We own BPYU shares, which are the IRS Form 1099 reporting equivalent to BPY units.
Brookfield Property is doing a good job of navigating the COVID-19 fallout in the real estate sector. The company declared a regular dividend of $0.3325 to be paid on June 30.
BPYU currently yields 15%. The also recommended Brookfield Property REIT Preferred A (BPYUP) yield is about 11%. Owning both is an attractive strategy to balance risk and reward.
Buy BPYU up to $11.00 to lock in a 12% yield.
Buy BPYUP up to $16.00 to lock in a 10% yield on the preferred shares.
Tim Plaehn, The Dividend Hunter, yn345.isrefer.com/go/cabmdpc/cab/, May 12, 2020
*Franklin Resources, Inc. (BEN)
One stock that we owned a few years ago has caught my eye again. Franklin Resources was not a winner for us when we sold in 2016. However, (those fateful words) this time may be different. BEN is trading below book value, with a PE below 7, while paying a 6% dividend. This is a profitable family-run business with insiders owning over 20% of the shares. I can’t help but think BEN’s brutal sell-off over the last two months is simply the herd following the market and not justified by any basic change in the fundamentals. We shall see.
Neil Macneale, 2 for 1 Stock Split Newsletter, 2-for-1.com, 408-210-6881, April 2020