Closing values: S&P 500 1,241.3 and the VIX 23.22
We want to thank Sol Palha at Seeking Alpha.com for his article, "5 Magnificent Material Plays With Tempting Yields As High As 10.5%". This article provided his view on the names below. We are familiar with all the names except Seadrill and thank him for introducing us to the stock which is now part of our database.
BWP Boardwalk Pipeline Partners LP - lowest ranked of this group - the lacks an active options market thus we were only able to price two expri dates. Premiums were not particularly generious and both dates earn the dividend. RVI's are low to mid range and the P/E's are a little too high for us. However, the dividend at 7.8% is attractive.
FCX Freeport McMoRan - Ranked #3 overall - this ranking is driven by its Days earning. We do like this sector and most of the stocks in this analysis are mining related. This is a sector we have liked. Beyond high dividends they are an inflation hedge. Recent sell offs have provided buying opportunities but investor caution has muddled price movements. FCX has a low P/E and RVI's. Days earning is attractive (ignore the 1/21 note as it is based on old info - the real w/o div numver is much better at 17.3 bps/day.
LINE Linn Energy, LLC - LINE is ranked #4 overall. RVI's are mid high but the dividend is attractive and P/E's are good.
SCCO Southern Copper Corp - We have liked this stock and continue to like it. Stubborn or waiting for the value to be realized? The stock had performed well until the commodity sell off. Overall it is the #1 ranked stock of the group. RVI's and P/E's are low and the dividend is high. The w/o dividend note here is also wrong as the real number is 9.6 bps/day.
SDRL Seadrill Limited ORD - Thank you for this new name for our database - #4 overall - Noce looking stock although RVI's are mid high. Our concern with this and the other off shore stocks is currency risk. Granted the $/real rate has declined in favor of the dollar over the year. This type of currency exposure can be and issue and at this point we would prefer to reduce risk rather than add risk that we cannot accurately manage.
SID Companhia Sidrurgica Nacional - Lower down the overall list - RVI's are near the extremes, P/E is low and the dividend is high. There does not appear to be enough reward for the imbedded risks.
VALE VALE S.A. American Depository - Another Brazilian company we have liked. RVI's are way low as are P/E's. VALE is the #2 overall stock in this group and its profile is attractive. The question is currency exposure.
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