Friday, November 22, 2013

This Investing Legend Proves He's an Income Investor's Best Friend

When the opportunity arose to add Icahn Enterprises LP (NYSE: IEP)  
This Investing Legend Proves He's an Income Investor's Best Friend
Friday, November 22, 2013


When the opportunity arose to add Icahn Enterprises LP (NYSE: IEP) to the High Yield Wealth portfolio in July, I pounced like Michael Moore on an unattended Burger King Triple Whopper with cheese (1,300 calories, by the way)). 

 

At the time, Icahn Enterprises had just hiked its distribution 25% to an annual rate of $5  per unit. The higher payout generated a luxurious 7% yield on the prevailing market price. The chance to invest along one of the world's greatest value investors and get paid 7% to boot was impossible to pass up. 

 

I can't say I've regretted the decision: In just over four months, Icahn Enterprises has generated a 60% total return for the High Yield Wealth portfolio. 

 

Admittedly, I'm biased. I share an affinity with Carl Icahn: Both of us understand the important role dividends and income play in the wealth-generating process. Long term, dividends account for 40% of the total return generated by the S&P 500. Dividend growth is key driver of share-price appreciation. 

 

If you are unfamiliar with Carl Icahn, his modus is straightforward: Seek undervalued companies in the Benjamin Graham tradition, a methodology for unearthing value in depressed prices. The difference is that while the typical Benjamin Graham value investor purchases undervalued securities and waits for results, Icahn purchases undervalued securities and agitates for change.

 

"Agitates" frequently means pounding the table for dividends and buybacks. Icahn understands, as do I, cash that flows to investors is what ultimately matters. You're the investor; the company should be run for your benefit. 

 

Icahn has a 40-year history of successfully pounding the table for shareholder interest. This year alone, Icahn Enterprises has chalked up a number of successes - Netflix (NASDAQ: NFLX), Apple Inc. (NASDAQ: AAPL), and Herbalife (NYSE: HLF). His strategy for Apple and Herbalife, in particular, is to get more cash to investors.

 

-------Advertisement------

Organize Your Dividends With One Step

 

Do you know when your next dividend stock pays out? Do you know when the dividend stock you want to buy more of pays out -- and how much? We've put together a simple calendar that highlights many of the market's best dividends into one easy to scan document. Read it once, and you'll see how to set up a 12 month dividend stream to ensure income all year long.

 

Click here to see the full details of the Dividend Calendar...

-------------------------------

 

This month, Icahn scored another cash-to-investors success with Transocean (NYSE: RIG), a large offshore drilling contractor. Thanks to Icahn's large equity position - 21 million shares - and relentless agitating, Transocean will switch to a master limited partnership organization, raise its annual dividend 33% to $3  a share, and reduce its board count to 11 from 14.

 

Due mostly to Icahn's influence, Transocean shares have popped 12% for all Transocean shareholders.  Of course, Icahn Enterprises investors have benefited as well. 

 

Accumulating investing successes is a key reason Icahn Enterprises is up nearly 70% for the year. If we go back 10 years, the accumulation of investing successes becomes even more pronounced: Since November 2003, Icahn Enterprises units are up over 622% compared to 68% on the S&P 500 - and compared to 107% on non-dividend-paying Berkshire Hathaway (BRK.A).

 

I still like Icahn Enterprises to this day. To be sure, the distribution yield on the current market price - down to 4% - is less luxurious than in July, but it's still higher than most quality blue-chip investments. 

 

Besides, there are still plenty of companies to which Icahn can apply his value-extracting magic for Icahn Enterprises investors. He says as much himself.

 

"There are many companies that are undervalued and badly managed," Icahn told Barron's. "Icahn Enterprises is uniquely positioned to do that because we have permanent capital (referring to his partners, Icahn Enterprises unitholders). We're able to take advantage of opportunities in undervalued companies that others can't do."

 

Actually, others can take advantage of these opportunities by investing with Carl Icahn in Icahn Enterprises LP.

 

Good Investing,

 

Stephen Mauzy

Aurora, Colo. 

 

 

 

Retire on One Stock

 

Our research team found a stock that pays dividends so big - you can live off them. This cash-cranking company has hiked its dividend 10-FOLD... paying investors like you dividends of $428.57, $913.93, and $924.43! If these ever-increasing payouts sound good to you, click here for all the details.

Popular Analysis from Wyatt Research
 

Thursday, November 21, 2013
BBY: A Great Buy On Weakness

Shares of Best Buy (NYSE:BBY) are still a great buy, especially after getting slammed on Monday. After reporting Q3 results, the stock fell 11% to $38.80.
 

Wednesday, November 20, 2013
The Latest Sign of a Second Internet Stock Bubble
Silicon Valley is littered with stories of genius college students dropping out to do the tech startup thing. The ones that go bust are rarely heard of. But success stories like Mark Zuckerberg and Facebook (NASDAQ: FB) capture the imagination of capitalists seeking to invest in the next great thing.

 

Tuesday, November 19, 2013
Why Microsoft Needs the Next Marissa Mayer

Steve Ballmer is out as Microsoft (NASDAQ: MSFT) CEO. After 33 years with the software giant, the last 13 spent as its CEO, Ballmer was essentially forced into retirement by Microsoft's board of directors.

 

 

Latest Income & Prosperity
 

Thursday, November 21, 2013
Supremex: The Rare 33% Dividend Grower
When a stock increases its dividend, it's only a matter of time before the share price jumps. One overlooked Canadian dividend stock is raising its dividend by 33%. Thanks to the small size of this stock, most investors didn't even notice.

 

Wednesday, November 20, 2013
BDCs: The Perfect Income Investment
The more I vet income investments, the more convinced I am that business development companies (BDCs) are the investment of choice for many income investors.

 

Tuesday, November 19, 2013
A New Opportunity to Double Your Dividend

I'd say it's no stretch to call AT&T (NYSE: T) one of the more reliable dividend-growth and income investment stocks on the market.

 

 

Disclaimer & Important Information

WyattResearch.com is owned and published by Wyatt Investment Research. Wyatt Investment Research is neither a registered investment adviser nor a broker/dealer. Readers are advised that this electronic publication is issued solely for information purposes and should not to be construed as an offer to sell or the solicitation of an offer to buy any security.

We encourage you to review our full Email and Disclosure policies.
To view our Email Policy, please
click here. To view our Disclosure Policy, please click here.

If you believe this communication to be a mistake or unsolicited, please e-mail
abuse@bfpnewsletters.com with details regarding your situation, and we will be sure to promptly investigate your situation.

You are subscribed with the following email address: godsentnnodim.investment@blogger.com
To unsubscribe from this newsletter, please visit www.wyattresearch.com/unsub/godsentnnodim.investment@blogger.com

Copyright (c) 2013 Wyatt Investment Research. |
Privacy Policy

Wyatt Investment Research
65 Railroad Street
Richmond, VT 05477. PO Box 790


 

 

No comments:

Post a Comment