Saturday, March 21, 2015

"Snooping around for good values here in the Commodity space,looking at Oil, Nat Gas, Copper and Gold. I found some compelling long term value investments".

Dow Jones Industrial Average 17,749.31 (Down) Week ending 03-13-2015
Dow Jones Industrial Average 18,128.00    (UP)   Week ending 03-20-2015

Greetings fellow investors. I am going a little off my normal track this week to put on my "Value Investor" hat. These are the stocks where you will need to have "Patience" like your Fed Chairman Janet Yellen, and just buy them and wait for them to fill in for your capital gain and collect the 2.5 to 10% dividend along the way. (So throw out the door PEG and Return on Equity standards, just for this week. You need to free up your mind for long term value.)

 Janet Yellen - Fed Chairman - "Patience/No Patience". I like her multi-colored pen.

 So first up, I decided to channel a little Mario Gabelli and look for a special situation that could pay off.  Regency Energy Partners LP. (Symbol RGP, $23.14) is going to merge with Energy Transfer Partners LP. The proposed merger will give the RGP shareholders $26.89 of value in the ETP stock. (I actually bought this one at $22.11 because, I can think faster than I can type it down on the page). 

Now I am no rocket scientist, but it looks like they are wanting to hand you a 16% gain in capital plus (RGP) is currently yielding 8.69% which will certainly drop lower under current market conditions, say to 3%. So if you buy this you are looking for a 19% return on your investment eventually this year? Seems to make sense to me to buy it here at $23.14.

The next stock I like is Boone Pickens , Mesa Royalty Trust, (Symbol MTR, $19.23). This is a great value here at this price. It is currently yielding 3.5% but normally pays out in the 8-10% dividend yield area. Great balance sheet and they give 90% of the income back to the shareholders. Boone said this week that the Oil market is sorting out its imbalances and expects to see oil back up to $70 a barrel before long.

 The next value that I see here and my broker concurs, (this one was his idea), is Chesapeake Energy Corp. (Symbol CHK, $13.61). This much maligned massive energy company should be due to turn direction. When it does you will own it. Again looking for good 3-5 year total return on your money with limited risk. has a 2.5% dividend yield kicker to boot also. 

 The last great value is a "Two for the price of One". Freeport- McMoran Corp. (Symbol FCX, $18.49 per share).  I think the miner's have stopped blocking the road and have gone back to work this weekend. Hopefully they are giving them a fair pay for their work. This stock gives you a play on Copper, Gold, and also they own two oil companies which in the short term looks like a mistake, (They just got a $7 Million dollar settlement payment from Credit Suisse for advising them to do so), but in the long term you have a lot of value here between all FCX's different properties. The stock has already shot up to $21.00 in the last couple months , then backed off. For an IRA long term account this is perfect. They currently have a 6.79 % dividend yield , but I expect them to drop that down to a 3-4% level for the time being.

There you have it.  Enjoy your second day of Spring, and make some money with some Value type investments. Remember, you must have "Patience" and just tuck these things away for 3 years.

"My Great, Great Grandfather used to own the hotel next to where this statue sits at 25-27 Broadway in the 1800's. It was called "Stevens House" His son. my great grandfather, was in the NY 7th Militia and guarded the Stock Exchange"  Freewilly.


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