I want to clarify an important point from yesterday, when I unveiled my strategy for generating income on a regular basis.
So sure, I mentioned it doesn’t involve traditional dividends. But don’t get me wrong. I’m not backing away from the value that dividend stocks can hold in a diversified portfolio, not at all. The reality is that many investors are turning to stocks that offer robust dividend yields, as well as reward shareholders through stock buyback programs. In fact, I still recommend several dividend-paying stocks, particularly in my large-cap portfolios.
I just want to remind you that these are unprecedented times, especially for folks about to enter or already entering their retirement years.
Over 10,000 Americans reach the age of 65 every day. That’s more than 3.5 million people reaching retirement age every year.
According to a recent survey, only 10% have enough money to last them until their 80s.
It’s a huge, huge problem—that’s not getting any better. Interest rates and dividend yields are extremely low — and I began to see the writing on the wall some time ago.
So, if you’re looking to catch up on lost profits, secure your retirement, and even splurge for that new car, all of these goals are very attainable with the right strategy.
It’s just that most dividend payouts aren’t big enough for any of that.
Let’s say you need $6,000 in income next month. That’s reasonable, right? In fact, I’m sure it sounds modest to many of you.
Well, to make $6,000 from dividends, you might need to invest $100,000…for a whole year. That would be a 6% yield.
And, to be frank, 6% in dividends alone is pretty darn good these days! (At least, from a stable company. Yield-seekers can find fatter payouts… but they can often come from companies in a dangerous, desperate sort of position.)
So, I’ll continue to recommend great dividend stocks where I find them — just not necessarily for my Accelerated Income Project 2021.
If you follow me here at Market360 or my other newsletters, you’ll recall my goal with dividends is a little different. It’s similar to the way the big fund managers on Wall Street play it: Use their payouts to help “smooth out” returns over time.
In other words, the dividend payout is more of a hedge against volatility. Not what pays your bills. Growth is what does that.
This is why, even when I recommend dividend-paying stocks, I’m talking about growth stocks that also pay dividends.
There’s another important distinction I’d like to make, between what we’ll do in the Accelerated Income Project 2021 and what I recommend anywhere else…
Secure Your Financial Future In Weeks Or Months — Not Years
People have used my quantitative system to invest in blue chip stocks, or to find small caps that can grow 10X. But now I’ve adjusted my proven investing analysis to focus on the stocks that are set to soar in just a short time period.
You won’t have to wait years for double- and even triple-digit returns with my Accelerated Income Project 2021. I’ve designed it so you can get the income you need on a regular basis. And no: It doesn’t require using options or any “trick” investing.
So many investors have spent years getting lousy market returns and now they need a strategy to catch-up to live the life they’ve always dreamed. That’s what we’ll be discussing here in Market360, in this series of articles: Your Accelerated Income Guide.
Each day, we’ll be talking about how I find “accelerated income” stocks: the ones that can shoot up quickly and provide the extra income everyone can use these days.
Let’s look at a couple examples of stocks that signaled they were about to liftoff, to see what we can learn.
Industry: E-Commerce – Retail
Buy Signal: April 5, 2017
I said: “In the fourth quarter of 2016, Baozun’s sales increased 25.2% year-over-year to $183.3 million, while earnings surged 358.8% year-over-year to $8.8 million. Earnings per share were $0.18, which topped analysts’ estimates by a penny. For the first quarter of 2017, the analyst community is expecting 20.2% annual sales growth and 75% annual earnings growth. BZUN is a buy.”
Outcome: BZUN ⇧ 38% by June, ⇧ 132% by August
Buy Signal: March 26, 2014
I said: “The company is best-known for its strong position in the ADHD market, with drugs like Vyvanse, Intuniv and Adderall XR. In the fourth quarter, the company’s sales rose 12% to $1.33 billion, and its operating earnings rose 36% to $2.26 per share compared with the same quarter a year ago. The company also provided positive sales and earnings guidance, and I want to use the recent dip that we’ve seen in the biotech sector as a chance to add Shire to the Buy List.”
Outcome: SHPG ⇧ 68% by July
SINA Corporation (SINA)
Industry: Online Media
Buy Signal: Dec. 20, 2016
I said: “The company operates SINA.com (portal) and SINA.cn (mobile portal) as well as social media network, Weibo.com. During the third quarter, SINA reported a 21% increase in total revenues and a 21% jump in advertising revenues. Income from operations surged 147%. For the fourth quarter, the analyst community is expecting 60% annual earnings growth and 18.6% annual sales growth. Analysts have also revised their earnings estimates 19% higher in the past three months, so another quarterly earnings surprise is likely.”
Outcome: SINA ⇧ 23% two months later; up 41% from mid-May to June alone
Now, if you’re like most investors, you’ve never heard much about those companies — if anything.
And even when you do see something about hot growth stocks, it’s usually in the rearview mirror, after they’ve made a big move. But, as we just saw, if you can spot the right stock BEFORE that next major event…you can make large gains in a much shorter period of time.
Case in point: My two latest buy recommendations, released Tuesday.
The first new buy is one of the biggest apparel manufacturers in the world. And, thanks to its industry leading position, the company crushed analysts’ earnings estimates for the first quarter by 166.7%. In the build up to the second quarter, Wall Street analysts have increased their earnings estimates for this company by 25% in the past three months.
The second new buy is benefiting from the red-hot housing market. For its fiscal year 2021, this company reported 46% earnings growth. And thanks to the strong results, analysts have upped earnings estimates by 45.7% in the past two months. For the first quarter in fiscal year 2022, earnings are expected to surge 131.8% year-over-year.
The outstanding earnings growth of these two companies was the confirmation I needed there… and for any other great growth play. Especially when so many other companies are struggling with profitability — and especially for my Accelerated Income Project 2021.
And I’m just getting started. I’ve got my eye on another accelerated income play I’m lining up for my Buy List next Wednesday.
So, now that we’re days away from the second-quarter earnings season, it’s just the right time to embark on our new hypergrowth initiative.
Note: The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owned the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:
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