Anthony Speciale Stock Market Analyst

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4 More Trade Ideas for Even Bigger Gains

(00:08):
Hi guys. Welcome back to a Better Way to Wealth. Lately the hot trend of everybody else in the financial media business is they want to give you a watch list and you’re supposed to watch these stocks because apparently they’re going to do tricks. I’m not sure how that works. I don’t want to do a watch list. I’m going to give you a hot list. These are stocks that I think have the potential to give you outstanding returns and you can buy them right now. Now the first one, so new spinoff, I love corporate spinoffs. Generally speaking the bottle of company will be sold off a little bit and the returns going forward would just be outstanding. Spinoffs have historically outperformed the S and P 500 by a whole bunch. And this is a pretty exciting little company. This is Jackson financial.

(00:52):
It’s a life insurance company. They’ve been around for a very long time. They got assimilated by Prudential PLC. The UK based insurance giant, that has a massive part of the global market. Well, now it’s being spun back off to shareholders. It’s going to trade here in the United States. Pru is going to maintain a bout in 19% interest in the company. They had considered doing an IPO, but it’s a little tricky to do financial IPO’s right now, particularly European countries, you know, doing an IPO here in the United States suddenly decided just to spin it off. Now it’s trading when issued right now, that’s J X, N dash WWI is the symbol on the 20th. It will be trading regular way. So look, these guys are number one, variable annuity sales through the bank market, through independent broker dealers and through wirehouses, they have the lowest expense ratio in the business.

(01:48):
They are growing like crazy generate tons of free cashflow. They have promised that they will pay out 60% of the free cashflow generated as shareholder rewards. Be it a dividend or buying back stock. I think they’re probably going to favor the cash dividend over the buyback. At least initially we’ll see how it comes out. Either one is very good for us as shareholders of the company. Now I’m not a big fan of variable annuity products, guys. I don’t love them. They tend to be very poor performers. The fees are insanely high, but brokers love them. They’re easy to sell. It’s a great story. The fees and commissions are buried deep in a thick perspective, full of legalees and people stand in line to buy these things because they, they look kind of like a free lunch when they’re presented quite often, anyway, brokers love to sell them.

(02:40):
People love to buy them. A lot of money’s being made. So Jackson national on the spinoff as a bonus here, one of my favorite private equity firms was involved. Apollo management owns about 11% through their ownings of Athene holdings and insurance company that is also involved in the deal. So I think stock has the potential for massive long-term returns. Variable is going to continue to be a fantastic growth business. And this company is going to be a dominant player in the field. So J X, N dash WWI be trading regular way under J X and on the New York stock exchange on September 20th. So one of the places that we’ve been looking a lot for deals and following 2007, after the meltdown and coming out of 2009, we found a lot of companies that had come public via special purpose acquisition companies, business combinations, and they were deeply undervalued because these, these businesses tend to get orphaned after a SPAC merger, because there’s no IPO underwriter, there’s nobody with a vested interest in keeping research on the company or following it, pushing it out to wall street.

(03:46):
You know, everybody gets paid when the merger is done and nobody cares. They walk away. We create warfare. So SPACs have been flying high over the past couple of years to say the least we’ve seen a lot of business combinations. Now, guys, we’ve seen some that were just awful. They stocks deserve to go to zero. We’ve seen way too much in that because there is an inherent incentive to do a deal at any price in this back offering. But we are also starting to see some specs that are really good businesses that have been orphaned and just got caught up in the selling pressure that are now getting to a point where you’re looking at it and go, you know, we really could be a fantastic stock and great business to up one of the tips to identify a SPAC orphan with the potential for massive returns.

(04:32):
When you see big insider buying by very smart people. We’re seeing that right now in a company called wheels up, shockingly, the symbol here is up. You P now wheels up is a business started in 2013 and they wanted to make private jet flying experiences available to a wider class of people. Well, you know, it’s a still somewhat limited market. The memberships here started about $3,000 to be a member in wheels up and have some basic benefits where you can use private jets and they use ride sharing and just all sorts of different promotions to make private flights what more widely available. And of course they charge for that. They’ve got, you know, membership programs. They’ve got a partnership with Delta. They’ve just started one with Porsche American express, and they’ve even got one with the NFL players association to promote the use of private jets.

(05:24):
And this is working year over year, revenues were up 113% memberships were up 47% in their last earnings report, which is just a month or so ago. This is a very good business. It’s been around since 2013 and they had large insider buy last week. The buyer here is a gentleman by the name of David Adelman. Now Mr. Adelman is a dealmaker and investor of some prowess on back in several years ago, he founded Fs investments, which is now a multi-billionaire dollar investment firm overseeing mostly credit. There, the co-manager of Fs KKR, a business development company we’ve talked about quite often here at a better way to wealth. It’s one of our absolute favorite income stocks. He hasn’t made a lot of bad deals or choices over his career. He has been involved in this company since 2013 and he is, he already owns a lot of stock. Okay. And he’s actively buying more stock on the open market to take advantage of the heavily discounted price. I think you can buy this stock, talk this business away because I think it’s going to take off and it’s going to recover a good portion of the decline that it suffered so far over the last year as a result of being a special purpose acquisition company. So it’s a busted back with insider buying. Those have traditionally worked out real well for us over the years.

(06:53):
Now, here we go. Here is one of the more interesting things going on in the market right now, a company by the name of Sprott Canadian, natural resources investor. They have mutual funds here in the states and Canada heavily involved in gold and commodities. Over the years, they bought out an ETF. It’s the Sprott physical uranium trust trades in Canada. Also trades here over the counter. S R U U F is assemble. There’s plenty of volume. So it’s in, don’t worry about the five the five letter us symbol there you can get in and out of this thing, pretty easier. Uranium is at VIN and a 13 year bear market. However, unlike the United States, most of the rest of the world is starting to figure out that the greenest most renewable fuel on the planet most reliable as well is in fact nuclear energy.

(07:45):
We’re seeing demand for the first time in over a decade for uranium begin to increase. Now, since uranium has been in a bear market, the two major producers have actually been shutting down mines, reducing how much they produce, no point producing too much of something. If you can’t sell it. So now as demand is increasing these guys, they can, you know, ramp back up, but it takes two to three years to get these mines back up to full production. Here’s the ball recently hedge funds have been getting into the action. Financial buyers are looking at uranium. They see the same things that I’m talking to you about. Now, the producers have back demand is growing. This commodity is probably going to go higher and that’s what’s happening. Now. Here comes Sprott. They bring out this ETF, they’ve bought 6.6 million pounds of the stuff already. They have enough firepower with the the IPO of the ETF.

(08:46):
Plus they added a billion dollars to the fund. They get by another 25 million pounds of this stuff. That’s a significant portion of the global market. It is causing a run in the sprout ETF, S R U U F. You want to buy this? You want to use a really tight stop. If you get stopped out, look for another entry point. When it goes back above your, your where you got parts, where you got to stop that because this thing is going to continue to make massive moves. You’ve got a classic supply squeeze going on here. There’s a lot of demand, not enough supply. And now you’ve got financial buyers coming in, making the supply even less. So sprout physical uranium trust S R U U F. It’s a, this is a trade guys, probably not going to hang onto it forever, but this thing should continue to run for awhile and what you to get into it with a really tight stop.

(09:41):
So that you’re not too exposed. Now, my final one is one of the special situations I told you about is Spock holdings, a symbols SPO, okay. Spock makes communication systems for hospitals to communicate patient codes, patient information, treatment plans between the clinical staff. And sometimes even the patient itself. You have the portals that you use and can log on to, to access your healthcare information. It’s a good company. It’s a good business. Last week, they received an offer from Acacia research for $10 and 75 cents a share to buy the company. The stock today is trading right about 10 bucks. So you seven and a half percent gap there, which is a pretty substantial gap. Spock has said, okay, we’ve got the offer. We’re going to tell the public that we got the offer, but we’re not sure what we’re going to do with it yet.
(10:32):
We’re going to talk to our advisors. We’re going to talk to our investment bankers to our lawyers, and we’re going to consider our strategic alternatives. That’s code word for, okay. We wouldn’t mind selling, but we’d sorta like to get more than $10 and 75 cents a share. So companies on the block at this point, they’re considering strategic alternatives, a 10 75 takeover price by Acacia research looks kind of like the worst case to me because you could make a heck of a case for some nasty lawsuits against the board. If they turn down the offer and the stock was to create or lower, it is a pretty good business. So we’re not going to rule out somebody else coming in and buying the entire company. In fact, that’s what we’re hoping is going to happen. So if you can buy shares of Spock holdings as P okay, for 10 bucks or less, I think you’ve got a decent, special situation.

(11:23):
Merger, merger, arbitrage, kind of trade going on here. That’s got small or larger upside with very little downside. So we love those situations. We view them as alternatives to cash. And so that’s, that’s kind of where we are right now. There’s four stocks. I think you could play right now. And we really cover the risk return curve in today’s episode of a better way to wealth. We’ve got low risk arbitrary situations, all the way up to a very aggressive bet on a uranium market squeeze and everything. Probably guys pumped in Melbourne. That’s a better way to, well, we’ll see,