Speaker 1 (00:00):
Hi, this is Carter clues. And welcome once again to Tim, Melvin’s a better way to wealth today. We’re going to talk about a watch list, watch list. Somebody might say what’s a watch list. Watch list is where you got to look for the absolute best deals on stocks. The greatest returns, and there’s one guy that knows him better than anybody else out there. The stock market goes up and down. It’s affected by dividend returns. Corporate moves, political moves. Those motors are conservatives all about that. Don’t wait. There’s one guy who knows matter which way it moves, where your stock moves should be. Tim, how you doing? Where are we going to go on the watch list this week?
Speaker 2 (00:35):
Wait, we’re going to go in some, some really interesting directions this week. There’s been some interesting events going on with, with some corporations. I’ve got six ideas total for you today. I think you’re really going to like these. They just get better as we go along. So let me just kick off with one that, you know, this is attractive, little bit more selling in this, and we’re going to be in the stock. Okay. A CIM commercial real estate trust. The symbol here is CMCT no secret guys. I love REITs. I love real estate investment trusts. Always have. The only thing I love more than a REIT is a REIT where there’s an activist buyer of the shares. And we’ve got exactly that going on with CIM commercial trust, a group led by a Rabi ADI, and Lionbridge two activist. Investment funds have accumulated a stake in this in this rate now CIM commercial owns office properties, primarily in San Francisco and the Los Angeles area.
Speaker 2 (01:38):
The activists are telling us that they believe that the office buildings can be sold based on activity in the market for substantially more than the value of the REIT. So in other words, they could sell the office properties, collect the cash and give us the cat as shareholders, the cash back is a special dividend and it would be well above what we’re going to pay to get involved with the stock now. Excellent. Okay. Here’s what, here’s what happens. She AM’s management just did something that is so egregiously wrong that I don’t see how we don’t get other activists involved or how they don’t get sued for this. They just did a rights offering kind of in your face of the activists, the activists, et cetera. It’s hard, right? Did you sell them the right to buy more stock at a fixed price? Okay. And they usually get to exercise right away.
Speaker 2 (02:35):
And that’s what happened. In this case, they sold $78 million worth of stock in this rights offering the activists had petitioned them not to do that because it would dilute their shareholdings. Okay. This was new stock coming to the market. They did it anyway. They didn’t need the cash. This wasn’t an offering to pay down debt. It was 100% to dilute the activist equity position in the company. That’s just, it’s one of the, just most blatant abuses of corporate power. I think I’ve ever seen. Now. It’s not going to make the activist go away. If anything, it’s going to make them more determined. I do believe we are going to see additional activist presence in the stock. The stock’s been selling off a little bit here and there. If it continues to fall, we’re going to get involved
Speaker 3 (03:29):
Because I made some phone calls, check some property
Speaker 2 (03:33):
Values, and the activists are absolutely correct. These are nice properties, office buildings in the good sections of San Francisco and Los Angeles, where it should be relatively easy to sell the buildings. Cops are occurring at a much higher valuation than the REIT is currently assigning to the shares. So CIS parent company CIM a management is an established real estate company with a lot of west coast properties. And I’m really shocked that they, that they went along with the management of the read on this one, but this is going to get activist involvement. I do think that you’re going to see a sale of these properties. Some special dividends of forced buy back of shares, a bunch of things that are going to happen to get the price of this rate higher over the rest of 2021, watching it like a Hawk, hoping it continues to fall. It’s at about 8 97. I think if it got all the way back down to eight which is like a major, what the technicians call support point for the stock. I think we would have to be a buyer of this stock at that time.
Speaker 1 (04:38):
And so you, at that point, you would let those who are your clients. Those of us are fortunate enough to get [inaudible] now’s the time right?
Speaker 2 (04:47):
Subscribers would get, you know, an alert. Hey, now here’s
Speaker 1 (04:50):
What she needed to do. Okay. All right. Thank you.
Speaker 2 (04:53):
Next up. Next up is Barnes and noble education. Now we all remember Barnes and noble. They got Amazon pretty much existence. There’s a few left. But Barnes and noble education was a spinoff and they own college bookstores all across the United States and hundreds of these things. And they also are doing some other new offerings, but here’s, what’s going on. This stock got crushed on Thursday of last week. Just absolutely crushed bounce back a little bit on Friday, but earnings were bad. Well, what did you expect? Colleges were closed for significant unfortunately last year.
Speaker 1 (05:33):
Why, why it got brought back?
Speaker 2 (05:35):
You got no no traffic in the store. So people are buying textbooks online from them, but that’s significantly less than people coming in. And the big thing that they lost is the front of the house merchandise. Okay. That’s like you walk into the university of Florida bookstore there’s books. There’s also university of Florida sweatshirts and, and coffee mugs and just all sorts of memory, you know, sports related stuff and team stuff. They couldn’t sell any of that. There was, there was no sports for one thing for a good portion of 2020, and you couldn’t get in the bookstore to buy the stuff. So that really hurt the company. But the big thing here that really attracting my attention is the focus on these college bookstores is masking and hiding the fact that there’s a significant digital transformation going on here. They are selling more and more course delivery services using electronic delivery of college courses for individual schools, schools actually sign up for it.
Speaker 2 (06:41):
So that’s definitely a development. They also have a tutoring service, not just for college kids that can also be used in K through 12. So there’s a digital transformation they’re moving online, just like the rest of the world. They’re still going to own these bookstores. Okay. and they’re still gonna have that business, but they’re adding this digital component to it. There should be. Yeah. It could be just a major driver of future growth. And they knocked this stock down this week from a little over 10 to as low as seven bucks. Now we back it up, you know, it’s trying to make a run back towards $8 a share. I think that’s going to pull back again. And I think, you know, seven 50 or under, we got to think, we probably want to buy this stock for the longterm. And look, it’s not just the digital right.
Speaker 2 (07:32):
Colleges are open this year. You got to get a job to go and an awful lot of them, but they’re open. The kids are going to be in the bookstores. They’re going to be buying those university logos and sweatshirts and sports related material. That’s the high margin stuff, the front of the store stuff. So that’s going to be back open. You’re going to see cash flows come back online. The stock will surpass, I think those highs of $10 and keep going from there because ultimately these guys have relationships with hundreds of colleges around the United States. They’re going to continue to grow that part of the business and they will continue to expand their digital offerings beyond courses, to books and everything else. I just think this is going to be a really solid performer going forward. So at the right price, we’re going to definitely want to be involved.
Speaker 1 (08:23):
How high do you think you would get Tim from the seven? The how high do you think it could go? Just guess? Well, the
Speaker 2 (08:32):
Analysts to follow, I think that it’s going to grow earnings at 20% a year for the next five years. I’m going to say from seven it’s a triple wow.
Speaker 1 (08:39):
Triple veil. Excellent. Good. All right. Now
Speaker 2 (08:44):
Guys, this just get better as we go along. So stay with us because one of the very best ones is the last one I’m going to share with you today. So hang on. All right. Next up dream finders homes. I
Speaker 3 (08:55):
Really like this one. Okay. The stock has
Speaker 2 (08:59):
Been smashed this month because they fell a little short of expectations. And then you had what happened in the home building market. Okay. Simple. Here’s DFH by the way homes, sales slowed right down because people stopped building it because the prices of lumber and copper got ridiculous. And there were supply chain problems. Even if you wanted to pay the price for the lumber, it wasn’t available in the lumberyard. Well guys that’s situations easing dramatically. You saw housing starts back up again for me, which surprised the economists who apparently never go out and drive around and look to see what’s going on in the world. Because I can tell you, I was aware of the construction slowed in April, but I knew it had started back up because I see the trucks on the road. I see the projects going up probably helps where I live in Florida, that I live in Florida where we’re building something on just about every corner down here this year.
Speaker 2 (09:51):
So, yeah. But anyway, they, they missed earnings up a little bit. I think the selling is probably about over here and this company, they did an IPO last year. Stock has been a solid performer. They’re building in. Let me make sure I get this right. Jacksonville, Orlando, Denver, Colorado, Washington, DC, the research triangle, Charlotte, Charlotte Riley, North Carolina area. As well as Austin, Texas, these guys are in some of the hottest home building markets in the United States. The analysts that follow the stock are raising their estimates. That’s always a powerful sign of a company that’s in growth mode and going to keep growing when you’ve got the wall street analysts looking at this thing and say, Hey, we need to raise our estimates. They’re doing better than we thought that is quite often indication. This stock’s about to take off. So
Speaker 1 (10:47):
You know what, when you’re talking about these are home builders, right? Yeah. And when you’re talking about this, I can’t help. But remember, and I think this is something our viewers, when they hear they’re going to say, yeah, I got a follow up. Do you remember envy recommendation or NBR?
Speaker 2 (11:01):
Sure, sure. And that was, that was kind of the same thing that, you know, we saw some things going on in the world that nobody else did. And you know, you made hundreds of times your money.
Speaker 1 (11:09):
Oh my God, you said, come in at 55, you went up to a high of 5,000, $300,000 investment made 95,000 bucks.
Speaker 2 (11:18):
That is absolutely correct. So we could be seeing a significant surge for home building. Look, guys, the home building, boom is not over. Millennials are finally starting to form families. And I can tell you that at long last, my son is actually getting married and having a child.
Speaker 1 (11:39):
Who’s a great guy by the way. Never, never
Speaker 2 (11:41):
Thought that would happen, but millennials are finally forming families. Thank you. And they’re buying homes. You had a lot of people in 2020 when they went to work from home, they figured out if I’m working from home, I don’t have to live in New York or Seattle or in deal with the civil unrest and the lockdowns and all the things that happened in urban America last year. So they’re moving out and they’re moving out to the burbs and beyond, and they don’t want to live in apartments anymore. They want houses. So the home search, not over, not by a long shot. So building’s going to be a great business. I dream finders homes I think is going to be a fantastic long-term stock. Perfect. Get a little more consistency here in the, in the, in the, in the price action. And we’re going to be a buyer. If we can get just a little bit more liquidity, for those of you familiar with options. If we get a little more liquidity than the options market, I would definitely with the stock at 24, be a seller of the October 20 foot’s on a cash secured basis to back my way in. If you don’t know what I just said, don’t worry about that for today. I’m going to do a video of that sometime in the next week or two, you’re going to do it.
Speaker 2 (12:59):
But if you are familiar with the options, that’s not a bad cash secured per sale to put on right now. So, all right, the next step, I love this company. This is the old Alexander and Baldwin. And back in the day, it was a shipping company that happened to own a massive amount of land in Hawaii. And it ended up getting taken private by some, I believe private equity guys, if memory serves and they sold off the property and made a ton of money for themselves and we made money, sell it to them. So it’s, it’s cool. Now it’s public again has been for several years. The new name is Mattson. The symbolist, M a T X. We unfortunately do not own all the land in Hawaii anymore. We do however, own a shipping business that ships between the United States and Hawaii, and remember everything in Hawaii ship.
Speaker 2 (13:51):
Then the exception of, with the exception of pineapples, pretty much everything is shipped into a Y. And they’re one of the few container lines running service to Hawaii out of the west coast. Now they also developed a very important shipping line out of Alaska and that’s the Alaska Asia express. And it’s one of the most important ways that Alaskan seafood gets to the growing and always hungry Chinese seafood markets. So that’s an important line of business for them. Yeah, they also have a logistics business guys. Okay. they can help you with trucking always near major ports around the United States. They have warehouse space on both coasts, again, kind of near you know, major ports to help you get your stuff from point a to point B. And they do supply chain management and in China, they’re doing freight forwarding. So just very cool ocean shipping based business.
Speaker 2 (14:52):
They are shipping to Guam, other islands in Micronesia, as well as China. And of course, Hawaii now business is really good. And this thing is generating a ton of cash. Last week board of this company met and they looked at the cash and said, what are we going to do with all this cash? We don’t really need all this cash. They raised the dividend by 30%, just a huge increase in the amount of cash that they’re willing to pay out to their shareholders. Given the stock a decent yield on top of the growth potential in this thing, they also said, well, that’s nice. And that uses up some of the cash. We’ve still got a lot of cash. What else could we do? Well, I got to go ahead and buy back 3 million shares of stock buyback at this price to earnings multiple is just fantastic news because this thing is only trading at 10 times earnings. So buying back stock here adds tremendous value to us as ongoing shareholders. So this is a management that say, look, we like our shareholders businesses. Good. We’re going to pay you. So between dividend and stock buyback, they’re gonna return a lot of cash to us over the next year. It’s a fantastic business. And as the global economy continues to open up Mattson stock is just going to get better.
Speaker 1 (16:10):
Sorry. Th that’s just absolutely. I got to ask you a question. I have a feeling it’s on, on the minds of every viewer out there right now. This obviously is I get 30% more in dividends. They’re going to stock buyback. So stocks going to go up? How come I haven’t heard about this and the talking heads on TV.
Speaker 2 (16:28):
It’s a shipping company. Nobody cares about shipping companies right now. There’s been just ridiculous moves in shipping stocks this year. And there’s like four guys following it. It’s it’s not technology. It’s not driverless cars. It’s not exciting. It’s not a great story. It doesn’t have the presents, right? It’s not yet. It’s not Facebook. It’s not Amazon or apple. So, you know, nobody’s, that’s, that’s what everybody wants to talk about. So I’d rather look at corporate events and say, look, I really like what’s going on at that company. I want to be a longterm owner of this business. Cause I think they’re going to send a lot of cash back to me as the business grows and that’s going to make the stock go higher over the longterm. So that’s kind of what we’re looking at right now. Okay. The next one up here is a DT midstream.
Speaker 2 (17:11):
The symbol is going to be DTM. You’ve never heard of this company. I guarantee it again. It was just spot off yesterday. Okay. DTE energy at our Michigan it’s big electric utility you know, kinda like Florida power and light or Baltimore gas and electric. It’s it’s that level big. Okay. in Michigan, they owed all these assets that they’ve decided to spin off as a separate company to focus on the utility business. I happened to love the assets that they’re spinning off its natural gas pipelines and storage facilities. They’re natural gas to electric and gas utility companies around the United States. They’re delivering it to large industrial users to power generators to energy producers. It’s getting natural gas to the people who are using it to run the business. They’re either making electricity or they’re actually running it straight to a large factory or facility. So they’re splitting us off. It’s going to pay a dividend. They say the combined dividend of DTE, N D T midstream is going to be higher than the almost 4% that DTE was paying prior to the spin-off it’s trading in the, when issued
Speaker 3 (18:30):
Market right now at bear with me second back to him, get this right.
Speaker 2 (18:43):
8 66. We should see active trading in this name next week. They’ll declare the dividend at the next quarterly board meeting, which will come up here pretty soon. It’s going to be, this is going to be a high growth company. Okay. And the dividends going to grow at a very high rate look, electric cars, solar power. I get it. I read the same stuff everybody else does, but guys, natural gas is going to be with us for a very, very long time. I used to live near Disney and Orlando. Okay. And there’s these solar field was on the highway going down the set from my house to get throughout for. So I drove by it all the time. It was enormous. The amount of space that is required for industrial solar is ridiculous. Many businesses, including Disney are relying on natural gas for the bulk of their power needs because it can be delivered quickly and easily without taking a whole bunch of space.
Speaker 2 (19:43):
And it’s clean to this. Is it as clean as solar? No, but it also works in the dark and it’s much cleaner than what we’re using now. Natural gas is not going away. This company is going to do extremely well. It’s going to generate a lot of cash. They have a rock solid balance sheet. We expect a lot of that cash to end up in our pockets in the form of dividends and who knows maybe some buy backs as we go down the road of the next few years. So anyway, it should start trading Monday if that’s weak. And I bet it is going to be because if you look at DTE, it’s owned by a ton of ETFs and index funds that only want to own, you know, if it’s a utility ETF, they only want to own the actual utility. And if it’s a an S and P 500 index fund or the, like, they don’t want the spinoff, they only want the parent company that’s in the index. So we could see index related selling in this index fund related, selling in this name next week. That takes us from, you know, pretty reasonably priced. They think the thing’s going to the company’s going to between three and three 50 a share next year. So you’re only paying about 10 times earnings. Now, if that got down to a point where I was paying eight times earnings, I’m all in and I’ll let my subscribers know that as soon as I, we go all in, they get first, first call on
Speaker 4 (21:01):
That one. So
Speaker 1 (21:04):
That’s fantastic. So that’s all six.
Speaker 2 (21:07):
Nope. Nope. We’ve got one more. We’ve got one more down. I lost count. Okay. All right. Oh yeah, there we go. There’s a study done last year. And so the insider biding buying near all time, highs is incredibly bullish. Insider buying at any level is bullish, but if you’ve got an insider buying shares as a stock is making highs, that’s a big statement. Usually you see insiders buying when they think the stock is cheap relative to future prospects. When they’re buying near a high, they’re saying, look, this thing’s coming up and it’s moving higher, but guess what? It’s so good. It’s going higher. And it happened in one of my favorite type of investment vehicles. We’re talking about a closed end fund. Now I’m not going to get real technical closed end funds are sold by brokerage firms, the shares trade on the exchange. So they are subject to the laws of supply and demand.
Speaker 2 (21:59):
If it is a popular fund, it will often trade for more than the value of the stocks that they own. That’s called trading at a premium. If it’s an unpopular or just orphaned fund, as most closed in funds are it’s going to trade at a discount. This is a closed end fund, the PIMCO energy and tactical credit opportunities fund. These guys are investing in primarily infrastructure assets, like pipeline companies. And they’re, they’re buying the common stock. The preferred stock that, that whatever part of the capital structure they think is the most attractive right now, they have the ability if they choose to, to invest in renewable energy companies at any level of the cap capital structure, if they choose to so far, they have not chosen to. So primarily in pipelines and pipeline securities, right now, it’s trading at a 12 and a half percent discount to its net asset value, which is too low.
Speaker 2 (22:56):
I mean, you know, that’s, it’s too high, a discount. It needs to be narrowed. And I think that’s part of why the insiders are buying. I think they might be aware that there’s a buyback or a tender or something coming up that will substantially narrow the discount. In the meantime, it’s paying a regular dividend of 5.3, 5%. And these guys are, these guys are smart. They know that there’s more opportunities are going to be created. And oil has been going higher. So oil related stocks, bonds, and securities have been going higher. They’ve been selling Carter into the strength. They’re sitting there with 23% of this fund in cash to deploy at better prices when those become available. So you’ve got insider buying in a heavily discounted closed in fund. That’s kicking out a nice dividend. So you’ve got the dividend, you’ve got capital appreciation potential from the is going and from the narrowing of the discount. So it’s kind of a triple win situation watching that, any increase in that discount going to have to be a buyer of this fund.
Speaker 1 (23:53):
So when you say insider buying, does that mean the people, the guys who own the company are investing their own money in it. At this
Speaker 2 (24:00):
Time I was running the guys, running the company, the officers and directors are buying more. They usually already own a bunch. They’re buying more
Speaker 1 (24:08):
And what’s, what’s the ticker symbol.
Speaker 2 (24:10):
Oh, sorry. NRG X on that one.
Speaker 1 (24:12):
N R G X. Excellent. Excellent. Now we’ve got the half dozen, the Baker’s half dozen and, and you’re right. You said you’re going to save the best for last and dividends, return, insider buying everything you look for. I know, because we’ve talked, is there?
Speaker 2 (24:31):
Yeah, that’s great. That’s the the pinko fund. If you’re looking for income in this market, that is a fantastic alternative to add to your portfolio. So again, any poll back in that, in that at all, subscribers should look for and I work that says, Hey guys, time to buy this one. That’s great. So that’s, that’s, that’s the sex that I’m watching this weekend. We’ll see how how the week plays. Yeah, that’s
Speaker 1 (24:51):
Fantastic. So they were going to have our weekly watch list from Tim. Melvin’s better way to wealth, right? Yes. Yes, we are. Fantastic. And we just got the first one. Thank you, Tim books. Now, you know where to watch and where to find a better way to wealth. So thanks for joining us. Thank you, Tim. Thank you. Got it.
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