Closed End Bond Funds Selling at a Discount Yielding Over 10% Paying Monthly

by Fred Fuld III

Closed-end funds (CEFs) are investment vehicles that pool money from multiple investors to invest in various assets such as stocks, bonds, or other securities. Unlike mutual funds or exchange-traded funds (ETFs), CEFs have a fixed number of shares, which are traded on stock exchanges like individual stocks.

How CEFs Work

Here’s how closed-end funds work:

Initial Public Offering (IPO): When a closed-end fund is launched, it goes through an IPO where a fixed number of shares are issued and sold to investors.

Active Management: CEFs are typically actively managed by professional fund managers who make investment decisions on behalf of the fund. Their goal is to generate returns by investing in a diversified portfolio of assets.

Stock Exchange Trading: Once the IPO is complete, the shares of the CEF are listed on a stock exchange, allowing investors to buy or sell shares throughout the trading day. The price of CEF shares is determined by supply and demand dynamics in the market and may deviate from the fund’s net asset value (NAV).

Leverage: Some closed-end funds may use leverage by borrowing money to make additional investments. This can potentially enhance returns but also increases risk.

Advantages of CEFs

Now, let’s discuss why it may be advantageous to invest in CEFs selling at a discount:

Buying Below Net Asset Value (NAV): CEFs often trade at a price that is lower than their NAV per share. This discount can occur due to market sentiment, investor behavior, or perceived concerns about the fund. Investing in CEFs at a discount means you can acquire a dollar’s worth of assets for less than a dollar.

Potential for Capital Appreciation: If a CEF’s share price eventually converges with its NAV, investors who purchased shares at a discount can benefit from capital appreciation. As the discount narrows or disappears, the value of their investment increases.

Higher Income Yield: CEFs typically distribute income generated from their underlying assets to shareholders. Buying CEFs at a discount can result in a higher income yield since the distribution is calculated based on the NAV, while the purchase price is lower.

Diversification and Professional Management: CEFs offer diversification benefits by investing in a portfolio of different securities. Moreover, they are managed by professional fund managers who employ their expertise to select investments, potentially generating attractive returns.

Potential for Active Trading Strategies: The market price of CEF shares can deviate significantly from the underlying NAV, providing opportunities for active traders to capitalize on these price discrepancies through short-term trading strategies.

It’s important to note that investing in CEFs involves risks, such as market volatility, interest rate fluctuations, and the performance of the underlying assets. Additionally, the discount at which a CEF trades may persist or widen, resulting in potential losses for investors. Therefore, thorough research and consideration of individual CEFs and their investment strategies is crucial before making investment decisions.

Closed End Bond Funds

Closed-end bond funds are a type of closed-end fund that specifically invests in a portfolio of bonds or other fixed-income securities. These funds pool money from multiple investors to invest in a diversified range of bonds, including government bonds, corporate bonds, municipal bonds, or even international bonds.

Here are some key characteristics of closed-end bond funds:

Income Generation: The primary objective of closed-end bond funds is to generate income for investors. They typically invest in fixed-income securities that pay regular interest or coupon payments. The income earned from these bonds is then distributed to shareholders in the form of regular dividends.

Interest Rate Sensitivity: Closed-end bond funds are sensitive to changes in interest rates. When interest rates rise, bond prices tend to fall, which can negatively impact the net asset value (NAV) of the fund. On the other hand, when interest rates decline, bond prices tend to rise, potentially leading to an increase in the NAV.

Portfolio Diversification: Closed-end bond funds provide investors with a diversified portfolio of bonds. By investing in a variety of issuers, sectors, and maturities, these funds aim to mitigate risk and reduce the impact of any individual bond’s performance on the overall fund.

Credit Quality: Closed-end bond funds may invest in bonds with different credit ratings, ranging from high-quality investment-grade bonds to lower-rated or even non-investment-grade bonds (also known as junk bonds). The credit quality of the bonds held by the fund affects the overall risk profile and potential return of the fund.

Leverage: Some closed-end bond funds may use leverage to enhance returns. They borrow money to invest in additional bonds, aiming to generate a higher income for shareholders. However, leverage also amplifies risk, as it can magnify losses if the market moves against the fund’s positions.

Discount or Premium: Like other closed-end funds, closed-end bond funds can trade at a price that is either below (discount) or above (premium) their NAV per share. The discount or premium reflects market sentiment, supply and demand dynamics, and investor perception of the fund’s performance and prospects.

High Yield, Payable Monthly, Selling at a Discount to NAV

Here are some examples of bond CEFs that have a high yield in excess of 10%, pay dividends monthly, and are selling at a discount to Net Asset Value.

CompanySymbolYieldPeriodicDiscount to NAV
Highland Funds I – Highland Income FundHFRO10.36%Monthly-33.23%
FS Credit Opportunities Corp.FSCO13.55%Monthly-32.20%
High Income Securities FundPCF11.84%Monthly-16.69%
Legg Mason BW Global Income Opp Fund BWG12.80%Monthly-15.92%
Virtus Convertible & Income Fund IINCZ12.90%Monthly-15.71%
Virtus Convertible & Income FundNCV12.99%Monthly-15.59%
Western Asset Mortgage Opportunity FundDMO11.70%Monthly-15.07%

Investing in closed-end bond funds offers potential advantages such as regular income, diversification, and professional management. However, it’s crucial to carefully evaluate the specific fund’s investment strategy, credit quality, interest rate risk, leverage, and expense ratios. Additionally, investors should be mindful of the potential impact of changes in interest rates and market conditions on the performance of these funds.

Disclosure: Author didn’t own any of the above at the time the article was written.

Stocks Going Ex Dividend in June 2023

The following is a short list of some of the many stocks going ex-dividend during the next month, which can be helpful for traders and investors interested in the stock trading technique known as “Buying Dividends” or “Dividend Capture.” This strategy involves purchasing stocks before the ex dividend date and selling them shortly after the ex-date at a similar price, while still being eligible to receive the dividend payment.

Although this technique generally proves effective in bull markets and flat or choppy markets, it is advisable to exercise caution and consider avoiding this strategy during bear markets. To qualify for the dividend, it is necessary to buy the stock before the ex-dividend date and refrain from selling it until on or after the ex-date.

However, it is important to note that the actual dividend may not be paid for several weeks, as the payment date can be delayed by up to two months after the ex-date.

For investors seeking a comprehensive list of stocks going ex-dividend in the near future, WallStreetNewsNetwork.com has compiled a downloadable list containing numerous dividend-paying companies. Here are a few examples showcasing the stock symbol, ex-dividend date, periodic dividend amount, and annual yield.

PepsiCo, Inc. (PEP)6/1/20231.2652.71%
The Kraft Heinz Company (KHC)6/5/20230.404.13%
CME Group Inc. Class A (CME)6/8/20231.102.46%
Gilead Sciences, Inc. (GILD)6/14/20230.753.82%
Nasdaq, Inc. (NDAQ)6/15/20230.221.63%
Lincoln Electric (LECO)6/29/20230.641.52%
York Water Company (YORW)6/29/20230.20271.89%

To access the entire list of dozens of ex-dividend stocks, subscribers will receive an email in the next few days. If you are not already a subscriber, you can sign up using the provided signup box below. Don’t miss out on this valuable information, and the best part is that it’s free!

Dividend Definitions

To better understand the dividend-related terms, let’s define them:

Declaration date: This refers to the day when a company announces its intention to distribute a dividend in the future.
Ex-dividend date: On this day, if you purchase the stock, you would not be eligible to receive the upcoming dividend. It is also the first day on which a shareholder can sell their shares and still receive the dividend.
Record date: This marks the day when you must be recorded on the company’s books as a shareholder to qualify for the dividend. Typically, the ex-dividend date is set two business days prior to the record date.
Payment date: This is the day on which the dividend payment is actually made to the eligible shareholders. It’s important to note that the payment date can be as long as two months after the ex-date.

Before implementing the “Buying Dividends” technique, it is crucial to reconfirm the ex-dividend date with the respective company to ensure accuracy and avoid any unexpected changes.

In conclusion, being aware of the stocks going ex-dividend can be advantageous for traders and investors employing the “Buying Dividends” strategy. WallStreetNewsNetwork.com provides a convenient resource to access a comprehensive list of such stocks, allowing individuals to plan their investment decisions effectively. Remember to stay informed and consider market conditions before employing any investment strategy.

Disclosure: Author did not own any of the above at the time the article was written; affiliate links are on this page.

How to Invest in Pickleball

by Fred Fuld III

What do Tom Brady, Patrick Mahomes, Naomi Osaka, LeBron James, Kevin Durant, Draymond Green, and Kevin Love all have in common, other than the fact that they are all sports figures?

They are all buying Major League Pickleball expansion teams.

According to Markets Report World, the pickleball industry “is expected to expand at a CAGR of 10.19% during the forecast period, reaching USD 2368.34 million by 2028.”

The sport of pickleball was invented in the mid-1960s by Joel Pritchard, a congressman from Washington state, along with his friends Bill Bell and Barney McCallum. The game was initially created as a form of entertainment for Pritchard’s family during the summer. The exact details of how the game got its name are not entirely clear, but it is believed to have been named after the Pritchard family’s dog, Pickles, who would often chase after the ball.

The first pickleball court was set up in the backyard of Joel Pritchard’s home on Bainbridge Island, Washington. The game quickly gained popularity within their community and started to spread to other regions. As more people discovered and enjoyed the sport, pickleball began to evolve and develop its own set of rules and equipment.

Pickleball combines elements of various paddle sports, including tennis, badminton, and table tennis. It is typically played on a court about one-third the size of a tennis court, with a net placed lower than a tennis net. Players use solid paddles made of wood or composite materials to hit a plastic ball with holes, similar to a wiffle ball.

In the 1970s, pickleball started to gain wider recognition and organized play. The USA Pickleball Association (USAPA) was formed in 1984 to promote and govern the sport. The USAPA established standardized rules and regulations, developed a ratings system, and organized tournaments and events.

Since then, pickleball has experienced tremendous growth, especially in the United States, but also internationally. It has attracted players of all ages and skill levels due to its accessibility, social nature, and the relatively short learning curve. Many parks, recreation centers, and athletic clubs have incorporated pickleball courts, and the sport is now played competitively at local, regional, national, and international levels.

Pickleball has become a global phenomenon, with enthusiasts and organizations working to promote and expand the sport’s reach. It continues to evolve, with ongoing innovations in equipment, strategies, and playing styles.

So with such growth potential, investors are looking for ways to participate in this industry. One way is to buy a pickleball franchise. According to the American Pickleball Association, “Franchisees can expect to make a total investment of at least $35,000.”

However, an easier way would be to invest in stocks that are involved in the pickleball field.

Unfortunately, there are no pickleball pure plays. But there are several companies that are involved in pickleball in one form or another.

Escalade Sports (ESCA) is a sporting goods company based in Evansville, Indiana, USA. They specialize in the production and distribution of various sports equipment and recreational products.

Escalade Sports has a connection to pickleball through their subsidiary company, Onix Sports. Onix Sports is a leading brand in the pickleball industry, known for manufacturing high-quality pickleball paddles, balls, and other accessories. They are dedicated to promoting the growth of pickleball and providing players with top-notch equipment.

Onix Sports is a company that specializes in the production of pickleball equipment. It was founded in 2005 by Steve Wong, a pickleball enthusiast and entrepreneur based in Evansville, Indiana, USA. Wong recognized the growing popularity of pickleball and saw an opportunity to create high-quality equipment specifically designed for the sport.

In the early years, Onix Sports focused on developing pickleball paddles that would provide players with improved performance and control. They conducted extensive research and development to create paddles that met the needs of players at all skill levels. With their commitment to innovation and quality, Onix Sports quickly gained recognition within the pickleball community.

As the sport of pickleball continued to grow in popularity, Onix Sports expanded its product line to include pickleballs, nets, bags, and other accessories. They aimed to provide players with a comprehensive range of equipment to enhance their playing experience. Onix Sports became known for their attention to detail, advanced technology, and dedication to meeting the evolving needs of pickleball players.

Over the years, Onix Sports established itself as a leading brand in the pickleball industry, gaining a strong presence at tournaments, events, and leagues. Their equipment has been used by both recreational players and professionals, earning a reputation for durability and performance.

In 2020, Escalade Sports, a sporting goods company based in Evansville, Indiana, acquired Onix Sports. This partnership provided Onix Sports with additional resources and opportunities for growth while allowing Escalade Sports to expand its presence in the growing pickleball market.

Escalade has a price to earnings ratio of 16, a decent price to earnings growth ratio of 1.06, and a very favorable price to sales of 0.53. The company has a low market cap of $157 billion but pays a dividend of 5%.

Life Time Group Holdings, Inc. (LTH) is a comprehensive health and wellness company based in Chanhassen, Minnesota, USA. Life Time operates luxury athletic resorts, known as Life Time destinations, which offer a wide range of amenities and services, including fitness facilities, spa services, sports courts, swimming pools, and more.

Life Time has recognized the growing popularity of pickleball and its appeal to a wide range of individuals looking for engaging and social fitness activities. As a result, many Life Time destinations have started offering pickleball facilities to their members. These facilities typically include dedicated pickleball courts and provide opportunities for members to participate in pickleball leagues, tournaments, and social play.

The connection between Life Time Group Holdings, Inc. and pickleball lies in the company’s efforts to promote and support pickleball as a recreational activity within their athletic resorts. By offering dedicated pickleball facilities, Life Time aims to provide their members with diverse fitness options and cater to the increasing demand for pickleball.

Life Time has a $3.87 billion market cap, a trailing P/E ratio of 63.6, and a forward P/E of 34. Earnings per share growth for next year is estimated to increase by 49.5%. The stock does not pay a dividend.

Another alternative is Dick’s Sporting Goods (DKS). It is a well-known sporting goods retailer based in Coraopolis, Pennsylvania, USA. The company was founded in 1948 by Richard “Dick” Stack and initially operated as a small bait-and-tackle shop. Over the years, Dick’s Sporting Goods expanded its product offerings and grew into a major retail chain with stores across the United States.

As for its connection to pickleball, Dick’s Sporting Goods has recognized the increasing popularity of the sport and has been actively stocking pickleball equipment in its stores. They offer a variety of pickleball paddles, balls, nets, apparel, and accessories from different brands. By providing a range of pickleball gear, Dick’s Sporting Goods aims to cater to the needs of pickleball players and enthusiasts.

In addition to selling pickleball equipment, Dick’s Sporting Goods has also supported the sport through sponsorships and partnerships. They have collaborated with various organizations and events to promote pickleball and increase awareness of the sport. Such initiatives include sponsoring tournaments, clinics, and leagues.

The company has an $11.5 billion market cap, trades at 12.8 times trailing earnings and 9.7 times forward earnings. The price sales ratio is a favorable 0.93. The stock has a dividend yield of 2.95%.

Other companies in this arena include adidas AG (ADDYY), which makes pickleball paddles, shirts, shorts, and shoes, ASICS Corporation (ASCCY) which makes paddleball shoes, and Big 5 Sporting Goods Corporation (BGFV) which sells pickleball paddles and balls.

Playing pickleball is a great way to work on your backhand and your portfolio. Both require patience, strategy, and a good follow-through.

Disclosure: Author didn’t own any of the above at the time the article was written.

Chocolate: Healthy for You, Healthy for Your Portfolio

by Fred Fuld III

Chocolate, especially dark chocolate that contains a high percentage of cocoa solids, has several potential health benefits. Here are some of the health benefits of  chocolate:

Rich in antioxidants: Chocolate, particularly dark chocolate, is a good source of antioxidants that help protect the body against free radicals that can cause cell damage.

May lower blood pressure: Studies have found that consuming dark chocolate on a regular basis may help lower blood pressure, which is a risk factor for heart disease.

May reduce the risk of heart disease: The flavonoids in dark chocolate may improve heart health by reducing inflammation and improving blood flow, which may lower the risk of heart disease.

May improve brain function: The flavonoids in dark chocolate may also improve brain function and protect against cognitive decline, particularly in elderly individuals.

May reduce the risk of stroke: Studies suggest that consuming chocolate, particularly dark chocolate, may help lower the risk of stroke.

May improve mood: Chocolate contains several compounds that may improve mood, including phenylethylamine, which stimulates the release of endorphins and dopamine, two chemicals that produce feelings of happiness and pleasure.

So if chocolate is so healthy, then maybe there are some investment opportunities in this tasty industry.

The Hershey Co. (HSY) is one of the largest chocolate manufacturers in the world. The company, which is headquartered in Hershey, Pennsylvania, controls a significant share of the domestic chocolate market.

The company produces a wide range of chocolate and confectionery products, including Hershey’s chocolate bars, Hershey’s Kisses, Reese’s Peanut Butter Cups, Kit Kat, Twizzlers, and Jolly Rancher candies. Hershey also manufactures baking chocolate, cocoa powder, and chocolate syrup.

In addition to its operations in the United States, the Hershey Company has a presence in over 70 countries worldwide, including Canada, Mexico, Brazil, China, and India. The company employs over 18,000 people.

The company has a market cap of $54.8 billion and pays a dividend yield of 1.51%. The stock has a price-to-sales ratio of 5.28, and trades at 33 times trailing earnings and 29 times forward earnings. Annual Earnings per share growth for the last five years was 17.8%, and a 44.6% growth this year.

Rocky Mountain Chocolate Factory Inc. (RMCF) is a confectionery and franchising company based in Durango, Colorado, United States. It was founded in 1981 by Frank Crail and has since grown into a well-known brand in the chocolate industry.

The company specializes in producing and selling a wide variety of chocolate and confectionery products. Some of their popular offerings include caramel apples, fudge, truffles, chocolate-covered strawberries, toffee, and various types of chocolate bars. They also offer seasonal and holiday-themed chocolates.

Rocky Mountain Chocolate Factory operates a combination of company-owned stores and franchised locations. Their stores are known for their attractive displays of chocolate and the opportunity to watch the candy-making process through a glass window, which adds to the customer experience.

In addition to its domestic presence, Rocky Mountain Chocolate Factory has expanded internationally and operates stores in several countries worldwide. They also offer online ordering, allowing customers to purchase their chocolates from anywhere.

Rocky Mountain Chocolate Factory Inc. has an extremely small market cap of $34 million. Its stock has a reasonable price-to-sales ratio of 0.99 and a price-to-earnings ratio of 13. Quarterly revenue growth year over year was 11.8% and quarterly earnings growth was 85.9%. The company is debt free.

Tootsie Roll Industries (TR), although not a “chocolate” company as such, is a confectionery manufacturer based in Chicago, Illinois, United States. The company was founded in 1896 by Leo Hirshfield and is named after his daughter’s nickname, “Tootsie.”

Tootsie Roll Industries is primarily known for its iconic Tootsie Roll, a chocolate-flavored taffy-like candy that has become a classic American treat. However, the company produces and markets a diverse range of confectionery products, including Tootsie Pops, Charms Blow Pops, Dots, Junior Mints, Sugar Daddy, Charleston Chew, and Andes mints, among others.

The company operates manufacturing facilities in the United States and Mexico. Its products are distributed both domestically and internationally, with a presence in over 75 countries.

Tootsie Roll Industries has maintained a focus on quality and craftsmanship throughout its long history. The Tootsie Roll, in particular, has remained relatively unchanged in its recipe and packaging, and it is often marketed as a nostalgic candy beloved by generations.

The stock has a market cap of $2.64 billion and pays a yield of 0.97%. It has a P/E ratio of 34, and earnings per share growth this year were up 17.3%.

A few other chocolate stocks that may be worth looking into are Mondelez International (MDLZ), Nestle (NSRGY), and Lindt & Sprungli AG (LDSVF).

Let me leave you with these thoughts:

“Investing is like a box of chocolates; you never know what sweet returns you’ll get.”

“Successful investing is like creating a perfectly balanced chocolate recipe – it’s all about finding the right mix.”

“Remember, investing is a marathon, not a sprint, just like savoring a piece of delicious chocolate.”

“Investing is like a chocolate factory; it takes careful planning and good management to churn out sweet profits.”

Disclosure: Author didn’t own any of the above at the time the article was written.

Top NYSE Short Squeeze Stocks

by Fred Fuld III

Many stocks have dropped during the last few weeks.

This may create a buying opportunity for New York Stock Exchange stocks that are heavily shorted.

Do short squeeze stocks actually go up?

On August 22, 2022, I posted an article about meme related short squeeze stocks, and pointed out Bed Bath and Beyond (BBBY) after it had its big run-up. In exactly one week after the article was posted, the stock jumped by more than 43%.

Another stock that was mentioned was Intercept Pharmaceuticals, Inc. (ICPT), which increased by almost 5% in just two days.

The stock with the biggest short ratio (days to cover) last August, at 14.3 back then, was Heron Therapeutics, Inc. (HRTX). It rose by 9.5% in three days.

When you short a stock, it means that your goal is to make money from a drop in the price of a stock. Technically, what happens is that you borrow shares of a stock, sell those shares, then buy back those shares at a hopefully lower price so that those shares can be returned. This all happens electronically, so you don’t actually see all the borrowing and returning of shares; it just shows up on your screen as a negative number of shares.

Short sellers can be profitable, but sometimes when the stock moves against them, and begins to rise, the short sellers jump in right away to buy shares to cover their positions, creating what is called a short squeeze. When a short squeeze takes place, it can cause the share prices to increase fast and furiously. Any good news can trigger the short squeeze.

Some traders utilize this situation by looking for stocks to buy that may have a potential short squeeze. Here is what a short squeeze trader should take into consideration:

Short Percentage of Float ~ The float is the number of freely tradable shares and the short percentage is the number of shares held short divided by the float. Amounts over 10% to 20% are considered high and potential short squeeze plays.

Short Ratio / Days to Cover / Short Interest Ratio -This is probably the most important metric when looking for short squeeze trades, no matter what you call it. This is the number of days it would take the short sellers to cover their position based on the average daily volume of shares traded. This is a significant ratio as it shows how “stuck” the short sellers are when they want to buy in their shares without driving up the price too much. Unfortunately for the shortsellers, the longer the number of days to cover, the bigger and longer the squeeze.

Short Percentage Increase ~ This is the percentage increase in in the number of short sellers from the previous month.

The following are some heavily shorted stocks that may be worth considering.

CompanySymbolShort % of floatShort % changeShort Interest Ratio
Carvana CoCVNA58.05%1%2.8
Silvergate Capital CorpSI45.08%-12%0.8
Big Lots, Inc.BIG39.78%11%7.3
Fisker IncFSR37.34%7%8.7
Wayfair IncW30.02%-5%4.3

The third stock on the list, Big Lots (BIG) has almost 40% of its float shorted, an increase of 11% over last month.

The short interest ratio is 7, which means that it would take the short sellers 7 days to cover their position, based on recent average volume.

Just keep in mind that just because a stock has good ratios and is heavily shorted, doesn’t mean that the stock will go up, especially in a bear market. Also, stocks that are significantly shorted may be shorted for a reason.

Disclosure: Author didn’t own any of the above at the time the article was written.

Stocks Going Ex Dividend in May 2023

The following is a short list of some of the many stocks going ex dividend during the next month.

Many traders and investors use the stock trading technique called ‘Buying Dividends,’ also commonly referred to as ‘Dividend Capture.’ This is the strategy of buying stocks before the ex dividend date and selling the stock shortly after the ex date at about the same price, yet still being entitled to the dividend.

This technique generally works in bull markets and flat or choppy markets, but during bear markets, you may want to consider avoiding this strategy. In order to be entitled to the dividend, you have to buy the stock before the ex-dividend date, and you can’t sell the stock until on or after the ex date.

The actual dividend may not be paid for another few weeks.

WallStreetNewsNetwork.com has compiled a downloadable list of the stocks going ex dividend in the near future. The list contains many dividend paying companies. Here are a few examples showing the stock symbol, the ex-dividend date, the periodic dividend amount, and the annual yield.

Walmart Inc.   (WMT)5/4/20232.281.49%
Fortis Inc.   (FTS)5/16/20231.6953.81%
Deutsche Bank AG   (DB)5/18/20230.32372.98%
FutureFuel Corp.   (FF)5/31/20230.243.13%
Tyson Foods, Inc.   (TSN)5/31/20231.923.15%

The entire list of dozens of ex-dividend stocks will be emailed to all subscribers this week. If you are not a subscriber, you can sign up at the signup box below. Don’t miss out. Remember, it’s free!

Dividend Definitions

Declaration date: the day that the company declares that there is going to be an upcoming dividend.

Ex-dividend date: the day on which if you buy the stock, you would not be entitled to that particular dividend; or the first day on which a shareholder can sell the shares and still be entitled to the dividend.

Record date: the day when you must be on the company’s books as a shareholder to receive the dividend. The ex-dividend date is normally set for stocks at two business days before the record date.

Payment date: the day on which the dividend payment is actually made, which can be as long at two months after the ex date.

Don’t forget to reconfirm the ex-dividend date with the company before implementing this technique.

Disclosure: Author did not own any of the above at the time the article was written; affiliate links are on this page.

What is Trending on Amazon

by Fred Fuld III

Have you ever wondered what the hot items are on Amazon (AMZN) that people are ordering? The following is a list of the latest trending items.

By the way, Amazon reports earnings on April 27.

Nintendo Switch – OLED Model – The Legend of Zelda: Tears of the Kingdom Edition

Polaroid Originals Now I-Type Instant Camera

LEVOIT Air Purifier

Keurig K-Iced Coffee Maker

Gotland 8 Piece Outdoor Patio Furniture Set with Gas Fire Pit

AND FOR MOTHER’S DAY:

Breville Smart Oven Air Fryer Pro

Salt, Fat, Acid, Heat: Mastering the Elements of Good Cooking

Disclosure: Author owns AMZN stock. This article contains Amazon affiliate links whereby I would receive a small commission on any sale through those links at no additional cost to you.

Top 5 Pure Play AI Stocks

By Fred Fuld III

You’ve seen it on TV, you’ve read about it on news websites. Artificial Intelligence, commonly referred to as AI, is now the hottest industry. Stocks that are involved in this industry are taking off.

I originally wrote about a form of artificial intelligence back in October of 2021 in an article called The Future of Artificial Intelligence: Can You Invest In It Now?

So you may be wondering what companies are the purest plays.

WHAT AI IS

Artificial Intelligence, or AI for short, refers to the ability of machines to perform tasks that typically require human intelligence, such as learning, reasoning, problem solving, and decision-making. AI algorithms are designed to analyze data, recognize patterns, and make predictions or recommendations based on that analysis.

In other words, AI is a way to teach machines to perform tasks that would normally require human intelligence, and to improve their performance over time based on the data they analyze. This technology has the potential to revolutionize many aspects of our lives, from healthcare to transportation to entertainment. AI is even being used to write articles and books.

WHAT CHAT AI IS

One of the most popular types of AI services is Chat AI. 

Chat AI refers to the use of artificial intelligence technologies, such as natural language processing (NLP) and machine learning, to enable machines to communicate with humans via chat interfaces, such as chatbots or virtual assistants.

Chat AI is used in a variety of settings, such as customer service, where chatbots can be used to answer frequently asked questions, provide information, or help customers troubleshoot issues. Chat AI can also be used in healthcare to provide personalized support and advice, in education to assist with learning, and in business to streamline operations and improve customer engagement.

The key advantage of Chat AI is that it enables organizations to provide 24/7 support to their customers, without the need for human intervention. Additionally, Chat AI can help organizations save costs by automating routine tasks and reducing the need for human labor.

To enable effective Chat AI, developers must ensure that the algorithms are capable of understanding and interpreting natural language, as well as providing appropriate responses to user queries. This requires a combination of NLP and machine learning techniques, as well as ongoing training and improvement of the chat AI system.

Overall, Chat AI is an increasingly popular technology that has the potential to transform the way we interact with machines and automate routine tasks in various industries.

CREATING IMAGES WITH AI

Yes, artificial intelligence is now being used to create images, such as book covers, logos, album covers, and many other purposes. You just need to type in a simple description, and a picture will automatically be created. One of the most popular AI image services is called DALL-E.

DALL-E is an artificial intelligence system developed by OpenAI that is capable of generating images from textual descriptions. The name “DALL-E” is a combination of the artist Salvador Dali and the Pixar character Wall-E.

The DALL-E system uses a combination of machine learning techniques, including natural language processing and computer vision, to interpret textual descriptions and generate corresponding images. It is capable of creating images of objects and scenes that do not exist in the real world, such as a teapot made of giraffe or a snail-shaped harp.

THE BIG PLAYERS

The DALL-E system was trained on a dataset of text-image pairs, which enabled it to learn the relationship between textual descriptions and their corresponding visual representations. The system was trained on a massive amount of data, including images from the internet and text descriptions from a variety of sources.

The potential applications of DALL-E are numerous, including in the fields of art, design, and advertising. It has the potential to streamline the creative process and help artists and designers bring their ideas to life more quickly and easily. However, there are also concerns about the potential misuse of this technology, such as the creation of fake images or the propagation of harmful stereotypes.

First, let’s get the large stocks out of the way. There are many companies involved in AI, ranging from startups to large corporations. However, some of the biggest companies involved in AI are:

Google (GOOG) (GOOGL) is known for its search engine, but it’s also heavily invested in AI, with products like Google Assistant, Google Photos, and Google Translate all utilizing machine learning.

Amazon (AMZN) is using AI in many areas, such as its recommendation engine, its Alexa voice assistant, and its Amazon Go stores, which use computer vision to enable a checkout-free shopping experience.

Microsoft (MSFT) has been investing heavily in AI and has developed several AI-powered products, including Cortana, Skype Translator, and Microsoft Cognitive Services.

IBM (IBM) has a long history of developing AI technologies, and its Watson platform is one of the most well-known examples of AI in action.

Meta/Facebook (META) uses AI in a variety of ways, including facial recognition technology for tagging photos and content moderation.

Apple (AAPL) has been incorporating AI into many of its products, including Siri and Face ID.

NVIDIA (NVDA) is a leading manufacturer of GPUs, which are essential for training and running AI models.

Baidu (BIDU) is a Chinese search engine that is heavily investing in AI, with projects ranging from self-driving cars to voice recognition.

Tesla (TSLA) is using AI in its autonomous driving technology and is working to develop a fully self-driving car.

Alibaba (BABA), the Chinese e-commerce company, is investing in AI to improve its recommendation engine and other areas of its business.

THE PURE PLAYS

Now let’s get to the purer plays in artificial intelligence.

C3.AI

C3.ai, Inc. (AI) is a software company, located in Redwood City, California, that provides enterprise AI solutions for a variety of industries, including energy, healthcare, and finance. The company was founded in 2009 by Dr. Thomas M. Siebel, who is also the CEO of the company.

Before founding C3.ai, Dr. Siebel was the founder and CEO of Siebel Systems, a leading enterprise software company that was acquired by Oracle Corporation in 2006. After the acquisition, Dr. Siebel focused on developing AI-based solutions for the enterprise market and founded C3.ai.

Initially, C3.ai focused on developing predictive maintenance and energy management solutions for the energy industry. The company’s first product, C3 Energy Management, was designed to help utilities optimize their energy generation and distribution systems using machine learning algorithms.

Over time, C3.ai expanded its focus to other industries, including healthcare, financial services, and manufacturing. The company’s current product offerings include C3 AI Suite, which is a platform that enables organizations to develop and deploy AI applications, and C3.ai Ex Machina, which is an AI-powered data science platform for data scientists and developers.

C3.ai has received funding from several prominent investors, including Breyer Capital, TPG Growth, and the Rise Fund. In December 2020, the company went public on the New York Stock Exchange under the ticker symbol “AI,” raising $651 million in its initial public offering.

The stock has a market capitalization of $2.45 billion. This debt-free company has $6.76 in cash per share.

SOUNDHOUND AI

SoundHound AI, Inc. (SOUN) is a Silicon Valley-based technology company that specializes in developing sound recognition and voice-enabled AI solutions. The company was founded in 2005 by Dr. Keyvan Mohajer, who is also the CEO of the company.

Initially, the company started as a music recognition app called “Midomi,” which allowed users to hum or sing a song, and the app would identify the song. Later on, the company expanded its focus to voice-enabled AI technology and changed its name to SoundHound Inc.

In 2015, SoundHound Inc. launched its flagship product, Hound, which is an AI-powered voice assistant. Hound uses a natural language processing (NLP) technology that enables users to speak complex and specific queries in a conversational manner. The Hound voice assistant is available as a mobile app and can be integrated into other devices and applications.

In addition to Hound, SoundHound AI, Inc. also offers a suite of AI-based products and services, including sound recognition technologies for speech-to-text and music identification, and voice-enabled AI solutions for automotive, hospitality, and other industries.

The company has received funding from several prominent investors, including NVIDIA, Samsung, and Tencent Holdings. By 2021, SoundHound AI, Inc. had raised over $250 million in funding.

SoundHound has a market cap of $580 million. The company is debt-free and quarterly sales increased by over 79% year-over-year.

BIGBEAR.AI

BigBear.ai Holdings, Inc. (BBAI) is a technology company that develops and provides artificial intelligence (AI) solutions for defense and intelligence organizations, as well as for commercial customers. The company was founded in 2018 and is headquartered in Reston, Virginia.

BigBear.ai’s technology solutions use AI and machine learning to help customers make sense of large and complex data sets, as well as to automate decision-making processes. The company’s AI-driven solutions are designed to improve situational awareness, increase operational efficiency, and support decision-making across a range of industries and applications.

The company’s solutions cover a range of capabilities, including computer vision, natural language processing, and data analytics. BigBear.ai’s solutions are used in a variety of applications, such as intelligence analysis, threat detection, predictive maintenance, and supply chain optimization.

BigBear.ai has a broad customer base that includes government agencies and commercial customers in various industries. The company has received funding from several venture capital firms, including Riverside Partners, Chart National, and Blu Venture Investors.

In 2021, BigBear.ai announced that it had entered into a definitive agreement to merge with GigCapital4, a special purpose acquisition company (SPAC), in a deal that valued the combined company at $1.57 billion. The merger was completed in August 2021, and the combined company is now publicly traded on the NASDAQ under the ticker symbol “BBAI” as “BigBear.ai”.

This debt-free company has a market cap of $458 million. 

T STAMP

T Stamp Inc. (IDAI) is an identity authentication software company that uses artificial intelligence (AI) to develop solutions for government, enterprise partners, and peer-to-peer markets in the United States, the United Kingdom, and Malta.

T Stamp’s AI-powered solutions leverage biometric science, cryptography, and data mining to deliver identity and trust predictions, protect sensitive user information, and extend the reach of digital services through global accessibility. The company’s solutions include converting biometric and other identifying data into an Irreversibly Transformed Identity Token that serves as a secure tokenized identity. T Stamp also offers solutions for privacy and data protection, document validation, identity verification, geolocation, duplicate detection, and biometric capture.

T Stamp’s solutions serve a variety of industries, including banking/fintech, humanitarian and development services, KYC/AML compliance, government and law enforcement, P2P transactions, social media, and sharing economy, and real estate, travel, and healthcare. The company was incorporated in 2016 and is headquartered in Atlanta, Georgia.

Overall, T Stamp’s mission is to provide secure and scalable identity authentication solutions that leverage AI and advanced technologies to protect user privacy and combat identity fraud.

This is a microcap stock with an extremely low market cap of $18 million, and should therefore be considered extremely speculative. 

MARPAI

Marpai, Inc. (MRAI) is a software company that specializes in developing and deploying artificial intelligence (AI) systems for the enterprise market. The company was founded in 2016 by a team of experienced entrepreneurs and AI researchers, including CEO and Co-founder Mark Sears.

Marpai’s platform, called “Cortex,” is designed to help businesses leverage AI to automate processes, extract insights from data, and improve decision-making. Cortex uses advanced machine learning algorithms to analyze large amounts of data and provide actionable insights to users.

The company has received funding from prominent venture capital firms, including Bain Capital Ventures, Crosslink Capital, and SVB Capital, among others. In May 2021, Marpai announced that it had raised $30 million in a Series A funding round led by M12, Microsoft’s venture fund, with participation from other investors.

Marpai has a range of customers across different industries, including finance, healthcare, and retail. The company’s solutions are used for a variety of applications, such as fraud detection, customer service automation, and supply chain optimization.

Overall, Marpai’s mission is to democratize AI and make it more accessible to businesses of all sizes, by providing a scalable and user-friendly platform for deploying AI solutions.

The stock is debt-free and quarterly revenue growth year-over-year was 28.8%. This is another microcap stock with an extremely low market cap of $40 million, and should therefore also be considered extremely speculative.

AI SUMMARY

According to Fortune Business Insights, “The Artificial Intelligence market is projected to grow from $387.45 billion in 2022 to $1394.30 billion by 2029, at a CAGR of 20.1%.”

Just remember, that there are many ups and downs in new industries, and all the pure play stocks in this list should be considered speculative. Remember, no recommendations are expressed or implied. 

If you want to learn more about artificial intelligence, you should get the book Artificial Intelligence: What AI Is and How You Can Use It to Make Your Life Easier: A Guide to AI for Beginners, available in both paperback and Kindle.

Disclosure: Author didn’t own any of the above at the time the article was written, although may be making purchases in the near future. This article contains Amazon affiliate links whereby I would receive a small commission on any sale through those links at no additional cost to you. 

Four Ways to Invest in Apple (without using options)

by Fred Fuld III

Are you bullish on Apple (AAPL)? Are you bearish on Apple? Do you know these are four securities you cn buy to participate in the movement of the Apple stock?

AAPL

First, you can just buy the stock outright. That’s Apple with the symbol AAPL. What you buy is what you get. When the stock moves up a dollar in price, your share move up one dollar.

AAPD

If you are bearish on Apple, and you don’t want to take the risk of shorting the stock, you can buy the Direxion Daily AAPL Bear 1X Shares (AAPD). This ETF has a goal of moving inversely to the price of Apple, on a dollar for dollar basis. In other words, if Apple moves down a dollar, then AAPD should move up about a dollar.

AAPU

If you are really bullish on Apple, you can consider trading the Direxion Daily AAPL Bull 1.5X Shares (AAPU), which is an ETF with a goal of moving one and a half times the direction of Apple. So if Apple moves up one dollar, AAPU should move up about $1.50.

AAPB

Now if you are super bullish on Apple, you might want to look at the GraniteShares 1.75x Long AAPL Daily ETF (AAPB), which attempt to provide 1.75 times the movement of Apple stock. Just remember, if Apple goes down, this ETF will drop by about 1.75 times.

Keep in mind that these Bullish Single Stock ETFs and Anti Stocks (Bearish Single Stock ETFs) should primarily be used for trading as opposed to investing, and can obviously carry a lot of risk.

Disclosure: Author owns AAPL.

Get Income on Penny Stocks that Don’t Pay Dividends

by Fred Fuld III

Yes, you read that heading correctly. You can own penny stocks that don’t pay dividends or even regular stocks that don’t pay dividends, and still get income from them.

And for stocks that do pay dividends, you can increase your income from them.

I’m not talking about writing options. I’m not talking about selling off some of your shares.

What I am talking about is something called the Fully Paid Lending Income program which most major brokerage firms offer. It is a way of making money off traders who  sold shares of a stock short .

Fully Paid Lending Income (FPLI) is a type of income that investors can earn by lending their fully paid securities to other market participants, such as hedge funds or other traders, who want to short sell the securities.

When investors lend their fully paid securities, they earn interest on the loan, which is referred to as FPLI. The interest rate is determined by market forces and may vary based on factors such as the demand for the security, the supply of available securities to lend, and the length of the loan period.

The process of FPLI works as follows: An investor with fully paid securities can lend them to a borrower through a lending agent, such as a broker-dealer or a custodian bank. The borrower then sells the securities on the market with the hope of buying them back later at a lower price. If successful, the borrower returns the securities to the lender, who earns interest on the loan.In summary, FPLI is a way for investors to earn additional income on their fully paid securities by lending them to other market participants who want to short sell the securities.

So you are probably wondering, can you really make any money from Fully Paid Lending? The answer is yes, and I’m talking from personal experience.

I recently called my broker about another issue relating to dividends, and as we were going through the income on my account, I noticed income of $164 listed as Miscellaneous. I asked the customer rep what that was and he told me that’s the fully paid lending income.

So I started to look back at previous months.

The following is an example from last month from my Roth IRA at TD Ameritrade. (Confidential information has been redacted.)

The dollar value of this stock during this time was around $8,000 and you will notice that the collateral at month-end was zero, which means that my shares were not borrowed for the entire month.

In spite of that, my stock generated over $164 for the month. That works out to 2% for just one month. Not too shabby for a stock that sells for around $4 and doesn’t pay a dividend. And if you annualize it…..

Now you are probably wondering, is this a one shot deal that you might get for only one month out of the year? The answer is no. Since December of last year, I have received over $100 every month.

Here is another example from January.

You can see that the same stock that generated $164 last month brought me $336 in January.

Let’s assume conservatively that this stock generates $150 per month. That’s $1800 per year, and for $8000 worth of stock, that’s a 22.5% return!

Considering that I originally bought the stock for just capital gains, this additional income is a nice bonus.

Now for the downside. You will notice that I had a second stock in January, which only generated six cents in lending fees. That can happen.

Sometimes you don’t make much and sometimes you don’t make anything on your stockholdings, but when you do, the income can be fairly high depending on if the stock is hard to borrow.

Be aware that you are not automatically enrolled in this program. You need to contact your broker, fill out some forms (which might need to be physical forms instead of electronic), and then wait a couple days for it to be activated.

I could not find any disadvantage to the program, although there are some basic requirements. I can sell my stock at any time. You can enroll both a regular account and an IRA account.

The way I look at it, I have nothing to lose and the possibility of a lot to gain. Especially with the low priced stocks.

Here’s to getting additional income on your stock portfolio.