At the end of last week I spent two days at the Orlando MoneyShow. I attend MoneyShow conferences across the country as an invited speaker, giving presentations on income-focused investing strategies. I also use these trips as an opportunity to talk one-on-one with some of the sharpest money managers, investor relations representatives, and analysts in the investing world.
Orlando has been a good and busy MoneyShow conference. Lots of investors looking for ideas to improve their own results. I also came across a couple of compelling investment ideas outside of my area of expertise. I share one of those below.
Energy midstream is the group of companies that provide transport, storage, and processing services between the oil and gas production areas and the end-users. These are the pipeline companies, most of which in the past were organized as master limited partnerships. The MLP/midstream sector has been in a six-year bear market. The Alerian MLP Infrastructure Index hit its record high at the end of August 2014.
Thursday night, I had dinner with Jay Hatfield, Founder, and CEO of InfraCap Funds, and the portfolio manager of the InfraCap MLP ETF (AMZA). This is a very high yield MLP fund. Jay uses some leverage and call option writing to boost the dividend-paying ability of AMZA. We also discussed Infracap’s newest ETF, the Virtus InfraCap U.S. Preferred Stock ETF (PFFA).
AMZA continues the reflect the struggles in the energy midstream sector. In December, it looked like stock values had turned the corner, with gains of 10% for the month. Then the Coronavirus news came out, and energy sector stock values have given up the December gains. The companies themselves have spent the last three years restructuring their financials to be less dependent on outside capital for growth and to make dividends more secure. There are several possible merger and acquisition events in the near term (through the end of the year) that could strongly increase the perceived value of midstream assets.
At the other end of the risk spectrum, PFFA has been a great investment when bad news roils the markets. Preferred stock prices are more stable than common stock shares. PFFA is about a year old, and Hatfield is very happy with how the fund is performing. The ETF pays monthly dividends and currently yields over 8%.
Here are a few other investment ideas I picked up in Orlando that you might want to look at.
I sat in on a presentation by Omega Healthcare Investors (OHI). My first presentation was in the same room so I arrived early to catch what they had to say before getting into my own talk.
This company is a healthcare REIT that owns skilled nursing care facilities. I have not recommended any healthcare REITs for several years.
The sector over built skilled nursing and senior housing properties, and several big operators have not been able to pay their rents to the REITs.
The OHI investors relations folks presented some compelling demographic data that indicates the sector’s woes may be in the rearview mirror.
National Retail Properties (NNN) is a net-lease REIT that owns 3,057 properties over 48 states covering 37 lines of trade. This REIT has increased its dividend for 30 consecutive years.
They have a booth at every MoneyShow and their representative makes presentations explaining how the company operates. As a long-term steady dividend growth stock, NNN is hard to beat.
And then off the beaten path of I came across a type of opportunity I’ve never seen at any prior MoneyShow conference.
I was intrigued by the investment opportunity presented by Oeno Future. This London based company provides a way to invest in appreciating fine wines from around the world. They recommend wines, store the wines, and have analysts that recommend when to sell the wines in an investor’s portfolio. Their fee structure is reasonable. They make money only if the investors using their service have profitable results. I saw model wine portfolios (think stock portfolio but instead with wines) with investments as small as $10,000. After learning a little about this alternative investment idea, I plan to get their director to join me on a webinar for my newsletter subscribers some time in the near future.