Hey, this is Tim Melvin!
Welcome to your Underground Income bonus report!
As you know, our goal here is to find dividend-paying closed-end funds trading at 10-20% discounts, which have a high probability of going up in value.
Today, let me introduce you to one of my favorite close-end fund opportunities, with a discount – and extra dividends! – on a legendary company…
Bonus Ticker
SRH Total Return Fund
Ticker: STEW
I love this fund.
37% of the assets in this fund are simply shares of Berkshire Hathaway.
1 share of Berkshire Hathaway is around $473,000.
1 share of STEW is $13.
And you’re getting Berkshire at a 17% discount!
That’s like paying $85,140 LESS than someone else who just bought a share.
While the rest of the market tanked double-digits the first two quarters of 2022…
BRK.A (its ticker) was in the green.
That means it likely will lead the pack going forward.
And you’re in at a massive discount.
Here’s the kicker…
Berkshire pays $0 in dividends. Which is odd as the Oracle of Omaha, Buffett, loves his dividends.
But STEW pays nearly 4%.
Collect 4% dividends while we wait for Activist investor activity. I can see it being a target for years to come.
Berkshire’s been public since 1964… and weathered many recessions and technological advances. It ain’t going anywhere.
STEW approaches their closed-end fund much like Buffett.
According to their site: “The Fund utilizes a bottom-up, value-driven investment process to identify securities of good quality businesses trading below estimated intrinsic value.”
One way they tap into this is by directly investing in Berkshire Hathaway, as I mentioned.
Almost 40% of their fund is simply Berkshire Hathaway!
Except, you’re getting in at a 17% discount.
Here’s my hypothesis for this fund:
STEW has been in existence since 1972!
That is a dinosaur in the open or closed-end fund space.
At some point, this discount gap must close and the fund likely be liquidated or merge.
In either of those situations, the assets (including 40% of Berkshire Hathaway stock) will sell at market rates.
That’s immediate returns.
Here’s how we make money:
#1. The 4% dividend
#2. The discount gap closing
#3. Tailwinds as Berkshire Hathaway is profitable and stock is green while the market tanks 25%+
#4. Activist investors finally liquidate the fund
Activist investors only have small positions… but I see a major deep pocket swooping in and taking the reins soon.
No way should Warren Buffett be trading at a 17% discount while his stock holds up well.
STEW should be trading at a premium!
RECOMMENDATION: Buy STEW, paying up to $20 per share
I definitely recommend adding STEW to your portfolio for steady income as we wait.
We’ll be adding 1-2x plays just like these every single month inside Underground Income.