| By Stephen Taub
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The BondsOnline Advisor strives to present you with income investment insights from analysts throughout the United States. Bonds, preferred stocks, real estate investment trusts, or master limited partnerships can be a part of a successful income portfolio – and BondsOnline and PreferredsOnline provide the “Income Investor Tools” to keep you informed.
This Month: Equity Strategies
Credit Suisse is sticking to a year-end target of 1450 for the S&P 500, and gives its reasons this month.
BofA Merrill Lynch says the S&P 500 is trading at a 5% discount to the investment bank’s current year-end target of 1400, and a 12% discount to its year-end intrinsic fair value estimate of 1500.
Citi Investment Research & Analysis continues to believe the S&P 500 will finish the year at 1400, but says “Frustration may be the best word to describe most institutional investors’ moods as market swings appear to have caught many positioned on the wrong side of the trading patterns.”
Wells Fargo says its S&P 500 Year-End 2011 target is 1250 to 1300. The bank recently completed an analysis of full decades of S&P returns going back to the 1945-1955 decade, and has some interesting conclusions.
JPMorgan Chase singles out stocks and groups that are what it calls relatively shock resistant. This means they are resilient in the face of higher oil; have minimal negative exposure to events in Japan; have minimal exposure to cuts in government spending; facing minimal input cost pressures or at least hedged out through a reasonable period. This month we feature several that have a dividend yield of more than 3%.
Master Limited Partnerships
It appears that double digit returns are still a likelihood in energy MLPs.
Citi says “On-shore crude production growth in the Lower 48 is driving infrastructure bottlenecks and regional supply/demand imbalances as basis differentials, quality spreads, and storage differentials have all seen sequential and year-over-year margin improvement.” Three of its mlps are featured this month.
Barclays discusses the value of MLPs, given the huge performance in 2010, Credit Suisse Securities points out five, and UBS, and Morgan Stanley each share their perspectives.
REITs
Although REITs have had a big run, Plum Creek Timber, several mortgage REITs, and a few others still look interesting.
Special Situations
Stifel Nicolaus currently has five Buy recommendations on Business Development Corporations (BDCs), high yielding opportunities with interesting tax considerations.
We feature several closed-end funds this month, and review Fixed Income/Preferreds strategies. (All is not over in the fixed income world).
For a list of securities, target prices, and detailed comments, get the current issue of Yield and Income Newsletter through PreferredsOnline.
© 2011, BondsOnline and BondsOnline Group, Inc.
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