- It is Time to Buy Beaten Down Healthcare Stocks
(September 29, 2015)
- How To Make A Double Trading 3xleveraged Gold Miner ETF In A Week
(September 4, 2015)
- Market Bounced. What is the Next? (August 30,2015)
- Has the Market Entered its Bear Phase? (August 23,2015)
- Signs of Market Weakness (July 12, 2015)
- JNUG - Doubled In Three Weeks (April 22, 2015)
- Gold via Fed Fund Interest Rate
- An Historical Prospect (March 8, 2015
- Crude Oil - Don't Be Too Optimistic (February 16, 2015)
- Gold - It May Have Topped (January 22, 2015)
- Our View On Coming Market Direction
(August 10, 14)
- In Search of the Next Multi-Baggers
(August 01, 14)
- Market Has Topped. Prepare for Market Correction
(September 22, 13)
- GLD - The Last Drop. Bought NUGT
(June 26, 13)
- GLD - Bottom Is In But Do Not Chase It
(June 02, 13)
- ReneSola Earnings Preview: What to Look For
(May 12, 13)
- Good Year for Our Short Term Play
(April 14, 13)
- The US Stock Market Will See New Highs in 2013
(January 02, 13)
- 10 Stocks That Could Be Doubled In Value During January Rally
(December 16, 12)
- Monthly Market Review And January Rally
(December 02, 12)
- Top 20 Gainers For The Week Of September 17 - 21, 2012
(September 17, 12)
- The Market - Will We See A Repeat Of 2008 Crash?
(June 26, 12)
- 2012 Will Be a Very Good Year for the US Stock Market
(January 02, 12)
- The Market Will Keep the Momentum in 2011
(January 15, 11)
- The Market Will Have a Good Run Over the Next Two Months
(August 22, 10)
- RAIT Financial Trust - Revisited
(August 14, 10)
- KKR Financial Holdings: A Value Investment Pick
(August 06, 10)
- Are We Going into Another Depression?
(July 05, 10)
- Why RAIT Financial Trust Looks Like a Comfy Investment
(Apr 23, 10)
- CELM - Not All Chinese ADRs Are the Same
(Apr 22, 10)
- Super Star Pick of the Day - PMI
(Mar 31, 10)
- Gold Prices for the Year of 2010 Revisited
(Mar 23, 10)
- The Near Term Outlook for Major Solar Stocks
(Mar 17, 10)
- Value Investing for Your Retirement - Next Pick
(Feb 20, 10)
- The Near Term Trend for Chinese Solar Stocks
(Feb 11, 10)
- Where Will Gold Price be Heading for 2010
(Feb 06, 10)
- Value Investing for Your Retirement - KFN
(Jan 05, 10)
- Super Star Pick of the Day - SANM
(Dec 07, 09)
- Will October's Market Minic September's Comeback?
(Oct 02, 09)
- Sinovac Biotech: Still Worth Owning?
(Sep 21, 09)
- Super Star Pick of the Day - KFN
(Aug 31, 09)
- Super Star Pick of the Day - GCI
(Aug 27, 09)
- Super Star Pick of the Day - RTK
(Aug 19, 09)
- Super Star Pick of the Day - AIG (Aug 08, 09)
- Super Star Pick of the Day - MNI
(Aug 03, 09)
- Market Trend and Our Strategy to Pick Our Next Big Winners
(Jul 25, 09)
- Buying on Fear (Jul 07, 09)
- Hot Stock of the Day - FITB (May 11, 09)
- Hot Stock of the day - BAC
(May 09, 09)
- Hot Stock of the Day - BRCD (May 08, 09)
- Hot Stock of the Day - ASH (May 07, 09)
- Value Investing for Your Retirement - MTL (Feb 01, 09)
- Value Investing for Your Retirement - BK (Jan 17, 09)
- Don't Fall on the Trap of Short ETFs
(Jan 03, 09)
- How Long Will This US Stock Bear Market Last?
(Oct 13, 08)
- Once in a Century Financial Crisis Once in a
Lifetime Investment Opportunity
(Sep 26, 08)
- Buy Open Gap Down at Support
(Aug 26, 08)
Value Investing Series
Value Investing for Your Retirement - 2
February 01, 2009
In the first article of "Value Investing for Your Retirement" series, I presented an Income Company good for long term BUY-and-HOLD strategy - Bank of New York Mellion Corporation (BK). I also answered the question: "Do we still have such a good investment now?"
I said that the answer is YES and said that we may not need the 25 years to achieve the same level of return now. Thanks to the financial crisis. It gave us the rare opportunity you may never have again in your life time.
That is, you may invest $100,000 in a company now and will receive a stable $100,000 annual dividend in just few years, may be in as little as 5 years.
I will present one of such companies in this article. That is Mechel OAO (MTL) - The second largest mining and steel maker from Russia.
The company went public in November 10, 2004. The company started the distribution of its annual dividend from 2005. 2005, 2006, 2007 yearly dividend is $0.488, $0.47 and $0.89 respectively. The amount of 2008 annual dividend will be decided in the middle of this year. If the company's dividend distribution policy keeps the same - to distribute 50% of its annual profit, 2008 dividend will be doubled again from 2007 level.
Let us assume that the dividend will be kept in the same 2007 level for the next three years.
MTL share price reached year low of $2.57 on January 20, 2009. Suppose we bought it at $2.60, $100,000 investment will give you 36,461 shares of MTL stock. $0.89 dividend equals to a 34% yearly return.
If you re-invest the dividend for the next three years and buy the stock at the the same low $2.60 level, 36,461 shares will become 92,541 shares. The annual dividend will become $82,361, still less than $100,000 but is close.
If the stock price is lower than $2.60, you can get more shares with the same amount of dividend.
Of course, MTL has only four years of history as a public company. Its future dividend is not guaranteed. But remember, not many companies gave consecutive yearly dividends in their early years as a public company.
We strongly believe that investing in MTL at this price level will give you a very good returns in long term. 10-bagger is not impossible.
MTL is not the only stock worth long term investment. Many such good investment opportunity exist now. More will be given in later articles.