by Travis Johnson, Stock Gumshoe | January 16, 2009 9:17 am
“This Google Partner is just one of the 18%+ high-yield trusts you can snap up now.”
This ad comes in from Roger Conrad[1] for his Canadian Edge[2] newsletter, one of several from the great KCI marketing machine that, like almost every other major financial newsletter publisher, is headquartered a stone’s throw from the stunningly opulent and energy efficient Stock Gumshoe central office.
I have yet to run into Roger Conrad at any of our 1,100 Starbucks locations, but if I do I’m sure he’ll talk my ear off about the great opportunity available in Canadian Income Trusts[3] (also called Royalty Trusts and Business Trusts). And this is a teaser for another one of those.
His newsletter will run you about $400 a year … the answer to this teaser? Priceless. Just read on!
“… nothing prepared us for the surge in returns that these trusts are showering on our readers now. And at the pace these trusts are moving, we should see returns up 100%, exactly double, on our favorite picks before the year is out.
“And these cash-rich trusts are still a bargain. Share prices, mostly beaten down last year, are still below our buy targets, so you’ve got a great entry point. And with yields up to 22%, there’s just no way you can miss.”
That’s how Conrad starts us off … then he gets into some of the specifics of this particular trust that he thinks we should buy. And, if my email load is an indication, this one is the pick that really caught the attention of my readers …
“This Google Partner Pays You 17.6% (Google Pays You Zip)
“How can two turbo-charged companies in the same web business have such a different way of rewarding investors (or not?)
“Like Google, this trust is a runaway, internet-based success. Unlike Google, this company pays you a monster-sized yield of 17.6%!
“This trust is Canada[4]’s undisputed leader in online media with over 20 web mega-sites and 200 ‘publications’. Its four top brands help consumers find everything from jobs to homes to apartments to cars — to the best shopping bargains around.
“And they’ve just inked a spanking new deal that’s sure to please both consumers and small businesses alike — and send their ad revenues through the roof — yet again.
“Many boutiques, restaurants, clinics, hairdressers, retailers, service outfits — you name it — do not have a website … with this new trust venture, any small business can convert its print sales material into a search-optimized web presence!”
Some specifics, perhaps?
“Their internet revenue alone surged a whopping 38.4% in the third quarter, not counting their expansions!”
Conrad thinks you’ll see a 20% dividend in 2009, and that the shares will double in less than nine months. So what is it?
Feed all that into the ‘ol Thinkolator, which is admittedly a bit squeaky after our latest cold snap, and after warming up for a few minutes we discover that this is …
Yellow Pages Income Fund (YLO-UN in Toronto, YLWPF on the pink sheets.)
Unlike some pink sheets shares there is at least some volume, so the prices ought to be a pretty close match to the Toronto shares, just make sure to check the current currency exchange rate before jumping in if you go that route (yesterday the units closed in Toronto at C$6.46, and closed on the pink sheets at $5.17 — that’s within a penny as of the last exchange rate check I made).
What do we know about these folks? The Trust is basically made up of the Yellow Pages Group, which publishes online and print directories and makes its money from local advertising; and Trader, which publishes “vertical media” stuff — publications that advertise local bargains, auto sales, real estate[5] etc. (the kinds of things you’ll see distributed free in any US city, I assume it’s the same in Canada — Auto Trader, Penny Saver, New Homes Guide, etc.).
And they do also have an online presence, and they are a Google partner — they are a reseller of AdWords for Google in Canada, and help customers optimize online ad campaigns and develop online advertising strategies, and they also publish their directories and Trader publications online. Their online revenue did grow 38.4% in the last quarter, but it’s also important to note that the print publications still provide the lion[6]’s share of their money — online revenues were only about 15% of total revenue last quarter. Saying that they’re in the “same web business” is perhaps a bit of a stretch, though it’s technically true that both of them are, to some degree, online advertising companies.
So … does that sound familiar? That’s a very similar business to the big US yellow pages publishers, R.H Donnelly and Idearc — and neither one has exactly been a fabulous investment in recent years, so the problems that those companies ran into might be signposts to use in your search for any skeletons in the closets at YLO.
Both Idearc and R.H. Donnelly were spun off from their former parents (Verizon and Dun and Bradstreet, respectively) with massive debt loads that they were expected to be able to handle thanks to their high margin, predictable business performance (dry cleaners and restaurants don’t usually cancel their yellow pages ads). Though they were touted by bottom-fishers all the way down, the business wasn’t strong enough to handle that leverage[7] last year — both fell more than 99% in 2008, and both are now delisted from the major exchanges and trade on the pink sheets at pennies a share.
Yellow Pages appears to be in far better shape than that, at least so far — they do carry a lot of debt, but they also reported good earnings last year … we’ll see if the problems that seem inevitable for the Canadian economy drag down the business, but the yield at the current rate is just about 18%. The trust’s investor relations page is available here [8]if you’d like to dig in and start your own research.
So … it’s not exactly Google, but maybe that’s a good thing. What do you think?
full disclosure: I own shares of Google. I do not currently own any other stock mentioned above, and will not trade in any shares mentioned for at least three days.
Source URL: https://www.stockgumshoe.com/reviews/canadian-edge/google-partner-18-yield-roger-conrad/
Copyright ©2024 Stock Gumshoe unless otherwise noted.
This is KCI again. To answer some questions related to my comment here a few days ago: Neil George left KCI and “Personal Finance,” pardon my memory, in the time frame of just before Thanksgiving ’08 to mid-Dec. A statement in “PF” in early/mid-Dec just called it a “sudden retirement.” Elliot Gue picked up the baton for “PF.”
More relevant to today’s article, “Yellow Pages” seems to be a favorite at KCI but I am personally nervous about it. I think the electronic revolution will hurt it badly over time. I have been watching electronics replace paper for much too long.
From a technical analysis standpoint, YLO looks good: a couple weeks ago it broke its downtrend line on strong volume and executed a perfect backtest before resuming its climb. A stop-loss just under $6.03 would make sense.
I receive Elliot Gue’s free energy newsletter, and I find it very well assembled. It summarizes together much of the same info I get of of theOilDrum.com, minus the wacko stuff that goes on any blog site. I’ve considered subscribing to his $400 energy newsletter, but am a little fuzzy about what it provides that I don’t already know.
Any thoughts out there on Gue & his subscription? KCI subscriptions in general?
Is this the same Roger Conrad that publishes “Utility Forecaster”?
I own YLO mainly for it’s high monthly dividend payments. I bought this one to help diversify me from the many oil and gas income trusts I own. YLO had been trading as high as $14. last year and it trades in high volumes in Canada each day often over a million. Another great dividend play in Canada is Jazz Air, JAZ.UN, which is an offshoot of Air Canada and services smaller communities across the country, it yield over 20%.
I advertise in the yellow pages… so perhaps I have a bit of an inside track. They own canada411.com and yes, they list you on that site when you buy an ad. I am listed as a quarter column 1 colour under one heading and just a listing under two other headings. I paid $2600 (calgary alberta prices) for the honour and they put me in their online search engine as well.
Yes trader publications are free inmost us cities. Up here they go for between 3 and 5 dollars depending on which you buy. They are free online to search. Listing the car or truck is what costs. They also own the bargain finder publications (also on line). I don’t own the stock but will likely research it. I don’t know how their future looks- I will not be listing in the yellow pages again this year… I suspect there will be other “drop outs” or reduced ad sizes.
With any luck they won’t cut their distribution, but if the market moves lower it’s very likely that the stock will trade lower than it’s distribution yield. I like some canadian trusts, however I won’t start buying those until the market proves it’s in recovery.
I am a subscriber — and a big fan of Eliot Gue and his comrade Roger Conrad. Have many good calls from them from last 8 years. Tho the sudden absence of Neil George was handled poorly, there was an apology and after the first few new issues I am still a believer.
Be prepared for lengthy — one of the last was 26 pages long — explanations/recommendations — these guys are going to make sure you understand it ALL. OIl rigs, Pipe lines, shipping, MLPs that are energy related: I think you can probably sign up for an introductory trial. yep here is the link: https://www.kcisecure.com/order-old/e_neworder/form_full.asp?rl=no&pub=tes&term=24&promocode=W90407
Nope they aren’t paying me to say this — and there is another fellow who uses same bank as I — and he’s a big big fan also.
Gue and Conrad are pretty good. I have followed both. Their newsletter are expensive, but they write columns in Personal Finance and in the financial press. I stopped taking PF in the last year, but still get to read some of Elliot Gue and Roger Conrad’s stuff.
If long yields were to spike,surely these things could hit serious trouble.
Hey Gunshoe, what’s this tiny obesity stock touted by Fannon of Phase One Investor, a high-priced letter from Stansberry & Associates.
[paste-in follows]
February 06, 2009
The Biggest New Drug in Medical History
By Rob Fannon, editor, Phase 1 Investor
The promise of a “marijuana munchies” drug is officially dead…
French drugmaker Sanofi-Aventis believed it’d struck gold with its drug Acomplia. Acomplia curbed appetite by targeting the “cannaboid” receptors in the brain – the same signals that give marijuana smokers the munchies.
According to Sanofi, the drug helped patients shed pounds, quit smoking, lower cholesterol, and treat diabetes. Wall Street hailed it as the next wonder drug. Analysts predicted annual sales in excess of $5 billion, calling it the “blockbuster of blockbusters.” One tiny problem – safety.
———- Advertisement ———-
On March 30th, FDA results could make you $195,600
We’ve waited 2 years for this day.
On March 30th, there’ll be an announcement of FDA results for a new drug that could create the single biggest return of any investment we’ve ever found, in 10 years.
Click here for the full details.
————————————
The obesity market is one of the last great untapped markets for biotech. This is just the latest chapter in the drug industry’s struggle to develop an effective weight-loss drug.
According to the Centers for Disease Control, two-thirds of Americans are overweight and 33% are “obese.” Obesity kills 300,000 people in the U.S. every year. High blood pressure, coronary heart disease, stroke, diabetes, and arthritis – these medical nightmares can be traced to the added stress of carrying too many pounds around the waistline.
If one industry stands to gain from the “Swelling of America,” it’s the drug sector. At any one time, 70 million Americans are trying to lose weight and spending tens of billions of dollars in the process. Already, we spend $50 billion a year for over-the-counter weight-related treatments. Conservative estimates put the obesity-related prescription-drug market at $10 billion per year.
For decades, drugmakers like Sanofi have been trying to tap into that market. And right now, three biotech companies are deadlocked in a race to develop the industry’s first obesity blockbuster.
The smallest of the three companies, $200 million market cap Orexigen (OREX), is wrapping up Phase III trials for its drug Contrave. San Diego-based biotech Arena Pharmaceuticals (ARNA) is working on Lorcaserin. And Vivus (VVUS) is racing to release data on its diet drug Qnexa.
The Flip Side of Drug Disasters
A Slow Death for the ‘Blockbuster of Blockbusters’
With a market so big and completely untapped, there’s plenty of room for all three drugs. But each company is aiming for the first-to-market advantage. The biggest winner could pull in as much as $5 billion or $10 billion a year.
Since I did not see any mention of the 2011 tax starting on all these trusts I take it that people think that it is so well known that it is priced in. Alantic Power is the only one that I know of that will not be taxed, if there are others I would welcome comments.
As far as dividends go has anyone looked at AGNC or that family, HTS is another. I will confess I do not understand nor could figure out their business. It has something to do with mortgages and rate differentials including the LIBOR rate, that is about the extent of my knowledge. However, the proof is in the pudding, in this downturn that family barely suffered and is paying upwards of 20% returns. AGNC just set a knew high on their declared $1.50 quarterly. They obviously cannot keep this up but even half that would be attractive.
Re: Utility Forecaster
I’m a 10 year subscriber, and I like those reco’s most of the time. I’ve made $ on even Enron, but only by using my intuition, i.e., when to bail out (90% profit). Overall, a good risk adjusted letter, worth the $. There is a lot of information there, but I worry that he is getting spread too thin with his other endeavors.
Some others to take a look at:
cmo,anh.
If my understanding is correct these are both fairly safe and very similar to nly.
On conrad. I use to subscribe to the canadian edge letter. I purchased his recommendations all at prices he recommended. Then waited for the sell signals (figuring the purpose of the letter is not only to get the buy signals but because he is suppose to be the expert on canadian trusts). All 10 positions dropped for a major loss. In the meantime I was reading other comments about getting out of trusts. When I wrote canadian edge we got the typical circle jerk answers. Not only did I cancel but other people I know did the same. you can do just as well on your own and it won’t cost you anything. Plus because you picked the position you will have a better feel on when to get out.
Can anyone identify the REIT identified in Conrad's tout for his Canadian stocks. A paste-in follows of his tout, which purports to be "Wall Mart's landlord.";
"…If you think selling eggs to Walmart makes a stock pop, imagine being Walmart’s landlord for the next 50 years!
I’ve identified a brand-new opportunity for you to fully leverage the Walmart Wealth Effect… all the way to the bank!
Up until recently, Walmart was buying more than $800 million worth of land EACH MONTH…
Today, Walmart has the same ravenous appetite for land. But the retail giant is leasing properties. Not buying.
Walmart’s strategic plan in North America during the next few decades calls for leasing property to penetrate big urban areas like the District of Columbia, Philadelphia and New York City.
And after successfully testing prototype models, the big-box behemoth is poised to begin a neighborhood rollout in 2011 of its smaller-format, higher-end Marketside stores.
After carefully evaluating over 130 different companies and 9 Indian tribes during the past year and a half, I’ve identified one Real Estate Investment Trust that is going to end up being the BIG Walmart winner!
This Real Estate Investment Trust is exclusively focused on retail real estate. Their core strategy involves leasing neighborhood shopping centers anchored by supermarkets.
The Trust owns and manages a huge portfolio of popular shopping centers in big urban areas in Canada and the northeastern United States. Their ownership interest contains an aggregate of over 60 million square feet.
My top-secret recommendation has already inked multiple lease agreements with the world’s biggest retailer. The term on these lease agreements is typically 20 years, plus six 5-year renewals, for a total of 50 years!
Of course, Walmart isn’t their only blue-chip client. The Trust has a diverse roster of Fortune 500 clients including Safeway and Giant grocery stores, Lowe’s, PetSmart and Staples.
This Real Estate Investment Trust presents investors with an unusually lucrative opportunity, for two reasons…
(1) Walmart’s transition from buying land to leasing land has gone almost completely unnoticed by the so-called “professionals” on Wall Street.
As my top-secret recommendation is discovered and starts to gap higher, the Wall Street pros will pile into the stock and drive it higher and higher up the charts.
(2) In the third quarter, the Trust completed six acquisitions. This new pool of earnings has not yet been factored into the future monthly distribution payments to unit-holders.
I would conservatively estimate this Trust could end up skyrocketing by more than 400% over the next few quarters, no matter what happens in the U.S. economy or the stock market.
In addition to this big winner being a remarkable growth stock, it’s also an income play. The Trust will mail you a big, fat distribution check every single month!
This investment opportunity has the potential to change your financial future. And the financial future of your children. And grandchildren. It’s that BIG!
And this is why it’s on my radar screen as one of THE most successful Canadian income trusts of all time and a potential 40-bagger! …"
[end of paste-in]
Here's a"teaser" from Agora's "5-Minute Forecast" Anyone have a clue??? [Paste-in follows]
" “At long last,” Patrick Cox wrote his Breakthrough Technology Alert readers yesterday, “we can begin to view the No. 1 cause of death — aged hearts and vascular systems — as a preventable disease.
“The ability to restore the heart, vascular and immune systems to full youthful health, using the donors’ own cells, has so many enormous implications.” One of the tiny companies Patrick follows unveiled plans last week to accelerate the development of a revolutionary treatment for both heart disease and autoimmune disorders.
How much will this breakthrough treatment cost? Patrick compares it favorably to a biotech darling of the recent past: “I don’t believe it will be more than Dendreon’s anti-cancer vaccine Provenge, which costs about $93,000 per customer.
“Dendreon estimates $400 million in U.S. sales this year. If you divide total expected revenues by the cost of the therapy, that amounts to only 4,301 prostate cancer patients. Analysts are predicting sales of over a billion annually. That’s 10,752 patients buying a therapy that on average extends life by about four months.
“Now think about the market for a nonsurgical cardiopulmonary therapy, delivered through transfusion, which could easily extend life by a decade.
“Let’s pretend this firm charges $200,000 for the procedure, clearing $100,000 per procedure. Also, pretend that only 5% of the world’s high net worth individuals buy rejuvenated cardiopulmonary system every year. One clinic in Hong Kong could perform that many transfusions easily.
“Regardless, that’s 100,000 procedures at a profit of $100,000 each, for a total profit of $10 billion a year.” All for a company with a market cap today of $426 million. No wonder Patrick sees this as one of the five “wealth quakes” coming in 2011. To learn more about all five, check out Patrick’s predictions for the year. Don’t hesitate; this presentation goes offline at midnight on Friday.
What stock brokerage for non-USA stocks do you recommend ?