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As a contributor to the New Low Observer (http://www.newlowobserver.com/about-this-site), we intend to give new insights on a low risk approach to trading in dividend paying stocks for tax deferred accounts. The New Low Observer (http://www.newlowobserver.com/about-this-site) is not intended for... More
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  • Royal Gold Technical Review

    On October 12, 2012, we posted the following SRL for Royal Gold (NASDAQ:RGLD):

    (click to enlarge)

    We said the following of the above chart:

    "The SRL for Royal Gold at $44.62 doesn't seem outlandish given what has already occurred in the previous declines from prior peaks. The X marks the first decline after a "minor" parabolic move that was later exceeded on a larger scale to point A1, B1 and C1. Additionally, the X reflects the minimum retracement from the top and has provided consistent support for the price for RGLD.

    "We'd consider buying RGLD if it declines to either of the support levels of X3 or C2. The movement of RGLD has been consistent with the price of gold (NYSEARCA:GLD) which is in stark contrast with gold stocks as represented by the Philadelphia Gold and Silver Stock Index (^XAU)...."

    On July 12, 2013, we said the following of RGLD:

    "RGLD has fulfilled almost all of our expectations for downside risk since October 2012. Although we'd much rather see this stock reach the extreme downside target of $33.28, we feel that purchases at the current level and below would be consistent with asset accumulation and wealth building, in contrast to those who were considering the stock at or near the October 2012 levels."

    So far, Royal Gold has adhered to the SRL outlined on October 12, 2012 and July 12, 2013 as displayed in the chart below.

    (click to enlarge)

    Royal Gold has a mid-range upside target of $100.39 and an extreme upside target of $133.85 based on Gould's Speed Resistance Line. However, the upside targets are somewhat immaterial when considered from the context of buying based on values.

    Tags: RGLD
    Jan 29 3:23 PM | Link | Comment!
  • Clean Harbors Update

    On February 9, 2012, we posted Edson Gould's Speed Resistance Lines [SRL] for Clean Harbors (NYSE:CLH) with the downside risk for the stock. At the time, the downside targets were:

    • $43.53 (conservative downside target)
    • $31.00 (mid range)
    • $22.53 (extreme downside target)

    Since that time, we've revised the downside targets to reflect the following minor changes.

    • $43.97 (conservative downside target)
    • $33.70 (mid range)
    • $23.43 (extreme downside target)

    A visual of the downside targets reveals the value of Gould's SRL.

    (click to enlarge)

    So far, CLH has adhered to the SRL that was initially outlined in 2012. If we consider the period of 2007 to 2009, when the stock fell as low as $20.54 and extend that same decline to the current period, then CLH could decline as low as $41.40. This assumption is predicated on the stock market not experiencing a precipitous decline from the current level. A broad market decline would easily bring CLH to the ascending $23.43 level in the SRL.

    While the fundamentals are not glowing for CLH as it goes through the process of spinning off its oil and gas services unit, which could "…take more than a year for the spinoff to be completed…", there are expectations that the current actions will refocus the company.

    Speculators, those willing to accept the downside risk of -36%, could purchase CLH with 25% of intended funds at $45.10 and $41.40. The final purchase would be at $31.00 or below. Investors, those willing to hold for 5 years or more, would want to re-assess CLH at $34 and below.

    Tags: CLH
    Jan 28 3:34 PM | Link | Comment!
  • U.S. Dividend Watch List Review

    In our ongoing review of the NLO Dividend Watch List, we have taken the top five stocks on our list from January 17, 2014 and have checked the performance one year later. The top five companies on that list can be seen in the table below.

    SymbolName2013 Price2014 Price% change
    TGTTarget Corp.60.2474.9424.4%
    PMPhilip Morris International83.3382.70-0.8%
    TAT&T Inc33.7033.800.3%
    TEGIntegrys Energy Group Inc53.6480.5950.2%
    EDConsolidated Edison53.9669.1028.1%
       Average20.4%
         
    DJIDow Jones Industrial16,458.5617,511.576.4%
    SPXS&P 5001,838.702,019.429.8%

    Watch List Review

    Our top five outperformed the market by a wide margin. The biggest contribution came from the utility sector. The search for yield has driven shares of Integrys Energy (NYSE:TEG) and Consolidated Edison (NYSE:ED) up by +50% and +28%, respectively. Interestingly, shares of Philip Morris (NYSE:PM) and AT&T (NYSE:T) which yielded above 4.5% didn't fair too well and were virtually flat for the year. Another exceptional performer was Target (NYSE:TGT) which was hit with news about a data hack, at the time. As we mentioned one year ago, we believed the news provided long-term investors with a great opportunity to buy shares at a reasonable discount.

    Disclosure: The author is long TGT.

    Tags: TGT, PM, T, TEG, ED, DIA, SPY
    Jan 17 12:37 PM | Link | Comment!
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