Industrials Gains Led By Dynagas, Capital And Macquarie Per Broker January Targets

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Includes: ADES, CMHHY, CMRE, CODI, CPLP, DLNG, FRO, FTAI, GMLP, HMLP, IEP, KNOP, LKSD, MIC, NAP, NWSGY, SFL, SSW, STB, USDP
by: Fredrik Arnold
Summary

DLNG led the industrials with an estimated net gain of 29.58% calculated 1/23/18, by 9 analysts, while NAP was top stock by yield at 17.79%.

The industrials sector has 23 component industries. Top 50 firms selected by yield represented 19 of those industries.

50 Top Industrials ranged in estimated yield from 4.66% to 17.6%. Top ten, KNOP, GMLP, IEP, CMHHY, USDP, FRO, ADES, DLNG, NWSGY, & NAP averaged 12.24% yield.

Top ten Industrials by broker-estimated gains, CODI, HMLP, STB, FTAI, SSW, CMRE, LKSD, MIC, CPLP, & DLNG, averaged 26.25% net.

$5k invested in the lowest-priced five top-yield ten Industrials stocks showed 32.31% more net gain than from $5k invested in all ten. Little stocks paced January's Industrials.

Actionable Conclusions (1-10): Analysts Calculated 18.36% To 39.27% Net Gains From Ten Top Industrials Stocks

One of ten top dividend-yielding Industrials stocks were verified as being among the top ten gainers for the coming year based on analyst 1-year target prices. (It is tinted gray in the chart above). So, this yield-based forecast for Industrials, as graded by Wall St. wizards, was 10% accurate.

Ten probable profit-generating trades revealed in YCharts for January 2019 were:

Dynagas LNG Partners (DLNG) was projected to net $392.70, based on the median of target estimates from nine analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 10% more than the overall market.

Capital Product Partners (CPLP) was projected to net $365.92, based on a target price estimate from eight analysts, plus the estimated annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 62% more than the market as a whole.

Macquarie Infrastructure (MIC) was projected to net $318.97, based on dividends, plus a median target price estimate from seven analysts, less broker fees. The Beta number showed this estimate subject to volatility 11% less than the market as a whole.

LSC Communications (LKSD) was projected to net $260.22 based on dividends plus a median target estimate from five brokers, less broker fees. A Beta number was not available for LKSD.

Costamare (CMRE) was projected to net $246.23, based on dividends, plus mean target price estimates from nine analysts, less broker fees. The Beta number showed this estimate subject to volatility 115% over the market as a whole.

Seaspan (SSW) netted $239.04 based on target price estimates from twelve analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 40% less than the market as a whole.

Fortress Transportation (FTAI) was projected to net $224.91 based on dividends, plus target estimates from six analysts, less broker fees. A Beta number was not available for FTAI.

Student Transportation (STB) was projected to net $207.73, based on dividends, plus a mean target price estimate from five analysts, less broker fees. The Beta number showed this estimate subject to volatility 26% less than the market as a whole.

Hoegh LNG Partners (HMLP) was projected to net $186.15, based on dividends, plus median target price estimates from nine analysts, less broker fees. he Beta number showed this estimate subject to volatility 4% less than the market as a whole.

Compass Diversified Hldgs (CODI) was projected to net $183.55, based on target price estimates from seven analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 45% less than the market as a whole.

The average net gain in dividend and price was estimated at 26.25% on $10k invested as $1k in each of these ten dogs. This gain estimate was subject to average volatility 8% more than the market as a whole.

Actionable Conclusions (11): (Bear Alert) Brokers Say This Top Industrial Stock Could Lose 3.26% Net By January, 2019

The probable losing trade revealed by YCharts for 2019 was:

Ship Finance International (SFL) projected a loss of $32.58 based on dividends and a median target price estimate from five analysts including $20 of broker fees. The Beta number showed this estimate subject to volatility 42% more than the market as a whole.

The Dividend Dogs Rule

Stocks earned the "dog" moniker by exhibiting three traits: (1) paying reliable, repeating dividends, (2) their prices fell to where (3) yield (dividend/price) grew higher than their peers. Thus, the highest yielding stocks in any collection became known as "dogs." More precisely, these could be, best called, "underdogs".

Top 50 January Industrials Sector Stocks By Yield

Actionable Conclusion (12-22) Yield Metrics Revealed 10 Top Dividend Industrials Stocks

Top ten Industrials Sector stocks ranked as of 1/23/17 by yield represented 6 of 23 constituent industries. Top yielding Industrials stock, Navios Maritime Midstream (NAP) [1] was one of six shipping & ports industry representatives. The others placed third, fifth, seventh, ninth, and tenth: Dynagas LNG Partners (DLNG) [3]; Frontline (FRO) [5]; China Merchants Port (OTCPK:CMHHY) [7]; Golar LNG Partners (GMLP) [9]; KNOT Offshore Partners (KNOP) [10].

Second place was secured by the lone engineering and construction representative, NWS Holdings (OTCPK:NWSGY) [2]. A pollution & treatment controls firm placed fourth, Advanced Emissions, (ADES) [4]

Finally, sixth place went to the lone railroads firm on the top ten list, USD Partners (USDP) [6], and Icahn Enterprises (IEP) [8], represented conglomerates in eighth place, which completed the top ten January Industrials dogs list by yield.

Actionable Conclusion (23-32): Ten Industrials Showed 11.83% To 29.58% Upsides To January, 2019

To quantify top upside rankings, analyst median price target estimates gave us a "market sentiment" gauge of up/downside potential. Added to the simple high-yield "dog" metrics, analyst mean price target estimates became another tool to dig out bargains.

Analyst Target A 32.31% Advantage For 5 Highest Yield, Lowest Priced Industrials Sector Stocks

Ten top Industrial dogs were culled by yield for their monthly update. Yield (dividend / price) results verified by YCharts did the ranking.

As noted above, top ten Healthcare dogs selected 1/23/18 showing the highest dividend yields represented six of twenty-three industries composing the sector.

Actionable Conclusions: Analysts Predicted 5 Lowest-Priced of the Top Ten Highest-Yield Industrials Dogs Delivering (34) 16.74% Vs. (35) 12.65% Net Gains by All Ten by January, 2019

$5000 invested as $1k in each of the five lowest-priced stocks in the top ten Dividend Industrials sector by yield was predicted by analyst 1-year targets to deliver 32.31% more gain than $5,000 invested as $.5k in all of those ten. The fifth lowest priced Industrials top yield stock, Dynagas LNG Partners (DLNG), was projected to deliver the best net gain of 39.27%.

The five lowest-priced Industrials top yield dogs for January 23 were: Frontline (FRO); Advanced Emissions (ADES); Navios Maritime Midstream (NAP); USD Partners (USDP); Dynagas LNG Partners (DLNG), with prices ranging from $4.97 to $11.97.

Five higher-priced Industrials dogs for December 20 were: NWS Holdings (OTCPK:NWSGY); KNOT Offshore Partners (KNOP); Golar LNG Partners (GMLP); China Merchants Port (OTCPK:CMHHY); Icahn Enterprises (IEP), whose prices ranged from $19.72 to $57.98.

The distinction between five low-priced dividend dogs and the general field of ten reflected Michael B. O'Higgins' "basic method" for beating the Dow. The scale of projected gains based on analyst targets added a unique element of "market sentiment" gauging upside potential. It provided a here-and-now equivalent of waiting a year to find out what might happen in the market. Caution is advised, since analysts are historically only 20% to 80% accurate on the direction of change and just 0% to 20% accurate on the degree of change.

See my instablog for specific instructions about how to best apply the dividend dog data featured in this article, this glossary instablog to interpret my abbreviated headings, and this instablog to aid your safe investing. --Fredrik Arnold

The net gain/loss estimates above did not factor in any foreign or domestic tax problems resulting from distributions. Consult your tax advisor regarding the source and consequences of "dividends" from any investment.

Stocks listed above were suggested only as possible reference points for your Healthcare dog stock purchase or sale research process. These were not recommendations.

Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, recommendation or endorsement to buy or sell any security. Prices and returns on equities in this article except as noted are listed without consideration of fees, commissions, taxes, penalties, or interest payable due to purchasing, holding, or selling same.

Graphs and charts were compiled by Rydlun & Co., LLC from data derived from www.indexarb.com; YCharts.com; finance.yahoo.com; analyst mean target price by Thomson/First Call in YahooFinance. Dog photo from: lordlou.com

Disclosure: I am/we are long ADES, BGSF. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.