ADX: Big 8% Yield, Big Discount To NAV (Tender Offer)

(10min)

Summary

  • The Adams Diversified Equity Fund just increased its annual distribution yield to 8%, plus it trades at a large discount to NAV (attractive).
  • It also just initiated a tender offer (at 98% of NAV) designed to increase shareholder value (and it's been working--and we expect the fund to continue to outperform through year-end).
  • We review the fund (i.e. price discount, initiatives to enhance shareholder value, interest from activist investor Saba Capital and more), and then conclude with our strong opinion on investing.
  • Looking for a portfolio of ideas like this one? Members of Big Dividends PLUS get exclusive access to our subscriber-only portfolios. Learn More »
The grand opening sound and light show of "Ain Dubai" ferris wheel in Dubai, United Arab Emirates

Adams Diversified Equity Fund (Blue Harbinger)

Iacob MADACI/iStock via Getty Images

We’ve been pounding the table on the Adams Diversified Equity Fund (NYSE:ADX) for over a month now, and as you can see in the chart below, things have been going well. Specifically, the discount to NAV on this attractive closed-end fund (“CEF”) has narrowed (thanks to

And if you are looking for additional big-yield opportunities, we have ranked Adams Diversified Equity Fund in our monthly update report: Top 10 Big-Yields: BDCs, CEFs, REITs. We also currently own shares of ADX in our 27-position Blue Harbinger High Income NOW portfolio (9.2% aggregate yield).

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This article was written by

20.73K Followers

Mark D. Hines | Private Investor. Former allocator and buyside PM. Now building Blue Harbinger Research (top ideas plus the “High Income NOW” and “Disciplined Growth” portfolios) and Herrick Lake Investments (helping you make informed decisions). University of Chicago Booth MBA, BS in Finance from the University of Illinois at Urbana-Champaign.

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Analyst’s Disclosure:I/we have a beneficial long position in the shares of ADX either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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