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Top 10 Panick High Yield Report Performance Highlights Of 2017

|Includes: Popular, Inc. (BPOP), COWN, FCEL, FSAM, MVC, NGL, OCSL, REXX
Summary

My Moderate Risk 10 Picks have generated a combined IRR of 28.3% since launched on 12/27/2015.

2017 highlights include winners in the preferred stock, BDC, baby bonds financial and midstream sectors.

The Panick Report has also consistently and accurately warned members about many high yield issues to avoid before they collapsed.

Outstanding subscriber reviews and one of the most friendly and active chat boards on Seeking Alpha.

Perhaps you have been following my public articles on high yield issues and are curious about my premium Panick High Yield Report service.  This article will answer those questions and provide ten of our 2017 performance highlights.

1.  The active chat board 

The active and friendly chat board at the Panick Report has itself become a highlight of the service.  I believe that the comments, questions and ideas being posted here are the most valuable part of the service.  Many of of our members have tried several Marketplace services (including those with a far higher price tag) and commented on this.

2. FCELB gains 29% in it's first 3 weeks as a pick

FCELB is a par $1000 cumulative preferred stock issued by FuleCell Energy Inc. (FCEL).  FCELB was added as a Panick 10 high yield pick at 295 on 10/4/2017 and is now trading at 380 after less than 3 weeks as a pick.  My Panick 10 picks are reserved for high risk / high reward high yield picks. Members received an advance look at my public FCELB article which was published on 10/11/2017 with FCELB trading at $346.70.  The Panick Report specializes in finding this type of off the beaten path issue.  

For example, on 6/1/2016 I was the first (and only) Seeking Alpha author to write about RXNRP which was then trading at $7.50.  RXNRP is a cumulative preferred issue for Rex Energy Corporation (REXX). Many subscribers were able to purchase that issue ahead of my public article in the $5 price range.  I recently recommended that members take profits and sell this highly speculative RXNRP preferred stock issue with it trading near $24.  Some members who purchased it near $5 in 2016 recovered their initial investment in dividends received alone.

3. NGL

The Panick Report looks for solid issues that have fallen out of favor with investors.   NGL Energy Partners LP (NGL) was picked up as a Panick 10 pick at $9.15 on 8/18/2017 following a selloff due to a poor earnings report.  The poor earnings were due to a hedging failure that appeared to me to be a one time event. NGL has rallied 24% in just over 2 months as a pick.  The hefty 39 cent quarterly dividend was just maintained despite many bearish predictions otherwise.  I liked NGL so much that I also added the lower risk high yield NGL-PB preferred stock as a Moderate Risk 10 pick. The par $25 cumulative preferred units have already returned 8% in 2 months as a pick including one 67.5 cent quarterly dividend.

4. OCSL gains 34% in 8 months as a pick

In search of deep value, the Panick Report is willing to make picks that are can be very unpopular and even hated by many investors.  Such was the case with the deeply discounted Oaktree Specialty Lending Corp (OCSL).  This issue was then known as FSC when added as a Panick 10 Pick for the 2nd time (the 1st time as a pick was also profitable) on 2/13/2017 at 4.52.  OCSL remains a current pick and has returned 34% including dividends as management control was sold by Fifth Street Asset Management (OTCPK:FSAM) to Oaktree which has a far better reputation.  Many members added to their investment the very day before the potential transaction with Oaktree was announced.  I noticed unusual trading in FSAM stock and correctly advised subscribers that this could indicate a transaction in this remarkably timely 6/29/2017 post to members only.

5. MVC Gains 22% in 8 months

Large gains are tough to find in BDC sector which is known for low volatility.  MVC Capital (MVC) has returned 22% (including dividends) in less than 8 months as a pick.  It remains a deeply discounted issues and is still a pick today.  My 3/21/2017 article correctly predicted that MVC would sell US Gas & Electric (which resulted in a huge gain) and raise the dividend as it transitioned from holding client equity towards holding client debt.

6. RSO-PC returns 41% gain

The RSO-PC cumulative preferred issue was added as a Moderate Risk 10 pick at $18.90 back on 12/27/2015.  I finally dropped RSO-PC on increased valuation on 3/6/2017 at $23.92.  The resulted in a 15 month total return (including dividends) of 41%.

7. RFT returns 32% & RAS-PC returns 39% before I turn negative

RFT is a RAIT Financial Trust (RAS) baby bond.  I added it as a Moderate Risk 10 pick at $19.78 on 4/30/2016 and dropped it at $24.63  on 2/27/2017 for a 10 month return (including interest) of 32%.  The higher risk RAS-PC was dropped from the Panick 10 picks at $24.30 on 2/27/2017.  RAS-PC had been added as a pick at $19.50 on 1/6/2016.  This resulted in a 14 month gain of 39% including dividends received.

The Panick Report follows many high yield issues as "Watch List" issues and I have continued to follow the RAS baby bonds and preferred issues after they were dropped as picks for large gains.  After dropping RFT and RAS-PC as picks, I became quite negative on the RAS issues.  Operating results were declining as RAS suffered unexpected losses on property sales.  Cash flow was crippled as RAS was forced to deleverage it's balance sheet to meet upcoming debt maturities.  Many subscribers had gains shorting the RAS common and preferred issues as I highlighted these problems.

8. Equity Pick COWN gains 45% & BPOP gains 50%

As the name suggests, the Panick High Yield Report is focused on High Yield.  The Moderate Risk 10 picks and Panick 10 picks require a high yield.  However, I do also provide some equity picks.  Many are undervalued issues that I come across while screening for high yield picks.  For example, I added Cowen Group Inc. (COWN) as an equity pick at $10.80 on 2/7/2016 and this current pick has gained 45% at a recent price of $15.70.  I became familiar with the COWN equity after following the COWNL baby bond which gained 16% during it's brief 1 month appearance in the Moderate Risk 10 picks from 2/8/2016 to 3/4/2016.

The same thing happened with the Popular Inc. (BPOP) issues.  I had the BPOPM trust preferred issue as a Moderate Risk 10 pick and it gained 18% in less than 2 months as a pick from 4/20/2016 to 6/2/2016.  The deeply discounted BPOP became an equity pick on 5/2/2016 at $29.85 and was dropped at $44.38 on 1/30/2017 for a 50% gain (including dividends received).  More recently I have turned negative on the OFG Bancorp (OFG) and BPOP Puerto Rican bank.  I don't believe that the full impact of the recent hurricane disasters is fully priced into these banks.

9. Timely warnings on high yield issues to avoid

The Panick Report monitors many high yield issues as Watch List issues.  For example, I dropped the XKE Toys R Us bond trust as a Panick 10 pick on 1/30/2017 for a 7 month return of 23% (including dividends).  I later turned quite negative and sent out several timely "sell" warnings as the retail sector deteriorated in 2017.  Some members shorted XKE as it declined and ended up in bankruptcy.  Timely negative alerts were sent out about several other high yield preferred issues such as RHE-PA and the RAS preferred issues.

10. Moderate Risk 10 picks generate 28.3% IRR since 12/27/2015 inception

The Panick Report has been published as an email newsletter since 9/26/2012.    I joined the Seeking Alpha Marketplace in September 2015.  While I have continued to cover many high risk / high reward issues, I found that many members wanted more coverage of the moderate risk area.  To meet the demand, the Moderate Risk 10 picks were launched on 12/27/2015.  As of today, these Moderate Risk 10 picks have generated an overall IRR of 28.3% (including dividends and interest).  This is based on a total of 28 open and closed picks with an average holding period of 179 days.  

The largest loser in the Moderate Risk 10 picks has been CORR-PA which I dropped for an 8% loss on 2/8/2016 at $16.71.  After I chickened out it later soared to trade above par $25.  Out of 28 Moderate Risk 10 picks, that was the only loss of over 5% to date.  So far, I have lived up to my goal of moderate risk for this group. 21 of the 28 picks had gains of over 5%.  Naturally it helped that I launched the Moderate Risk 10 picks during a favorable bull market period.  RSO-PC was the largest Moderate Risk 10 gainer with a 41% total return (see item #6).

Conclusions

There are a lot of performance claims being made by many different Seeking Alpha Marketplace services and I encourage folks to be skeptical.  I have chosen to highlight the Moderate Risk 10 pick performance because the performance of every single pick can easily be verified.  For example I say in item #2 that FCELB was added as a pick at $295 on 10/4/2017.  Members can easily find my date stamped 10/4/2017 members only post and verify this fact.  The Panick 10 Picks and Equity picks include picks before I joined the Seeking Alpha Marketplace.  I provide members with an Excel model (see the Performance_Stats sheet) that includes a history of every pick and shows the performance calculations.

However, a service is not just about performance.  Past performance may not be indicative of future results. The Panick High Yield Report should be viewed as a learning tool for those who want to understand how to invest and trade the high yield sector.  Check out our outstanding subscriber reviews (includes all reviews as collected by Seeking Alpha). Despite the tremendous value offered, my Panick High Yield Report is one of the more moderately priced top 15 services in the Seeking Alpha Marketplace.  Some of the features such as the chat board are hard for me to properly explain here.  The best way to understand our service, is to give it a try.

Disclosure: I am/we are long NGL, MVC, COWN.

Additional disclosure: I am also long FCELB