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Long-Term Swine Flu Play With +157% Dividend Growth |
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By
Amy Calistri |
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By the time it dominated the headlines, it was already too late to
contain the outbreak of swine flu. Originating in Mexico, cases have
already been confirmed in the U.S., Britain, Spain, Canada, Israel
and New Zealand. South Korea, Australia, Sweden and Switzerland have
suspected swine flu victims under surveillance, awaiting
confirmation.
And since investors seize any opportunity -- even one
that comes on the heels of a potential pandemic -- swine flu-related
investments were already in play by Monday morning. But sometimes
investors think short term. So while the obvious plays have had
their day, investors still have chance to capitalize on swine flu's
long-term benefits to this solid dividend paying company.
(Full Story Below) |
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Also in Today's
Issue... |
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Capture 14% Yields and Total Returns up to +185.6% |
On the last trading day of
2009, 94% of the picks in this high-yielding portfolio
were up. Most of them have returned more than +10%, and
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Long-Term Swine Flu Play With +157% Dividend Growth
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Once
a major story breaks, it doesn't take the market long to
identify the immediate winners and losers. So I wasn't
surprised to see companies effected by the news of the swine
flu outbreak move double-digits within the first few minutes
of trading on Monday morning. But I was a little surprised
that some of the longer-term beneficiaries had largely been
ignored.
The Losers
Anything to do with Mexican travel and tourism were
logical losers. Grupo Aeroportuario del Pacifico (NYSE: PAC)
operates 12 airports in Mexico's tourist-oriented Pacific
region; its shares lost -15.1% on Monday. Cruise lines that
feature Mexican destinations like Carnival (NYSE; CCL) and
Royal Caribbean (NYSE: RCL) also saw their share prices
fall.
But just as the flu isn't isolated to Mexico, neither
were the losers. All travel and tourist-related companies
had a tough time. Houston-based Continental Airlines (NYSE:
CAL) lost -16.4%. And on average, casino companies posted
double-digit losses for the day.
The Short-Term Winners
Currently there is no vaccine for swine flu, but
antiviral medications have proven to be effective
treatments. Predictably, the makers of the antiviral
medications used to treat swine flu were up; Roche
Holding AG produces TAMIFLU while GlaxoSmithKline (NYSE: GSK)
manufactures Relenza. Even the shares of Gilead Sciences
(Nasdaq: GILD), which gets a percentage of Roche's Tamiflu
sales were up.
Quidel (Nasdaq: QDEL) is one of the companies that
manufactures diagnostic kits for swine flu. The company's
stock exploded on Monday. And tiny Alpha Pro Tech (AMEX:
APT), with a market cap of just $41m, saw its share price
climb +31.6% on Monday. The company makes disposable
protective apparel and infection control products.
One interesting beneficiary was Netflix (Nasdaq: NFLX).
Speculating that people would rather stay at home to watch a
movie, rather than risk mingling in public theaters, NFLX
stock was up +8.5% on the day.
Thinking Longer-Term
As much as it is on our minds today, this tragic swine
flu outbreak will eventually be contained. Our collective
hope is for that to happen as quickly as possible and with
minimal lost of life. When it's run its course, the vast
majority of us will put it behind us. Sales of medications
will drop off. Diagnostic kits will sit on the shelves. And
the temporary boost to most companies will be over.
But for some companies, this outbreak will have
consequential benefits to their long-term growth; companies
that produce vaccines.
As governments around the world now scramble to ensure
there are adequate supplies of antiviral medications, each
and every one of them is wishing they had a vaccine to
better protect their populations instead. And they will --
and probably in the very near future.
On Monday, I thought about one company in particular. It
already makes regular flu vaccines and is poised to turn
around a swine flu vaccine. I thought of the company because
I had recently read a profile about it in StreetAuthority
newsletter,
High-Yield International -- just weeks before
the outbreak.
This company was High-Yield International's April
"High-Yield Security of the Month." It's a company with a
solid track record and an equally solid dividend yield of
5.8%. It also has consistently grown its dividend over the
last five years -- by +157%.
-- Amy Calistri
Investment Strategist
Global Dividend Opportunities
GlobalDividends.com
839-K Quince Orchard Blvd.
Gaithersburg, MD 20878-1614
P.S. It's hard to beat the market once the headlines
break. The short-term winners and losers move within
minutes. But fewer people think long-term. And even fewer
have the advantage of top quality research like readers get
from High-Yield International. If you'd like to
learn more about this publication,
please visit this link.
P.S.S.
-- Don't miss a single issue! Add our address,
Research@GlobalDividend.com,
to your Address Book or Safe List. For instructions,
go
here.
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One
Stock a Month is All You'll Ever Need
For the entire 2009
calendar year 100% of Amy Calistri's Stock of the
Month picks have been winners. ALL of her picks are
up -- as much as +58.4% in just a few months. And her
subscribers are making money hand over fist alongside
her. One has made $10,272... another is up $46.002.
Click here to get her latest pick. |
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