Thursday, May 26, 2011

A couple of securities to consider

Here are two stocks that I like for but are not allowed in my hedge fund due to option availability. However they could be good investments for you.

TCAP...Triangle Capital Corp...I highlighted this security back early in my posting blog. The company is a business development company that lends to small companies that generally are in start up phase or companies ready to expand. There are numerous BDC;s trading in the market, but Triangle Capital is in my opinion the best run, most conservatively financed BDC in the country. I frankly would feel very safe with a long term investment in TCAP. The CEO knows his stuff, and just keeps paying out a 8% plus dividend, that just got increased this year. Take a look at their chart and you will see nothing but up even through the economic downturn. TCAP kept their dividend intact the whole time as well. With every quarterly report I become more impressed with TCAP and frankly believe it might have one of the safest dividends out there, despite being a BDC. Local company for you Raleigh area investors, so you can actually go visit your investment.

TNH...If you want to get in on the fertilizer boom Terra Nitrogen is your opportunity. This company makes nitrogen fertilizer products and distributes it to various customers in the US. This company is a direct play on the US government requirements that ethanol be used in gasoline. If you buy groceries you have have seen the big increase in prices lately and those increases are a direct result of this requirement and the subsidy the government pays farmers who grow corn for ethanol. Owning this security is like being the arms supplier to the world's need for more food grains. TNH just announced a huge dividend for May of $4.00 plus due to the increased profits. That large dividend is profit from selling product for the spring planting season, TNH currently pays a $8.00 plus dividend annually. TNH is a partnership, so all profits are paid out as distributions and you do get a K-1 for tax season. The only risk I see here is the entire operation is located at ONE plant in Oklahoma so if something happens there you lose big. But if want in on the fertilizer boomthis is your ticket.

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