The Yellow Brick-and-Mortar Road to Profits

Forgive me for starting this article with a little braggadocio, but I think now is a pretty good time to be a Hidden Profits subscriber.

Yes, the Trump-fueled rally continues to break record after record. Bitcoin is, what, $50,000 a pop? I wouldn’t be surprised. Wherever you look there’s something “disrupting” everything from currencies to cars. Sure, some people are making money in the chaos, but it’s unpredictable and messy.

To add even more fuel to the fire, Congress is close to finalizing a tax bill that would lower corporate tax rates. And not just lower them, but slash them to levels we’ve never seen. Thing is, we have among the highest corporate income tax rates in the world. Not every company pays that highest rate, of course, but the consistently cash-gushing ones do.

Those cash-gushing companies are the ones we love at Hidden Profits, because we choose companies that have what are basically private printing presses. They’re awash in money they don’t need to grow their businesses. In fact, they send that money to their investors.

Now, courtesy of the federal governrnment (for once!), these companies are going to double what they can pay out. My Hidden Profits model pinpoints these companies that pay investors first.

My newest recommendation, in fact, is a brand you know. One of its stores is probably located within driving distance of you, wherever you are.

In an age where Amazon seems hell-bent on buying up entire cities and businesses and our computers are doing all the thinking for us, brick-and-mortar retail seems almost quaint, like something in a Norman Rockwell painting.

But brick-and-mortar retail isn’t quaint. Far from it. Each year, Americans spend about $1 trillion in retail — but online sales account for just a tenth of that figure. That means the old-fashioned dollars haven’t gone anywhere, and this particular ubiquitous retailer is primed to soar in the coming years.

The beauty is that this month’s stock selection is the No. 1 ranked company in my Earnrnings Quality Model.

Here are some facts and figures:

The rub is that our retailer gets little love from the financial press. The cold shoulder from Wall Street and low expectations are what make the stock compelling. Sometimes it really pays off to be a contrarian and go against the grain of conventional wisdom. I firmly believe this is one of those times.

But I’m not reckless. I’ve been very cautious on equities due to high valuations and extremely optimistic expectations among investors. But, when I see a company that can throw off mounds of cash and pay shareholders first, I dive in feet first.

Retailers have been hammered in recent times, as you know. It really is ugly out there, but ugly stocks can make for beautiful investments. Learnrn about one right here.

Good investing,

John Del Vecchio

Editor, Hidden Profits