Stock Quitters Portfolio:
Lock In a Predetermined Gain of up to 227% in Four Years
Every once in a while, you get a good stock that doubles… triples… maybe even quadruples your money in a few short years.
We all love those stocks…
But it’s the remaining stocks in the market that can be nerve-wracking…
Especially with all the volatility we’ve seen lately.
Most people can’t stand the uncertainty of it all… the constant ups and downs… the vulnerability to elections and pandemics and who knows what else… and the dramatic crashes that occur in the stock market…
That’s why my VIP Trading Service Oxford Bond Advantage is dedicated to teaching American Stock Quitters how to use the power of certain bonds to increase their returns.
Now, I’m not suggesting that you pull your money out of the market. Instead, we’ve been sidetracking stocks by investing in the bond market.
And here’s the strangest thing: You can often get BETTER returns than you can in the stock market.
The bonds I’m recommending today are a very special type of bond – I call them superbonds. They offer much bigger returns… locked in and backed by legal contracts.
Most importantly, we’ve been able to collect these returns with peace of mind, not worrying about a sudden market crash, a political event or a disease cratering our hard-earned savings.
And if you’re reading this report, you’ll learn how to get that peace of mind for yourself… with an untouchable return on your nest egg.
In this report, you’ll learn about the three superbonds I promised you…
They all meet my criteria…
- Sufficient cash flow to cover their debts
- Strong leadership
- Reputable companies that aren’t flash-in-the-pan trends
- Expected returns that are better than the stock market average.
Keep in mind that the prices and returns of these bonds are as of January 2023. The exact prices and returns you receive may be different.
Three Superbonds to Grow Your Nest Egg
Superbond No. 1: ParkOhio
In today’s low interest rate world, it is difficult to track down a 20.5% minimum expected annual return (MEAR), but I uncovered one for you.
The bond is provided by 116-year-old, Cleveland-headquartered ParkOhio Holdings.
Although ParkOhio is a big player in international supply chain logistics, the company is very much off the radar.
There are hardly any analysts following ParkOhio’s stock. The bonds of this steady business are even less closely watched.
With a market cap of under $200 million, ParkOhio is too small for most big institutional investors to bother with.
Exacerbating the situation is the fact that the company doesn’t do anything to bring attention to itself. Management just plugs along running the business (and purchasing shares), not wasting any time with promotional activities.
I like that.
And that makes the bond I’m recommending one of the best kept secrets in the public bond market.
And management is doing a fine job of growing the company. ParkOhio has grown revenue from $100 million in the mid-’90s to more than $1.6 billion in 2022.
2023 is setting up to be a banner year. The company expects to report record sales, a significant improvement in profitability and positive adjusted earnings per share (EPS) for each quarter of 2023.
Management attributes the anticipated significant EPS improvement to strong demand, customer price increases and cost-reduction efforts.
ParkOhio’s growth strategy has been to roll up complementary manufacturing businesses under the ParkOhio corporate umbrella.
It has worked very well, and today, ParkOhio operates approximately 60 manufacturing sites and 65 supply chain logistics facilities in more than 20 countries throughout North America, South America, Europe and Asia.
The Crawford family remains the largest single shareholder of ParkOhio. (Matthew Crawford, son of the founder, runs the company.) In total, insiders control more than 30% of the shares.
With that huge share position, you can bet that Matthew Crawford will run this business carefully.
Whenever possible, I want to be invested alongside owner-operators like this who have huge skin in the game. And as bondholders, we’re ahead of the owners in the capital structure.
So you can be sure they’re going to want to make sure we get paid back… Otherwise, their stake is worthless.
Action to Take: Buy the ParkOhio Holdings (CUSIP 700677ar8) April 15, 2027, 6.625% coupon bond at $900 or lower. The bond is rated CCC+ by S&P Global Ratings.
At the current trading price (as of this writing) of $684.46, you will lock in a MEAR of 20.5%.
You will receive nine interest payments of $33.125, minus $15.64 in accrued interest, plus a $315.54 gain at maturity from buying at a discount to face value, for a holding period of 51.2 months at a cost of $684.46 per bond.
9 x 33.125 – 15.64 + 315.54 / 51.2 / 684.46 x 12 = 20.5%
(For the sake of simplicity, the equation above – and others like it in this report – is calculated from left to right rather than using standard order of operations.)
At maturity, you should expect about an 87% total gain from this bond.
Superbond No. 2: Rite Aid
Founded in 1962 and headquartered in Philadelphia, Rite Aid is one of the nation’s leading drugstore chains. The company has approximately 2,450 stores in 17 states and employs more than 50,000 people.
Rite Aid sells prescription drugs and provides various other pharmacy services.
But if you’ve been in a Rite Aid store, you’ve seen the smorgasbord of products on the shelves.
Its assortment of products includes over-the-counter medications, health and beauty aids, personal care products, seasonal merchandise, cosmetics, household items, food and beverages, greeting cards, seasonal and general merchandise, pet care items, and a variety of other convenience products.
In addition to its retail pharmacies, the company also has a pharmacy services segment. This segment serves health plans, commercial employers, labor groups, and state and local governments.
Offerings include technology solutions, mail delivery services, specialty pharmacy services, network and rebate administration, claims adjudication, and pharmacy discount programs, as well as drug benefits under the federal government’s Medicare Part D program.
A Business Model for a Modern Market
Although late to the party, Rite Aid is now taking steps to expand its offerings and delivery methods while reducing its retail footprint.
Rite Aid is now providing digital, mail delivery, specialty pharmacy and pharmacy benefit management services.
The transition to a more contemporary business model is causing Rite Aid financial pain now but will provide the needed capital to fund future debt payments.
Rite Aid does not have any debt maturing until 2025, and the bond I’m recommending doesn’t mature until 2027… So the company has time to get its financial house in shape.
Thanks to expanded product offerings, operational improvements and the closing of unprofitable stores… the financial picture is getting better.
In fiscal year 2021, revenue increased by more than $2 billion. In fiscal 2022, it jumped up another $525 million.
For fiscal 2023, management expects nearly $24 billion in total revenue, and it expects to generate positive free cash flow to continue to pay down debt.
Although the company will not be profitable this year, its balance sheet is improving.
Rite Aid paid down more than $200 million worth of debt in fiscal 2022, has $1.85 billion in liquidity available and expects to have positive free cash flow this fiscal year.
The company is taking the proper steps to improve the business… It’s increasing market share by growing the current business, expanding into untapped markets and creating new offerings.
This 60-year-old company isn’t going anywhere. And I expect that over the next several years, it will be stronger than ever.
Action to Take: Buy the Rite Aid (CUSIP 767754aj3) February 15, 2027, 7.7% coupon bond at $800 or lower. The bond is rated CCC- by S&P Global Ratings.
At the current price of $397.09 (as of this writing), you will lock in a MEAR of 56.5%.
You will receive nine interest payments of $38.50, minus $31.01 in accrued interest, plus a $602.91 gain at maturity from buying at a discount to face value, for a holding period of 49.2 months at a cost of $397.09 per bond.
9 x 38.50 – 31.01 + 602.91 / 49.2 / 397.09 x 12 = 56.5%
That means, at maturity, you should expect about a 227% total gain from this bond…
Superbond No. 3: Liberty Media
As you can tell from my two previous recommendations, I like companies that have been around awhile… not just flashes in the pan.
This next company is no different…
Although you may not be familiar with Liberty Media, it’s a Fortune 500 company that was founded more than 30 years ago.
To avoid any confusion regarding the recommendation…
Liberty Media is now called Qurate Retail, as it changed its name in 2018.
The bond we’ll be buying was issued under the name Liberty Media and remains that way. Qurate is financially responsible for the bond.
You’re likely familiar with at least one of Qurate’s seven leading retail brands – QVC, HSN, Zulily, Ballard Designs, Frontgate, Garnet Hill and Grandin Road.
Qurate is the largest player in video commerce…
Qurate reaches more than 200 million homes worldwide via 14 television networks and reaches millions more via multiple streaming services, social pages, mobile apps, websites, print catalogs and in-store destinations.
And Qurate shouldn’t have any problem meeting its future financial obligations…
In 2022, the company reported full-year revenues of $12.1 billion, but reported a loss for the year.
2022 sales and profits were adversely affected due to costs incurred from loss of inventory and a permanent shutdown at the company’s second-largest fulfillment center after a fire caused extensive damage.
Qurate had negative free cash flow for the year, but that should reverse in 2023 with new cost controls and lower expenses. Free cash flow was negatively affected by approximately $150 million to $200 million in payables due in the first half of the year for inventory from 2021. That is expected to reverse in the first half of 2023.
Management expects the company to be free cash flow positive in 2023 – remember, free cash flow is calculated after the company has paid interest on its bonds. It has $1.3 billion in cash and credit available. Plus the company lowered its overall debt a little bit in 2022.
Now that the fire and resulting issues are mostly behind the company, its ability to better serve customers has improved.
This is a distressed bond with a big opportunity for improvement.
The company is making the needed adjustments (including hiring a new chief financial officer) and is on a three-year path to reestablish revenue growth, margin expansion and free cash flow generation.
The company got a big boost when it was recently revealed that famed hedge fund manager Michael Burry bought 5 million shares. Another lift came when the Roku Channel announced that it had started carrying HSN and QVC.
Qurate has new leadership at several of its brands, and I’m seeing progress being made. Due to its strong brands and broad customer reach, the company is operating from a position of strength.
I expect sales, earnings, and cash flow to accelerate in 2023.
Again, the Qurate bond that we’re buying is listed under its old name, Liberty Media.
Action to Take: Buy the Liberty Media (CUSIP 530715ad3) July 15, 2029, 8.5% coupon bond at $850 or lower. The bond is rated CCC by S&P Global Ratings.
At the current price of $523.78 (as of this writing), you will lock in a MEAR of 30.2%.
You will receive 14 interest payments of $42.50, minus accrued interest of $41.32, plus a $476.22 gain at maturity from buying at a discount to face value, for a holding period of 78.2 months at a cost of $523.78 per bond.
14 x 42.50 – 41.32 + 476.22 / 78.2 / 523.78 x 12 = 30.2%
This is another bond that will nearly TRIPLE your investment.
At maturity, you should expect about a 199% total gain from this bond.
Make Your Portfolio Super
Together, these bonds make up my Stock Quitters Portfolio. These recommendations are expected to produce total returns of about 87%, 227% and 199%, respectively.
And remember, these returns are contractually obligated!
Opportunities like these are exciting, especially in a market besieged by a lingering pandemic, ongoing supply chain issues and persistent inflation (among other problems).
But here, we’ve got predictable returns… protected by law.
To me, bond investing gives you the best of both worlds: consistent gains and very limited downside risk.
And with these superbonds in your portfolio, you can juice your portfolio’s growth just as simply.
However, keep in mind…
The expected total return on these will fluctuate too, depending on when you get in on these bonds. So try to buy them around the prices I mentioned above.
Don’t chase the price up on these. Just wait for them to come back down before buying so you can maximize your total return.
Remember, these are speculative bonds. But if they meet their obligations as required by law, the returns will be spectacular.