For Conservative Investors:
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There are no safe havens in the stock market. Every stock carries risk. But some less than others. This column features stocks that have shown one or more of the following characteristics: less volatility, better earnings, larger market caps, safe and increasing dividends. In these times of turmoil, our goal is to show readers better opportunities for investing with fewer risks. | | ADX | $11.40 | Best Features: Trading at a 10% discount to NAV; well diversified, conservative mix of equities.
Watch Out For: Market gyrations; economic slowdown. | 52-wk range | $8-$12 | | Beta | 1.04 | | Dividend Yield | 1.1% | | Market Cap. | $1.0B |
April 4, 2011 - Adams Express Co. (ADX-NYSE) is a self management investment trust. The firm invests in the public equity markets of the United States. It invests in growth oriented value stocks. It employs a fundamental analysis with a bottom-up stock picking approach. The Adams Express Company was founded in 1840 and is based in Baltimore, Maryland.
This is a closed-end regulated investment management company. Its goals are to preserve capital and have long term growth of income. A closed-end fund is one that sells a certain number of shares, then takes the proceeds and invests them according to the prospectus. It doesn't continually issue new shares, such as an open-end mutual fund. Therefore, these closed-end funds will sometimes trade at a discount or premium to their Net Asset Value (NAV). That means investors can sometimes buy these funds for less than they are worth, if they were to be liquidated. In other words, you can buy dollars for 90 cents or some other less than a buck value. Right now, investors can buy a dollar's worth of ADX for 90 cents. One reason investors might want to consider this fund, apart from the discount, is the make-up of the current portfolio. Management has invested 5% of the fund's funds in Petroleum and Resources Corp ($59.064 million). With oil trading at $108 a barrel, it's probably been a very good place for the money. It also suggests that the fund will continue to meet its objectives as there doesn't seem to be any hint that oil is going down anytime soon, if ever. Traditionally this fund has traded at a discount to its NAV, usually in the 12% to 17% range. Now that discount has narrowed as investors looking for a conservative place for their money put some of it in this fund. One bonus for shareholders: if the fund trades with a discount over 10%, the fund can buy back up to 5% of its outstanding shares. That means the discount could narrow further. The fund's top ten holdings are: Petroleum & Resources Corp.(5.3%), Oracle Corp.(3.1%), Microsoft Corp.(2.9%), Apple, Inc.(2.4%), JPMorgan Chase & Co.(2.1%), PepsiCo, Inc.(2.1%), Procter & Gamble Co.(1.8%), General Electric Co.(1.7%), Target Corp.(1.7%), McDonalds Corp.(1.7%) A good mix of technology, consumer products, financials, and of course, that large oil position. Most of these companies have increasing sales and showed solid improvement over the last few quarters. These top ten represent about 40% of the portfolio.
Essential numbers: In 2010, total return (market price appreciation plus dividends) was 11.5%. Total return based on nav was 11.2%. In 2009, those two numbers were 32.1% and 30.6% respectively. Expenses to net assets in 2010 were .58%. Portfolio turnover was 16.15%. Return on equity for the last 12 months was 10.03%. Most recent Book Value per share was $12.65. In the last 52 weeks, the stock is up 6.34%. There are 88.88 million shares outstanding with a Float of 85.10 million. Insiders own 10.19% of the stock. Institutions have 13.40% of the Float. The annual dividend is 12 cents a share for a yield of 1.1%. The last dividend was paid on Feb. 28. Conservative investors looking for a way to diversify their stocks will find this fund of interest. Not only are the stocks in the fund conservative, but they're being sold at a discount. Plus there's a small dividend. Combined they should make most investors, but particularly conservative ones, very comfortable. |
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