Savings Experiment: Snow Removal
The Money Man Behind Rick Santorum: Who Is Foster S. Friess?"Our latest high-dividend stock pick is AllianceBernstein (NYSE: AB), a leading global money manager," says Mark Skousen.
In his premium service, High-Income Alert, he explains, "The company offers mutual funds, structured products, and managed accounts to corporations, endowments, institutions, and government agencies.
"Of course, asset managers collect fees based on the quantity of assets under management. As asset values decline, so do net fees. And, needless to say, with the haircut that world bond and equity markets have taken during the past two years, sales and earnings at AllianceBerstein have fallen.
"However, the markets have rebounded sharply during the past six months. And yet shares of Alliance have not. Today, the stock trades at just a quarter of what it did two years ago.
"Yet, there are good reasons to believe that shares will soon be trading higher. For starters, $3.58 trillion is currently parked in U.S. money market funds. These investors are earning next to nothing -- and so are the fund managers.
"With the worst of the recent financial meltdown behind us, this money is likely to migrate into investments with greater upside potential -- and higher fees for fund and account managers.
"Also, Alliance has been hit hard this year by redemptions. Investors withdrew $24 billion in the second quarter alone. But the timing of these investors was terrible.
"With markets on the rebound, client defections likely on the wane and new clients coming in every day, Alliance is likely to see a substantial net gain in total assets in the months ahead.
"To boost earnings further, Alliance recently has opened a new derivatives trading operation with five top veterans from rival firms.
"Also, this stock is cheap. It currently trades at just 14 times forward earnings. And, of particular interest to us, it currently yields 7.3%. For all of these reasons, I expect Alliance to keep trending higher."
Steven Halpern's TheStockAdvisors.com offers a free daily overview of the favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.
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