I was talking with an old college buddy the other day, and he was lamenting his recent investment performance. Up until a few years ago, he could do no wrong chasing the latest hot trade in small-cap biotech stocks.
We’re not talking beer money winnings, either. We’re talking life-changing money. My friend’s best trade to date was buying 5,000 shares of Pacific Biosciences (PACB) in the early days of the pandemic at $3.50 a share …. then selling half of it at around $35 a share last year!
That’s $70,000 in profits in less than two years.
On one trade.
Of course, things have been much harder for him in 2022. As biotech stocks have cratered from 2021 highs, he’s now pulling his hair out, looking for alternatives that provide less risk (and less personal stress).
I am always happy to talk investing strategies, but admittedly many of the kinds of stocks I typically research – consumer stocks, REITs, financials – weren’t his cup of tea. After a while, however, we zeroed in on one big opportunity that had us both breaking out in grins.
It was almost too perfect to be true! The best of both worlds – a stake in the IPO-like potential of development stage biotech stocks, but a mammoth and a commitment to regular distributions to shareholders.
Don’t worry, I won’t keep you in suspense like those other websites do … the stock we are high on is Horizon Technology Finance Corporation (HRZN). I’ll explain what is so exciting about this stock next, but make sure you keep reading for other plays that are similar — but offer even more reliable and sustainable income potential, to provide maximum long-term returns.
Horizon, A High Tech Income Investment
Horizon is a BDC, or Business Development Company. It operates out of Connecticut, which isn’t as sexy as Silicon Valley but is a major hub for healthcare innovation. And it is a specialist at identifying opportunities in this field much like a venture capital fund, taking out senior debt and equity investments in the opportunities it finds. As of December 31, the firm had funded 224 portfolio companies and invested $1.8 billion in full.
One prime example of the kind of stocks in its portfolio comes via a $10 million venture loan in March to Aerobiotix, an innovative company that is focused on filtration solutions to improve indoor air quality and reduce airborne pathogens. In the wake of COVID-19, that’s sure to be an area with big potential – and this is exactly the kind of growth-oriented biotech start-up that momentum investors typically flock to.
The difference is that Horizon is the financer of Aerobiotix, allowing it to participate in the upside but with less volatility. And with more than 200 other companies in its present portfolio, you can still find a path to profits even if one of these high-growth but high-risk plays falls apart.
Best of all, the biotech stocks that pay back these loans do so at a premium rate that powers consistent dividends, with HRZN stock offering an impressive 8.4% yield at current pricing. The fact that those distributions roll out on a monthly basis is simply the icing on the cake.[/if_not_subscriber_to]
Closed-End Funds Can Offer Growth, Diversification and Monthly Payouts
If you like the monthly income and long-term growth potential that comes from Horizon, then you’ll really love what the top closed-end funds have to offer right now.
Closed-end funds offer a lot of the same benefits that Horizon has. They diversified by investing in a basket of companies. They offer monthly distributions for reliability and low-risk returns. And best of all, they offer amazing yields that are regularly five times the typical blue chip stock.
The latest issue of the Contrarian Income Report breaks down the very best opportunities out there in closed-end funds right now. These include:
- A well-hedged 8.1% payer in one of the most in-demand sectors right now,
- The brainchild of one of the top fund managers on the planet that’s throwing off an amazing 7.8% yield.
- And a rock-steady 6.3% dividend whose managers own significant stakes. We love to see this in an investment because it aligns management’s interests with our own.
And best of all, for a limited time you can test-drive this service via a risk-free trial – complete with five comprehensive investment reports, weekly email updates and alerts, and a 100% money-back guarantee!
Call it the friends and family discount.
There’s no denying that the current environment is unlike anything we’ve seen in recent memory. But you don’t have to navigate these uncertain times alone. It helps to have friends who know a thing or two about investing to guide you, and the expert advice of the Contrarian Income Report will help you invest profitably and with peace of mind.