Leveraged ETFs, A Potential Market-Beating Spin-Off, InsiderEdge Highlights, and More
Welcome back to the BBAE Blog, your trusted source for the latest investment insights and analyses from the BBAE team. This week, we’re excited to share some highlights that will keep you informed and ahead of the market. Don’t forget, some of our most valuable insights are available exclusively in the BBAE Pro app—download it now to unlock full access!
- Leveraged ETFs: Should You Buy Them and Hold?
- A Potential Market-Beating Spin-Off
- InsiderEdge™️ Highlights: August 2024’s Top Insider Trades
- Weekly Roundup: Nvidia Falls, Recession, Bad September, 31 Years of 10%
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Leveraged ETFs: Should You Buy Them and Hold?
BBAE CIO James Early explores the controversial world of leveraged ETFs, challenging common perceptions about their long-term viability. He examines how these products work, their risks, and their unexpected performance over extended periods. Early discusses specific examples like GraniteShares’ LMI3 ETF and a simulated 3x S&P 500 ETF, showing potential for massive outperformance despite inherent risks. He also highlights the psychological challenges of holding leveraged ETFs long-term. Read the full article for a deeper understanding of leveraged ETFs and their place in investment strategies. Read the full article here.
A Potential Market-Beating Spin-Off
Rich Howe, founder of Stock Spin-off Investing, discusses the potential of spin-offs to outperform the market in a conversation with James Early. Howe highlights Liberty Global ($LBTYA) as a particularly interesting spin-off opportunity. Drawing from his career studying spin-offs, Howe explains their mechanics, reasons for potential outperformance, and distinctions between spin-offs, split-offs, and equity carve-outs. While noting that not all spin-offs succeed, Howe provides insights on identifying promising opportunities in this space. Watch the full video here.
InsiderEdge™️ Highlights: August 2024’s Top Insider Trades
- Telos Corp ($TLS): On August 15th, a Director purchased 1,000 shares at $2.42/share, leading to a 53.64% stock price surge to $3.38 after the InsiderEdge signal.
- Heritage Insurance ($HRTG): On August 13th, the CEO acquired 5,000 shares at $8.59/share, resulting in a 51.21% stock price rise to<> $16.27 after the InsiderEdge signal.
- Trinseo ($TSE): On August 15th, the CEO and President bought 40,000 shares at $2.57/share, causing the stock to climb 32.96% to $3.59 after the InsiderEdge signal.
- Leslie’s, Inc ($LESL): On August 30th, the Interim CEO purchased 120,000 shares at $2.53/share, driving the stock up 30.00% to $3.25 after the InsiderEdge signal.
- Fidelity D & D Bancorp ($FDBC): On August 8th, a Director bought 5,000 shares at $42.95/share, with the stock price remaining steady at $42.95, reflecting a 20.54% gain after the InsiderEdge signal.
Read the full InsiderEdge highlights here.
Weekly Roundup: Nvidia Falls, Recession, Bad September, 31 Years of 10%
This week’s news roundup covers several key topics:
- Nvidia’s Stock Decline: Despite being up 120% year-to-date, Nvidia’s stock has fallen sharply recently. Factors include a DOJ subpoena for antitrust investigation and market expectations exceeding even phenomenal quarterly results.
- September’s Poor Stock Performance: Historically, September has been the worst month for stocks. This trend is continuing in 2024, with many equity indexes down 2-3% early in the month.
- 31 Years of S&P 500 Gains: Analysis shows consistent long-term gains in the S&P 500 since 1993, with an average annual return of 10% over 31 years. This data supports the case for long-term investment in broad market index funds.
- Yield Curve and Recession Predictions: The yield curve, a traditional recession predictor, is returning to normal after a period of inversion. Some analysts suggest this normalization might actually signal an impending recession, contrary to historical patterns.
Read the full roundup post here.
Happy Investing,
Barry Freeman
CEO @ BBAE
