To OTC Journal Members: 
 

Be sure to check out a couple of blog entries from earlier this week after you're done with today's edition. I touched on the iShares Brazil Index Fund (EWZ) trade, which we've been gratefully holding for a while... we're getting very close to my target price of $60.00. 

I also updated our view of Nighthawk Systems (NIHK), which is starting to look a little different than the NIHK of yesteryear. I'm still not fully convinced the company's time has finally come, but the chart's starting to hint perhaps it has. It's worth keeping an eye on anyway.

Like I said, it's all in the blog. 
 

A Perfect Yield Storm is in the Forecast

The methodic unraveling of the economy and stock market over the past year or two has created "A Perfect Storm." 

I know what you're thinking, "Oh, no. Not another gloom-and-doom commentary about the crashing of GM, financials and the U.S. dollar."

You're in luck. I'm not going to bore you by beating a dead horse. I'm talking about "A Perfect Storm of Investment Opportunities" left behind by the steep sell-off in stocks over the past year or two. 

Let me explain. When picking stocks, investors usually look for growth and appreciation, high-yield or those following current hot trends (like emerging markets, commodities, etc.). It usually depends on whether you're seeking growth or want to "play it safe." 

Imagine, though, if you could get all of the above in one stock. It's like hitting the jackpot. Well, that's precisely what I'm seeing in the market right now. 

Remember, as stock prices drop, yields rise. Since the March 9th low, the dividend yield of the S&P 500 has dropped from 4.12% to 2.12%. At the same time, the yield on the 10-Year Treasury Note has risen from a low of just over 2% to its current level of 3.73%. 

It's a rarity to find companies with all of their stars aligned: high-yield that grows along with sales and earnings and evidence of a rising price pattern. 

But I've spotted a few. 
 

High Yields and Growth

With ties to China and Taiwan - and a juicy 15.5% yield - I like the looks of Himax Technologies (Nasdaq: HIMX), a leading producer of semiconductors used in flat-panel displays found in computer monitors, laptops, mobile phones, digital cameras and car navigation devices. 

These are still selling well worldwide, and will sell like hot cakes in countries like China and India with emerging middle-class consumers hungry for Western-style goods. Himax is a recognized category leader with a strong reputation, market share and huge growth potential. 

Although Q1 net income fell to $4.4 million, or 2 cents a share, from $34.1 million, or 18 cents a share, a year earlier, the company forecast earnings of 7 cents to 9 cents a share on sequential revenue growth of 52 percent to 55 percent. 

Analysts look for global flat-panel sales to grow 25-30% annually in the coming three to five years. 

The next two companies fall under a different umbrella than ordinary stocks. Both are publicly traded master limited partnerships (MLPs) that operate pipelines and related infrastructure. 

MLPs collect a fee for transporting fuel and sometimes for processing or storing it; they don't drill for it or sell to any end users. Typically, these businesses aren't directly affected, in any great degree, to fluctuating prices for oil or natural gas.

On the other hand, energy MLPs require a steady volume of goods passing through the pipes to cover their fixed costs, While the economic downturn has slowed sales of refined products (like gasoline and jet fuel), pipelines that handle mostly natural gas have continued to thrive (like the two companies I'm about to talk about.).

You can't simply focus on yield when choosing an MLP. Its an expensive undertaking to building and maintain a pipeline, so you want to focus on partnerships that can tap the debt and equity markets even in today's unsettled climate. Again, the two MLPs I like are well financed for 2009 and beyond, with plenty of cash flow to cover quarterly distributions to shareholders.

The first MLP is Enterprise Products Partners (EPD). Besides sporting an impressive growth record, the company has raised its distribution for 18 quarters in a row and yields an eye-opening 8.1%. 

Normally, I steer clear of the highest yielders because they're often facing some kind of financial squeeze. In this case, though, EPD's yield has risen for purely technical reasons: The partnership issued $205 million of new shares during the second week of January, depressing the price. EPD traded back down with the market in early March but has since rebounded nicely from 

The second MLP is ONEOK Partners (OKS). Since 1994, it has racked up a total return of 382% and currently yields 8.7%. Unlike EPD, which moves crude oil and petrochemicals as well as natural gas, this MLP focuses exclusively on gas - the safest market niche for a pipeline. Moreover, substantially all the gas gathered, processed, stored and transported by this company comes from the U.S. and Canada, limiting political risk.