NEW YORK (TheStreet) -- I'm not just referring to gold or silver mining companies when I say I'm "prospecting" for overlooked gems in today's stock markets.
All that glitters isn't gold, and here are a couple of companies with the prospect for exceptional total returns.
On a recent fishing expedition through the oceans of investment opportunities I came across two companies I'd forgotten. One of them I'd owned in the past. Because I waited until the price of the stock came down to my buy-limit price, I experienced an excellent total return outcome.
For those who don't know what a "total return outcome" is, allow me to explain. If I can find a publicly traded company that is profitable and gushes geysers of cash profits, I begin there. If that company also happens to pay a generous dividend to shareholders I get even more interested.If I purchase the shares at a reasonable price and I'm able to hold the stock for 12 months or longer, I'm going to anticipate that when I sell that stock for a capital gain I will also have collected most of the annual dividends. The amount of those dividends plus the amount of the capital gains are my "total return outcome." One way I accomplish this is by utilizing two important disciplines: position sizing and a carefully chosen trailing stop alert system that lets me know (via an email or text message alert) when the stock I own has moved a given percentage below or above the price for which I purchased it. It's called a "trailing stop" because it follows the movement of the stock price and alerts me when that price has moved a predetermined percentage below my entry price or the highest price that the stock has climbed since buying it. For more details on trailing stop alerts click here. Let me introduce you to one of the examples of a stock that a total return investment prospector like me would be attracted to.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV