June 2016

TheCROW’SNEST

June 2016 Issue

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A hoy Crow’s Nesters,

I’m going to keep this issue short and sweet...

That’s because summer has finally hit here on the East Coast. It’s sunny, it’s fresh, and it’s still not hot or humid enough to make me curse the skies yet.

While I’m definitely a fall type of guy, summertime is a totally different beast for me, season-wise… mostly because I have more time to relax and reflect.

There are more family gatherings, more time laying on the beach, a hell of a lot more steamed crabs and beer, and — most importantly for this newsletter — despite the heat, a complete cooling of my short-term investing. There’s a reason “Sell in May and Go Away” is one of the most popular phrases in investing.

Not only does the stock market typically stay pretty stagnant over the summer, but we all have more free time to reflect on long-term goals and forget the day-to-day stress of managing a stock portfolio.

You can personally “go away” along with your stocks, and simply enjoy your life.

I think it’s incredibly important to reject the day-to-day grind during the summer and really prime yourself for long-term strategies. Take that time to get your ducks in a row.

Of course, it’s also a great time to spend time with your family, which is really the most important thing you can do. Not to be totally sappy, but whether it’s a full-on vacation, a long weekend, or even a phone call, please let your family know how much you care about them.

I’ll get off my sentimental soapbox now.

But by the recent letters I’ve received, it seems like many of your crewmates are feeling the same way.

So here are some letters that focus on cherishing your family and investments at the same time...

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Jimmy,

I wanted to thank you for you article on investing for kids and grandkids. It’s something I’ve been putting off forever, simply because I didn’t know the best way to get started.

After reading your article, I sprung into action. I loved the idea of starting with a dividend reinvestment plan that kids can relate to – like Disney. I just started one for my granddaughter. Thank you!

I wondered if you could also write about some accounts to start that would give us a tax break when investing for children. Can I keep their stocks in my IRA until they are ready? Do you know anything about tax-free education accounts I can start for their college funds?

Thanks again,

Stephen R.

Thanks Steven, I’m glad you are acting on the advice. I assure you, it will pay off in a big way. For any new readers who may have missed it, I did a feature in the February issue on investing for our youngins’.

You can read it here.

You can also listen to an interview I did on the subject with Money Show here.

As many of you already know, I have two young children: Henry, who is 4, and Julia, who is 2.

Before having kids, I was far more selfish (and shortsighted) in my investments. While I did have some long-term investments and a typical 401(k), I wanted my individual investments to double my money in a year or two. I simply wasn’t thinking long term. In essence, I was greedy.

I’ve lived and I’ve learned, and now my philosophy is far more measured and forward thinking.

I’ll lay out a couple of the tax-free or tax-lowering accounts that Stephen alluded to in the Tie Down the Mast section. These are often very overlooked. And tax-free to me means “free money.” If you aren’t taking advantage of some of these, you are just giving too much money to the government, plain and simple.

Remember — it’s your money. Personally, I’d like to hang onto as much of it as possible to make sure my family and I are secure and safe for a very uncertain future.

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That leads me to our next question...

Ahoy Mr. Mengel,

Thanks so much for focusing on safe investments! I have subscribed to so many newsletters that promised me 1,000% gains time after time. You are the first letter I subscribed to that is calm and collected. The results have (been) speaking for themselves – I’m up 70% on Collector’s Universe and Piedmont Natural Gas, and collecting big dividends every few months.

I also invested in the Aqua America DRIP and the McCormick DRIP – both of which I plan to hold for years to come. (Already up 30-40% on those, by the way.)

I think I’m ready to start vetting some of my own DRIPs. Do you have any tools you use to calculate how much compounding interest that a single stock will return over the long term?

Thanks again,

Robert McCarren

Thanks so much Robert.

So, as far as the DRIP tools I use, here’s a solid one for you.

It will allow you to get a baseline idea of how much you can expect to make over time. Now, you can never be sure about future performances with stock prices or dividend payouts. That’s why I often focus on dividend aristocrats, since they are more predictable in terms of their dividend raises, and are generally more solid companies in general.

As for your other comments, honestly, I’m sure my publisher would be far happier if I were pitching 1,000% returns. It’s a far easier way to sell newsletters. That’s primarily because people are trying to get rich quick.

Some guys are great at finding those kinds of investments — my colleague Nick Hodge is a great example. I’ve personally found some myself. That being said I am far more comfortable giving 100% level-headed, sound advice that will eventually pay off versus taking a mighty hack for a huge windfall. While we’ll get those from time to time, I allocate the bulk of my portfolio to the sure money.

I’m not one to bet against the house every hand I’m dealt.

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It’s just who I am, and I’ve had a lot of success with that approach. And I would rather my readers get a healthy return from all of my recommendations than hit a grand slam on 10% of my recommendations. We all have a finite amount of money to invest after all, and I’d rather play the odds.

Which is one of the reasons I recommended healthcare REITs in the last issue. It may take a little bit more time, but I’m sure you’ll double your money over the next 5 to 10 years. I just gave an interview with Money Show about the topic, and if you missed the last update, no fear, you can read it here and listen to it here.

I also have a new recommendation in the healthcare REIT sector for you, which can be found in the Plundering section.

Now that’s out of the way, let’s get to the issue...

Let’s keep this simple. You can feel comfortable buying any of these dividend aristocrats for the long term, especially in a dividend reinvestment program.

Abbott Laboratories (NYSE: ABT)

Boeing Company (NYSE: BA)

Walt Disney Company (NYSE: DIS)

General Electric Company (NYSE: GE)

McCormick & Company, Incorporated (NYSE: MKC)

The Sherwin-Williams Company (NYSE: SHW)

I provide regular updates on all of them – and they are all no-brainers for the long term. Now let’s get to lesser known stocks in the portfolio...

Charting the Course

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CME Group (NASDAQ: CME)

This is one way to play smart, not play hard: the CME — or The Chicago Mercantile Exchange Group.

CME Group is the world’s leading and most diverse derivatives marketplace.

You see, roughly $170 billion worth of stock is traded on the NYSE each day the markets are open.

The gold market trades roughly $22 billion daily...

More than $400 billion is traded in the bond market...

The foreign exchange market (Forex), where currencies trade, is worth more than $4 trillion a day...

And the largest U.S. options exchange (CBOE) trades millions of contracts daily, with a value in the billions.

These are some of the largest, most complex financial markets in the world.

CME Group has its hands in all of them and takes a cut every time one of these trades are made.

You can read my whole company report right here.

It was just been named ‘Clearing House of the Year’ by GlobalCapital in its Americas Derivatives Awards 2016.

The awards honor the companies, platforms, services, and products that have made an impact on the U.S. derivatives market during the last 12 months.

“We are very pleased by GlobalCapital’s recognition of our efforts to offer innovative clearing solutions across a variety of asset classes,” said Sunil Cutinho, President, CME Clearing. “We remain focused on providing the most capital-efficient clearing solutions available, and we thank our customers for their support and feedback over the past year.”

CME Group Inc. will announce earnings for the second quarter of 2016 before the markets open on Thursday, July 28, 2016.  The company has scheduled an investor conference call that day at 7:30 a.m. Central Time.

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A live audio Webcast of the conference call will be available on the Investor Relations section of the company’s Web site, www.cmegroup.com. Following the conference call, an archived recording will be available at the same site. Those wishing to listen to the live conference via telephone should dial 800-768-6570 if calling from within the United States or 785-830-1942 if calling from outside the United States, at least 10 minutes before the call begins.

I just read a great article that analyzed CME’s performance each time it announced earnings. Here’s a quick rundown, from Zergwatch:

Based on the most relevant historical data, there is a 56 percent probability for share price to go up following the next earnings report. Looking further into earnings reaction history, the stock had moved up 14 times out of last 25 quarters. It has topped earnings-per-share estimates 66% of the time in its last 12 earnings reports. It missed earnings on 2 occasions, and it has met expectations 2 times.

So how did CME’s earnings announcements affect its stock price in the past few quarters?

CME Group Inc. (CME) Earnings Reaction History

Overall, the average earnings surprise was 2.13 percent over the past four quarters. Back on April 28, 2016, it posted earnings per share at $1.15 which met the consensus $1.15 projection (no surprise). Revenue came in at 934.2M versus consensus estimate of 936.1M. The stock dropped -2.25 percent the day following the earnings was released, and on 7th day price change was -2.27 percent.

On February 5, 2016, it posted earnings per share at $0.92 versus the consensus estimate of $0.9 (positive surprise of 2.2%). Revenue of 813.8M was above the $810.77M analysts had expected. The stock gained 2.57% the day following the earnings was released, and on 7th day price change was 3.46%.

On October 29, 2015, it posted earnings per share at $1.02, topping the consensus estimate of $0.99 (positive surprise of 3%). Revenue for the quarter was $850.3M while analysts had expected revenues to come in at $853.11M. The stock gained 1.55% the day following the earnings was released, and on 7th day price change was -0.57%.

On July 30, 2015, it posted earnings per share at $0.95 compared with the consensus estimate of $0.92 (positive surprise of 3.3%). That came on revenues of $820M for the quarter. Analysts had expected $807.22M in revenue.

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CME Group Inc. Earnings Expectations

In front of Q2 earnings release, Wall Street is expecting earnings per share of $1.09. The analysts’ current consensus range is $1.01-$1.16 for EPS. The market consensus range for revenue is $858.53M-$944M, with an average of $899.54M.

CME Group Inc. (NASDAQ:CME) last closed at $96.16, sending the company’s market cap around $32.56B. The consensus 12-month price target from brokerage firms covering the stock is $99.57. The share price has declined -2.26% from its best level in 52 weeks and dropped 7.49% this year. It recently traded in a range of $94.24-$96.22 at a volume of 1561200 shares. The stock ended last trading session with the price nearly 1.05 higher for the last 5 trading days, rebounding 20.39% from its 52-week low.

We’re buying CME before earnings under $100.

Right now it’s trading around $97, and yields a respectable 2.55% on its dividend.

Collector’s Universe (NASDAQ: CLCT)

As you know, Collector’s Universe is one of my favorite stocks — and going back to the children’s investment angle, one of the easiest to explain.

Collectors Universe Inc. provides third-party authentication, grading, and related services for rare and high-value collectibles consisting of coins, trading cards, sports memorabilia, and autographs.

Its brands include: Professional Coin Grading Service (PCGS), the world’s leading third-party coin grading service; Professional Sports Authenticator (PSA), the world’s leading third-party sports card grading service; and PSA/DNA Authentication Services (PSA/DNA), the largest and most respected autograph authentication provider.

You can read my whole report on the company here:

Now, times have definitely changed since I was a kid and every one of my friends was collecting baseball cards. Baseball cards have since been taken over by Pokemon cards, Magic cards, and any number of cards of which I have no clue about....

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But I know baseball cards, and I was thrilled to see this tweet from Collector’s Universe expert Joe Orlando:

I have this very card, and while it’s not in quite the same condition, it’s still worth at least five times more than when I bought it. That’s the power of time. It’s also a lesson in investing in something fun for kids — baseball cards are pretty much what started my investment career, in fact.

This is a great company to get kids investing — and just got even better.

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Last year, it launched Collectors.com, a collectibles aggregator with nearly 37 million listed collectibles, has added five new verticals to its inventory: comic books, action figures, historical memorabilia, sports memorabilia, and entertainment memorabilia.

Collectors.com now has 10 total categories, all of which house thousands to millions of collectibles:

• Action Figures (1,466,636 total collectibles);

• Autographs (2,727,774 total collectibles);

• Coins (2,565,366 total collectibles);

• Comics (3,731,366 total collectibles);

• Currency (235,444 total collectibles);

• Entertainment Memorabilia (2,368,113 total collectibles);

• Historical Memorabilia (991,327 total collectibles);

• Sports Memorabilia (3,785,759 total collectibles);

• Stamps (1,113,615 total collectibles);

• Trading Cards (18,024,078 total collectibles)

“With millions of collectibles listed, it’s easy to find what you collect. Comic collectors can find that elusive Superman comic, while action figure collectors can finally finish their Avengers set. It’s truly fulfilling to make the search for collectibles easier and spread the joy of our hobby across the world,” said David Hall, Founder and President.

“We just launched Collectors.com in August of last year, and since that time, the site has grown 260% in terms of collectibles listed. And this is only the beginning,” he said.

Since its launch on August 27, 2015, Collectors.com has amassed information on collectibles for sale from more than 754 websites, involving a total of 448,152 sellers. These sellers and sites combined for a total of 36,962,629 collectibles, amounting to $2,496,742,008 in value.

The site originally launched with aggregated collectibles listings for rare coins, paper money, trading cards, autographs, and stamps. In addition to the latest five verticals, Collectors.com will eventually feature dozens of other popular collectibles categories.

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I spoke with Collector’s Universe co-founder Van Simmons this week, and he had some very interesting things to say about the company’s expansion into China and its presence in Europe. I can’t say anything about it now, but I have set up an interview with both Van and President David Hall in the coming weeks.

I want to pick their brains on the company’s expansion into China, which could be a game changer for it. As they say, the only thing that’s real in China is the counterfeiters, and they are desperate for a company like Collector’s Universe.

We’re already up over 80% and reaping a whopping dividend of over 7%.

We’re buying Collector’s Universe under $20.

Where Food Comes From (OTC: WFCF)

In keeping with the theme of children, one of my main priorities with my own is making sure they are eating healthy, nutritious food. I can’t stand the idea of my kids eating processed, poisonous foods that are marketed directly to children.

I’m certainly not a maniac about it, and will spoil them from time to time with sugary garbage. But one thing I do want to know when we’re eating at home is: where did this food come from?

Enter the aptly named company: Where Food Comes From. It is the number-one provider of certification and verification services to the food industry.

This is one of our high-risk, high-reward plays. Though it’s a tiny stock, we’re up an easy 20% already. And I think we could see plenty of gains coming soon...

Here are some of the most recent financial highlights:

• Revenues of USD 2.45 million, Net Earnings of USD 0.09 million.

• Gross margins widened from 46.28% to 49.36% compared to the same period last year, operating (EBITDA) margins now 4.25% from 0.59%.

• Earnings growth from operating margin improvements as well as one-time items.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

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All good news.

Now, remember, this is a small company, and could fluctuate plenty as it figures things out. It has a market cap of $59.65M and 52-week range of $1.62 - $3.10.

We’re buying Where Food Comes From (OTC: WFCF) under $2.75. It has a one-year price target

of $4.00

Here are some of the best ways to protect your investment money when it comes to children, as Stephen asked about above.

529 College Plans

Given the ridiculous cost of higher education these days, I try to stay keenly aware of how much I’ll need to save for my children’s education. Which is to say I’m horrified about the mere thought and want to squirrel away as much money as possible until that time comes. You can see how absurd it’s gotten when compared with the Consumer Price Index (CPI), which is a measure of inflation.

Tying Down the Mast

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Needless to say, you need a lot of money to put kids through school.

So it’s fortunate that as a financial writer, I’m also keenly aware of both the short- and long-term benefits offered by a 529 Plan.

You can open a 529 Plan — which gets its name from section 529 of the Internal Revenue Code — once your child receives his or her Social Security Number. This won’t take long. My daughter’s came in the mail about a week after she was born — Uncle Sam needs to track his revenue-generators, after all.

Armed with your child’s SSN, you can open a 529 Plan that is operated by either a state or an institution. In most cases, you can open an account with any state, even if you don’t live in that state and don’t know if your child will attend college in that state. We live in Maryland, my daughter was born in Texas, and the 529 Plan we chose is out of New York. Who knows where she’ll end up going to college?

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The important thing is that you start saving for it now. And that’s exactly what a 529 Plan helps you do, with some additional benefits that you can’t get with a regular ol’ savings account.

Almost every state offers a 529 Plan. And each state decides how it’s managed and what you can invest in, so each one is different. We went with the New York 529 Direct-sold plan because it was managed in part by The Vanguard Group, had low fees, a great track record of performance, and had one of the highest ratings at SavingForCollege.com.

In addition to direct-sold 529 plans, where you select which funds to invest in, you can also choose an advisor-sold 529 plan. With these plans you’ll get an advisor who guides you toward which funds to invest in, but also generally comes with higher fees.

For my money, I don’t think advisors are worth it. A 529 plan is a long-term investment that is best served by holding index funds or low cost mutual funds. There is no need to pay for an advisor-sold fund.

You can compare both direct-sold and advisor-sold funds by state here.

In addition to the peace of mind that comes from starting to save for you child’s education early on, 529 Plans offer several other benefits as well.

First and foremost are with taxes. While contributions to 529 Plans aren’t tax deductible, investment returns in a qualified plan grow federally tax-free and will not be taxed when the money is taken out for college.

In addition to Federal tax savings, 35 states offer a full or partial credit for 529 contributions. Here is a state 529 plan tax calculator.

Once you decide which account you’re going to open, you will be the owner of the account forever. You can select your child (or a grandchild) as the beneficiary, but they have no legal rights to the funds. You decide how they’re invested, and you decide when they’re withdrawn. You can take money out any time, but keep in mind there is a 10% tax penalty if funds are taken out for non-education-related spending.

These plans are simple and low maintenance. I went to the state’s 529 plan web page, and was able to open an account in just a few minutes’ time. All you’ll need is the future student’s social security number to assign them as the beneficiary. You can decide to contribute whatever amount is comfortable for you, either monthly or quarterly. I linked ours to our checking account so it is truly set-it-and-forget-it.

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You don’t have to report contributions on your taxes. You won’t get a 1099 form until you make withdrawals from the plan. And you can deposit $14,000 per year ($28,000 for couples) that qualifies for the annual gift tax exclusion.

There are no other age, income, or contribution limits.

So if you’re a parent or grandparent wanting to kickstart your special one’s college savings, there’s no reason not to open a 529 plan today.

Just remember:

• Compare plans between states for both performance and costs. Some states offer 529 plans with no annual fee.

• A direct-sold plan will be cheaper than an advisor-sold plan, and just as effective regarding long-term investment performance.

That’s it. Get out there and research which 529 plan is best for your family.

When it comes time to pay for college... you’ll be glad you did.

Roth IRA

If your child is a bit older, and is earning some kind of income — think lawn mowing or babysitting — you can start a Roth IRA in their name. They’ll be able to stash away everything that they make for the year up to $5,500.

Since most kids want to hang on to some of that cash, you can make contributions on their behalf.

Say your child holds onto the Roth IRA for 40 years. If you load $4,000 into the account and have an average return of say 7% a year over that time. The interest will compound — tax-free — and your child will be sitting on a $60,000 nest egg by the time they are ready to retire

They can take the funds out tax-free when they turn 59 1/2.

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Senior Housing Properties Trust (NYSE: SNH)

The whole purpose of a real estate investment trust is to drastically reduce tax concerns while maximizing the return to investors.

After all, by law, they must return 90% of their taxable income to shareholders through dividends.

Our next Crow’s Nest recommendation does that with a yield that cannot be beat, while taking advantage of the growing demand for healthcare services and senior housing.

Senior Housing Properties Trust (NYSE: SNH) was founded in 1986, has been publicly traded since 1999, and considered investment-grade since 2001.

The company owns independent living and assisted living communities, continuing care retirement communities, nursing homes, wellness centers and medical offices, and clinic and biotech laboratory buildings located throughout the United States.

The majority of the properties are triple-net leased, meaning that each tenant pays rent, while also being responsible to pay all operating costs, taxes, insurance and maintenance costs that arise from the ownership and use of our property.

SNH has a wide geographic base, with approximately 640 tenants in 428 buildings in 43 states and Washington, D.C.

In total, these properties represent a $7.5 billion investment portfolio.

The majority of these properties, along with the company’s growth focus, is on private pay senior living communities and medical office buildings.

Plundering

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As you can see from the breakdown to the right, these two property types account for 94% of what this REIT owns.

As an added perk, the company is not constrained by tightening government funding. Roughly 97% of net operating income comes from private pay properties.

Nor are there a lot of complicated deals or hidden issues. SNH has no ground leased properties, no joint ventures, and only 57 out of the 428 properties — 13% of the portfolio — are tied to mortgages and capital leases.

Comparing Peers

SNH is going to be a value and yield play for us, and there are some factors holding back the company in the short-term that will provide a catalyst for share appreciation and greater dividends going forward.

First up, SNH generates good revenue from a well-positioned portfolio, but it’s externally run by an outside management company named RMR Group Inc.

RMR Group is a holding company that works with four REITS, and three real estate operating companies, one of which is Five Star Quality Care, Inc. (Five Star).

Five Star Quality Care is also one of the companies operating SNH’s properties, along with Brookdale Senior Living, Sunrise Senior Living, and 13 private senior living operators.

This creates a large exposure to Five Star Quality Care, and the revenue it generates for SNH, which undermines its otherwise diversified portfolio.

However, SNH has been moving to reduce this exposure, and has done a good job for the last two years in branching out.

At the end of the first quarter of 2014, Five Star Quality Care accounted for 37% of SNH’s revenue. Two years later, it was down to 27%, and it will continue to drop.

Second, the debt picture is a bit interesting. While the company has a higher debt ratio compared to peers, it also manages to have lower debt as a percentage of gross book value of

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real estate assets.

Company leadership has carefully managed leverage to date, and will do so in the next couple years to get over a debt maturity hurdle.

With the investment-grade debt it can issue, and historically low interest rates virtually guaranteed for years to come, we can expect management to roll over and smooth out this debt on the cheap.

Management had this to say through an earnings call for the first quarter of 2016:

“Our focus is on furthering our relationships with existing operators, continuing to seek internal growth opportunities, including expansions and renovations at our communities and other opportunities to enhance investment returns while maintaining a strong balance sheet.”

In this situation, this is exactly what we want to hear. Weighted average occupancy sits at 86% as of the June 2016, second quarter results. This is good, but there is room to boost revenue without the need for more debt.

We should expect to see few acquisitions, or smaller-scale ones, while the company optimizes its debt.

As a value investment with a strong yield, and steady improvement over the last several years, now is the time to establish a position before the headline numbers pull in investors with a herd mentality.

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Good Valuation

It is no secret that stocks are expensive these days when compared to earnings, and the REIT sector is no exception.

Income investors have flocked to REITs in recent years, driving up some key metrics. In particular, net debt compared to enterprise value.

Britton Costa, director of U.S. REITs at Fitch Ratings, recently had this to say:

“It is much more challenging for them to fund large portfolio transactions on a leverage-neutral basis when their equity is more expensive, and at the same time, leverage for these issuers has increased by about a turn over the past year, year and a half.”

With the sector roughly six times levered on net debt to earnings before interest, tax, depreciation, and amortization, “...that makes it much harder for them to enter into larger portfolio transactions than it was a year or two ago.”

SNH is in a position where it will not be exposed to these risks. As covered above, improvements in the balance sheet will continue.

Its forward funds from operations payout ratio has already improved from 89.1% in 2014 to 84.8% in 2015, to 81% in the first quarter of 2016.

Then there is the enterprise value vs EBITDA, which is strong compared to other popular healthcare REITS:

In short, HCN is the value play in a sector popular with investors, and its books can easily support the high yield the company offers to shareholders with its improving balance sheet.

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The Details

Senior Housing Properties Trust (NYSE: SNH) is a healthcare REIT focusing on senior living and medical office buildings. It has a market capitalization of $4.76 billion.

There are 237.47 million total shares outstanding with a float of 234.32 million, producing a low insider ownership of 0.33%. Institutional holdings account for 79.9% of outstanding shares.

The dividend yield comes in around 7.8%, if you account for some wiggle room in day-to-day share price fluctuations, and the payout ratio is a strong 318.21%.

Common stock metrics don’t always work well for REITs, especially price-to-earnings ratios. Instead, we look to forward funds from operations.

FFO came in at $0.46 per share at the end of the first quarter, up from $0.34 quarter-to-quarter and from $0.42 year-to-year.

While SNH has one of the highest yields among its peers, the forward funds from operations payout ratio has drastically improved, hitting 81% in Q1 2016.

The increasing excess cash flow protects the high yield going forward, while improving management’s capacity to internally invest and manage debt.

Total cash stood at $39.2 million, while total debt stood at $3.5 billion at the end of the first quarter.

The company’s operating margin (ttm) is 30.56% and profit margin (ttm) is 11.22%, while return on assets (ttm) is 2.87%, and return on equity (ttm) is 3.37%.

There is an “apples to oranges” comparison effect here, compared to more traditional stocks, but there are no outliers when compared to the REIT sector.

The 52-week low was hit on February 11, 2016, at $13.53 per share. The 52-week high is $20.16.

Currently, shares are trading right at the top of that range, reflecting the improvements the company has made, which were reinforced in the first quarter results.

We’re adding Senior Housing Properties Trust (NYSE: SNH) to the Crow’s Nest portfolio at or below $23 as a high-yield play that will see share appreciation due to demographics, underlying medical and senior living demand growth, and consistently improving results.

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Have a great summer everyone.

Godspeed,

Jimmy Mengel Investment Director, The Crow’s Nest

The Crow’s Nest, Outsider Club LLC Copyright © 2016, 111 Market Place, Suite 720, Baltimore, MD 21202. All rights reserved. No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer or the solicitation of an offer to buy or sell the securities or financial instruments mentioned. While we believe the sources of information to be reliable, we in no way represent or guarantee the accuracy of the statements made herein. The Crow’s Nest or Outsider Club LLC does not provide

individual investment counseling, act as an investment advisor, or individually advocate the purchase or sale of any security or investment. Neither the publisher nor the editors are registered investment advisors. Subscribers should not view this publication as offering personalized legal or investment counseling. Investments recommended in this publication should be made only after

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