You should be filled on last month’s recommendation to buy Goldman Sachs MLP and Energy Renaissance Fund (GER). Great!
GER held up surprising well in the face of recent downside in energy markets and associated oil-service names — while throwing off a healthy yield of 8%.
I’d feel comfortable buying more shares of this name on weakness to build a larger long-term position.
In the meantime, the outlook for U.S. interest rates is turning higher. This comes on the Fed’s monetary tightening commitment and on consistent messaging from members supporting two more interest rate hikes this year.
While the market seemed concerned over the recent cycle of softer U.S. economic readings, the May FOMC meeting communications viewed it as “transitory” and not enough derail upcoming hikes.
And that’s in large part because the April unemployment rate fell to its lowest level in nearly nice years and supports their view that the economy is reaching full employment.
All of which bolsters the case that interest rates will be higher, not lower a year from now.
In the meantime …
Continue working buy order in Royal Gold Inc. (RGLD) at $63.10 or better, good-till-canceled.
While I’m impressed with RGLD’s resilience during the decline in precious metals last month, I still recommend being patient. That’s because an unexpected leg down in precious metals could materialize, which should be enough to trigger an entry. And I’d be comfortable owning RGLD at that level.
Finally, an update on existing positions …
GAMCO Global Gold Natural Resources & Income Trust (GGN) is also performing well, while generating a nice 10.5% yield at the time of writing. This is another name that I’d like to buy more of on weakness.
Westlake Chemical Partners LP (WLKP) posted first-quarter results that fell short of top and bottom line expectations. But they registered a stellar 20% year over year increase in MLP distributable cash flow to $11.4 million. This was attributed to increased production volumes the OpCo’s Petro 1 facility from year ago levels, as well as lower maintenance capital expenditures. Continue to hold.
