TradeSmith Snippets: Microsoft’s 10% Dividend Increase, What to Make of Real Estate Stocks, and What Our Tools Say about the Two Stocks Carl Icahn Says to Buy

[TradeSmith Daily]( TradeSmith Snippets: Microsoft’s 10% Dividend Increase, What to Make of Real Estate Stocks, and What Our Tools Say about the Two Stocks Carl Icahn Says to Buy Happy Monday, and I’m glad you’re here with us to kick off another week with TradeSmith Snippets. Along with my friend and colleague Senior Analyst Mike Burnick, I’ve been stressing the importance of owning what Mike calls “Pay Me Now” stocks — companies generating revenue in the here and now and passing that income on to their loyal shareholders as dividend payouts. In our first snippet, our team analyzes what to make of Microsoft Inc. (MSFT) as it plans to hike its dividend payout by 10%. For the housing market, I sent a warning in May that trouble was brewing. With mortgage rates jumping to 41-year highs, many folks are getting priced out of buying a home. Our second snippet will show what our Health Indicator is saying about popular homebuilding stocks. Finally, billionaire Carl Icahn said that the “worst is yet to come” at an investing event on Sept. 21. Pressing him for what he would invest in, an audience member asked during a Q&A session, “I’m just curious what stocks look cheap and viable right now.” In our third snippet, we’ll share the stocks Icahn picked and run them through our TradeSmith tools. I’ll let the team take it away from here. Enjoy your Monday — Keith Kaplan, CEO, TradeSmith Snippet No. 1: Microsoft Shares the Wealth Overview Microsoft is increasing its dividend payout by 10% from $0.62 per share to $0.68 per share. The Breakdown For shareholders of record on Nov. 17, the increased dividend will be paid out on Dec. 8. This is considered a positive sign for the company’s forward-looking results, as it wouldn’t increase its dividend if it expected a significant decline in revenue in the immediate future. It would only increase its dividend if it plans to maintain the higher payout. The TradeSmith Takeaway As MSFT’s dividend yield is only 1.04%, this increase in the dividend payout alone isn’t a reason to buy MSFT. Putting it through the ringer, MSFT is in our Red Zone and in a downtrend, and with a Volatility Quotient of 24.26%, it’s considered a medium-risk investment. Overall, our tools are saying Microsoft is not a “buy.” But there is a potential profit opportunity forming that does involve Microsoft. In our latest edition of Special-Situation Central, we shared Microsoft’s plan to buy Activision Blizzard Inc. (ATVI). Microsoft will pay $95 per share to ATVI shareholders to close the deal, which is more than a 25% premium from the stock’s price as of this writing. Activision Blizzard shareholders approved of the deal in April, but the holdup is regulatory scrutiny over whether this will create anticompetitive business practices, like Microsoft only allowing Activision Blizzard games on its Xbox console. ATVI CEO Bobby Kotick believes the deal will still close by 2023, and there’s another “conviction factor” behind owning Activision Blizzard stock: Warren Buffett’s Berkshire Hathaway Inc. (BRK.A) owns nearly 9% of the company. You can find out more about that and the risks and rewards behind this arbitrage investing opportunity [here](. RECOMMENDED LINK [Why do investors keep bringing knives to a laser gun fight?]( To navigate this stomach-churning market, you need to dominate the volatility. Problem is, the primitive human brain doesn’t know how to time entries and exits with precision. Thankfully, TradeStops does — by scanning over 3,053 dynamic data points and making 9,250 calculations per day on over 150,000 stocks. Then, if a stock is green, you buy it. If a stock is red, you sell or short it. This is how TradeStops has been giving everyday people the chance to rack up phenomenal wins like you see above. It even helped one investor retire 25 years earlier than he planned. [See how you can access what he did for yourself today...]( Snippet No. 2: Mortgage Rates Have Their Biggest 12-Month Jump in 41 Years Overview On Sept. 26, the average 30-year fixed mortgage rate jumped to 6.87%. The Breakdown At 6.87%, that 30-year fixed mortgage rate has the dubious honor of being the highest mortgage rate since 2002 AND being the biggest 12-month jump since 1981. That interest rate prices some buyers out of the market and keeps them on the sidelines. For example, someone who had a $500,000 mortgage for 30 years at a rate of 3.2% would need to pay $2,162 in monthly principal and interest. If they were to take out that same $500,000 mortgage now, that monthly payment would be $3,260. The TradeSmith Takeaway Back on May 13,[Keith warned readers in Money Talks]( about the trouble that was brewing for the housing market. His advice back then was to avoid homebuilder stocks and housing investments dependent on a strong housing market. Our Health Indicator says to keep following that advice. Just looking at five popular homebuilding stocks and companies that provide supplies to homebuilders, four are in the Red Zone and only one is in the Yellow Zone: - Taylor Morrison Home Corp. (TMHC): Yellow Zone - Legacy Housing Corp. (LEGH): Red Zone - Cavco Industries Inc. (CVCO): Red Zone - Builders FirstSource Inc. (BLDR): Red Zone - NVR Inc. (NVR): Red Zone Just as important as knowing what to invest in is knowing what to stay away from, and homebuilders are clearly companies to stay away from for the foreseeable future. RECOMMENDED LINK [Market Wizard who made $95 million for his clients in 2008 – and predicted the 2022 collapse back in January – reveals his strategy:]( The One-Ticker Retirement Plan How to make all the money you need – in any market – using a single stock. [Click here for the name of the ticker...]( Snippet No. 3: Two Stocks Carl Icahn Would Buy Overview When asked during an investing event where he sees good opportunities in the stock market, Icahn mentioned CVR Energy Inc. (CVI) and CVR Partners LP (UAN). The Breakdown CVR Energy operates in the petroleum refining and nitrogen fertilizer manufacturing industries, and CVR Partners was created by CVR Energy to own, operate, and grow its nitrogen fertilizer business. CVR Energy subsidiaries own 37% of the common units of CVR Partners, and the manufacturing facilities of CVR Partners primarily produce urea ammonium nitrate and ammonia fertilizers. The war between Russia and Ukraine has disrupted fertilizer shipments, contributing to soaring fertilizer prices. The gate price (the value of a product direct from a facility, not including the cost of selling or transportation) in Q2 for urea ammonium nitrate shot up 134% year-over-year, and the gate price for ammonia climbed 193%. And Icahn put it succinctly during the event when he said, “You need fertilizer if you want to eat.” The TradeSmith Takeaway As the S&P 500 has dropped this year, CVR Energy and CVR Partners have provided positive returns that anyone would be happy with right now. Google Finance Analyzing each company with our tools, both are in the Green Zone, meaning that our system says that each is still a “buy.” But keep in mind that both are considered risky investments, with CVI having a VQ of 54.77% and UAN having an even higher VQ of 80.34%. Have a great start to your week, Team TradeSmith P.S. This ONE profit amplifier, based on a single math equation you’ve likely never seen, could potentially multiply the returns of your favorite newsletter picks by as much as 7x — without options, shorting, or any other gimmicks. 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