Small-cap Funds

August 8, 2011 by staff 

Small-cap FundsSmall-cap Funds, Investing income has a place in every portfolio, and can be used as a strategy for diversification. Equally important, these investments can be a healthy source of income in the periods in the stock market is moving sideways. And contrary to popular belief, investors can make huge gains in income-generating investments – including fixed income securities such as bonds.

Given the current market volatility, “safe” income-generating investments are increasingly seen by smart investors.

Many investors think they are diversified with a mix of stocks, including stocks, mutual funds and ETFs. However, the real diversification can only happen when an investor owns more than one asset class and have an exposure to real estate, tangible assets like gold, and fixed income securities such as corporate bonds, municipal bonds and Treasuries.

Many Americans are exposed to real estate through its ownership of the property, which is often their greatest asset. But many investors overlook the importance of investment income, as are attracted by the historic superior long-term stock gains.

This is a mistake. Classically balanced investment portfolios are typically allocated 60 percent of equities (stocks), and 40 percent fixed income (bonds). The precise allocation may vary according to individual circumstances, such as age, number of dependents, financial goals, and the number of years to retirement.

While most investors know that the generation of income, investments should be included in your portfolio, you may not know where to start.

This is one of those companies I mentioned several months ago to my subscribers Small Cap and I still think is a wonderful game of income.

Universe Collection (Nasdaq: CLCT) offers relatively unknown in the business of collectibles, memorabilia, and authentication. But while the industry is not clear, this company is nothing. It owns some of the most recognized brands in the industry, including: Professional Coin Grading (PCGS): Third-party service classification of coins: Professional Sports Authenticator (PSA / DNA): Participation third sports card grading and authentication provider services autograph: Professional Stamp Experts (PSE): the leading manufacturers of qualifying service mark in:
With this set of services, the Universe and authentic coin collectors grades, tickets, souvenirs, stamps and business cards. In addition, it also takes its extensive knowledge base to publish authoritative guides price, operate the line certified dealer distributor currency (check out: and the conventions of hosts.

If you own a collector or numismatic coins, you’ve probably bought coins authenticated by PCGS. There are very few competitors in this field, and the price of gold and silver in place, the authentication process of collector coins are experiencing unusual growth.

Collectors Universe made the difficult decision to suspend payment of dividends at September 26, 2008. The root of this financial problem is mainly due to the credit crisis, and a profitable jewelry business that was discontinued in March 2009. After the worst of the crisis passed, and management has made significant progress in implementing its strategic plan (which includes leaving the jewelry business), the Board of Directors approved a dividend to 0.25 per share – this was increased then to 0 and 0.30 per share in the fourth quarter of the company in 2010 and again to 0.33 in the second quarter of 2011. Each of these dividends represents increases of 10 percent or more.

While not 100 percent dividend is safe, the decision to sell the jewelry business and focus on improving the collection less intensive capital and business authentication to date has proved the right decision for Collectors Universe. The company was able to buy back nearly 9 million of its own shares in the first quarter of 2010, stop bleeding money and start doing instead.

In the third quarter of 2011 (at March 31, 2011) Universe collectors and reported revenues of 12.6 million, up 17 percent in the third quarter of 2010. And net income was 1.97 million, or 0.25 and diluted share.

With this new company started, it has been able to focus on your business classification of exchange, which grew 21 percent in the most recent quarter. At quarter end sitting in cash and 21.2 million and no long-term debt, and follows the wind on the lease obligations of discontinued operations – freeing up more cash flow.

Despite a couple of difficult years, collector’s universe seems to have been able to get a stronger more focused company. It is still a small file small caps, but its beta of 1.0 indicates that this population is not as volatile as most of this asset class. And the strengthened financial situation leads me to believe that the dividend is safe for the coming quarters.

The turnover of this company is thin, only about 33,000 shares a day. And there is zeroanlyst coverage so if you buy stocks you need to feel comfortable doing your own research. But if so, this is worth taking a close look at, offering a dividend of fat stock prices reasonably stable and the double-digit growth.

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