PDI: Buy For A Double-Digit Yield And You May Even Beat The S&P 500 (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• PDI's portfolio comprised mostly of bonds and other debt securities with only modest equity exposures offers an attractive 13.7% yield.
• Since its inception in 2012, PDI has matched long-term equity market returns with lower risk as measured by standard deviations.
• >5% bond yields and a S&P 500 CAPE ratio of >30x make a case for bonds and hence PDI outperformance over the next 5 years.
• PDI trades at a premium to NAV, but this is typical, and I think acceptable, especially since PDI vs SPX 500 technicals look ready for a bullish turn.
• Fed rate policies are a key monitorable. In particular, faster-than-expected rate cuts would dampen bond yields and make equities more attractive, posing a risk to the bull case for PDI.

Read the full article here.