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Income Advisor
Conservative investing. Double-digit income.

February 4, 2025

It’s one thing after another. But stocks keep inching higher.

January featured the interest rate scare, as the ten-year Treasury hit the highest level since 2023, and the DeepSeek news, which called AI spending into question and sent related stocks reeling. Yet the S&P 500 finished the month up 2.7% with 10 of the 11 sectors higher for January. This week features more potential market-moving issues.

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The Market Wobbles Higher

It’s one thing after another. But stocks keep inching higher.

January featured the interest rate scare, as the ten-year Treasury hit the highest level since 2023, and the DeepSeek news, which called AI spending into question and sent related stocks reeling. Yet the S&P 500 finished the month up 2.7% with 10 of the 11 sectors higher for January. This week features more potential market-moving issues.

This week opened with concern about the Trump tariffs and the possible negative effect on GDP and inflation. But we’ll see how long those tariffs last and what effect they truly have. It’s also earnings season, with several big tech companies reporting this week. There will also be the jobs report later this week and January inflation numbers coming soon.

Earnings have been strong so far, and continuing strength could certainly lift stocks higher. But the main issue right now is still the DeepSeek fallout. The market seems to have deemed last Monday’s selloff as an overreaction, as most stocks have recovered somewhat. But they haven’t recovered all the way. It’s unclear at this point whether the half-baked recovery is because the market sees some legitimacy to the threat or that these stocks were overdue for a pullback anyway.

In the absence of game-changing news, it looks like technology stocks will continue to wobble while the rest of the market picks up the slack. The difference in earnings growth between technology companies and the rest of the market is expected to shrink considerably. That’s good news. A broader rally is healthier.

Past Month’s Activity

January 7th
Sold CEG March 21st $260 call at $20 or better
Sold QCOM March 21st $160 call at $11 or better
NextEra Energy, Inc. (NEE) – Rating change – “HOLD” to “BUY”

January 14th
Toll Brothers, Inc. (TOL) – Rating change “BUY” to “HOLD”

January 17th
EPD Jan 17th $29.00 calls at $1.75 – EXPIRED
Enterprise Product Partners L.P. (EPD) – CALLED

January 21st
Sell CQP March 21st $60 call at $3.00 or better

January 28th
Purchased Broadcom Inc. (AVGO) - $207.36

Portfolio Recap

AbbVie Inc. (ABBV)

Yield: 3.7%

Earnings

The biotech company surged 4.7% last Friday after an upbeat earnings report and overtook its 200-day moving average. The company beat earnings forecasts, but the main driver was the performance of its immunology drugs Skyrizi and Rinvoq, which collectively delivered $5.61 billion in revenue for the quarter. Those drugs alone have replaced the Humira revenue, which peaked at a little over $20 billion annually. The company also raised revenue forecasts on the two drugs by $4 billion to $31 billion a year by 2027. The earnings report showed Abbvie has replaced the Humira revenue and is well on track to strong earnings growth in the years ahead. The patent cliff had been holding the stock back but that’s gone now. BUY

AGNC Investment Corp. (AGNC)

Yield: 15.0%

Earnings

The mortgage REIT reported solid earnings on Monday. Numbers were better for the full year but a little worse for the quarter as the environment took a slight step back. The stock was up after the report because the environment is clearly trending in the right direction for the mortgage REIT. After wallowing since October, AGNC has had a nice rebound so far this year, up about 9%. Spreads are still higher as the Fed Funds rate has already been cut 1% and longer rates are higher. AGNC should be set up for a much better 2025. BUY

Ally Financial Inc. (ALLY)

Yield: 3.1%

Earnings

Ally has had a strong move off the recent bottom this month, up over 16% since January 10th. It had been floundering badly along with most other financial stocks as a soaring interest rate narrative took hold. But it rallied this month as big bank earnings were stellar and December inflation was okay. Now, there are renewed expectations for the Fed to cut rates this year. Plus, the regulatory environment is certain to become much friendlier in the new administration. Analysts are also expecting earnings growth of 40% in 2025. BUY

Broadcom Inc. (AVGO)

Yield: 1.2%

This technology AI powerhouse and newest portfolio addition had a nice bounce back last week. The stock plummeted almost 20% last Monday after Chinese company DeepSeek threatened to upend U.S. AI spending. But the fears were likely overblown and AVGO had a 9.5% rebound off Monday’s close last week. Broadcom has a unique infrastructure niche that is not easily duplicated, and the stock has been successful for a very good reason: skyrocketing profits. It still isn’t known how serious the DeepSeek threat really is, and the market will likely bounce around for a while still. But AVGO is unlikely to revisit the recent bottom and it should trend higher over the course of the year. BUY

Cheniere Energy Partners, L.P. (CQP)

Yield: 5.3%

This high-yielding liquid natural gas export partnership is still hovering near the high. The natural gas trade got clobbered last week but the issues don’t really apply to CQP. The demand for U.S. exports is likely to continue to grow strongly even without the anticipated level of data center spending. The news is still good. The Trump administration is highly encouraging of natural gas exports and Cheniere is the country’s largest exporter. The longer-term situation was always strong and now the short-term situation is improving. (This security generates a K1 form at tax time). BUY

Constellation Energy Corporation (CEG)

Yield: 0.5%

This nuclear power company stock took a huge hit last week, down over 20% in one day. The DeepSeek news called into question data center energy demand, which had been driving deals with technology companies and the rise in CEG. The stock had been up 43% YTD and 200% over the past year. It was probably due for a comeuppance at some point anyway. But the story is still strong. Electricity demand is still likely to skyrocket, and Constellation is in an ideal position to benefit. The stock rallied 9% last week from Monday’s close and still has a 24% YTD return. Last week’s news was overdone. AI and data center investments aren’t going anywhere, and Constellation will continue to benefit, although the stock did get ahead of itself. HOLD

NextEra Energy, Inc. (NEE)

Yield: 3.0%

The regulated and clean energy utility stock moved higher this month after it reported earnings. NextEra delivered a strong quarter with earnings growth of 8.2% and reiterated its outlook through 2027. But the utility also announced plans to restart its Duane Arnold nuclear plant and a collaboration with GE Vernova to develop natural gas-fired projects across the U.S. The utility is taking advantage of the soaring electricity demand and the projects are likely to deliver more revenue and stronger growth going forward. The story is still strong and NEE only pulled back slightly after last week’s news. BUY

Qualcomm Corp. (QCOM)

Yield: 2.0%

QCOM didn’t take a hit last week because it wasn’t riding high like other AI-related stocks. Although QCOM has been strong this year, it’s still stuck in the mud in the recent range. It’s way below the June high and still the same price it was last spring. But we have sold four calls on the stock and ratcheted up the return despite the recent lack of appreciation. It’s worth being patient because when this stock moves it easily makes up for lost time. And it will take off at some point. The market wants to see strong U.S. smartphone sales from an AI upgrade cycle. Although that hasn’t happened, it could become a catalyst sometime this year. Qualcomm reports earnings this week and we could get a better idea of the near-term direction of the stock. BUY

Realty Income Corp. (O)

Yield: 5.8%

The legendary monthly income REIT moved up over 4% in the month of January. O rallied along with most interest rate-sensitive stocks and is also getting a boost during the recent move toward defensive stocks. It had tumbled back to near the yearly lows after riding high for a while in the summer and fall. Although it has a stable and growing business and an unparalleled track record of increasing monthly dividends, O has been a slave to the changing interest rate narrative. Lately, that’s been a bad thing, but things are changing for the better. HOLD

Toll Brothers, Inc. (TOL)

Yield: 0.6%

The luxury home-builder company stock had a nice move higher in January. After a tough couple of months, TOL moved convincingly off the recent bottom. The recent better news about the likely direction of mortgage rates was the main catalyst. TOL was downgraded to HOLD earlier this month as the recent glum interest rate outlook, combined with the inflation report, presented a high level of short-term risk. But the outlook has improved, and mortgage rates have been falling. The recent rebound is a very welcome change for TOL so far. But the stock will still be rated a HOLD until the recent upside is more established. HOLD

Existing Call Trades

Sell CEG March 21st $260 call at $20 or better

Although CEG took a big hit last Monday, it has since recovered nearly half of the losses and is still around $40 per share above the strike price. I know. We sold these calls too early as CEG soared since. We missed out and could have sold a call for a massively higher price and/or secured a huge total return. But it’s not that bad. We sold two calls for a total of $44 which more than makes up for the price difference right now. We got a great income and secured a terrific total return.

Sell QCOM March 21st $160 call at $11 or better

The stock moved above the strike price after a strong January. It’s still stuck in the same range since the spring though. QCOM has a good chance to take off sometime this year, but we’ll see where the price is on options expiration in March. We secured a great income in addition to the four other calls sold on this stock over the past few years.

Sell CQP March 21st $60 call at $3.00 or better

The stock only pulled back a little last week and has been moving back toward the high. It’s still above the strike price but there is still a long way to go between now and expiration in a market that seems uncertain.

Current Recommendations

Open RecommendationsTicker SymbolEntry DateEntry PriceRecent PriceBuy at or Under PriceYieldTotal Return
AbbVie Inc.ABBV12/17/24$175.38$183.90$200.003.73%5.86%
AGNC Investment CorpAGNC9/24/24$10.47$9.97$12.0014.88%1.26%
Ally Financial Inc.ALLY11/26/24$39.42$38.97$45.003.14%-0.38%
Broadcom Inc.AVGO1/28/25$207.36$221.27$240.001.17%6.71%
Cheniere Energy Prtns.CQP7/23/24$53.04$61.36$60.005.30%18.48%
Constellation Energy Corp.CEG8/27/24$196.14$299.98$270.000.47%53.18%
NextEra Energy, Inc.NEE4/25/23$77.50$71.56$80.002.98%-3.29%
Qualcomm Inc. QCOM5/5/21$134.65$172.93$180.001.97%39.20%
Realty Income Corp.O6/27/23$60.19$54.64NA5.80%-0.78%
Toll Brothers, Inc.TOL10/22/24$148.02$135.81NA0.60%-8.08%
Open RecommendationsTicker SymbolInitial ActionEntry DateEntry PriceRecent Price Sell To Price or betterTotal Return
CEG Mar 21 $260CEG250321C00260000Sell 1/7/25$20.00$51.27$20.0010.20%
QCOM Mar 21 $160 callQCOM250321C00160000Sell1/7/25$11.00$18.25$10.007.43%
CQP Mar 21 $60 callCQP250321C00060000Sell1/22/25$3.00$2.75$3.005.66%
as of close on 1/31/2025
SOLD STOCKS
XTicker Symbol ActionEntry DateEntry PriceSale DateSale PriceTotal Return
Innovative Industrial Props.IIPRCalled6/2/20$87.829/18/20$100.0015.08%
QualcommQCOMCalled6/24/20$89.149/18/20$95.007.30%
U.S. BancorpUSBCalled 7/22/20$36.269/18/20$383.42%
Brookfield Infras. Ptnrs.BIPCalled6/24/20$41.9210/16/20$458.49%
Starbucks Corp.SBUXCalled8/26/20$82.4110/16/20$886.18%
Visa CorporationVCalled 9/22/20$200.5611/20/20$2000.00%
AbbVie Inc.ABBVCalled6/2/20$91.0412/31/20$10012.43%
Enterprise Prod. Prtnrs.EPDCalled6/24/20$18.141/15/21$2015.16%
Altria GroupMOCalled 6/2/20$39.661/15/21$407.31%
U.S. BancorpUSBCalled 11/25/20$44.681/15/21$451.66%
B&G Foods Inc,BGSCalled10/28/20$26.792/19/21$284.42%
Valero Energy Inc.VLOCalled8/26/20$53.703/26/21$6011.73%
Chevron Corp.CVXCalled12/23/20$85.694/1/21$9612.95%
KKR & Co.KKRCalled3/24/21$47.986/18/21$5514.92%
Digital Realty TrustDLRCalled1/27/21$149.177/16/21$1555.50%
NextEra Energy, Inc.NEECalled2/24/21$73.769/17/21$8010.00%
Brookfield Infras. Ptnrs.BIPCalled1/13/21$50.6310/15/21$5511.65%
AGNC Investment CorpAGNCSold1/13/21$15.521/19/22$155.92%
ONEOK, Inc.OKECalled5/26/21$52.512/18/22$6019.62%
KKR & Co.KKRSold8/25/21$64.522/23/22$58-9.73%
Valero Energy Inc.VLOCalled11/17/21$73.452/25/22$8315.53%
U.S BancorpUSBSold3/24/21$53.474/13/22$51-1.59%
Enterprise Product Ptnrs EPDCalled3/17/21$23.214/14/22$2411.25%
FS KKR Capital Corp. FSKCalled10/27/21$22.014/14/22$2313.58%
Xcel Energy Inc. XELCalled10/12/21$63.005/20/22$7012.66%
Innovative Industrial Props.IIPRSold3/23/22$196.317/20/22$93-51.23%
One Liberty PropertiesOLPSold7/28/21$30.378/24/22$25-12.94%
ONEOK, Inc.OKECalled5/25/22$65.141/20/23$652.66%
Xcel Energy, Inc.XELCalled10/26/22$62.571/20/23$654.67%
Realty Income Corp. OCalled9/28/22$60.372/17/23$635.41%
Medical Properties TrustMPWSold1/24/23$13.223/21/23$8-38.00%
Brookfield Infrastructure Cp.BIPCCalled11/9/22$42.437/21/23$458.72%
Star Bulk Carriers Corp.SBLKSold6/1/22$33.308/8/23$18-31.38%
Visa Inc.VCalled12/22/21$217.168/18/23$2359.16%
Global Ship Lease, Inc.GSLSold2/23/22$24.968/29/23$19-13.82%
ONEOK, Inc.OKECalled3/28/23$60.989/15/23$659.72%
Hess CorporationHESCalled6/6/23$132.2510/20/23$15517.87%
Tractor Supply CompanyTSCOSold9/26/23$203.0311/28/23$200-1.02%
Digital Realty TrustDLRCalled7/18/23$117.311/19/24$13517.16%
Intel CorporationINTCCalled7/27/22$40.181/19/24$439.76%
AbbVie Inc.ABBVCalled7/25/23$141.633/15/24$16015.11%
Marathon Petroleum Corp. MPCCalled10/24/23$149.453/28/24$16512.06%
The Williams Companies, Inc.WMBCalled8/24/22$35.585/17/24$357.14%
Main Street Capital Corp.MAINCalled3/26/24$46.409/20/24$4910.91%
Brookfield Infrastructure Cp.BIPCCalled2/27/24$32.649/20/24$3511.00%
American Tower Corp.AMTCalled1/23/24$202.269/20/24$2105.43%
ONEOK, Inc.OKECalled8/27/24$79.5910/18/24$8811.18%
Alexandria Real Estate Eq.ARESold12/19/23$129.5411/19/24$108-12.82%
FS KKR Capital Corp.FSKCalled4/23/24$19.4212/20/24$2014.06%
Enterpise Product Ptnrs.EPDCalled2/27/24$27.611/17/25$2912.60%
EXPIRED OPTIONS
SecurityIn/out moneySell DateSell PriceExp. Date$ returnTotal % Return
IIPR Jul 17 $95 callout-of money6/3/20$3.007/17/20$3.003.40%
MO Jul 31 $42 callout-of-money6/17/20$1.607/31/20$1.604.03%
ABBV Sep 18 $100 callout-of-money7/15/20$4.609/18/20$4.605.05%
IIPR Sep 18 $100 callin-the-money7/22/20$5.009/18/20$5.005.69%
QCOM Sep 18 $95 callin-the-money6/24/20$4.309/18/20$4.304.82%
USB Sep 18 $37.50 callin-the-money7/22/20$2.009/18/20$2.005.52%
BIP Oct 16 $45 callin-the-money9/2/20$1.9510/16/20$1.954.65%
SBUX Oct 16 $87.50 callin-the-money10/16/20$3.3010/16/20$3.304.00%
V Nov 20 $200 callin-the-money9/22/20$10.0011/20/20$10.004.99%
ABBV Dec 31 $100 callin-the-money11/18/20$3.3012/31/20$3.303.62%
EPD Jan 15 $20 callin-the-money11/23/20$0.801/15/21$0.804.41%
MO Jan 15 $40 callin-the-money11/25/20$1.901/15/21$1.904.79%
USB Jan 15 $45 callin-the-money11/25/20$2.001/15/21$2.004.48%
BGS Feb 19 $27.50 callin-the-money12/11/20$2.402/19/21$2.408.96%
VLO Mar 26 $60 callin-the-money2/10/21$6.503/26/21$6.5012.10%
CVX Apr 1 $95.50 callin-the-money2/19/21$4.304/1/21$4.305.02%
AGNC Jun 18 $17 callout-of-money4/13/21$0.506/18/21$0.503.21%
KKR Jun 18 $55 callin-the-money4/28/21$3.006/18/21$3.006.25%
USB Jun 16 $57.50 callout-of-money4/28/21$2.806/18/21$2.805.24%
DLR Jul 16 $155 callin-the-money6/16/21$8.007/16/21$8.005.36%
AGNC Aug 20 $17 callout-of-money6/23/21$0.508/20/21$0.503.00%
OKE Aug 20 $57.50 callout-of-money6/23/21$3.508/20/21$3.506.67%
NEE Sep 17 $80 callin-the-money8/11/21$3.509/17/21$3.504.75%
BIP Oct 15 $55 callin-the-money9/1/21$2.0010/15/21$2.003.95%
USB Nov 19 $60 callout-of-money9/24/21$2.3011/19/21$2.304.30%
OKE Nov 26 $65 callout-of-money10/20/21$2.2511/26/21$2.254.28%
KKR Dec 17 $75 callout-of-money10/26/21$3.5012/17/21$3.505.42%
QCOM Jan 21 $185 Callout-of-money11/30/21$9.651/21/22$9.657.17%
OLP Feb 18 $35 Callout-of-money11/19/21$1.502/18/22$1.504.94%
OKE Feb 18 $60 Callin-the-money1/5/22$2.752/18/22$2.755.24%
USB Feb 25 $61 callout-of-money1/13/22$2.502/25/22$2.504.68%
VLO Feb 25 $83 callin-the-money1/18/22$4.202/25/22$4.206.13%
EPD Apr 14th $24 callin-the-money3/2/22$1.254/14/22$1.255.69%
FSK Apr 14th $22.50 callin-the-money3/10/22$0.904/14/22$0.904.09%
XEL May 20th $70 callin-the-money3/30/22$3.005/20/22$3.004.76%
SBLK July 15th $134 callout-of-money6/1/22$1.607/15/22$1.604.80%
OKE Oct 21st $65 callout-of-money8/24/22$3.4010/21/22$3.405.22%
OKE Jan 20th $65 callIn-the-money11/25/22$3.701/20/23$3.705.68%
XEL Jan 20th $65 callin-the-money11/25/22$5.001/20/23$5.007.99%
O Feb 17th $62.50 callin-the-money12/28/22$3.002/17/23$3.004.97%
QCOM Sep 16th $145 callout-of-money7/20/22$11.759/16/22$11.758.73%
V Mar 17th $220 callout-of-money1/24/23$12.003/17/23$12.005.51%
OKE May 19th $65 callout-of-money4/11/23$2.705/19/23$2.704.43%
V Jun 2 $230 callout-of-money4/21/23$10.506/2/23$10.504.82%
BIPC $45 July 21st callin-the-money5/23/23$3.257/21/23$3.257.66%
V $235 Aug 18th callin-the-money7/11/23$9.008/18/23$9.004.13%
GSL $20 Aug 18th callout-of-money7/11/23$1.258/18/23$1.255.00%
OKE $65 Sep 15 callin-the-money9/15/23$3.207/25/23$3.204.92%
INTC $35 Oct 20th callout-of-money9/8/23$3.7810/20/23$3.789.41%
HES $155 Oct 20th callin-the-money9/8/23$9.0010/20/23$9.006.81%
DLR $135 Jan 19th callin-the-money11/22/23$6.001/19/24$6.005.11%
INTC $42.50 Jan 19th callin-the-money11/29/23$3.501/19/24$3.508.71%
ABBV $160 Mar 15th callin-the-money1/10/24$7.003/15/24$7.004.94%
MPC $165 Mar 28th callin-the-money2/14/23$10.003/28/24$10.006.69%
QCOM $200 July 19th callout-of-money6/5/24$12.007/19/24$12.008.91%
MAIN $49.4 Sep 20th Callin-the-money6/27/24$2.009/20/24$2.004.31%
BIPC $35 Sep 20th Callin-the-money7/16/24$3.009/20/24$3.009.19%
AMT Sep 20 $210 callin-the-money7/30/24$15.009/20/24$15.007.42%
OKE Oct 18 $87.50 callin-the-money8/27/24$3.5010/18/24$3.504.40%
FSK Dec 20 $20 callin-the-money10/25/24$0.9512/20/25$0.954.89%
CEG Dec 29 $260 callout-of-money9/25/24$24.0012/20/24$24.0012.24%
EPD Jan 17 $29 callin-the-money11/12/24$2.001/17/25$2.006.34%


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