Dear Mr. Berko: I’m in search of a better yield with the money I’ll be getting from a $53,000 certificate of deposit that comes due next week. The following stocks were recommended by a stockbroker. I can be aggressive. Please give me your opinion on them.
— P.L., Wilmington, N.C.
Dear P.L.: OK, let’s begin with Apollo Global Management (APO-$19.05). It’s a huge global alternative investment manager with nearly $170 billion under management, including hedge funds, mutual funds, real estate, financial services, business services, stocks in multiple industries — including metals, mining, entertainment, cable, satellite and wireless — buyouts, carve-outs, recapitalizations, distressed capital, commercial mortgage obligations and collateralized loan obligations. APO’s $1.48 dividend yields 7.9 percent. Value Line suggest a three- to five-year appreciation of 60 percent. Just buy 300 shares.
Frontier Communications (FTR-$3.65) provides broadband, satellite video, wireless internet, data access, data security solutions and special bundled offerings for small businesses and home offices and advanced communications for medium to large businesses. FTR has 3.2 million residential customers, almost 300,000 business customers and 2.5 million broadband subscribers, which produce over $10 billion in revenues but no profits. FTR yields 13.4 percent, but I wouldn’t touch this stock with a barge pole. Standard & Poor’s likes the stock, but I think those guys are nuts. Don’t touch it.
Computer Programs & Systems’ (CPSI-$23.85) $1.36 dividend yields 3.9 percent. CPSI designs health care information technology, primarily for smaller community hospitals. It automates the management of clinical and financial data and allows hospitals to outsource various data-related business processes. Wall Street doesn’t seem to care for CPSI, which recently reduced its dividend, and I agree.
