I love buying dollar bills for $0.80. Of course, you don’t find many chances like that in the stock market. Whenever such a great deal arises, investors quickly bid up the price of shares. But one of these opportunities has just cropped up. And it just so happens to be in one of my favorite industries for the next 10 years.
This deal comes from a unique type of security called a “closed-end fund.” Closed-end funds have one feature that separates them from other types of investments: they sometimes trade for large discounts to their real values. Supply and demand determine the market price for units. As a result, these funds often trade at a discount (or a premium) to their liquidation value. And once in awhile, these discounts get quite substantial. That’s when I take notice. We have that situation now with a closed-end fund in the energy business, the Cushing MLP & Infrastructure Total Return Fund (NYSE:SRV), also known as the Cushing MLP Total Return Fund.
Source: Income Investors
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