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High Yield Bond Market Opportunity

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9 months agoBusy2 min read

Bonds bought at a discount can be a great return


Bonds are a consistent way to earn income since companies are legally required to pay the coupon interest and principal on a fixed schedule. If they miss payments they will default and possibly go into bankruptcy. In this scenario bond holders have a higher claim on company assets than common stock holders.

Right now we can invest in the third largest home security company in the U.S. Monitronics International monitors nearly 1 million homes and businesses in all 50 states, Puerto Rico, and Canada.

The business model is attractive as customers pay regular, fixed fees for professional monitoring of homes and businesses. This provides predictable cash flows on a recurring monthly basis.

Monitronics is also benefiting from one of the biggest recent trends of smart home technology. People use smartphones, tablets, computers and voice control to manage household functions. Everything from door locks, lights, temperature, music and home security. Monitronics sells "HomeTouch" direct to consumers avoiding additional cost working through authorized dealers.

With steady security monitoring and new Smart Home technology Monitronics is a healthy growing company we can take advantage of by buying bonds at a discount.

Buy the Monitronics International 9.125% bond due April 1, 2020 (CUSIP No. 609453AG0) up to $850 per bond. At maturity in 2020 you will be paid $1,000 per bond and earn $91.25 per bond per year.

This represents a current yield of over 10% and a yield to maturity of over 18%. Take advantage of other investors short-sight today.

Disclosure: I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article.


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