Is This Penny Stock Safer Than Your Bank?

Some penny stock investors thrive on a weak economy. There are also those penny stock investors that eschew risk and prefer to park their money in so-called “safer investments.” For some, that means Treasury bonds and Certificates of Deposit (CDs).
Treasuries are government-backed investments with a stated interest rate paid out semi-annually. The interest rate (normally) decreases with greater demand for the bonds and rises with lower demand. After the markets crashed in 2008, interest rates on 10-year Treasury bonds were the lowest in history, because economic conditions were deteriorating and investors needed low-risk investments.
And by “low risk,” I do mean low risk: your return is almost non-existent. A one-year Treasury bond, today, yields 0.2%; a three-year bond yields 0.4%; a five-year yields 0.7%; and a seven-year Treasury will give you a 0.1% return. (Source: Bloomberg.com.)
Some investors are also turning to CDs. Offered by banks and credit unions, CDs are insured and virtually risk-free. However, while your money might be safely parked in the bank, the returns are dismal. The national return averages for one-year, three-year, and five-year CDs are 0.7%, 0.9%; and 0.4%, respectively.
If you’re having difficulty forgetting the economic crash triggered by the big banks and want to realize a larger annual return, you may want to direct your attention to Artio Global Investors, Inc. (NYSE/ART).
Artio Global offers equity and fixed-income strategies, including international equity, global equity, high-grade fixed income, high yield, and local emerging markets debt.
Based in New York City, with offices in Los Angeles, Toronto, London, and Sydney, Artio Global has assets under management of $18.1 billion. The company has over $61.0 million in cash, levered free cash flow of $67.5 million, and total cash per share of $1.04.
What makes this asset management penny stock more attractive than some government or bank offerings? Artio Global pays an annual dividend of 2.5%—that’s head and shoulders above the annual returns of both government-backed treasuries and bank-secured CDs.
Some penny stock charts can be deceiving. While Artio Global’s share price slipped lower over the spring, it has stabilized since June. Further, it has found strong support near $3.00 and tested resistance near $3.40. Since June, every time this penny stock’s share price retraced to its support level, it rebounded higher within its trading range.
With strong fundamentals and a continuing 2.5% annual dividend, Artio Global has been darting around a nice tested range. Furthermore, insiders hold an impressive 49.0% of the company. With that much of a stake, the company’s executives and its board of directors have a vested interest in actually seeing the company rebound. As a result, even though Artio Global is sitting near its all-time low, it continues to have great upside potential.