How our readers made a fortune on the health care boom...

How our readers made a fortune on the health care boom... Aging Baby Boomers mean big bucks... 37 years of consecutive dividends... And a potential 50% increase on the way... Target hits a new all-time high... Dinner with Jim Rogers and Jim Rickards...
 

 The health care boom has made a fortune for many Stansberry Research subscribers...

 

For years, we've recommended loading your portfolio with some of the highest-quality names in health care. The thesis was simple: As Baby Boomers near retirement, they will require more health care. Over the next 20 to 30 years, the older segment of our population will explode. And aging Baby Boomers will spend a fortune on everything from nursing homes to pharmaceuticals and life-saving devices.

 

Dr. David "Doc" Eifrig's Retirement Millionaire subscribers are sitting on several big winners from the health care boom. As he wrote in May 2011...

 

Older people use three to four times the amount of prescription drugs as folks under 50. And more than 30 million people will gain Medicare coverage by 2014. This means an increasing number of written prescriptions.

 

 In addition to the demographic trend, Doc also expected the government to spend more money on health care...

 

Right now, only 10% of Medicare dollars are spent on pharmaceuticals. If Washington starts looking for cost-effective ways to manage health, prescription drugs will be a quick and easy way to test its hypothesis. In many cases, the use of drugs can ward off diseases for many years. For example, doctors already know blood-pressure pills and diabetes medications prolong lives cheaply.

 

 Retirement Millionaire is sitting on five triple-digit winners in the health care sector, including pharmacy chain CVS Health and Big Pharma firm Eli Lilly.

 

Another one of his health care picks – medical-device maker Medtronic – hit an all-time high yesterday. Doc recommended shares in February 2011, in part because the company is on the cutting-edge of devices to treat heart and brain diseases – both huge problems for the elderly. As Doc explained in that issue...

 

Medtronic is synonymous with health care technology. The company's main business is pacemakers. For generations, Medtronic has been a leader in using electronics to stabilize and manage heart rhythms and maintain lives. It was one of the first to create an implantable pacemaker that could withstand the giant magnets of an MRI machine.   But the company has grown and diversified. In 2010, the Cardiac Rhythm division represented only 33% of the total revenue of the company ($15.8 billion).   Today, Medtronic gets about 20% of its revenues from cardiovascular devices (e.g., heart valves) and 20% from spinal products (it's a leader in scoliosis management). The rest comes from its neuromodulation – regulating the nervous system – (10%), diabetes (8%), and surgical technologies.   Medtronic has grown steadily, even during tough economic times. Sales have grown about 8% in each of the past three years, a difficult feat for any business.   But what makes Medtronic special is its dividend. The company has paid shareholders for 36 years and increased its dividend for 33 consecutive years. A company that keeps growing by producing cutting-edge technologies and rewarding shareholders is the kind of company we love to own at Retirement Millionaire.

 

 Doc paid 10 times earnings for Medtronic, about half the valuation of the average S&P 500 company at the time.

 

Yesterday, Medtronic reiterated its intention to buy Covidien for $42 billion. Covidien makes simple but essential medical supplies like bandages and staples.

 

The merger will make Medtronic "one of the most powerful companies in health care," Doc said last week.

 

 And the good news continues for Medtronic... According to a recent report from investment bank JPMorgan, Medtronic could increase its dividend by 50%. Medtronic currently yields 1.8%, versus 2.6% for competitor Johnson & Johnson. But its deal with Covidien may help close that gap. From Barron's...

 

Dividend fans may be especially pleased. Medtronic has increased its payments annually for 37 straight years, most recently in June, by 9%. But the company's policy of returning half of free cash flow to shareholders has lately looked unsustainable, because only 35% to 40% of free cash flow was being generated at home. The new company will be able to tap up to 60% to 65% of its free cash flow, and that figure will rise over time.   "Post-closing of Covidien, Medtronic could increase its dividend by 40% to 50% (to $1.70-$1.80 a share) and still have more than $2 billion of free cash flow available for buybacks and U.S. acquisitions, plus another $2.6 billion unavailable, but being generated outside the U.S.," wrote JPMorgan analyst Michael Weinstein on Thursday. Medtronic says it hopes to close the deal late this calendar year or early next year. Weinstein lists Medtronic as a top pick.

 

Retirement Millionaire subscribers were up 93% on Medtronic as of yesterday's close.

 

 And today, another company in the Retirement Millionaire portfolio is hitting an all-time high: retail giant Target.

 

Target just announced a fantastic quarter, sending shares up 7.3%. (Target's earnings came in after its largest competitor, Wal-Mart, recently reported a blockbuster quarter.)

 

 Doc recommended Target shares in February when the company was embroiled in a data-breach scandal. Hackers stole the credit-card and personal information of more than 100 million customers. It was the largest retail hack in U.S. history.

 

As a result, shares fell 23% in six months. In these cases, you have to ask yourself... Is Target's business worth 23% less in six months because sophisticated hackers broke into its files? Of course not. Doc understood Target would continue to produce big retail profits long after the drama passed.

 

 Today's earnings prove Doc's thesis was correct... Third-quarter revenue rose to $17.7 billion, up 3% from $17.3 billion in the same period of 2013.

 

Target's $0.55 in earnings per share (EPS) bested analyst expectations of $0.40-$0.50 for the quarter. The company expects fourth-quarter EPS between $1.13 and $1.23 and anticipates EPS of $3.15-$3.25 for 2014.

 

Same-store sales – an important retail metric – rose 1.2%. Online sales jumped 30%. In the November 11 Digest, we detailed Target's efforts to compete in digital sales... including offering free shipping on online orders until December 20.

 

Chairman and CEO Brian Cornell said Target is "encouraged by the improving trend we've seen in our U.S. business throughout the year."

 

As we all know, good results means the company can pass more money along to shareholders. Target paid $330 million in dividends in the third quarter, a 21% increase from the same period last year. The company also recently hiked its quarterly dividend from $0.43 to $0.52 per share... a 21% rise.

 

Since February, Retirement Millionaire subscribers were up nearly 30% on Target.

 

 If you aren't already a Retirement Millionaire subscriber, now is the perfect time to test the waters... In his latest issue, Doc reviewed his entire portfolio... explained why the next two years will be a great opportunity to build wealth... and told readers exactly which stocks you should buy today. These are high-quality businesses that pay solid dividends – including one blue-chip firm paying a 5%-plus dividend today.

 

You can sign up for Retirement Millionaire for only $39... And if you decide it's not for you, we offer a 100% money-back refund. Learn more here.

 

 We'll close today's Digest with a note from The Atlas 400 Membership Services Director Gray Zurbruegg...

 

 You could hear them coming. Hundreds of horsepower charged our way... the engines' growls grew... and then, they were gone.

 

Luckily, we relived the experience again and again. We had exclusive use of the Formula One track in Austin, Texas for the entire day. It was one of the most exhilarating experiences of my life.

 

Atlas members recently took Austin by storm. It's a fantastic town with great food and better people... and none of the pretense you would expect in the fastest-growing city in America.

 

During our visit, we raced supercars at speeds of 150-plus miles per hour on the Formula One track. Champions from the popular television show Top Chef hosted us at their restaurants. And we took over one of my favorite hotels in the world, Hotel St. Cecilia... a wonderful mix of style, luxury, and bohemian attitude.

 

To describe the trip simply, it was a blast.

 

 

 One evening at dinner, I looked at a fellow member – who lives in Tokyo – and thought back to all the places we've visited and experiences we've shared.

 

He and I have climbed mountains in Patagonia... stalked massive stags in the Scottish Highlands... toured the best vineyards in Napa... and now, we have raced cars in Germany and in Austin. I've never even done these types of activities with my family. But during my years with The Atlas 400, I've discovered a new family.

 

We've created real relationships. That's what happens when you travel the world together, get off the grid, and talk about what really matters, like families, hobbies, worries, and goals. We rarely bring up business.

 

And frankly, I never would have come into contact with my Tokyo friend during the normal course of my life if it weren't for The Atlas 400. Nor would I have enjoyed a private dinner with legendary investor Jim Rogers and economics expert Jim Rickards in the Dominican Republic.

 

 But that's the beauty of our club. Atlas is a group that brings people together to share ideas, participate in one-of-a-kind experiences... and get to know each other. It sounds simple, but it's becoming rarer in today's digital world.

 

Simply put, I don't know of another organization that offers so much of what really matters to its members.

 

There are plenty of opportunities for you to join our members on the horizon, too. Early next year, we'll make our annual trip to the sportsman's paradise at Cabin Bluff in southern Georgia. We've also planned a trip to the slopes in Aspen. And in the fall, we're headed to visit our friends at Porsche and BMW in Germany.

 

Germany is by far our most popular event... This will be the fourth time our group has visited. You can read Porter's stories from his first Oktoberfest visit. He called it "five of the best days of my entire life." He also shared some videos from our trip.

 

If you'd like to learn more about The Atlas 400, please click here. I look forward to speaking with you... and sharing some adventures in the future.

 

 New 52-week highs (as of 11/18/14): Apple (AAPL), Becton Dickinson (BDX), Brookfield Property Partners (BPY), Cisco (CSCO), Dollar General (DG), Express Scripts (ESRX), Energy Transfer Equity (ETE), Fidelity Select Medical Equipment & Systems Fund (FSMEX), Kinder Morgan Management (KMR), Medtronic (MDT), 3M (MMM), AllianzGI Equity & Convertible Income Fund (NIE), PowerShares QQQ Fund (QQQ), ProShares Ultra Technology Fund (ROM), ProShares Ultra Health Care Fund (RXL), ProShares Ultra S&P 500 Fund (SSO), Cambria Shareholder Yield Fund (SYLD), Sysco (SYY), TC Pipelines (TCP), Wal-Mart (WMT), and Alleghany (Y).

 

 Who knew the mailbag would continue to be overflowing with feedback on Porter's OneBlade razor? Remember... you can bid on one of the first 10 blades by clicking here. Continue to send us your thoughts on Porter's newest business venture to feedback@stansberryresearch.com.

 

 "I think the discussion of the startup of OneBlade makes sense for the Digest in that it is a natural extension of the entrepreneurship focus that Stansberry has added since partnering with James Altucher. While I have not yet even taken the leap to 'chicken sh*t' entrepreneurism, I do think these stories tie in to investing and help to motivate people to take more ownership (no pun intended) on their situation. Investing in yourself. I think in Porter's 'rebuttal,' he says he always bets on himself; this can be done even in a corporate environment – sacrifice some salary for a chance at a larger bonus. I liked the anecdote and if you don't, it's a free publication anyways so just skip to the end. I will only get worried when Porter starts doing radio shows with Jason Hervey a la Richard Scrushy." – Paid-up Subscriber Dan Stringer

 

 "I must admit that I was a bit taken back. What a novel idea and approach. I do hope that your idea works out. You have a tendency to make gold out of lead. I loved the full article." – Paid-up subscriber Monty B

 

 "For me it is simple, a very successful business man invited me to invest in one of his businesses. The start up money is a bid on his first product. If he is successful, once again, my investment should go up in value. The only thing I can say to that is thank you for the opportunity. I placed my thank you with my bid. Those who can not see that, I say there is no teaching, maybe one day learning." – Paid-up subscriber Don Wright

 

Regards,

 

Sean Goldsmith

Baltimore, Maryland

November 19, 2014