BlackRock Health Sciences Trust (BME) Stock

Closed-end funds have seen significant discount narrowing in 2024 across the board, as discounts have been cut in more than half on average. Despite record highs being hit regularly this year in the S&P 500, NASDAQ 100, and DJIA, opportunities still exist as not everything has been participating on the upside equally. Investors could consider funds like the BME and FLC, which may still offer attractive entry points despite the overall discount narrowing in the CEF space and elevated broader equity markets.

Not many people know this, but if you really want to diversify—deftly balancing and rebalancing to maximize (and protect) your gains, you need to invest in closed-end funds (CEFs).

Last time around, we had rated BlackRock Health Sciences Trust as a hold. The fund has not delivered much since then, but the sector has gotten really oversold. We go over the thesis for this one today and tell you why we think its is a Buy.

B&M European Value Retail SA (LSE:BME) shares gained ground on Thursday after the discounter posted improved first-half figures as cost pressures continued to drive demand. Group sales climbed by 3.7% to £2.64 billion over the six months to September, aided by a 6.0% uptick across the UK in the second quarter, B&M reported on Thursday.

BlackRock Health Sciences Trust offers exposure to healthcare companies and employs a covered call strategy to generate option premiums to help support the distribution. The latest tender offer measurement period for BlackRock discount management programs has come to a close, and BME made the list, but it was close this time. The fund's 6.15% distribution yield might not be the most exciting, but it is one of the most consistent and steady you'll find in the CEF space.

BME has delivered solid long-term returns since its 2005 launch, earning positive ratings from Seeking Alpha analysts, with most recent articles rating it a Buy or Strong Buy. The trust has a relatively high expense ratio and has experienced significant volatility related to trading levels relative to NAV. BlackRock recently announced a tender offer that will allow 2.5% of the fund's units to be repurchased at 98% of NAV.

BlackRock Health Sciences Trust (BME) offers exposure to the healthcare space while also utilizing a covered call strategy. BME's discount has narrowed since our last update but remains attractive, with the potential for attractive returns going forward. BME's distribution yield may be more modest than other CEFs, but that has helped it boast of never having to cut the regular distribution and helped it provide some capital.

BlackRock Health Sciences Trust trades at an attractive discount to net asset value. The dividend yield of 6.1% remains supported from net investment income. Some weakness revolves around the use of return of capital, however. Future interest rate cuts may serve as a price catalyst. Inflation continues to cool while the unemployment rate ticks upward.

B&M European Value Retail SA (LSE:BME), the discount retailer, saw its sales edge higher in the first quarter helped by new store openings and volume growth. Group sales increased by 2.4%, reaching £1,345 million for the 13-week period ending 29 June 2024.