(Link to the post I wrote in March, when I bough ARLP)

Remember when your parents told you there’s no such thing as a free lunch? Well, grab some popcorn, because I’m about to tell you how I got some free coal for Christmas – and surprisingly, that’s actually a good thing. It’s just one success story in my ongoing monthly adventure of trying to get “free shares” of companies I like.

First, Let Me Explain My Monthly “40% Free Stock Strategy”

Here’s my perpetual treasure hunt that I’ve been sharing with my blog readers:

1. Every single month, I pick one new stock and invest exactly $1,500
2. For each stock, I wait until it goes up 40% (yes, really – patience is apparently a virtue)
3. When a stock hits that magical 40%, I sell just enough shares to get my original investment back
4. Keep the remaining shares forever as my “free shares” (free as in “I’m not paying for these anymore”)

This means I’ve got multiple positions cooking at any given time – some from last month, some from six months ago, some from years ago – all waiting for their moment to hit that 40% mark. Think of it as running a dozen slow cookers simultaneously, each with its own timeline for perfection.

The ARLP Trade Breakdown – By The Numbers

The Entry (March 2024):

• Buy Date: March 19, 2024
• Shares Purchased: 74 units
• Purchase Price: $19.8509 per unit
• Total Investment: $1,468.97

The Exit (December 2024):

• Sell Date: December 6, 2024
• Shares Sold: 57 units
• Selling Price: $26.4767 per unit
• Amount Recovered: $1,515.60
• Remaining “Free” Shares: 17 units

Key Metrics at Purchase:

• Trailing P/E: 4.11
• Forward P/E: 4.72
• Forward Annual Dividend Yield: 14.17%

Why I Picked ARLP for My March Investment

Back in March 2024, when everyone was talking about AI and space stocks, I went full contrarian and chose Alliance Resource Partners (ARLP). Why coal? Because sometimes the most unloved sectors offer the best opportunities. Here’s what caught my eye:

1. Ridiculously Low Valuation: A P/E ratio of 4.11 suggested either the market was severely undervaluing ARLP or the world was ending. I decided to bet against the latter.
2. Impressive Income Potential: That 14.17% dividend yield looked almost too good to be true, but ARLP’s solid cash flows suggested it was sustainable.
3. Contrarian Appeal: While everyone was racing toward renewable energy stocks, coal companies like ARLP were still generating significant cash and paying substantial dividends.

How It Played Out

While not quite hitting my usual 40% target, ARLP’s rise to $26.48 (a 33% gain) was close enough to trigger my strategy. By selling 57 shares, I recovered my initial investment of $1,515.60, leaving me with 17 “free” shares that continue paying dividends.

The Uncomfortable Truth

While everyone was busy predicting the death of coal, companies like Alliance Resource Partners kept doing what they do best – making money and paying dividends. It turns out that sometimes the most unloved stocks can deliver the sweetest returns.

Lessons Learned

1. Value metrics matter – extremely low P/E ratios and high yields can signal opportunity
2. Patience is crucial – it took over 8 months to reach our target
3. Sometimes the best investments are in sectors others avoid
4. Having a clear exit strategy helps remove emotion from the decision-making process

What’s Next?

With my initial investment safely back in my pocket and some free ARLP shares tucked away, I’m already on the hunt for next month’s $1,500 investment. After all, with twelve picks a year, something’s bound to work out… right?

Meanwhile, my other monthly picks from April, May, June, and so on are still out there, patiently waiting for their turn to hit that 40% mark. Some might make it next week, some next year, and some might make me question my life choices forever.

Stay tuned for next month’s selection. I promise it will be equally questionable and potentially profitable.

Disclaimer: This blog post is for entertainment purposes only. If you’re taking investment advice from someone who voluntarily invests in coal and thinks getting “free shares” is a legitimate strategy, you might want to reconsider your life choices. Always consult with a qualified financial advisor who will probably roll their eyes at this entire concept. And yes, I really do this every month.