My Top Pick for an income investment comes right from the our quantitative research process. Each day our systems sweep through more than 6,000 US stocks and ADRs to identify the best in show, suggests Jason Bodner, co-founder and editor at MAPSignals.

This is done by isolating stocks with superior fundamentals being bought by what our algos believe are large professional investors. The process has reliably identified many top performing stocks year after year.

With a lot of focus typically placed on large cap stocks for income through dividends, I am finding opportunity in a small cap company. Black Stone Minerals LP (BSM) is an interesting potential income investment. BSM is a finance company, but really an energy company at heart.

Black Stone is an oil and natural gas exploration company that focuses its operations in the Louisiana-Mississippi Salt Basins, Western Gulf, Permian Basin, Palo Duro Basin, East Texas Basin, Anadarko Basin, Appalachian Basin, Arkoma Basin, Bend Arch-Fort Worth, and Southwestern Wyoming.

But unlike traditional oil and gas companies, BSM invests in a portfolio of energy companies. That’s why it technically classifies as a financial company. But the portfolio holdings are exclusive to energy.

This portfolio approach allows BSM to diversify its holdings and keep costs down to a minimum. This is why BSM, as of this writing, yields over 10% and does so with low debt. The stock has a forward P/E ratio of 8.4 times earnings.

BSM has solid fundamentals such as 1-year sales growth of 70.5%, 3-year sales growth of 4.5%,1-year earnings growth of 31.4%,and a profit margin of 36%. It has double-digit positive estimated 1 year sales and earnings growth too.

As far as unusual buying goes, BSM has seen inflows in an unusual way all year long — a tell tale sign of institutional demand supporting stocks.

Finance companies, specifically Asset Management and Financial Advisory Services have been seeing unusual buying according to my research lately. BSM has appeared on the MAPsignals top 20 report 11 times since July of 2014. It has great fundamentals, visible institutional support, and a high MAP Score  of 74.1 in December of 2022.

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