JJC:    Safety... capital preservation... is still our #1 priority, since the bear market began. You know I think the bear market could be ending, but we still spend more time talking about preservation, and there are few things safer, and are able to preserve capital, than an unfairly beaten down stock that has a huge yield.

That's why I like EPD, with its buxom 6.9% yield.

Now, a lot of these ones where I've been talking about yield... like Consolidated Edison Inc. (ED)'s up to 6% almost... these are where I want you to be, at least for some of your diversified portfolio.

EPD is what is called a "mid-stream energy company." It provides natural gas processing and transportation services. Basically, they manage the pipes for moving natural gas around, and you know we feel natural gas is big in this country...

EPD also has ownership interest in six offshore platforms, including the huge Independence Hub, off the Gulf of Mexico... which we love here at Mad Money... and it's got a small, as in 12% of profits, petro-chemical business.

These are all fine things to own, especially in 2008 which, you know, we deem the year of natural gas. And so far, Anadarko (APC), Apache (APA), Chesapeake Energy (CHK), XTO Energy (XTO*), and Cimarex Energy (XEC) have said that we are right!

But the big reason I like EPD is that it's been the victim of what I believe is a lot of what I call a lot of unnatural selling... artificial selling.

EPD is the most dumped stock of any stock I've seen this quarter. There was a great article in Business Week... Hedge Funds Frozen Shut... The article was a couple of weeks ago, and it talked about how more people than ever are trying to pull their money out of hedge funds, so the funds have to resort to trying to freeze redemptions in order to prevent a massive run. Or, they can't freeze redemptions, because it's the end of a quarter... and that's causing huge artificial selling, as the funds struggle to pay back their investors...

You've got to sell the stock to have the cash to give back... And now, these stocks have to liquidate, and that really drives stocks down unnaturally.

When a hedge fund or a mutual fund starts to sell, in order to pay back its investors, it's selling as fast as it can... faster than the buyers can come to the rescue. It sells at unnaturally low prices. That gets the attention of the brokers, who lend the money to the fund. And, sure enough, now the brokers, not just the investors, want their money back because, remember, the funds are buying from the brokers... and then there's even more forced selling. I call it a vicious circle down.

Since a lot of funds owned EPD on margin, because of its high yield, it's been one of the hardest hit stocks by the whole process, but I don't think any of it has anything to do with the fundamentals. In fact, through it all... well, there's been consistent insider buying. The chairman of this company, who happens to be the 34th richest man in America - Dan Duncan - he's bought back roughly 210,500 shares to date. A couple of other directors have made some smaller buys... 4,400 and 4,000 shares.

Insider selling happens for a lot of reasons, but insiders only buy when they think their stock is going higher! I believe the insiders have been buying, because 2008 is a year of improvement for EPD... Its natural gas liquids business has been held back by two expansion projects that should be fully online this year. In other words, the past... not prologued...

Its offshore pipelines will benefit from the inclusion of the massive Independence Hub that I mentioned, and its pipeline connecting the platform to the mainland. And EPD has already seen a huge increase in volume going through the Cameron Highway pipeline... a 50% increase in volume in a pipeline in which it owns 50%... all in the annual report, friends...

Now, I recommended EPD higher, back on May 8th... yep... and, again, it was because of the insider buying. The stock has come down since then. It's down 9.6%, but you only lost 5%... but, when you count the dividends, it does knock back down the loss...

And I'm recommending it again, because I want you to average in...

EPD's dividend yield is much higher than my last recommendation [See Jim's past stock recommendation feature comments - from 05/08/07 - for EPD here]...

The company actually raised its distribution, just this past quarter. Its business is better. I think it's been unfairly knocked down by hedge funds who've been margined out of the stock.

Where should you put this one?... Ideal for 401k's and IRA's because of the compouding of the tax-free distributions. That's capital preservation and appreciation at its very best!