Investments

I’ve created a list of companies likely to take a beating when the next recession finally arrives. One of such sectors is probably lodging and within the sector Apple Hospitality REIT appears to have quite solid fundamentals. Therefore I consider it as safe enough to own even in the current economic environment. I didn’t want to start with too big exposure so I bought 110 shares for 17,64 USD per share. This is enough to keep me interested while waiting for the economic turn. Meanwhile I can collect quite decent monthly dividends and also have the possibility to trade it in and out since it seems to swing quite consistently between high 17’s and low 20’s.

Maintenance purchases for the secondary portfolio in the form of 100 Loudspring shares bough for 0,634 EUR per share and 600 NEL ASA shares bought for 3,6 NOK per share. The obvious risk with Loundspring has materialised lately mainly because of their portfolio company Nocart. That’s a company which may very well go bankrupt at some point but personally I’ve never considered it as the most interesting company they own. In my books Eagle Filters has claimed that spot. Having said that, Nocart has been the major driver for the share price in the past so naturally such issues have had a major impact on the share price going forward. Current valuation however seems low even though it’s impossible to really value the portfolio they have. NEL on the other hand is progressing really well. I have very high hopes for it in the next five to ten years. In my books it has all the characteristics of a prime take over candidate.

Currencies tend to fluctuate and lately the Swedish Krona has been trending down and same can be said about Telia Company. Therefore I decided to buy additional 420 shares for 40,80 SEK per share. I could have bought these from Helsinki stock exchange but my strategy says that dividend income in multiple currencies is preferred. Second dividend payment of the year is coming up next month so it’s a bit unusual to see such a drop in stock price even though there are clear reasons for it: Swedish state might sell the position it holds due to changes in media landscape (Telia becoming a player in the segment through acquisition. Let’s see how the price moves once that materialises, I might make a significant addition at that point.

Maintenance purchase for secondary portfolio with a purchase of 50 NEL ASA shares bought for 3,444 NOK per share. Extremely small transaction but this is mainly setting a baseline for the company in the secondary portfolio. I’ll try to move all my NEL shares from primary portfolio to secondary portfolio. Primary portfolio is really a dividend based one and NEL – being a more speculative growth holding – doesn’t really fit there. Timing of the actual transfer will depend on stock price moves during the next months or even quarters. I’ll probably sell my shares if there’s a significant pop without a a huge change in short term fundamentals.

Nordea has bounced back a little bit so I decided to sell all my 162 Nordea shares held in the secondary portfolio for 8,81 EUR per share. Quick trades in and out don’t typically pay off but that’s what this secondary portfolio is currently for. I was originally looking to replace these with Telia shares but Telia also bounced back already. XXL ASA is also looking very interesting for a quick trade. Let’s see how both will move in the coming days.

Maintenance purchase for the secondary portfolio in the form of 8 Loudspring shares bought for 1,336 EUR per share. Tiny transaction but acceptable in the secondary portfolio as the fees are so low with Nordea.

This is a purchase I have mixed feelings with. H&M was similar and so far it hasn’t served me too well but let’s see what the future brings. Europris ASA appeared too cheap to pass and I had the currency (NOK) already available from the Gjensidige exit, therefore I bought 1500 shares for 21,50 NOK per share. With this cost basis I can expect above 8 per cent yield which appears to be very high but also sustainable. I still haven’t made up my mind if this is a long term dividend investment or short/mid term capital appreciation play. This increases my debt level but not too much leaving me with multiple options going forward. I most likely will sell my stake on BHP Billiton at some point (due to the cyclical nature of it) for which I could currently offset the taxes by selling my not-so-succesfull stake in H&M. That would lower the debt level significantly but I can also manage the debt component with new capital.

Oops, I did it again as I bought additional 60 shares of Nordea Bank for 8,12 EUR per share for my secondary portfolio. Nordea announced today that they are buying a Norwegian online bank from Gjensidige Forsikring ASA, a company I still recently had position on, for €578 millions paid in cash. Interesting developments in general – Sampo being a major owner of Nordea and Gjensidige being a competitor of Sampo. I suppose we will see plenty of M&A activity in insurance & banking sectors in the coming years.

See: https://www.nordea.com/en/press-and-news/news-and-press-releases/press-releases/2018/07-02-06h00-nordea-to-acquire-gjensidige-bank-and-enter-strategic-partnership-with-gjensidige.html

I can’t help myself so I decided to stop trying and bought additional 24 shares of Nordea Bank for 8,135 EUR per share. Valuation appears too cheap and yield too high to pass.

Maintenance purchase for secondary portfolio with a purchase of 6 additional shares of Nordea Bank for 8,225 EUR per share. Rather insignificant as such but keeps the fees away for a quarter.