Investments

Lockheed Martin is a long term play of mine. I have a short term interest in the traditional military aspect but long term interest in the space exploration and, as a Skunk Works fan, technology R&D aspect in general. Therefore I decided to buy 8 additional shares for 299,50 USD per share. Many stocks are down today and Lockheed Martin is in the news with F-35 related bonus payment issues – hard to say what’s the impact on the share price today but that’s irrelevant in the long term. US decision to create a new space force branch for the military is also very interesting.

See: https://www.politico.com/story/2018/06/18/trump-space-traffic-debris-630189

AT&T has been down lately due to the litigation for Time Warner merger. They got a favourable decision and the merger is moving on. It’s a move which is very difficult to value as the such mergers tend to come with pros and cons – huge debt load being one of them. Other telecoms are making similar moves on smaller scale but this is big enough to really move the needle. I personally share some of the doubts people are having about this but overall I view this as a positive change. Therefore I bought additional 40 shares for 32,55 USD per share.

See: http://money.cnn.com/2018/06/12/media/att-time-warner-ruling/index.html

Sampo rarely trades below or even close to fair value but when it does, I’m ready to make some unplanned moves. Today I decided to exit from my Citycon and Gjensidige positions and deployed some of the money back to Sampo. While at it, I also decided to increase my stake in VEREIT which is starting to settle the ongoing legal issues. There are still plenty of unknowns there but based on my personal projections the stock appears to be significantly undervalued.

• Sold 1200 shares of Citycon for 1,902 EUR per share
• Sold 220 shares of Gjensidige Forsikring for 130,10 NOK per share
• Bought 40 shares of Sampo for 41,79 EUR per share
• Bought 200 shares of VEREIT for 7,296 USD per share

Small re-balancing for the portfolio as Diageo appears to be quite fully valued at the moment: I sold 20 shares out of 50 for 145,49 USD per share. I used the profits to buy 13 shares of Johnson & Johnson for 119,138 USD per share and 4 shares of Lockheed Martin for 316,8008 USD per share. Johnson & Johnson is a core holding of mine trading at the low end of the 52 week range and has a yield close to 3 percent – that pretty much explains my timing here. Lockheed Martin Corporation on the other hand has a huge backlog but isn’t particularly cheap. However it fits my strategy in many ways, space exploration related actives being one of them.

Busy day today. My primary broker has campaign for small orders and problems in Italy were causing falling valuations here and there. Especially banking and finance sector was hit. I decided to seize this opportunity and bought 200 shares of Citycon for 1,856 EUR per share and 10 shares of Sampo Plc for 42,05 EUR per share. In addition to this I sold my Fortum shares held in my secondary account and replaced those with 72 shares of Nordea Bank AB bought for 8,255 EUR per share.

 

Loudspring announced today that the CEO will leave to company and chairman of the board will replace him. They claim that it was mostly for personal reasons but who knows. It could very well be strongly recommended action for the CEO and/or natural development given the new strategy. I decided to buy additional 160 shares for 1,236 EUR per share. Next 10 years or so will tell if this was a wise move to make.

See: http://news.cision.com/loudspring/r/loudspring-appoints-new-ceo,c2514697

There are companies that tend to always trade with significant premiums. Sometimes it’s because of the undisputed quality and 3M Company sure fits that description. Today however we saw significant drop in the share price after slightly lowered guidance. I wasn’t really planning to buy anything especially since I already increased my stake in Philip Morris but since this is a rare occasion, I decided to open a new position with a purchase of 20 shares for 199,80 USD per share. This barely fits under the debt balance limit I’ve defined in my strategy but barely is enough in this case.

See: https://seekingalpha.com/news/3347916-3m-slips-lowering-guidance-range

I’ve been thinking about my Philip Morris position for quite some time now as it has been quite modest but there really hasn’t been any great possibilities to steal additional shares with cheap enough prices. Today they reported results and, despite quite OK results, the share price tanked over 12%. This presented a situation where I had to make up my mind. It has plenty to love as a company: it’s an addiction business with strong R&D with their heated tobacco line. They do business outside of USA which perhaps provides some protection from legal issues. Though it should be noted that the very same protection might hurt in short term should they build a business out of weed as it’s probably going to happen first in the US. Factoring in all this I decided to buy additional 25 shares for 88 USD per share.

See: https://www.marketwatch.com/story/philip-morris-tops-profit-estimates-but-revenue-falls-short-2018-04-19

Small maintenance purchase as I bought 40 Loudspring shares for 1,478 EUR per share. This is a high risk position which I intend to build up with extremely small orders. It’s difficult to value a company such as this as there’s not much data available from the companies they own. Therefore I’ll keep the position small and will analyse the results in 10+ years.

Portfolio maintenance buy for March consisted of 10 Fortum Corporation shares bought today for 17,68 EUR per share. Nothing special here as I’m still in mainly in maintenance mode. Plan is to make these small purchases of Fortum, Loudspring and probably Citycon until debt level improves. It has improved nicely as the current D/E ratio is 0,0725 which already is below my target in normal market conditions. It’s another topic if we’re in normal market conditions and I really haven’t yet decided if I’m aiming 0,05 ratio or even eliminating the whole debt component.