Investments

I wasn’t expecting too much from Yara but the results they reported were still a slight disappointment. Dividend cut was also proposed which doesn’t fit well for a income oriented dividend growth portfolio. Therefore I decided to sell all my 80 shares for 335,70 NOK per share. I redeployed the money right away and bought 100 Telenor shares for 173,10 NOK per share and 3000 NEL Hydrogen shares for 2,858 NOK. This in part implements the short term strategy in which I plan to focus on digital services (Telenor) and sustainable energy (NEL) among others. This will also protect the dividend income stream received in NOK as lower yield of Yara was replaced with higher yield of Telenor. NEL doesn’t pay a dividend so it’s a long term value play with some M&A potential.

See: https://www.nasdaq.com/article/norways-yara-q4-lags-forecast-proposes-dividend-cut-20180208-00137

Second unplanned purchase for the week as Citycon dropped today after earnings. Considering the overall market phase and key metrics, this purchase made enough sense for me to pull the trigger regardless the deleveraging plan. I bought 1000 shares for 1,94 EUR per share. This and previous Apple purchase will pretty much make up the whole dividend reinvestment for the year and it’s not even March yet.

See: https://www.citycon.com/sites/default/files/citycon_financial_review_2017.pdf

Long awaited pullback happened yesterday when US markets saw a record drop in points. This is likely to continue today. I decided to make an unplanned purchase and bought 20 shares of Apple for 158,00 USD per share. I considered it to be reasonably priced even before this so this made the decision even easier. I consider the position to be full now but might overweight it in case the marked goes insane. Apple fits in my long term plan in which I will focus especially on certain sectors: sustainable energy, water, AI & digital services and space exploration.

Today I decided to sell my moderate General Mills position mainly because of the slightly stretched valuation (even though the company is likely M&A participant) and recent drop in REIT valuations. I sold all my 50 shares for 59,661 USD per share and bought 20 shares of Realty Income Corporation for 53,0799 USD per share and 190 shares of VEREIT for 7,15 USD per share instead. This doesn’t hurt the dividend income in short term (hopefully) and allows a slight deleveraging as a bonus. Especially VEREIT appears to be undervalued though it shouldn’t be noted the legal issues have not been settled yet which is a risk of course.

Planned maintenance purchase for January consisted of 10 Fortum shares bought for 17,87 EUR per share and 50 Loudspring shares bought for 2,65 EUR per share. I’m also considering adding Kemira to the list of maintenance purchases as it’s quite reasonably priced and the secondary portfolio containing these maintenance purchases will act as watch list going forward. Due to technical reasons this portfolio will host only stocks listed in euros or stocks not paying any dividends (currency transaction costs).

Secondary maintenance purchase for December with a purchase of 80 Loudspring Plc shares bought for 2,56 EUR per share. I expect to slowly build a full position on the company as they have quite a few interesting holdings. Nocart is the most obvious one as they have huge potential in African market which is not the easiest of the markets but there are others as well.

See: http://loudspring.earth

Omega Healthcare Investors took another hit yesterday as possible class action law suit was made public. I used this opportunity to trade in and out in order to increase my position with additional 25 shares and to record some tax losses as a bonus. Cost basis for these additional shares was 26,86 USD per share. Let’s see what this litigation means in practise.

See: http://www.businesswire.com/news/home/20171120005769/en/EQUITY-ALERT-Rosen-Law-Firm-Announces-Filing

Nordea has been dropping lately mainly because of the speculation on Swedish housing bubble and uncertainties in the long term business model. Latter one is kind of the reason I’m buying right now. I expect to see a banking merger motivated partly because of these concerns and I expect Nordea to be on the right side of the table in such event. I suspect that this has has been Sampo’s goal all along. It might take couple of years to happen and major correction before that is a significant risk but one I’m willing to take. That’s why I today bought additional 100 shares for 9,98 EUR per share.

Telia dropped today probably just because it’s Telia. Sure there are uncertainties in operator business models as well but I anticipate bright enough future for companies such as Telia. Strategic state ownership and associated regulation should work in their favour even though growth prospects are a bit limited. I consider Telia to be the bond substitute in my portfolio and therefore bought additional 250 shares for 3,764 EUR per share.

All this puts the portfolio debt level slightly above the target level. Depending on the market situation I might once again focus on reducing the debt but should there be attractive enough valuations, I’ll increase it accordingly.

Sampo reported third quarter results today and those were excellent as one could expect. Market reaction was a little bit strange as the stock went slightly down. In preparation for my eventually happening exit on Nordea, I decided to buy additional 27 shares for 45,10 EUR per share. This rounds up the total share count as well. Not that it matters but it kind of does.

See: http://www.sampo.com/globalassets/arkisto/taloudelliset-raportit/2017/sampo_q3_2017_en.pdf