Investments

Stocks went down today mostly because of the North Korean missile experiments. I took the opportunity to deploy some of the cash from the sale of Scorpio Tankers back to market in the form of Sampo Plc. I bought additional 12 shares for 43,70 EUR per share. Mentally this might be considered as the maintenance purchase for September but let’s see what the market has in store for us as this could the beginning of mid sized correction.

I’m also looking at couple of companies I might be interested in. First of all I’m waiting for a pullback in NEL Hydrogen to open a very long position on it. Really interesting sector to be involved in as energy and transportation sectors are transforming to something new. Second company on my list is Apple Inc. Valuation seems to be quite reasonable given the size of the company and phase of the overall market. If the stars align correctly and there’s no market meltdown nor unexpected product and delivery problems, I don’t see why the stock would reach for the 200 USD per share valuation during the first half of 2018.

I hate selling but sometimes it makes sense. In retrospect I have usually failed at the timing but a plan wouldn’t be a plan if I wouldn’t at least try to execute it. With that in mind I decided to sell all my Scorpio Tankers (NYSE:STNG) shares for 3,583 USD per share which translates to a minor loss. Looking back couple of months the stock has seen daily swings around ~4 percent. Today the swing was a positive one so I decided to exit the position for now. It’s very likely that I will have the possibility to buy back the shares for a bit cheaper but I’m not convinced I’d do so but it is something to consider.

Maintenance purchase for August consisted of 7 shares of Fortum Corporation and 8 shares of Sampo Plc. I wasn’t really planning to increase my Fortum exposure but lately anonymous buyers have pushed the price up. This might indicate that someone has knowledge of upcoming M&A actions so this minimal increase was justified. As a bonus it also rounded up the total share count to full hundreds which gives me some unexplained mental pleasure. Sampo on the other hand is an easy decision even though the valuation isn’t cheap. It’s partially preparation for switching Nordea for Sampo if they choose to move to Denmark. In addition to these small purchases I decreased portfolio D/E ratio to 0,123 from 0,135 a month ago.

Summary:

• 7 shares of Fortum Corporation for 14,94 EUR per share
• 8 shares of Sampo Plc for 44,59 EUR per share

Planned maintenance purchase since Q2 reports caused minor corrections for both Fortum and Sampo. I’m increasing my position in Sampo mainly because I might eventually trim or even eliminate my position in Nordea due to tax reasons. Sampo allows me maintain some of the exposure in that case and in general is exceptionally well managed company. Fortum is in a position to benefit from major trends but has way too much political risk. I most likely will not increase my position on it unless there are significant changes in valuation and/or market situation. In addition to these purchases I trimmed the portfolio debt a little bit and current D/E ratio stands at 0,135 target being 0,1 or less.

Summary:

• Fortum Corporation 14 shares for 13,98 EUR per share
• Sampo Plc 4 shares for 45,89 EUR per share

Maintenance purchase to complete the monthly purchase target. Fortum is not very cheap and has all the political risk I would like to avoid but it still has, in my view, more upside than downside potential. Hence the purchase of additional 14 shares for 14,20 EUR per share. Right below 200 EUR in total to keep the transaction fee in line (broker campaign).

Speaking of blue chips, REIT sector really took a beating today. This was mainly caused by tenant issues Spirit Realty is having. Realty Income Corporation has demonstrated such a quality that I wouldn’t mind adding to it even if it would have similar short term issues itself. Sure, online sales and companies such as Amazon are a risk for it but very reasonable one given the tenant base Realty Income has. So I decided to buy additional 27 shares for 55,14 USD per share.

VEREIT on the other hand was slightly undervalued, in my books, even before this dip. Therefore it wasn’t very difficult to find reasoning for buying additional 150 shares for 7,57 USD per share. VEREIT really isn’t a key holding of mine but the turnaround is impressive and I have high hopes for 2018 and 2019. Debt reduction is on track and after these purchases I really should follow their lead on that.

https://seekingalpha.com/news/3263616-triple-net-lease-players-sink-alongside-plunge-spirit-realty

https://seekingalpha.com/pr/16821049-vereit-announces-first-quarter-2017-operating-results

AT&T is among the bluest of blue chips in the world. Recently the share price dropped a little bit so I decided to make a move on it. I still wanted to maintain the debt strategy I’ve set to myself so I pretty much had to sell something. Betsson in the other hand was originally purely speculative play on my part. I initiated a position on it with suspicion of share price engineering to benefit management through their bonus program. Funny coincident that there’s similar bonus period coming up soon. Then again the management is proposing initiatives I don’t fully understand. Based on this I assume that there’s a good enough change to buy shares back with cheaper valuation during the summer and sold all my 230 shares for 74,90 SEK per share. This translates to a minor loss. I then proceeded to to buy additional 37 shares of AT&T for 39,00 USD per share.

Premature dividend reinvestment on Sampo Plc with a purchase of 4 shares for 44,21 EUR per share and 4 shares for 44,20 EUR per share. Separate orders due to small transaction campaign my broker has. Sampo has grown to be a core holding of mine. The quality of the company is so great that I might add to it during summer if the price is right. Close to 40 EUR per share would be really difficult to pass in the current market even though I’ve already gone overweight on it.

There aren’t many great opportunities out there but Pfizer seems to be quite reasonable with current valuation. Therefore I decided to buy additional 30 shares for 33,79 USD per share. Valuation is not exceptionally cheap but considering the overall market it’s quite OK. Yield is on high side with moderate payout ratio so it’s quite natural addition especially since I already had a starter position on it and had some USD to spend without converting too many euros.

Next month I might focus on taking advantage of the small transactions campaign my broker still has. I might add to my position in Sampo and Fortum. Latter surprised positively with the latest report and I still consider it to be a very relevant position in the long term. The political risk is a big factor there but it might be a manageable risk after all.