Investments

Nothing new here, just a minor strategic operation with NYSE:BBL. As it became evident that basically all miners would be taking extra beating, I decided to sell my 110 shares on December 7th for 23,2401 USD per share. The following day I bought back 130 shares for 21,68 USD per share. As a bonus I recorded some losses to be used later for tax deductions.

Long term fundamentals haven’t really changed but the current situation is challenging. There could be a dividend cut in the cards but personally I wouldn’t event mind having one. Current situation in the overall market provides excellent possibilities for strategic moves by such a big player.

I’ve been waiting to add on various cyclical companies but BHP Billiton has been taking extra beating lately due to various problems. Latest one was the collapsing of a dam in Brazil in a mine co-operated with NYSE:VALE. It’s tragic but also hopefully a one time indecent that has very little to do with the company itself. Sure there are risks involved with this purchase. Cleaning up this mess can cost anything from tens of millions to hundred millions dollars. On top of that there’s the overall economic situation which alone is a real risk for the dividend. Then again the long term fundamentals haven’t really changed. Having said that, today I bough additional 50 shares for 26,93 USD per share which brings my total up to 110 shares.

Additional information: http://seekingalpha.com/article/3665126-bhp-vale-samarco-dam-failures

As anticipated, balancing positions continued with NYSE:VER (formerly NYSE:ARCP). Troubled company in transition process and my only truly speculative position. On November 6th I bought additional 130 shares for 8.18 USD per share. I still doubt that I would build a full position on VEREIT but the jury is still out on that one. Interest rate issues will play a significant part here but I ended up with a target value in the neighbourhood of 9.90-10.10 USD per share. That’s just a side note though as my primary focus is on the dividends.

One view on the matter: http://seekingalpha.com/article/3657246-net-lease-reit-vereit-continues-to-execute-on-investor-day-blueprint

Safe, stable and boring? Things change quickly as TeliaSonera (HEL:TLS1V) has been accused of operating in not so legal or moral grounds. Muddy Waters Research issued the following open letter to the board of TeliaSonera: http://d.muddywatersresearch.com/wp-content/uploads/2015/10/MW_TLSN_OpenLetter_10152015.pdf. Later the company responded with the following statement: http://www.teliasonera.com/en/newsroom/press-releases/2015/10/teliasonera-comments-on-open-letter-to-the-board.

This led me to take a boring gamble as today I bought additional 250 shares for 4,38 EUR per share. Personally I don’t mind grapping falling knives since catching the opposite kind of knives would require me to position myself in uncomfortable heights.

Today I added to a really small position in Raisio Oyj (HEL:RAIKV) by purchasing 50 shares for 4,30 EUR per share and 200 shares for 4,40 EUR per share. This action has been queued for a while now but there were always something else higher up on the queue. Yes, there would have been better valuations available couple of months ago but this is good enough for me and I expect to build a full position on the company.

See: http://www.raisio.com/en/investors

Today I bought 70 shares of Fortum Corporation for 13,36 EUR per share. Minor addition to existing position with seemingly reasonable valuation. In reality this is a piece of a cash pile standing on two legs made of political risk. It remains to be seen which – Russian or domestic – will proof to be worse.

I had much faith in former CEO who still stays in the company and high hopes for the new CEO. They have plenty of cash to invest which should proof to be very effective in the current market environment. Then again majority of the company is owned by Finland which has a lengthy history of killing cash cows.

Fortum Investors Page: https://www.fortum.fi/en/investors/pages/default.aspx

Volatility truly is a friend. Major indexes made some pretty insane moves not to mention individual stocks. Some say that the market is efficient and brutally honest with valuations. That may be true for most of the time but today there were absolutely insane, albeit brief, valuations for some companies. Look at NYSE:JNJ for example. Todays range was 81,79 – 95,21 USD dollars (market was still open when writing this). This for a company that is more stable than majority of the world’s nations.

All this volatility triggered some actions on my part. On August 18th I sold my BBL position for 35,43 USD per share and bought it back for 34,71 USD per share a day later. On August 21st I sold my Fortum position (160 shares) for 14,76 EUR per share and on August 22nd I bought 175 shares back for 14,45 EUR per share. These actions were triggered by emotional panic, taxes played no part on it if you know what I mean.

On August 24th I bought 220 shares of TeliaSonera AB for 4,71 EUR per share, 75 additional shares of Fortum for 13,99 EUR per share and 12 shares of Johnson & Johnson for 92,36 USD per share. That’s unusual amount of activity for such a short period of time. The slide might continue or it might not. Despite the worries in economy, I consider these valuations to be very fair. Next month I hope to add on BBL. Yes, the cyclical ones are taking a beating and that might even continue but eventually fear will pass and greed shall prevail.

http://seekingalpha.com/news/2742936-stocks-putting-on-midday-rally-to-erase-worst-of-losses

This turned out to be yet another red day pretty much everywhere. Volatility is a friend though so I went ahead and bought another 12 shares of Deere & Co (NYSE:DE) for 83,25 USD per share. This puts the yield at 2.88% together with a low payout ratio which provides decent margin of safety on the dividend department. For me the short term guidance doesn’t mean that much as the long term fundamentals are still there. This is a cyclical company operating in a sector which might never be fashionable but I actually prefer (some of) my stocks dull. Eventually they will benefit from major trends such as growing population and increasing demand for efficient food production. This is my second purchase which I was originally planning to do quite some time ago when the share price was around 81 dollars. At the time I didn’t have enough cash to deploy and the price soon started climbing but better late than never. Next purchase will hopefully be done during Q1/2016 but it’s obviously depending on the valuation at the time.

Speaking of cyclical, BBL is starting to look interesting as well. There are some risks involved and it’s very difficult to come up with a solid vision on how the situation in China and world economy will play out during the next months or even years. Long term fundamentals are there but if we are looking into a lengthy bear market and slowing economy, they might not be able to sustain their current dividend or at least it might prove to be difficult.

Links: http://finance.yahoo.com/news/deere-profit-falls-40-percent-111410901.html