CapMan was trading lower today so decided so sell my tiny position on Hexagon Composites and bought CapMan as replacement. Hexagon position was really small starter position which I hadn’t managed to build up. It was really unlikely that I would be able to build that position in coming months so this move made sense to me given the valuation CapMan had. I bought additional 100 shares for 2.40 EUR per share. Hexagon Composites was very much secondary position and overall I think that I might end up exiting the whole sector during this year or next as I expect eventual buy out for NEL.
Corona is spreading all around the world and stocks took a nose dive as a result. I was building a position on CapMan but stock price went up before I was able to complete the position. Now with corona induced drop I decided to continue and bought additional 230 shares for 2,51 EUR per share. This is a balancing act as we could be headed towards a major drop instead of mild correction seen so far. Therefore I’d like to keep decent amount of ammunition available but don’t want to sit out completely.
Monthly purchase and this time around it was once again EPR properties. I bought additional 20 shares for 72,30 USD per share. Nothing much to say about this as I’ve been building this position for a while now. This position could now be considered full or one purchase shy from it as my REIT exposure tends to be on the high side already. This purchase was also partially dividend re-investment action as I try to make at least one purchase per month on both porfolios.
Short term watch list going forward could include various kinds of stocks such as CapMan, AbbVie, Barrick Gold, Freeport-McMoRan and Brookfield Renewable Partners. CapMan is a bit tricky one as dividend ex-div is getting close and they reported excellent results today so valuation tends to be on the high side for short term. On the other hand it’s a full position in the making so I just might have to keep building it in steady manner. I’m also looking for additional euro stocks to host in Nordea which doesn’t provide currency accounts (and dividend income in other currencies would include conversion costs there).
Minor maintenance with a swap of Loudspring for CapMan Plc. Sold the tiny position that consisted of 550 Loudspring shares for 0,338 EUR per share and bought additional 110 CapMan shares for 2,315 EUR per share. This was mainly done because I have some indirect exposure for Loudspring even without this and it’s very likely that I have plenty of time to jump back in should there be significant change on the outlook. Essentially this is is streamlining effort which helps on the process of building a real position on CapMan.
First real purchase in the process of building a position on CapMan with a purchase of 320 shares bought for 2,27 EUR per share. More will follow during next few months unless something else comes up. CapMan serves a proxy for quite interesting sectors when we as societies are in the beginning of a major shift. As they but it:
At CapMan, we build better organised, managed, and financially stable companies, because this contributes to overall economic well-being. More jobs and innovations equal better conditions for the society. Similarly, we invest in real estate and infrastructure, because we believe that functional high-quality environments and utilities are cornerstones for functioning societies.
Most of all it is a dividend oriented company and therefore fits into my strategy as a potential combination of high initial yield and decent dividend growth. On top of that I suspect that there might be some real M&A possibilities in coming years which could lead to significant price appreciation. Recent insider activity is also a plus at this point.
Dividend re-investment for the portfolio hosted in Nordnet with the purchase of 15 EPR Properties shares. Purchase price was 69,99 USD per share. Not much to say about this one. Still reasonably priced and company profile in general is acceptable considering the phase of the market. There are decent valuations available but it’s very difficult to find anything really interesting to buy at the moment in the dividend scope. Personally I doubt we would be getting a major correction next year but it is possible of course. Political tensions have been pushed back a bit but no doubt will come back at some point especially with the approaching US elections and possible deal with China.
Tiny maintenance purchase for portfolio hosted in Nordea. CapMan is a position which I intend to build in the coming months or during Q1/2020 but for the “mandatory” at least one transaction per quarter I bought mere 20 shares for 2,045 EUR per share . CapMan will be included in primary portfolio even though hosted in Nordea. I plan to buy some of the primary portfolio holding for the portfolio hosted in Nordea as it will spread the broker risk. Most likely these will be mainly European stocks listed in euros as my primary broker (Nordnet) has accounts for various currencies which allows me to decide when to convert dividends received in various currencies. For now the portfolio hosted in Nordnet will in one kind of maintenance mode (new purchases being mainly dividend re-investments).
It’s been a while since my last real purchase in main portfolio but today there was three. Hopefully this wasn’t motivated by the negative news from Nordea Bank and Sampo. Both of which are slashing next dividend. First purchase was additional 15 shares of EPR properties bought for 79,46 USD per share. Nothing special here. Decent valuation and acceptable company profile given the interest rate environment and phase of the cycle. GEO Group and CoreCivic are much more interesting. Both are in the much hated for profit prison business which has taken a real beating as the US presidential election approaches. Personally I consider it extremely unlikely that a) US would elect really left leaning president such as Elizabeth Warren and b) would really move away from private prisons any time soon. Having said that, you never know what the general public does and therefore these come with high risk which is at least partly priced in. Very high yield above 10% is also reflecting it as a result. Therefore I bought 80 shares of CoreCivic for 16,17 USD per share and 80 shares of GEO Group for 16,09 USD per share.
I decided to restructure my finances including mortage. In my current strategy debt to equity ratio is one key metric. I plan to include mortage in the debt component but exclude the attached real estate from equity. This is because co-owned real estate used as home is by no means liquid asset. In theory it doesn’t make sense to pay off cheap loans too soon but there are many factors to it. One is the current cycle phase and trade war in general which makes this likely a decent time to lock in some tax efficient gains and play safe. Therefore I sold today 650 shares of Telia Company for 41,18 SEK per share (roughly break even), 70 shares of Apple Inc for 202,1101 USD per share (roughly 3000 EUR profit plus dividends which I can offset with old losses) and 2500 shares of NEL ASA for 6,68 NOK per share. There’s a good chance that I’ll regret these at least for short term. I still see a 300 USD per share bull case for Apple but then again it’s very much possible that I can buy these back as I expect the trade war issue to remain well beyond US elections next year. NEL is a question mark but I kept 3000 shares just in case my bull thesis for 2025 plays out the way I expect.
Pfizer is about the spin-off it’s generics business and the impact on company profile and dividend strategy remains to be seen. This move is too complex for me understand in detail but I expect further short term pressure on the share price while this saga plays itself out (as many conservative shareholders will wonder how this will play out). I decided to protect the invested capital and sold all 100 shares for 35,44 USD per share (originally bought in the 32,36-33,79 range in 2017). During this time I received 304,00 USD (pre tax) in dividends. I used this capital to buy 10 shares of 3M company for 163,12 USD per share and 20 shares of EPR Properties for 76,77 USD per share. 3M is what it is. Not cheap but acceptable. EPR is a monthly paying REIT which is reasonably recession resistant and should benefit from the insanely low interest rate environment. I might add GEO Group as well since prison REIT should be quite a solid bet going into recession.