Q3/2017 Results

Third quarter is over and done with. Major events impacting the portfolio during this quarter were the still ongoing tensions with North Korea, Nordea deciding to propose moving HQ to Finland and Fortum buying a major stake in Uniper. All this didn’t cause much fluctuations in portfolio value, rather minor swings back and forth and closing with 1,32% gains. As a preparation to the Nordea decision I’ve built a bit overweight position on the company via Sampo. I don’t see that as a huge problem as both are quality companies which act as a hedge against eventually rising interest rates. Therefore it’s not likely that I would sell neither one unless there’s a major overvaluation which would justify such a thing. However I did sell my stake in Fortum with a nice profit. News on the ¬†Uniper deal drove the share price up and since this deal increases the involved political even further, I didn’t see any problem in selling out. I might be interested in buying back the shares around 14 EUR (sold at 17,20 EUR) per share but that’s a big if. Political risk was significant before but this will take it to a whole new level.

Another short term target was to eliminate some of the debt which was a bit on the high side and above my target level. Selling my stake on Fortum made this possible even though I initiated a new position on Apple Inc. In this market situation I’d be inclined to reducing the debt even further but there are some interesting valuations to pursue as well. As I don’t see a clear mechanism for major market correction (as I ever would if one was coming) or quick changes in the interest rates, I might just as well keep the debt level target as is and keep investing as long as I can find reasonable valuations in quality companies.

Pre-tax dividends were 680,11 USD compared to 487,01 USD year before. Nothing special there, pretty much as expected. Perhaps the most positive thing was the increase from BHP Billiton which is turning around nicely. Last year they paid 39,20 USD for my 140 ADR shares and this year much nicer 120,40 USD which I expect to go up next year.

Links:

https://www.ft.com/content/af24ddac-a2d9-11e7-b797-b61809486fe2?mhq5j=e5

https://www.ft.com/content/4fc74af4-33f6-11e7-bce4-9023f8c0fd2e?mhq5j=e5

Recent Buy: Apple Inc.

I’ve been looking at Apple for quite some time now. Recent launch of new iPhone 8 and the new watch together with upcoming launch of the flagship iPhone X has been received with some mixed feeling. Stock price has reacted to this with a minor correction downwards as the launch hype really isn’t what it used to be. Flagship is likely to have very limited supply and it might cannibalise the sales of iPhone 8 models. After considering all this I’ve come to a conclusion that all this is likely just short term noise. Update cycle will be significant and overall the company is in excellent position to continue to generate massive income and also grow in multiple segments, services being a major one going forward. Therefore I decided to open an initial position on the company with a purchase of 20 shares for 151,40 USD per share. I see a strong possibility for the share price to reach 200 USD level in the first half of 2018. To support this I also upgraded my old iPhone 5S to new iPhone 8 Plus. Joking aside I’ll try to replace the DSLR camera I sold recently with the new iPhone.

Recent Trading Attempt: Fortum Corporation

Fortum came out today with a plan to buy a significant piece of Uniper. This is a decent speculation possibility which I decided to use. I sold all my 300 shares for 17,20 EUR per share with intention to buy those back once there’s more clarity and I fully understand how this fits into Fortum’s strategy. In my opinion there are plenty of unknowns here and it’s very much possible that we will see big swings presenting buyback possibilities with reduced price. In short term this also reduces the portfolio debt significantly which is a plus.

Link: Bloomberg

Recent Buy: Hennes & Mauritz AB

Old buy order was executed today as the Hennes & Mauritz AB stock dropped mainly because HSBC lowered their target price to 180 SEK per share. Funny coincidence that anonymous buyers were actively buying today. I didn’t expect this to happen right now but overall I consider this to be a decent valuation. These additional 90 shares bought for 197 SEK per share make this a full position for now.