Recent Buy: Kesko Oyj (B series)

I was waiting for Kesko shares to trade around 16 EUR per share which they did. I got greedy and tried to buy some for 15,50 EUR per share. Almost did but almost doesn’t count. Had to give up with that and bought additional 50 shares for 16,19 EUR per share instead. Not a big deal but will keep an eye on this in coming weeks and months as might still add at least additional 100 shares. Valuation seems to be very favourable when looking few years ahead. Effectively this is a play on construction sector without having to own construction companies. That is a cycle which has to be at least close to bottoming out and hopefully will eventually bounce back even in Finland.

Recent Buy: Pfizer Inc.

This is complicated one but I decided to buy additional 30 shares of Pfizer Inc. for 25,78 USD per share. Pfizer has been dropping for awfully long period of time. In a way for a good reasons but personally I see current valuation as a somewhat significant overreaction. There are real challenges with portfolio and potential for legal issues especially from the COVID-19 vaccines. Portfolio problems are hopefully short-term issues and vaccine related contracts should guard the company reasonably well. Latter is naturally just speculation as reality will set in only after someone tests those in court. My thesis is quite simple: Pfizer is still one of the big dogs and I prefer to buy pharmaceuticals when they are down due to patent cliff or for whatever reason that is typical for the sector. Each one of such positions is relatively small and I think of these as a basket of pharma stocks. For now Pfizer smells a bit of a yield trap as current yield is about 6,4% but let’s see how this plays out. Hopefully yield will drop towards historical average as valuation improves.

Recent Buy: Kesko Oyj (B series)

Dividend re-investment done in advance as this is effectively re-investing remaining dividends from Fortum and some that will be paid next week (CapMan and Kesko). Nothing special here as the thesis is same: I’ll just slowly nibble on Kesko unless I see valuations closer to 16 EUR per share. This time around I nibbled 20 additional shares for 16,99 EUR per share.

Recent Swap: Castellum AB for Nordea Bank

I originally initiated position in Castellum as a short term dividend turn around play with currency speculation twist. Both aspects lead to a failure as no turn around has yet been seen in dividend and – while I still think it is likely outcome – it will likely take still quite some time to materialise. Currency play failed as well since SEK has been deteriorating since this purchase. Today I decided to exit this position with a minor loss and bough additional 100 shares of Nordea Bank. I sold Castellum shares for 137,60 SEK per share and bought Nordea shares for 10,70 EUR per share. This move simplifies portfolio a bit and increases projected dividends without injecting new capital or re-investing received dividends. As a whole I expect Nordea to perform quite well for next couple of years.

Recent Buy: Nordea Bank

Dividend re-investment time once again and this time I’m even investing back to the same company. Nordea paid and I bought additional 100 shares for 10,74 EUR per share. Reasoning is quite simple: despite times being tough, Nordea seems to be very solid company with very reasonable valuation. Sure, interest rates are likely going down from here and it will have negative impact on Nordea. Yet they are buying back shares and have executed very well in zero interest rate environment in the past. Even after considering these headwinds current valuation seems to be on the low side (as it has traditionally been for European banking sector in general, often for a good reason).

Recent Buy: Kesko Oyj (B series)

Dividend re-investment time with additional 20 shares of Kesko Oyj (B series) bought for 16,74 EUR per share. Nothing special here as Kesko is in my list of additions for this year. I would like to see per share price closer or even below 16 EUR but these levels are fine as well. Challenging times for Kesko and for our local economy. Furthermore, competition has taken market share from Kesko in certain segments but for long term I consider current valuation to be fair.

Q1/2024 Results

First quarter is over and not much has changed in grand scheme of things. Same geopolitical tensions are still in play, US market has been extremely resilient and our Finnish economy has been even less resilient than I initially feared. Major global tensions with Russia and China are not likely to be resolved anytime soon. Hopefully same time frame does not apply to our local tensions with union strikes which are pretty much putting last nails – at least on short term – on the coffin for Finnish economy. First quarter results were in line with my expectations. Dividend income was 1504,89 EUR before taxes which consisted mainly of USD dividends (1573,31 USD) with minor EUR additions (49,60 EUR). This was to be expected as dividend income for second quarter is significantly higher than for any of the other quarters. Furthermore projected annual dividends indicate that portfolio provides so called lean FIRE level income (basic necessities) with minor margin for safety.

For the second quarter – and for remaining three quarters – I will probably increase my positions in Fortum, Kesko and Nordea Bank and probably in existing US healthcare/medical/pharma positions like Bristol-Myers Squibb, Pfizer and Medtronic. I might also initiate new position in Valmet but that remains to be seen. Next few months I’ll probably focus mainly in dividend reinvestment but all that naturally depends on market moves and valuations.

Recent Buy: Fortum Corporation

Fortum held their annual general meeting and therefore had their ex dividend date. Did tiny maintenance purchase of 25 shares for 11,14 EUR per share. Fortum as a whole is complicated company as they have many positive aspects, troubled past and problematic state owner. Yet for the long term it does hold strategic assets in very low carbon electricity generation. After this purchase I might have reached a full position of 700 shares but will be considering going for 1000 shares in small chunks.

See: https://www.fortum.fi/media/2024/03/fortum-oyjn-vuoden-2024-varsinaisen-yhtiokokouksen-paatokset

Recent Swap/Addition: 3M for Realty Income and Bristol-Myers Squibb

Today I sold my 50 3M shares for 94,36 USD per share. Main motivation for this was the fact that I want to skip the upcoming Solventum spin-off as I don’t want to have yet another tiny position and can do this now in tax effective way. Will I eventually initiate a position in 3M and/or Solventum? Perhaps. Depends on how both behave after the spin-off. For now I used these funds as planned before and added on existing positions with a purchase of 75 shares of Realty Income for 53,20 USD per share and 25 shares of Bristol-Myers Squibb for 54,38 USD per share. These purchases included also re-investing received dividends in addition to sales profits.

Additional information: https://investors.3m.com/news-events/press-releases/detail/1829/3m-board-of-directors-approves-spin-off-of-solventum

Recent Buy: Kesko Oyj (B) & Fortum Oyj

Maintenance purchase time and this time around I bought additional 10 Kesko shares for 17,94 EUR per share and 25 Fortum shares for 11,01 EUR per share. Nothing special here as Fortum seems to be reasonably valued. With Kesko I have doubts for short term and would like to see lower valuation to buy even remotely significant amounts. While waiting for better valuations – and spring dividend period to pass – I’ll just nibble these tiny chunks.