As a risk management operation I decided to open a new account in Nordea Bank. It will complicate reporting a little bit but allows me to spread the risk in many ways. Most obvious is the protection against service downtime which could prevent me from placing buy or sell orders. Their pricing model also allows me to put the overall portfolio in a maintenance mode in which I will be making only small purchases (with reasonable fees) and use most of the new capital to pay down the portfolio debt. This also a way to put some pressure on my main broker Nordnet as they have some technical limitations that are not really acceptable, though I have to admit that they are not likely not notice this. Anyway, as the new account was opened and they had a campaign in which the stocks listed in Helsinki stock exchange could be bought without any fees, I re-initiated a position in Fortum Corporation with mere 10 shares bought at 17,73 EUR per share. I don’t expect to build a full position on the company due to the political risks mentioned before but slightly smaller position will do as there’s a lot to like in their strategy going forward.
Investments
Recent Buy: Omega Healthcare Investors, Inc.
Omega Healthcare Investors took another hit yesterday as possible class action law suit was made public. I used this opportunity to trade in and out in order to increase my position with additional 25 shares and to record some tax losses as a bonus. Cost basis for these additional shares was 26,86 USD per share. Let’s see what this litigation means in practise.
See: http://www.businesswire.com/news/home/20171120005769/en/EQUITY-ALERT-Rosen-Law-Firm-Announces-Filing
Recent Buy: Nordea Bank AB and Telia Company AB
Nordea has been dropping lately mainly because of the speculation on Swedish housing bubble and uncertainties in the long term business model. Latter one is kind of the reason I’m buying right now. I expect to see a banking merger motivated partly because of these concerns and I expect Nordea to be on the right side of the table in such event. I suspect that this has has been Sampo’s goal all along. It might take couple of years to happen and major correction before that is a significant risk but one I’m willing to take. That’s why I today bought additional 100 shares for 9,98 EUR per share.
Telia dropped today probably just because it’s Telia. Sure there are uncertainties in operator business models as well but I anticipate bright enough future for companies such as Telia. Strategic state ownership and associated regulation should work in their favour even though growth prospects are a bit limited. I consider Telia to be the bond substitute in my portfolio and therefore bought additional 250 shares for 3,764 EUR per share.
All this puts the portfolio debt level slightly above the target level. Depending on the market situation I might once again focus on reducing the debt but should there be attractive enough valuations, I’ll increase it accordingly.
Recent Buy: Sampo Plc A
Sampo reported third quarter results today and those were excellent as one could expect. Market reaction was a little bit strange as the stock went slightly down. In preparation for my eventually happening exit on Nordea, I decided to buy additional 27 shares for 45,10 EUR per share. This rounds up the total share count as well. Not that it matters but it kind of does.
See: http://www.sampo.com/globalassets/arkisto/taloudelliset-raportit/2017/sampo_q3_2017_en.pdf
Recent Buy: NEL ASA
This is a purchase I’ve been thinking about for quite some time now. NEL ASA reported their 3rd quarter results today and I’m still liking what I’m seeing. I consider this to be a slightly contrarian play on electrification of transportation. EVs are clearly going to be a big thing, there’s no doubt about it, but I still see a clear bull case for hydrogen. With this in mind I initiated a position on NEL ASA with a purchase of 7000 shares for 2,94 NOK per share. It’s a bit odd position for my dividend portfolio but as I’ve said in the past, it will be an ultimate dividend growth stock if and when it starts paying one. That remains to be seen and I’m willing to wait for that to happen.
See: http://nelhydrogen.com/news/third-quarter-2017-results/
Recent Buy: Nordea Bank AB
Nordea dropped today after reporting 3rd quarter results. Valuation was just so compelling that I decided to buy additional 100 shares for 10,50 EUR per share. I don’t expect this to be exceptionally long position as I suspect that Sampo has big plans for Nordea. I wouldn’t be surprised if they complete the relocation to Finland next year, optimise the operations including the IT infrastructure and announce a merger in 2019 which could complete in 2020. They appear to be in excellent shape going forward and the gradually rising interest rates should work in their favour as well.
See: https://seekingalpha.com/pr/16980447-nordea-bank-ab-publ-3rd-quarter-results
Recent Sell: General Electric Company
Well this escalated quickly. I went over the numbers again and made projections for the next six to twelve months and as a consequence decided to eliminate the whole GE position consisting of 230 shares for 22,013 USD per share. There’s a significant risk for an extremely hard reset for the company. For the short term is also allows me to take some tax losses from my original entry position. I’ll keep an eye on the company for a re-entry but don’t expect it to happen until the first half of 2018. Then again my thesis might be completely wrong in which case I’ll try to use the cash to trim down the portfolio debt which I would like to eliminate completely within a year or so.
Recent Buy: General Electric Company
General Electric is a company on which I’m moderately bullish in the long term. Calling the bottom however is really difficult since the company is very much in restructuring mode for the months to come. None the less I decided to buy additional 100 shares today for 22,50 USD per share. This makes it a full position but should there be a steep decline on possible dividend cut news, I might overweight it for short term. Personally I think that that the dividend cut is pretty much priced in already but who knows. I wouldn’t be surprised if it goes to mid teens at some point but for the long term I see plenty of potential considering the size of the company. Aggressive restructuring might provide significant upside from the current valuation. I’ll consider this to be a contrarian limited risk position in my portfolio.
https://seekingalpha.com/news/3302970-general-electric-tumbles-5-percent-downgrades-baml-buyer
Recent Sell: Coca-Cola Company
Coca-Cola is one of those companies you should never sell but that’s what I did. This was a minor position of 38 shares and the valuation has been a bit stretched. I sold mine at 46,33 USD per share. It’s a high quality company but given the valuation and growth potential, my money might be better invested elsewhere. I’m currently monitoring GE and Apple for additional purchases and on the home front Sampo is still looking extremely interesting even though it’s currently my single largest position.
Recent Buy: AT&T Inc.
AT&T went down today after reporting that Q3 earnings will be impacted by natural disasters. To me this appears to be a clearly too dramatic market reaction so I bought additional 30 shares for 36,30 USD per share.