Investments

Turmoil in Russia presented some unexpected possibilities today. On December 16th I bought 100 shares of Nordea Bank AB for 8,88 EUR per share and 200 shares of TeliaSonera AB for 5,04 EUR per share. Both transactions averaged down on existing positions. Nordea is now on slight overweight and TeliaSonera is a solid full position. Russia is a risk for Nordea but the stock seems to be very attractively valued at these valuations.

On December 15th I bought another 100 shares of Nordea Bank AB for 9.45 EUR per share. This was an existing half position which was now increased to full position. Similar move will be made for TeliaSonera AB at some point (most likely during Q1/2015).

Recent turmoil in commodity stocks resulted extra transactions which I didn’t have planned in my previous shopping list. This might not be a problem after all since I’ve decided to wait for better entry point for Munich Re (or some alternative european insurance company). Meanwhile I hope to increase my position on TeliaSonera AB, restore cash reserves consumed by the extra transactions and start monthly purchases on existing positions to maintain current weightings in the portfolio. On the other hand oil might present some unplanned entry points for companies such as Exxon and Chevron.

On December 11th I averaged down on BHP Billiton Plc and bought another 30 shares for 42,71 USD per share. There are some short term  risks involved here but looking at this on 10+ years perspective I consider this to be a sweet deal.

Plans are made to be changed. Recent changes in commodity prices presented an opportunity too good to pass. Oil price has been dropping heavily and most of the associated companies are feeling the heat caused by it. BHP Billiton has been the crowd favorite in DGI community lately and no wonder why. It’s very diversified company trading near 52 week low valuation with very low P/E, nice yield and relatively low payout ratio. It was easy to justify opening a new position by purchasing 30 shares for 47,39 USD per share on December 1st.

HP Billiton Limited engages in the discovery, acquisition, development, and marketing of natural resources worldwide. It produces iron ore, metallurgical and energy coal, conventional and unconventional oil and gas, copper, aluminum, manganese, uranium, nickel, and silver deposits. The company also explores, develops, produces, and markets petroleum with operating assets located in the deep water Gulf of Mexico, onshore U.S., and Australia, as well as in the United Kingdom, Trinidad and Tobago, and Pakistan; and holds potash exploration rights to approximately 14,500 square kilometers of prospective ground in the Saskatchewan potash basin in Canada. The company was formerly known as BHP Limited and changed its name to BHP Billiton Limited in July 2001. BHP Billiton Limited was founded in 1851 and is headquartered in Melbourne, Australia. BHP Billiton Limited operates as a subsidiary of BHP Billiton Group.

Source: https://finance.yahoo.com/q/pr?s=BHP+Profile

Monthly purchase was this time motivated by the need to balance out the overall portfolio. OHI was an existing position which was now increased to full position (full position here means roughly 5% weight). On November 20th I bought 30 shares for 37,27 USD per share. With this move my overall REIT exposure is a bit one the high side but it will balance itself out in few months.

In the following months I’m hoping to add on existing positions on TeliaSonera, Nordea, Aflac and Deere and to open a new position in one european company preferably in insurance business (Munich Re being a strong candidate). Timing and actual companies depend on the current market situation though.

ARCP has been on my extended watch list for a while. So far I’ve focused on much more conservative companies in the REIT sector and have invested in companies such as Realty Income Corporation (0) and Omega Healthcare Investors, Inc (OHI). Considering the accounting issues ARCP announced yesterday, I really can’t regret that choice. That being said, on October 29th I bought 90 shares of ARCP for 8,20 USD per share.

This is somewhat a risky play here but the position is very small or even insignificant. It’s hard to say if their current dividend is safe or not but according to the current information it might be. In such case this would provide a very, very generous yield on cost. On the other hand the company could be buried with lawsuits and eventually go out of business. In such case I would still get something to deduct in taxes. In that sense this is not that risky move after all. Yesterday I saw the stock closing +20.79% above my purchase price and at the time writing this, it’s down -5.70% from previous close. In near future this will provide plenty of turbulence but all in all, I feel that the issues they are having are not bad enough to justify the -35% hit they were taking yesterday.

Reference:

ARCP Analyst/Shareholder Conference Call Transcript

Buy the dip shopping spree continues. Nordea was on my published shopping list so it was natural candidate to follow TeliaSonera AB. On October 15th I bought 100 shares for 9,225 EUR per share. Previous dividend was 0.43 EUR per share which would increase my annual dividend income by 43 EUR.

Company profile from http://www.reuters.com/finance/stocks/companyProfile?symbol=NDA.ST

Nordea Bank AB (the Bank) is a Sweden-based bank engaged in corporate merchant banking, as well as retail banking and private banking. The Bank reports three main business areas, namely Retail Banking, Wholesale Banking and Wealth Management. Retail Banking offers a range of banking products and services to household and corporate customers in the Nordic markets, as well as in Poland and the Baltic countries. Wholesale Banking provides banking and other financial solutions to large Nordic and international corporate, institutional and public companies. Wealth Management provides investment, savings and risk management products, manages customers’ assets and advises individuals, as well as institutional investors on their financial situation. In April 2014, the Company sold Nordea Polish bank, life and finance businesses to PKO Bank Polski. In July 2014, it completed divestment of its shares in Nets Holding.

General Electric wasn’t on the published list but it happened to drop below 24 USD on the same day so I bought 50 shares for 23,96 USD per share. Quarterly paid dividend has been 0,22 USD per share which would increase my annual dividend income by 44 USD. GE really needs no introduction but one can be found from here: http://www.reuters.com/finance/stocks/companyProfile?symbol=GE.N

After some consideration I decided to postpone buying Allianz which was the first item on my shopping list. Few things contributed on this decision. First of all the tax refunding issues would make such investment a bit less ideal candidate. Secondly, Munich Re might be better candidate. Germany will just have to wait. I might pick something else from the european insurance sector.

Instead I moved on with the list and on October 9th bought 200 shares of TeliaSonera AB for 5,2050 EUR per share. Decent dividend expected for the next couple of years and most likely decades to follow. Very stable stock which can be a positive or negative thing depending on ones outlook. Previous dividend was 3.00 SEK and the company has specifically communicated that it shall target “to distribute an annual dividend of at least SEK 3 per share for the fiscal years 2014 and 2015″ (source).

Company profile from http://www.teliasonera.com/en/about-us/teliasonera-in-brief/:

TeliaSonera provides network access and telecommunication services that help people and companies communicate in an easy, efficient and environmentally friendly way.

International strength combined with local excellence is what makes us truly unique – and provides a world class customer experience, all the way from the Nordic countries to Nepal. This combination has brought groundbreaking 4G, a world class fibre network, and introduced 3G at Mount Everest.

We offer our services in the Nordic and Baltic countries, the emerging markets of Eurasia, including Russia and Turkey, and in Spain.

In May 2011 we united ourselves under one common symbol and identity. When you see this symbol, you will know that you are not only dealing with a local telecom operator – you are plugging into the world of TeliaSonera, a world filled with new and exciting possibilities

Founded in the 1850’s we are pioneers of the telecom industry, one of the inventors of mobile communications and founders of GSM. We are committed to continue to drive the information society and to constantly take our customers one step further. We have evolved from local operators into Europe’s fifth largest – in less than 20 years.

True to our heritage as telecommunication pioneers we continue to invest in high quality networks to meet the demand for bandwidth. Together with our partners and suppliers we will ensure that our customers have access to the best solutions available now and in the future. We will continue to focus relentlessly on ensuring a superior customer experience.

TeliaSonera. International strength combined with local excellence. At your service.

As anticipated in the previous shopping list update, Omega Healthcare Investors, Inc was the purchase of the month this time around. On September 19th I bought 30 shares for 34,64 USD per share. Current quarterly dividend being 0.51USD per share, the projected impact on annual income is 61,20 USD before taxes.

Company profile from http://www.omegahealthcare.com/CorporateProfile.aspx?iid=103065:

Omega Healthcare Investors, Inc. (NYSE:OHI) is a Real Estate Investment Trust (“REIT”) providing financing and capital to the long-term healthcare industry with a particular focus on skilled nursing facilities located in the United States.

At June 30, 2014, the Company owned or held mortgages on 563 skilled nursing facilities, assisted living facilities and other specialty hospitals with approximately 63,733 licensed beds (61,353 available beds) located in 37 states and operated by 49 third-party healthcare operating companies.

As a source of capital to the healthcare industry, Omega continually evaluates the opportunities, trends and challenges affecting the industry. Our goal is to identify long-term investments in quality healthcare properties with outstanding operators that provide the most favorable risk/reward ratio to our investors.

Stock information: http://www.omegahealthcare.com/stockinfo.aspx?iid=103065

 

While waiting for the stock market correction everyone is talking about, I’m considering the following stocks for my next purchases. Expected order is roughly as follows:

• Omega Healthcare Investors
• Allianz
• Nordea
• Telia-Sonera
• Aflac
• Deere

Bubbling under:

• Adidas
• Travelers Companies Inc.

OHI has been on my watch list for a while now so it is the most obvious pick. Aflac and Deere are existing positions but both are very likely to present attractive opportunities during the next 6-24 months. I’m not in hurry to add on those positions but instead will start on adding positions in european companies before the spring payouts. This is pretty much the preliminary shopping list for the next six months. Execution depends on the moods of Mr. Market.