EPR Properties has been hit hard but it has already bounced back quite a bit. I’m putting my money on EPR surviving this COVID-19 panic. Sure, it will take time. Sure, they might have to reduce or even eliminate dividend. Sure, people might permanently stop golfing or skiing. I’m guessing that they won’t. In fact I’m quite sure that once the dust settles, there will be huge demand for that kind activities. Therefore I bought additional 30 shares for 29,90 USD per share. Let’s call this a speculative purchase.
There has been relatively many positive factors for Fortum lately. Uniper posted solid results, Fortum is getting positive publicity – well some negative as well for the coal usage – and Inderes increased target price today to 17 EUR per share. Share price hasn’t really noticed any of these so I bought additional 67 shares for 14.96 EUR per share. Considering the future potential, company metrics and overall state of the economy this appears to be very acceptable valuation.
Maintenance purchase since Fortum was trading ex dividend today. Bought additional 13 shares for 14,825 EUR per share. Uniper posted great quarterly results yesterday but that wasn’t too clearly visible on Fortum share price at least today. Could have bought more but I’m still keeping an eye on things and pacing myself.
Corona is hitting everything and REITs especially. Sure, temporary suspension of dividends is likely but that’s somewhat irrelevant short term noise. Private prison REITs appear to be very cheap as they were first hit by the political risks due to the presidential elections and then with the corona disaster which may very well spread in prisons in uncontrollable manner. This is unfortunate of course but for the long term not much has been changed. I doubt US government will scale down the usage of private prisons who ever may be sitting in white house in any given year. Considering the current economic situation and US way of living, it’s difficult to see any path in which there would be meaningful decrease in crime and punishments that follow. In worst case scenario these REITs could sell their portfolio to the government and I would be perfectly fine with that as well. With this in mind I bought additional 80 shares of GEO Group for 11.57 USD per share.
First quarter of the year is over and what a ride it was. First the markets were hitting all time hight valuations and then corona virus hit the global stock markets like a black swan on steroids. In retrospect quick adaptation by selling everything would have been the sensible choice but that doesn’t really fit into the DGI influenced strategy. Real impact on dividends will remain to be seen. Short term there will be a significant hit but there are also long term possibilities. Some of the strong companies should probably eliminate the whole dividend and invest the money wisely. Prime candidate for this would be Sampo Plc which could increase the stake on TopDanmark. For the main portfolio this quarter was quite bad with -37% drop in value. Impact on dividends is not visible on metrics until next quarter. Dividend income during Q1 was 1 302,58 USD and 101,40 EUR before taxes.
Overall this drop was not totally unexpected though it should be noted that exact timing and reason was unexpected to me. In retrospect it should have been quite obvious if one would have paid enough attention on the news coming in from China during January and February. Long term strategy has not been changed. I was always planning on buying at least for one turn of the economic cycle. Therefore I’ve naturally now moved back to normal buying mode. I’m quite well positioned for it unless of course if this economic turn hits my personal finances. Even that should be quite easily digestible event as I’ve prepared for the turn for quite some time now. This was mainly done by reducing the debt load to minimum. It’s quite easy to take this kind of hits without mortgage. This drop also opens the possibility to make some tax efficient moves by e.g. moving certain assets between providers.