Tiny maintenance purchase for portfolio hosted in Nordea. CapMan is a position which I intend to build in the coming months or during Q1/2020 but for the “mandatory” at least one transaction per quarter I bought mere 20 shares for 2,045 EUR per share . CapMan will be included in primary portfolio even though hosted in Nordea. I plan to buy some of the primary portfolio holding for the portfolio hosted in Nordea as it will spread the broker risk. Most likely these will be mainly European stocks listed in euros as my primary broker (Nordnet) has accounts for various currencies which allows me to decide when to convert dividends received in various currencies. For now the portfolio hosted in Nordnet will in one kind of maintenance mode (new purchases being mainly dividend re-investments).
Recent Buy: EPR Properties, CoreCivic & GEO Group
It’s been a while since my last real purchase in main portfolio but today there was three. Hopefully this wasn’t motivated by the negative news from Nordea Bank and Sampo. Both of which are slashing next dividend. First purchase was additional 15 shares of EPR properties bought for 79,46 USD per share. Nothing special here. Decent valuation and acceptable company profile given the interest rate environment and phase of the cycle. GEO Group and CoreCivic are much more interesting. Both are in the much hated for profit prison business which has taken a real beating as the US presidential election approaches. Personally I consider it extremely unlikely that a) US would elect really left leaning president such as Elizabeth Warren and b) would really move away from private prisons any time soon. Having said that, you never know what the general public does and therefore these come with high risk which is at least partly priced in. Very high yield above 10% is also reflecting it as a result. Therefore I bought 80 shares of CoreCivic for 16,17 USD per share and 80 shares of GEO Group for 16,09 USD per share.
Q3/2019 Results
Third quarter is over and this time around it was a bit special one. I decided to restructure my overall finances and paid off my mortgage. This operation involved some stock sales as well since the main motivation was to trim things into a more defensive position (keeping the investment debt carried in portfolio in low end of the allowed range). In global economy main risks are still in place as I expected. Recession risk is real but then again political decisions can easily cause big shifts in a way or another. I might increase cash position in fourth quarter but that remains to be seen. I’m also considering splitting the main portfolio between Nordnet and Nordea. This could be achieved by making additional purchases in portfolio hosted in Nordea.
Third quarter was quite solid considering all the global challenges. Dividend income was 1 337,50 USD and main portfolio value increased 5,45% during the quarter.
Sold: Telia Company, Apple Inc. & NEL ASA
I decided to restructure my finances including mortage. In my current strategy debt to equity ratio is one key metric. I plan to include mortage in the debt component but exclude the attached real estate from equity. This is because co-owned real estate used as home is by no means liquid asset. In theory it doesn’t make sense to pay off cheap loans too soon but there are many factors to it. One is the current cycle phase and trade war in general which makes this likely a decent time to lock in some tax efficient gains and play safe. Therefore I sold today 650 shares of Telia Company for 41,18 SEK per share (roughly break even), 70 shares of Apple Inc for 202,1101 USD per share (roughly 3000 EUR profit plus dividends which I can offset with old losses) and 2500 shares of NEL ASA for 6,68 NOK per share. There’s a good chance that I’ll regret these at least for short term. I still see a 300 USD per share bull case for Apple but then again it’s very much possible that I can buy these back as I expect the trade war issue to remain well beyond US elections next year. NEL is a question mark but I kept 3000 shares just in case my bull thesis for 2025 plays out the way I expect.
Recent Swap: Pfizer for 3M and EPR Properties
Pfizer is about the spin-off it’s generics business and the impact on company profile and dividend strategy remains to be seen. This move is too complex for me understand in detail but I expect further short term pressure on the share price while this saga plays itself out (as many conservative shareholders will wonder how this will play out). I decided to protect the invested capital and sold all 100 shares for 35,44 USD per share (originally bought in the 32,36-33,79 range in 2017). During this time I received 304,00 USD (pre tax) in dividends. I used this capital to buy 10 shares of 3M company for 163,12 USD per share and 20 shares of EPR Properties for 76,77 USD per share. 3M is what it is. Not cheap but acceptable. EPR is a monthly paying REIT which is reasonably recession resistant and should benefit from the insanely low interest rate environment. I might add GEO Group as well since prison REIT should be quite a solid bet going into recession.
Recent Buy: NEL ASA
Just another maintenance purchase. My existing NEL position wasn’t even hundreds so I added to missing 70 shares for 6,975 NOK per share. These small maintenance purchases are mainly done to make sure that I have enough activity on the secondary portfolio to keep the costs down (at least single event for every three months). Other that there’s not much to say about this. I still think the hydrogen mega trend is in the making and NEL is well positioned. It’s a shame that they will probably be bought out eventually but let’s see how long it will take and what kind of terms it will have.
Q2/2019 Results & Strategy Update
Q2 is over and not much has changed. The very same problems in world economy are still in place. Markets are close to all time high valuations but there’s increasing discussion about recession or worse. I’ve successfully eliminated effectively all debt within the portfolio and the question remains: should I keep building cash reservers or look for investment opportunities? There are some interesting possibilities such as Wärtsilä corporation (dropped today on earnings but long term energy mega trend story is still there) or EPR properties (new REIT position with monthly and relatively high dividend). On the speculative growth side there’s the Second Sight Medical Products which I’ve been looking at as a speculative brain-machine-interfacing position.
Q2 results didn’t contain any major surprises. Dividend income was 3047 EUR before taxes which can be compared to 1824 EUR year before. Solid growth mostly fuelled by additional investments.
Recent Buy: Hexagon Composites & Nexgen Energy
Yet another tiny maintenance purchase. Today I bought additional 100 Nexgen Energy shares for 2,17 CAD per share and 10 Hexagon Composites shares for 41,20 NOK per share. Nothing new here as hydrogen and uranium sectors are currently the most interesting plays I know. I’ll continue to make these small purchases monthly and will consider additional bigger purchases case by case. I’m also considering additional positions within these sectors as fuel cell manufacturer(s) would fit in nicely and uranium sector in general is really difficult one to pick winners in.
Q1/2019 Results
First quarter is now over and it can perhaps be best described as unexpectedly quick rebound from previous quarter. Main dividend portfolio value increased over 15% in value during the quarter. Received dividends totalled 1442,40 USD including one time extra dividend from BHP Billiton. Main problems are still in place as the trade war tensions between US and China have not been resolved and the brexit resolution was once again pushed forward. Main portfolio is currently in maintenance mode in order to deleverage while waiting for better opportunities and some kind of resolutions for the main problems in global economy. One extra ingredient in this are the local elections which might end up changing the local tax environment from quite bad to extremely bad. This remains to be seen.
Recent Buy: Hexagon Composites
I was originally thinking about initiating a position on Powercell Sweden to complement the primary hydrogen position in NEL ASA. I decided to skip on it for the time being and initiate a position on Hexagon Composites instead. I’m still looking into fuel cell manufacturers but let’s see if I’ll ever pull the trigger. For now I will most likely focus on building a minor position on Hexagon. This initial position consists of mere 70 shares bought for 30,85 NOK per share.