Q1/2024 Results

JP

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

JP

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

JP

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

JP

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.

Recent Buy: Bristol-Myers Squibb Company

JP

Today I initiated a new position in my Big Pharma basket as I bought initial 25 Bristol-Myers Squibb shares for 49.87 USD per share. This was mainly dividend re-investment from other positions with small injection of fresh capital. Quite basic addition in the basket of big pharma players. Stock price has dropped and subsequently yield has gone up. They have been very active on acquisitions and it remains to be seen if those moves truly materialise in coming years. My initial target position is modest 100 shares which I’ll hopefully build during 2024 but it depends on market moves.

See: https://www.bms.com/investors.html

Recent Buy: Kesko Oyj (B)

JP

Tiny maintenance purchase of 10 shares of Kesko Oyj (B series) at 18,115 EUR per share. Nothing new here. Will just nibble very slowly as share price has increased quicker than I originally expected considering the overall state of economy. Might bite bigger chunks if we see a correction in share price. If not, I’ll just keep of nibbling and see where I end up.

Q4/2023 & FY2023 Results and FY2024 Strategy

JP

Another year has passed and it was yet another with multiple global issues: Russia’s war in Ukraine, tensions with China, tensions in middle east, inflation and energy crisis just to name few. Considering all this markets have been surprisingly strong and in a way western economies have shown even some strength while dealing with these issues. There has been plenty of weakness but for example adaptation to energy crisis was way better than I personally expected. Sadly majority of these issues are likely main topics for 2024, perhaps even for 2025.

Q4 was pretty OK as main dividend account grew 5,67% and whole portfolio produced 2045,84 EUR pre-tax income during the quarter when converted to Euros at the time of writing (of which 181,91 EUR was interest paid for cash reserves, not much but significant indication of the impact from inflation and change in interest rates). Year over year changes were OK for FY2023. Very conservative allocation aimed for controlled dividend income resulted portfolio value increase of 1.78% and produced 10312,73 EUR pre-tax income when converted to Euros at the time of writing. This is minor drop in dividends compared to previous year, mainly a result of dividend cuts (some due to listed global issues, some just because of extra high payments during previous year) and due to exiting certain positions and therefore missing some payments completely (reinvested money will convert to dividends next year).

For FY2024 I have very mixed feelings. Aftermath of said global issues will likely take significant time and especially Finish economy is in very bad shape with the insanely high debt load and increased interest rates. Therefore my plan for 2024 is quite conservative: I’ll try to buy something every month but mainly with smaller maintenance purchases and dividend reinvestments. For now I have my my eye mainly on following companies: Fortum, Kesko and Bristol Myers Squibb. Perhaps also something in the REIT space depending on how the US interest rate cycle evolves.

Recent Buy: Kesko Oyj (B)

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Maintenance purchase once again with Kesko Oyj (B series) as I bought additional 20 shares for 17,55 EUR per share. Finnish economy doesn’t look too good and forecasts for next couple of years are indicating decline in GDB. National performance is awful not only in Nordic but also in European context. This is bound to have negative impact on Kesko but then again tax reforms could partially mitigate that. Current valuation appears decent to me but I’ll just nibble with these tiny maintenance purchases while waiting for better valuation. Ideally I would like to aim for a total position of 500 shares but it remains to be seen if I’ll ever get there. I would like to see share price around 16 EUR to make any bigger moves.

Recent Buy: Pfizer

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Minor addition on Pfizer with additional 20 shares bought for 30,53 USD per share. Broker had black friday campaign so reinvested some USD dividends without transactions fees. Pfizer has dropped significantly as Covid boost is gone and some people apparently wouldn’t mind seeing Pfizer and others being hit with legal issues. Still, drop seems a bit drastic given the size of the company and impact on whole sector. I will not likely add much on the position though since I consider this sector as one that is best approached with a basket of stocks. If I would be truly able to analyse their backlog, I would probably work in big pharma myself.

Recent Buy: Kesko Oyj B

JP

Maintenance purchase and dividend re-investment once again in the form of 10 Kesko Oyj shares bought for 17,29 EUR per share. Tiny steps and nothing special here. Kesko share recovered already a bit so won’t make any big moves for now. Valuation is still very reasonable given the overall quality of the company and international – well Scandinavian – potential.