This is most likely the last trade for FY2015. I decided to skip on GE and Telenor and instead slightly increased my position on Deere today by purchasing 13 shares for 77,35 USD per share. There’s nothing special behind this action but I skipped GE because of the valuation. I’m hoping to add on it in the 28-29 range. Telenor however is on my buy range at the moment which makes it the strongest candidate for January purchase unless GE drops to the mentioned range.
Recent Sell & Buy: BHP Billiton Plc
Nothing new here, just a minor strategic operation with NYSE:BBL. As it became evident that basically all miners would be taking extra beating, I decided to sell my 110 shares on December 7th for 23,2401 USD per share. The following day I bought back 130 shares for 21,68 USD per share. As a bonus I recorded some losses to be used later for tax deductions.
Long term fundamentals haven’t really changed but the current situation is challenging. There could be a dividend cut in the cards but personally I wouldn’t event mind having one. Current situation in the overall market provides excellent possibilities for strategic moves by such a big player.
Recent Buy: BHP Billiton Plc
I’ve been waiting to add on various cyclical companies but BHP Billiton has been taking extra beating lately due to various problems. Latest one was the collapsing of a dam in Brazil in a mine co-operated with NYSE:VALE. It’s tragic but also hopefully a one time indecent that has very little to do with the company itself. Sure there are risks involved with this purchase. Cleaning up this mess can cost anything from tens of millions to hundred millions dollars. On top of that there’s the overall economic situation which alone is a real risk for the dividend. Then again the long term fundamentals haven’t really changed. Having said that, today I bough additional 50 shares for 26,93 USD per share which brings my total up to 110 shares.
Additional information: http://seekingalpha.com/article/3665126-bhp-vale-samarco-dam-failures
Recent Buy: VEREIT, Inc
As anticipated, balancing positions continued with NYSE:VER (formerly NYSE:ARCP). Troubled company in transition process and my only truly speculative position. On November 6th I bought additional 130 shares for 8.18 USD per share. I still doubt that I would build a full position on VEREIT but the jury is still out on that one. Interest rate issues will play a significant part here but I ended up with a target value in the neighbourhood of 9.90-10.10 USD per share. That’s just a side note though as my primary focus is on the dividends.
One view on the matter: http://seekingalpha.com/article/3657246-net-lease-reit-vereit-continues-to-execute-on-investor-day-blueprint
Recent Buy: Telenor ASA
Balancing act for the portfolio as this transaction wasn’t motivated by timing. Yesterday I bought additional 65 shares of Telenor ASA for 164,50 NOK per share. Since I’ve gone a bit overweight on some assets, there’s a bit catching on to do. In the following months I should balance my position on General Electric, Coca-Cola and Vereit. Vereit is a tough one as the company has a bit problematic past which hardly justifies a full position. Then again it’s the only fully speculative position on the portfolio and in that sense fits to my current strategy. I’ll most likely build a half position on it.
I’ve also build a 10% position with external liabilities. These positions are also covered by my emergency fund which I’ve been building up lately. I would like to continue doing so for couple of months so it will be a bit problematic to come up with additional free cash for next month’s transaction. I might even skip that since this month has had plenty of extra action. It remains to be seen.
Telenor Investors Site: http://www.telenor.com/investors/
Recent Buy: Omega Healthcare Investors, Inc.
Yet another addition to an existing position on Omega Healthcare Investors (NYSE:OHI) as I bought additional 40 shares for 35,78 USD per share. Lately I have also updated the strategy to allow external liabilities up to 10% of the portfolio value. Such liabilities can pump up the ROE as I would be paying an interest rate of 0.99% for it. Comparing that to a dividend yield above 6% in case of NYSE:OHI makes it a no brainer as long as the involved risks are understood. Then there are the tax benefits on top of that.
Corporate profile: http://www.omegahealthcare.com/corporateprofile.aspx?iid=103065
Recent Buy: TeliaSonera AB
Safe, stable and boring? Things change quickly as TeliaSonera (HEL:TLS1V) has been accused of operating in not so legal or moral grounds. Muddy Waters Research issued the following open letter to the board of TeliaSonera: http://d.muddywatersresearch.com/wp-content/uploads/2015/10/MW_TLSN_OpenLetter_10152015.pdf. Later the company responded with the following statement: http://www.teliasonera.com/en/newsroom/press-releases/2015/10/teliasonera-comments-on-open-letter-to-the-board.
This led me to take a boring gamble as today I bought additional 250 shares for 4,38 EUR per share. Personally I don’t mind grapping falling knives since catching the opposite kind of knives would require me to position myself in uncomfortable heights.
Recent Buy: Raisio Oyj
Today I added to a really small position in Raisio Oyj (HEL:RAIKV) by purchasing 50 shares for 4,30 EUR per share and 200 shares for 4,40 EUR per share. This action has been queued for a while now but there were always something else higher up on the queue. Yes, there would have been better valuations available couple of months ago but this is good enough for me and I expect to build a full position on the company.
Q3/2015 Report
This quarter was full of market turbulence: worries about China slowing down, FED hiking the interest rates, commodities taking a beating. Market value of the portfolio decreased by 6.81 percent during this quarter. Compared to the Q3 last year, there was significant increase in the dividends received. Compared to the previous quarter though, there was a slight decrease. This is largely explained by the fact that BBL paid a dividend of 74,40 USD during Q2 but not in Q3 (they use a semi-annual dividend policy). Considering this, the overall performance was satisfactory.
Passive income during Q2 (before taxes) was as follows:
375,96 USD compared to 173,89 USD for Q3/2014 and 333,63 USD in Q2/2015.
Update: Removed false information since BBL paid during Q3 after all. Transaction didn’t show in my brokerage account until today.
Recent Buy: Fortum Corporation
Today I bought 70 shares of Fortum Corporation for 13,36 EUR per share. Minor addition to existing position with seemingly reasonable valuation. In reality this is a piece of a cash pile standing on two legs made of political risk. It remains to be seen which – Russian or domestic – will proof to be worse.
I had much faith in former CEO who still stays in the company and high hopes for the new CEO. They have plenty of cash to invest which should proof to be very effective in the current market environment. Then again majority of the company is owned by Finland which has a lengthy history of killing cash cows.
Fortum Investors Page: https://www.fortum.fi/en/investors/pages/default.aspx