Q1/2015 Results
Dividends received during the first quarter of fiscal year 2015 (taxes not included):
- 240.10 USD (Q1/2014: 45,90 USD)
- 186 EUR (Q1/2014: 0 EUR)
Market value increased by 14,90%. US dividends decreased marginally from previous quarter (244,30 USD) mainly due to inactivity during Q4 and because of the temporarily suspended dividend by NASDAQ:ARCP. Latter one I expect to be restored during Q2/2015.
Recent Buy: Baxter International
It’s been a while since the last time I went shopping in NYSE. It was finally possible due to minor changes in EUR/USD exchange rate and USD income from existing positions. As planned I averaged down on Baxter International and bought 15 shares for 68,38 USD per share. Key factor here is the upcoming Baxalta spin-off for which some information can be found from here.
Company profile from http://www.baxter.com/:
Baxter International Inc. (NYSE:BAX), through its subsidiaries, develops, manufactures and markets products that save and sustain the lives of people with hemophilia, immune disorders, infectious diseases, kidney disease, trauma, and other chronic and acute medical conditions. As a global, diversified healthcare company, Baxter applies a unique combination of expertise in medical devices, pharmaceuticals and biotechnology to create products that advance patient care worldwide. Baxter had 2014 sales of $16.7 billion and has approximately 65,500 employees.
Recent Buy: Telenor
Plans are meant to be changed. I couldn’t justify converting euros to dollars with the current exchange rate. Otherwise I would have started with Baxter International but in the current situation I’ll wait a while to build up dollar position from dividends received from existing positions. Instead I opened a new position on Telenor by buying 55 shares for 152,70 NOK per share. This is my second Norwegian holding. I’m not super excited about the valuation, this more like a good enough position in the current situation. I might double the position during this month and after that focus on finding something from the euro zone. Right now I’m considering to play the QE scenario by loading up on iShares STOXX Europe Select Dividend 30 UCITS ETF for two to four months.
Summary from http://www.telenor.com/investors/company-facts/:
Telenor Group:
186 million mobile subscriptions
One of the top 500 global companies by market value *
Revenues 2014: NOK 107 billion
Workforce: employees (Q4 2014)
Listed on the Oslo Stock Exchange
Telenor Group has mobile operations in 13 markets and in additionally 14 markets through our ownership in VimpelCom Ltd.*Financial Times Global 500, 2012
Shopping List Update
Bull market just keeps on going and it’s very difficult to see a major shift happening very soon. It seems that the most likely outcome of the QE operations is a significant bubble which will continue to grow for couple of years. Volatility might increase in near term but it’s very difficult to imagine all the loose money not going to stocks especially in Europe. All this makes it a bit difficult to come up with a solid shopping list for the next 6 months or so. In general I’d need to consider or address the following issues:
- Portfolio balancing would require adding on existing positions in companies such as Baxter International, General Electric, AT&T, Aflac Inc and perhaps Deere. Baxter is special item here since I’d like to increase my position before the upcoming Baxalta spin-off.
- I’m not a huge fan of the idea of converting euros to dollars with the current exchange rate (existing USD income will help a bit)
- It’s much more difficult to find high quality companies from euro zone (especially ones that pay a quarterly dividend)
- In general I would like to increase my position in currencies other than euro and US dollar
Having said that, the expected shopping list and order to go as follows:
- Baxter International
- Unilever/Diageo/something european
- Telia-Sonera/Nordea/Gjensidige if there’s a temporary and significant enough drop during spring (otherwise these will be considered during Q4/2015 and Q1/2016)
- Canadian bank (looking at Royal Bank of Canada and Bank of Nova Scotia at the moment even though I have some concerns about the housing bubble)
- General Electric/AT&T/Aflac/Deere (it remains to be seen how the dollar valuation moves or is moved, I might consider converting dollars to euros as well)
Recent Buy: Gjensidige Forsikring
My latest portfolio addition reported it’s Q4/2014 results today. As a result it was down about 5 percent and close to my average price. That was enough for me to make the planned second purchase. On February 4th I bought another 70 shares for 125,00 NOK per share. Gjensidige is now a full position and so far my only Norwegian position.
The report itself (based on a quick browse through) didn’t contain anything extraordinary nor something to get super excited about. The following pretty much sums it up:
Proposed dividend:
The Board has proposed a dividend of NOK 2,950 million for the 2014 financial year, corresponding to NOK 5.90 per share. Ex-dividend date is 24 April 2015.Highlights 2014 (2013)
Profit before tax: NOK 5,399.6 million (4,574.1)
Profit per share: 8.38 (7.34)
Earned premiums: NOK 20,386.8 million (18,736.9)
Underwriting result: NOK 2,862.3 million (2,019.6)
Combined ratio: 86.0 (89.2)
Cost ratio: 15.0 (15.3)
Financial result: NOK 2,426.3 million (2,480.9)Source: https://www.gjensidige.no/group/feed-view?releaseid=1806384
Recent Buy: Gjensidige Forsikring
I’ve been looking for an european insurance company for many months now. I was originally looking into companies such as Allianz and Munich Re but settled for a company which has one of the most difficult names in the world to type without any mistakes. On January 21st I bought 70 shares of Gjensidige Forsikring for 123,80 NOK per share. Changing valuation of Norwegian krone played a minor role as well. This is a starter position to which I expect to add on during February.
From https://www.gjensidige.no/group/about-us:
Gjensidige group
We are a leading Nordic general insurance company. We also offer banking-, pension- and savings products in Norway.
Gjensidige has provided insurance services for nearly 200 years.
The Group’s operations are divided into six business areas:
General Insurance Private
General Insurance Commercial
General Insurance Nordic
General Insurance Baltic
Pension and savings
Online retail banking
Q4/2014 Results
Total dividends received (before taxes) during Q4/2014 were 244,30 USD. Overall portfolio performance during 2014 was above expectations as the market value in euros increased by 20,70% (including increased valuations, dividends and changes in EUR/USD exchange rate). Total dividends for the whole year were 123 EUR and 584,32 USD.
This was first full year for this portfolio. Strategy for the new year shall remain the same unless political situation offers extraordinary circumstances. Oil prices and NOK (currency, not stock) valuation is something I have my eye on in 2015. Otherwise I expect mainly to add on existing positions and perhaps open one or two new positions depending on the market situation and valuations.
Recent Buy: Nordea Bank AB and TeliaSonera AB
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.
Recent Buy: Nordea Bank AB
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.