Sunday, July 8, 2018

Preparing Our Portfolio For The Next Bear Market

The stock markets are in a mature bull phase, and I was thinking about how to improve our portfolio to adapt to this situation. I don't know when will come the next bear market, and I think that nobody can predict it. Because of it I can only do what I have influence on: change our portfolio to fit for an unpredictable future.

There are a lot of good shares, what we can buy at a reasonable price, but we try to choose those, that are working in non-cyclical industries. If I see two good opportunities I will choose for our portfolio the one that works in non-cyclical industry. The non-cyclical companies will perform better in the next economic recession, and we will have more reliable dividend income from them.

Because we have large positions in cyclical shares like Royal Dutch Shell (RDS.A), BHP Billiton and BMW we had to build sizable positions in non-cyclical companies. In June we bought the shares of Walgreens Boots Alliance (WBA) and CardinalHealth (CAH) companies. Now WBA is our second largest position. The shares of BHP Billiton and Royal Dutch Shell (which is our largest position) were bought during the oil price downturn in 2015-2016.

To streighten our portfolio we can buy consumer staples, what would be really great, but I think that the threat of Amazon created a good opportunity to buy healthcare related shares and they provide better valuation than the most consumer staples.

WBA and CAH are the members of David Fish's list. Cardinal Health increased it's dividend in the last 21 years and WBA is a dividend aristocrat, which increased it's dividend in the last 42 years. I believe, that both of them will be good investment for the next decades.

Disclosure: We have Royal Dutch Shell, BHP Billiton, BMW, Walgreens Boots Alliance and Cardinal Health shares.

Wednesday, June 6, 2018

Recent Sell - Macy's

I bought a few shares of Macy's at $19.02 seven months ago. At that time, the panic about the impact of the Amazon on the offline retailers was really high. Almost every financial newspapers write about it, and it was a good opportunity to buy an undervalued good company. I saw, that the company worth more, and it can easily pay out the dividends from it's FCF. I thought that I can collect my dividend payments until the market realize, that the company worth much more. So I had a great, 7.94% dividend yield, while I am waiting.

Yesterday I sold all of my shares at $39.79. It was a really good business for me, because I can double my initial investment. If I would not sell it, now I can collect 3.77% dividend yield. This yield is not so good for me for a fairly valued company. I think, that there are much better investment possibilities at todays market. I hope, that I can find some undervalued dividend growth stock in a few days.


Sunday, February 11, 2018

Recent Sell & Buy – January – TEVA, Ventas, Gilead Sciences

I bought a few shares of TEVA in August 2017. I thought that the market overreacted the announced goodwill impairment, and it has a good valuation. As I saw the revenue and EPS decline, and the large restructuring, I felt that I can not predict the profit of the company for the next few years and I closed my long position at $21.41. It brings me a small profit for this few months.



(Source: www.finviz.com)

I bought Ventas (VTR) shares at $56.19 which means 5.52% dividend yield for me. I think that VTR is a great company, which increased it's dividend in the last 7 years and has not decreased it in 2008-2009.


(Source: www.finviz.com)


As I have more money after selling my TEVA shares, I bought a few shares of Gilead Sciences (GILD) at $80.74 which gives me 2.86% dividend yield (after the recently announced dividend increase).


  (Source: www.finviz.com)



Full disclosure: Long VTR, GILD

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Sunday, December 31, 2017

Profit of Hungarian Shares in the Last 10 Years


I calculated the profit of the largest publicly traded Hungarian companies. I used the share prices from the end of 2007 as a starting point. So, it is before the Great Recession of 2008-2009, that's why, the beginning valuation is really high, and the profits are not so good for a ten year period. (If I would start from the end of 2008, it would show us much better profits.)



Data sources: Budapest Stock Exchange, Sectors and Industries from investing.com.


I found really interesting, that there are plenty of high dividend paying shares among the top of the table. The share price of Zwack, Emasz or Elmu changed only a little, but the high dividend brought good returns for the shareholders. That's why I like so much the dividend paying stocks.

Disclaimer: long ANY


Saturday, December 30, 2017

Recent Sell – V. F. Corporation

I bought a few shares of V. F. Corporation (VFC) in February 2017. I thought that it has a good valuation at $50.30. 

When I bought the shares, the P/BV was 4.21 and the P/S was 1.71, but now I calculate P/BV 7.62 and P/S 2.50. The P/E was 19.80 at the time of my purchase, and I felt, that it is a good opportunity to buy a dividend aristocrat. 

Now, (as I calculate) the P/E is 28.52, which is a really high value for a company which has only single digit long term revenue and EPS growth rate. So these ratios show me, that it is better to realize my profit. I sold my shares at $74.14, which gives me a really good capital gain. I think that I will find much better investment opportunities for my money in the next few months.

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Friday, December 1, 2017

Recent Buy – November – Fresenius

November was a calm month for my investments. I got my dividends from Next Plc and CVS Health and I bought a few shares of Fresenius SE (Xetra: FRE) at 62.28 which gives me 0.99% dividend yield. Fresenius is a global healthcare group, and offers products and services for dialysis, hospitals and outpatient medical care. It focuses on the hospital operations and offers engineering and services for hospitals and other health care facilities.

Fresenius increased it's dividend in the last 24 years, which is really rare among european companies. As I look at the numbers and valuation of Fresenius, I think its a great company at a fair price. It shows great growth in the last 10 years and I believe that it can maintain this growth in the next decade.


Full disclosure: Long CVS, Next Plc, Fresenius

Wednesday, November 8, 2017

Recent Buy – October – CVS Health, Walgreens Boots Alliance, Express Scripts, Macy's

October was a really busy month for me. I saw some opportunities on the stock market to improve my portfolio and increase my forward dividend income.

I bought a few shares of CVS Health (CVS) at $73.09 which gives me 2.74% dividend yield. CVS Health is a dividend contender, which increased it's dividend in the last 14 years. After my purchase the price went down more, so I am thinking about to buy more shares of the company.


(Source: www.finviz.com)

I bought Walgreens Boots Alliance (WBA) shares at $67.36 which means 2.38% dividend yield for me. WBA is a dividend aristocrat, which increased it's dividend in the last 42 years.



(Source: www.finviz.com)

I like to build my portfolio from companies, that reguraly pays me dividends, but sometimes I saw great companies such as Alphabet (GOOGL) or Express Scripts (ESRX) on prices, that are good for me. I thought that the Express Scripts will be a good investment, so I bought it at $57.01.

Finally, at the end of the month, I bought the shares of Macy's at $19.02 which gives me 7.94% dividend yield.



(Source: www.finviz.com)

Full disclosure: Long CVS, WBA, GOOGL, ESRX, M