Wednesday, 17 July 2013

New Purchases - BP and Reckitt Benckiser


Today I went a little crazy.  All transactions below were done in my Tax Free Savings Account (TFSA).

1. I decided to sell my 400 shares of Leon’s Furniture because Canadian consumers are maxed out on debt and I cannot see LNF growing substantially over the next decade. When bloated real-estate values come down, I think furniture sales will follow suit. Plus, it did not increase it’s dividend in January 2013.

Capital Loss = $314.03 over 1.5 years
            Dividends Received = $254.85
            Decrease in Annual Dividends = $160

2. I decided to sell my 25 shares of Caterpillar because I was paying a 15% dividend withholding tax. If CAT dips below $83 again, I will buy shares in my RSP, where I have added new funds (there is no withholding tax in an RSP).

            Capital Gain = $79.35 over 3 months
            Dividends Received = $11.05
            Decrease in Annual Dividends = $51

3. I decided to sell 90 shares of TEVA because they just lost a very large patent case which might cost them a lot of money. The stock just ain’t going anywhere and there is a 15-20% dividend withholding tax.

            Capital Gain = $21.55 over 2 years!
            Dividends Received » $160
Decrease in Annual Dividends = $90

4.  I bought 100 shares of BP. There is no dividend withholding tax on UK stocks held in a TFSA.

            Total Cost = $4274.95 ($42.75 per share)
            Increase in Annual Dividends = $216

5. I bought 200 shares of Reckitt Benckiser (RBGLY). Again, there is no withholding tax on UK stocks held in a TFSA. I don’t think shares are necessarily cheap, but I do like the potential growth of the company.

            Total Cost = $2841.95 ($14.21 per share)
            Increase in Annual Dividends = $81.40 (assuming USD to GPB = 1.52)

Before these transactions, my forward 12-month dividends were $5,081.83. They now stand at $5,078.23.

4 comments:

  1. Pretty busy day! Im in the same boat with you on TEVA. Im holding for now. I like CAT and have been adding around $85 and below.

    cheers,
    AA

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    Replies
    1. Hi AA,

      It was a tought decision to sell, but I think my portofolio will be better off long-term with BP and Reckitt. I'll be paying close attention to TEVA over the next 6 months as I still own 205 shares in a different account; at least the dividend has been growing at a healthy pace.

      Congats on reaching $10k in divies per year. Cannot wait to be up there.

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  2. Your sales make sense. I looked at TEVA pretty closely a few months back. Proprietary pharmaceuticals losing patent protection was my main concern. I liked the generics side of the business. I decided to go with Baxter and started a small position in their common stock instead.

    I plan on doing some portfolio rearranging next month by selling one position and perhaps writing covered calls on INTC till it gets called away.

    Investments don't always work out as planned, sometimes we need to move on to greener pastures. Cheers!

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    Replies
    1. Hi CI,

      Just got back from vacation and was looking through my portfolio this morning. Lots of not so good news in the past two weeks for INTC, NSC and SNC.

      As for TEVA, I keep wondering if it is undervalued or a value trap.

      I look forward to your play on INTC and might even follow suit.

      Delete