Thursday, 26 December 2013

Recent Buys and Sells


I have several transactions to report on.

1. Purchased more GreenStar Agriculture

December 19: I bought 1,500 more shares of GRE @ $0.8666/share including commission (6.92% dividend yield). It is unlikely that I will add to this position as it is quite risky and accounts for 2.2% of my portfolio.

+$90.00 to my forward 12-month dividends

2. Sold some SNC-Lavalin

December 23: I sold 100 of my 350 shares of SNC @ $47.68 ($47.58 after commission), for a profit of about 33% ($1,200 CAD including dividends) over 15 months. Shares are held in a TFSA so there is no tax to be paid.

Some of the reasons I reduced my position are:
a. SNC seems to be on the track to recovery, but uncertainty remains;
b. It looks like it will take a while before EPS start to increase at a reasonable pace;
c. Because the lack in growth of EPS, the dividend is unlikely to increase much, which I deem unacceptable for a stock that yields less than 2%; and
d. SNC accounted for over 10% of my portfolio. It now accounts for 5.75%.

-$92.00 to my forward 12-month dividends

3. Sold Vodafone

December 24: I sold my 300 shares of VOD @ $38.81 ($38.78 after commission), for a profit of 51.6% ($4,185 including dividends) over an average period of 17 months. Shares are held in TFSA so there is no tax to be paid.

Some of the reasons I sold VOD are:
a. I’m uncertain as to the direction the new company is heading;
            b. I’d have to pay a dividend withholding tax on my new VZ shares; and
c. VOD appears to be fully valued and I replaced it with a stock that I believe to be undervalued (Ensco).
             
-$499.20 to my forward 12-month dividends

4. Bought Ensco

December 24: I bought 200 shares of ESV @ $56.32/share including commission. ESV is a global provider of offshore drilling services to the petroleum industry.

The reasons I bought Ensco are:
            a. Graham price = $69.98;
b. Cyclically Adjusted Price to Earnings Ratio (CAPE) = 13.8;
            c. EPS are forecasted to grow at 20% per year over the next two years;
d. P/E = 10;
e. 54% payout ratio;
f. 5.33% dividend yield;
g. It is a British company, so no dividend withholding tax in my TFSA; and
h. I wanted to increase my exposure to the energy sector.
           
Before purchasing ESV, I had a hard look at OXY and CVX but decided on ESV due to its compelling valuation. It should be noted that only recently has ESV started to increase its dividend.

+$600.00 to my forward 12-month dividends.

Conclusion

With the above transactions, my forward 12-month dividends stand at $5,408.20.

I am now sitting on $28,000 in cash and will be looking to make some wise buys. Cannot wait for Mister Market to come on down to The Price Is Right.

Merry Christmas Everyone!

5 comments:

  1. Never heard of ENSCO and I already like what i see. Thanks. good luck to you.

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    1. Ensco popped up on my radar a week ago when I was searching for British companies. There are a few articles about its valuation seeking alpha. I will write up a post about ESV soon. Thanks for stopping by.

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    2. Yea, I read a few articles and if the prices hold at current level i will be buy as well.

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  2. Thanks for pointing out esv. The company looks solid and poised for growth. I just put in an order.

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    1. Hope this works out for us. I've been scouring the net trying to find undervalued stock and there is very little. I might add to my HCP position in the new year to lower my cost basis and as mentioned before, TGT is also on my list of cheap stocks but I'm waiting for a dip below $61 as I'd like to lower my cost basis. Cheers.

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