Friday, 25 March 2016

New Purchase - Pason Systems

In February 2015, I bought 100 shares of PSI @ $18.35 and sold them in December 2015 @ $21.23, for a 15.7% capital gain. If you count the $51.00 in dividends received, my total return was 18.5%. However, during this time, I sold a call on these shares which netted me $77.60.  Including this amout, my total return was 22.7% over 9 months. If only I had been so lucky with Ensco (I lost $15,000 on that one).

Anyway, on March 24, 2016, I decided to get back into PSI at a much lower price; 21.8% lower than my sell price.

Number of shares purchased
100
Price per share
$16.52
Commission
$9.95
Total cost per share
$16.62
Total cost
$1,661.95
Annual dividend per share
$0.68
Initial dividend yield
4.1%
Increase in forward 12-month dividends
$68

PSI isn't doing so well. Since the decline in oil, they've shrunk their work force by 25% and EPS have not been very stable:

2009201020112012201320142015
-$0.07$0.44$1.05$0.49$0.29$1.36-$0.17

On the bright side, the company has no debt and basically controls market share in Canada (94%), USA (61%), Australia (85%) and Latin America (70%). 

With this purchase, my 12-month forward dividend income is $10,418.

Thursday, 24 March 2016

Update on several transactions

National Bank (NA)
11-Feb-2016, bought 30 shares @ $36.13
18-Mar-2016, sold 30 shares @ $43.42
+20.2% in a little over 1 month
Profit: $218.60

Caterpillar (CAT)
12-Jan-2016, bought 20 shares @ $62.40
18-Mar-2016, sold 20 shares @ $74.85
+20.0% in two months
Profit: $249.06

CSX
9/Nov/2015 Sold 1 $27 Put
18/Mar/2016 BTC $27 Put
Profit: $96.59

Vodafone (VOD)
5/Feb/2016 Sold 1 $30 Put
18/Mar/2016 BTC $30 Put
Profit: $102.59

General Motors (GM)
16/Feb/2016 Bought 1 $30 Call
21/Mar/2016 STC $30 Call
Profit: $112.59

Pfizer (PFE)
22/Mar/2016 Sold 1 Jan 20 '17 $30 Put @ $2.40


I took advantage of the market rally to lock in some profits.

Luckly, not all stocks rallied. This gave me an opportunity to sell a put in PFE and reinitiate a position in Pason Systems (PSI), which I will write about at a later date.

Have a great Easter weekend.

Monday, 14 March 2016

New Purchase - Empire

I first bought shares of Empire Company (Sobeys, IGA) in 2009 and sold for a handsome profit in 2014. The dividend yield and dividend growth were just too low.

The recent uptake in the market has left very few deals on the table. I've been on the hunt and I think I may have found one. EMP.A is trading at BV, the Graham price is $26 and the CAPE is 16. But it's not without problems. The March 9, 2016 press release says:

"The challenges that we experienced in the first half of fiscal 2016 related to the integration of our Safeway business only intensified in the third quarter. In addition, increased promotional activity across the West as well as a difficult economic environment mainly in Alberta and Saskatchewan, resulted in sales erosion in our Safeway banner and West business unit," said Marc Poulin, President and CEO, Empire Company Limited.

"While these challenges, and the implementation of associated mitigation plans, remain a top priority, it has become apparent that stabilizing our business will take longer than originally expected and has required us to take an impairment charge this quarter. Our focus is on rebuilding top-line sales in the West through initiatives such as our Better Produce at Lower Prices initiative introduced into the market at the end of the third quarter.


So today, I bought back in.


Number of shares purchased
145
Price per share
$22.20
Commission
$9.95
Total cost per share
$22.27
Total cost
$3,228.95
Annual dividend per share
$0.40
Initial dividend yield
1.80%
Increase in forward 12-month dividends
$58

With this purchase and the reduction in BHP's dividend, my 12-month forward dividend income stands at $10,475 per year.