Investment Hunting just started a Blogger Interview series with an interesting interview with Roadmap2Retire a few days ago (June 21). One question in particular caught my attention, If you could only use one metric to evaluate a stock, which one would you choose? Sabeel’s answer was spot on in my book (I don’t think there is one metric that can be used to evaluate stock. If everything could be boiled down to one single number, investing would be easy. The reality is that investing in a company is a multifaceted aspect and there a hundreds of things to consider – both from a qualitative and quantitative standpoint.), but led me to ponder the proverbial what if: If there were only one which would it be?
On June 10th, I added to my existing Manulife Financial holdings at $14.16 (US). Manulife is a Canadian insurance company which operates in the US under the John Hancock brand. With this purchase, I was able to reduce my cost basis to $16.17 (US).
Although the price has dropped 24% over the past year, by many measures it’s currently undervalued. MFC was not on my radar – particularly since it’s an ancillary holding but decided to perform a little research since I had a little money to spend from the completion of the Baxalta/Shire merger.
What puzzled me most were the financial maneuverings. Like issuing a REIT in Singapore with US real estate. Or the US dollar denominated bonds issued in Taiwan. I don’t think mine were the only concerns based on how the stock has traded. My conclusion – and I may be wrong – is that MFC is liquidating US assets (via Singapore) due to valuation levels. The bond offering is probably attractive in Asia in a low or negative interest rate environment. then moving the proceeds to Canada where their dollar is beginning to strengthen is brilliant – providing it works. Which is why I bought.
“cant see the forest for the trees”
Simply that you have focused on the many details and have failed to see the overall view, impression or key point. Urban Dictionary
I find it interesting when multiple unrelated occurrences converge and coalesce into a singular thought. Case in point:
- Investment Hunting did a financial quiz with one of the questions being “I’ve never bought a stock on OTC Markets?” Wallet Squirrel’s response (presumably tongue-in-cheek) was, “No, no idea (what) that is. “Octopus Tentacle Club”?”
- DivHut presented his June 2016 stock considerations with a response by Tawcan being, ” … I continue to like V, SBUX, National Bank (not sure if they’re listed in US market) …”
It dawned on me that there was a lack of understanding regarding the OTC (over the counter) market. Without getting into the nuances (grey, pink, etc.), let me just that a significant benefit to US investors is unprecedented access to foreign markets – notably Canada, but also Australia, Singapore and more. In this post, I’ll focus on Canada.
May was generally favorable for the markets with the big weakness being retail – and this was a mixed bag. Earnings reports presented some surprises although the trend of beating analysts’ expectations while presenting lower year over year results continued. Financials were modestly positive on indications the Fed may raise rates in May or June. Peltz announced he was exiting his PEP position without the hoopla associated with Icahn’s exit from Apple so the market treated it as a non-event. Finally, Apple ended a see-saw month with Warren Buffet initiating a position. So the month for the S&P ended up 1.63%.
My portfolio value managed a 3.22% gain with the weaknesses (SBUX and AAPL) being offset by M&A activity (LSBG being acquired by BHB and WSBC acquiring YCB).
- Updated the Blog Directory
- Updated Goals
- BUSE entered the portfolio with the completion of the PULB merger.
- Added to LBAI.
- Opened a new position HRNNF (H.TO).
- Added to AAPL
- Added to LB
- Added to YUM.
- Added to BXLT after merger vote – yeah I know – I changed my mind. I realized that I bought Baxter 11 months ago, so the only hope of avoiding short term tax treatment is to convert to Shire. So I bought more to get the $18 per share.
- May delivered an increase of 52.5% over May 2015. This was due primarily to two dividends being paid in May instead of June. With these two excluded, the Y/Y increase would have been 32.8%.
- May was also up from last quarter by 12.6%.
- Announced dividend increases currently average 9.85% with 52.7% of my portfolio having at least one raise so far this year.
- Through May, dividends received were equal to 47.55% of all 2015 dividends, keeping me on pace to exceed last year’s total on around October (as compared to 2015 being Sept. 9th).