Ringing In The New Year

As I wait for the last three dividends of 2017 to post to my account, my final accounting report will delayed into next week.  Sure I could just accrue said dividends and release the report but where would the fun in that be?  Especially since I can lay claim to being the first official victim of the new tax plan, aka the Tax Cuts and Jobs Act of 2017.  As it’s not even effective yet, I guess this is the first – of probably many – unintended consequences to emanate from this bill.  This week I’ll also cover my last minute 2017 moves and my first 2018 activity.  But first …

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Recent Buy – AKO.B

ako

Keeping with my Coca-Cola bottler strategy, yesterday I added a new holding to my portfolio.  Embotelladora Andina S.A. is based in Chile with territory covering Brazil, Argentina, Paraguay in addition to Chile.  Their product line includes Coca-Cola products in addition to bottling and distributing outside brands including Amstel, Dos Equis (XX), Heineken and others.  They have an integrated operation, meaning they manufacture the bottles, cases and caps used in their bottling operation.

Andina has two share classes, the A shares carry greater voting power while the B shares pay a higher dividend.  As I don’t expect to accumulate enough shares to impact the board, I chose the higher dividend.  The shares are traded on the NYSE as an ADR administered by Bank of New York Mellon (BK), another of my holdings.  The ADR ratio is 6 shares of Andina-B (Chilean exchange) to 1 AKO.B (NYSE).

A dividend is paid almost quarterly (Feb, Jun, Sep, Nov) but is variable as the cycle is Provisorio/Adicional.  The company’s goal is to pay approximately 35% of earnings to shareholders.  The TTM for the ADR is $.70 which translates into a current yield of 2.88% at my $24.25 purchase price.  The forward (12 month) yield would be about 3.1% depending on actual declarations and the future exchange rate.

A also added to my TD holdings making it a full satellite position (1.5% of portfolio dividends) due to weakness (can you say Wells Fargo?).

Closing the Primerica Experiment

One year ago I embarked on a mission to determine whether Primerica stock (PRI) was a better investment then the sum of its’ parts – well at least most of the parts.  SEC filings were scoured to identify their investments as insurance companies are required to maintain reserves (the float).  A portfolio was established (3Q 2015) , funded (4Q 2015) and tracked (Oct 2015 to Sep 2016) to be able to declare a winner.

And the winner is … Primerica by 16.15%.  Now I realize that a single snapshot in time may not be reflective of reality, but to my surprise Primerica outperformed the basket through this snapshot in time.

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Madness (Pt 2) Updated

Last year I published Methods To My Madness Pt 2 where I presented part of my non-core investing strategies.  One section has seen some activity in the broader market recently to the point I figured an update was warranted.  The section in question:

Not so obvious are Webster, UMB Financial, Health Equity, UnitedHealth and Xerox.  Each of these companies operate Health Savings/ Flexible Spending Plans.

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Unbundled PRI Q3

Once again while I’m waiting for my last two dividends to post to close out the quarter, an  update to the Primerica challenge is due.  Just to recap, a Primerica rep provided some advice to me a while back the gist being even if I bought no products, I might want to buy the stock since it has performed ‘pretty well’.  So I did – but got to thinking – do the pieces that are sold via the reps perform better as a standalone investment rather than packaged under the Primerica banner?  The results thus far have been mixed and as we head into the final quarter of this year long challenge, Primerica has taken the lead but the game remains a tossup.

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Unbundled PRI Q1

Yes, I know you want me to get to the end of year results and 2016 goals already.  Those will be my next two posts.  Promise.

Meanwhile, it’s time for a review of the first quarter of my Primerica analysis.  Here’s my initial write up.  On Christmas Eve, I used my remaining free cash to purchase this group of companies.  I did make a few changes to the original selection:

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