November 2017 Update

The upward trend continued this month fueled by the progress on the tax plan.  If finalized, my guess is that the first half of 2018 will be good for corporations (i.e., dividends) with reality setting in later in the year that the average consumer received a raw deal and has less disposable income than advertised.  That is unless trickle down really works.  The wild card being the government (or lack thereof) as a second felony plea was accepted with individuals tied to the campaign or administration.  The S&P index increased by 2.81% while my portfolio increased by 3.22% largely fueled by Financials.  For the year I’m still ahead of the index by 3.12%.

Headlines impacting my portfolio (bold are owned):

  • 11/1 – OMI buys HYH‘s Surgical and Infection Prevention (S&IP) business
  • 11/2 – SBUX sells Tazo line to UL
  • 11/6 – AVGO bids to acquire QCOM at $60 cash & $10 stock per share
  • 11/6 – BCE acquiring ARFCF
  • 11/9 – AAPL acquires InVisage Technologies
  • 11/13 – GE cuts dividend by 50%
  • 11/13 – AMT buys Idea/VOD Cellular towers in India
  • 11/13 – VER selling Cole Capital to CIM Group
  • 11/14 – Baupost Group initiates 3,565,361 sh position (abt 6.25%) in AMC
  • 11/14 – MSG to sell WNBA team (Liberty)
  • 11/15 – SQ launches ability to buy and sell Bitcoin
  • 11/16 – PYPL sells $5.8B loan package to SYF
  • 11/16 – IRM buys China assets from SFG.CO
  • 11/20 – MSG acquires Obscura Digital
  • 11/27 – PNC acquires The Trout Group, LLC
  • 11/28 – BLK to acquire C‘s Mexican asset management business

Portfolio Updates:

  • increased position in existing DRE holding

Dividends:

  • November delivered an increase of 18.3% Y/Y with the about 60% of the increase being attributable dividend increases and the remainder purchases.
  • November delivered a 1.0% decrease over last quarter (August) due to two payouts being moved to December.
  • Declared dividend increases averaged 11.9% with 71.75% of the portfolio delivering at least one increase (including 2 cuts (XRX and YUM) and and 1 suspension (TIS)).  Note: GE’s announced cut is counted as 2018.
  • YTD dividends received were 109.86% of total 2016 dividends which exceeded last years’ total on October 25th.

Spinoffs:

Spirit Realty Capital (SRC) – Nov 21, Form 10 was filed confidentially with spin completion targeted for 1H 2018.

Mergers:

AGU/POT (Nutrien) remains pending with the US being the only approval pending.

Summary

My 2018 strategy is forming with the focus turning towards Consumer Staples and Utilities (existing holdings).  I expect to incorporate a side strategy on lower yielding but faster growing companies which I’ll publish in the next week or two.   Of course I will continue to also pursue opportunities as they arise.

And how was your month?

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October 2017 Update

This month was pretty solid with the market continuing its upward grind.  Earnings season was in focus with good reports outweighing the bad.  Most of the attribution to the hurricanes was legitimate but a few did raise my eyebrows.  The US dollar turned in a second rising month.  The S&P index increased by 2.22% while my portfolio lagged (again) by only increasing 2.03%.  The two culprits were international currency weakness and a drop in value in my October (speculative) purchase.  For the year I’m still ahead of the index by 2.7%.

Headlines impacting my portfolio (bold are owned):

  • 10/3 – IRM acquires Bonded Services Holdings from Wicks Group, LLC
  • 10/4 – IBM acquires Vivant Digital (pvt)
  • 10/5 – YUMC initiates quarterly dividend scheme
  • 10/5 – IRM buys CS datacenters in London and Singapore
  • 10/6 – K acquires Chicago Bar Company LLC (RXBAR)
  • 10/11 – BHB sells insurance business
  • 10/11 – FHN acquires Professional Mortgage Co.
  • 10/16 – SJI buys NJ/MD assets from SO
  • 10/17 – SYY acquires HFM Foodservice
  • 10/18 – India approval for POT/AGU merger received. awaiting  US and China.
  • 10/18 – DGX to acquire Cleveland Heart Lab
  • 10/19 – JNJ acquires Surgical Process Institute
  • 10/25 – AAPL acquires PowerbyProxi
  • 10/30 – DGX aquires some California Laboratory Associates assets
  • 10/30 – TU to acquire Xavient Information Systems

Portfolio Updates:

  • initiated position in NXNN

Dividends:

  • October delivered an increase of 24.59% Y/Y with the about half of the increase being attributable dividend increases and the other half purchases.
  • October delivered an increase of 8.53% over last quarter (July).
  • Declared dividend increases averaged 10.91% with 70.62% of the portfolio delivering at least one increase (including 2 cuts and 1 suspension).
  • YTD dividends received were 103.83% of total 2016 dividends which exceeded last years’ total on October 25th.

Spinoffs:

Spirit Realty Capital (SRC) has been announced.

Mergers:

AGU/POT (Nutrien) remains pending.

Summary

With the primary goal of exceeding last year’s dividends completed, my focus turns to developing a strategy for 2018.  Meanwhile adding NXNN (speculative) in October and DRE for November’s primary purchase.  DRE as they go ex-div next week and a special dividend is likely in December as a result of the sale of their Medical buildings to HTA this past May.

May 2017 Update

May was generally quiet with the market trending generally higher.  With few pullback opportunities, I barely deployed new dividends so my cash position increased again.  At least the turmoil I experienced moving from Loyal3 subsided and I could resume a more moderate pace.  An upcoming election in the UK may present a buying opportunity on weakness in the GBP versus the US dollar.  The S&P ended the month up 1.16% while my portfolio recorded a gain of 1.37%.  For the year (so far), I’m ahead of the index by 4.07%

Headlines impacting my portfolio (bold are owned):

  • 5/1 – DRE sells medical office portfolio to HTA
  • 5/1 – TIS suspends dividend
  • 5/4 – FHN to acquire CBF
  • 5/30 – JNS/HGG.L merger completed (becoming JHG)
  • 5/31 – KEY acquires HelloWallet from MORN

Portfolio Updates:

  • Initiated position in SGAPY
  • Added to IVZ
  • Added to PWCDF (proceeds from sale of TIS)
  • Added to DST
  • Added to PLD

Dividends:

  • May delivered an increase of 51.44% over May 2016 with the vast majority of this attributable to foreign dividend cycles not held last year.
  • May delivered an increase of 38.94% over last quarter (Feb) for the same reason.
  • Declared dividend increases averaged 8.89% with 48.02% of my portfolio delivering at least one increase (2 cuts – XRX and YUM; 1 suspension – TIS)
  • YTD dividends received were 47.11% of total 2016 dividends which if the current run rate is maintained would exceed last year’s total in early November.

Note: with 14.6% of current dividends paid by foreign sources, the weakening US dollar is providing a tailwind with exchange rates i.e., increasing my return.

Spinoffs:

The MET spin (Brighthouse Financial – BHF) remains in regulatory review.

Mergers:

Agrium/POT, SGBK/HOMB remain pending

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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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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