With the big news being government dysfunction – the partial shutdown in the US, the Brexit power play in the UK, Hong Kong’s volatility and Italy’s lagging growth, earnings reports provided a modest nudge to the markets which was welcomed generally by the Financials. I’m more interested in the forthcoming multinational reports as a barometer of health. Thus – as usual in earnings season – my mind tends to wander to obscure – some could posit meaningless – issues to occupy myself. With a short market week and the only other to-do item is blog housekeeping – here’s my diversionary tactic.
It appears to be a busier month than normal. Today I exited a position that I’ve held since 2013. Orchids Paper announced this week the suspension of their dividend. I can’t say this was a total surprise as I’ve had them in my penalty box for a while. In fact, the comment I made when Investment Hunting sold his position seems eerily prescient:
Yes I still own it but it has never been a DG stock. With a(June 12, 2016)
stagnant dividend, a high payout ratio, previous management’s penchant
for diluting current owners and the frequent misses on earnings I’m at
about break even on this one. This one is a gamble on current
management, their strategy (expansion), and their execution of their
plan with the wild card being stable pulp pricing.
Since then, the South Carolina expansion has encountered delays, their Mexican venture has had difficulties, they’ve decided to spend money moving the headquarters to Tennessee and finally go hat in hand to their lenders (led by US Bank) for waivers to their loan covenants (which was the likely cause of the suspension). As this holding was in my IRA, I have no room for a non-dividend payer in that account.
In searching my database, it appears in addition to IH, Broke Dividend Investor sold in September and I think Dividend Pursuit sold around year end. Meanwhile, Weekly Investment, Passive Income Mavericks, Mr Free at 33 and A Frugal Family’s Journey are contemplating their options.
So an $80 loss is booked which includes the offset by dividends received.
My past blog post was my most popular by far. Now that’s not saying much since mine is not one that is read by the masses. In fact, one could surmise that a little bit of my meanderings go a long way. So thanks to all the visitors and commenters.
Since then the awareness has become more mainstream and positions being taken on all sides of this craze. As most of my readers are aware, I prefer a slightly eclectic view of events. As a consensus forms I tend to migrate to the next concept. Before doing that I wanted to bring some closure to my views on this topic.
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?
“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.