Hello, sharing an update of my investment actions today. Some trades where made:

Sold Compass Minerals Inc.

Source: www.simplysafedividends.com

Taking a 4.79% loss here and relocate the money to something safer. While it may seem like putting “salt on the road” is a safe long-lasting business, the company has grown its risk with increasing the debt after heavy investments. The Debt/Equity is now 1.78 (which I prefer to have around 1), and it´s even more crucial that it’s low for cyclical companies. Also, CMP faces more headwinds with increased risk due to aggressive expanding of capacity. Probably meaningful upside, but let’s just stay safe for once.

 

Trimmed VEREIT

Source: www.simplysafedividends.com

Nothing special. Just trimming the position from 6.8% to something closer to 2 %. Trying to be a bit more conservative on the speculative bets. Also, a major reason is that REITs make up 25% of my portfolio (too much), and I want to increase more on O and HCN in the future. With VER being so big, the task of buying great companies while having somewhat sector diversified portfolio becomes harder.

 

Added to CVS Health Corp.

Bought 14 shares of CVS at $68.76

Added to Veidekke

Bought 100 shares of Veidekke (VEI). Post coming soon about this great company.

That’s it, folks. I still have some capital left which I’m thinking of adding to Veidekke,  Hormel Food Corps, Omnicom or Dominion Energy. What are you looking at right now?

Take care,

Stockles


10 Comments

Mr. ATM · November 9, 2017 at 5:01 am

Regarding CMP, our friend Tom just wrote about it on his blog, you should check it out. It will validate your move.

I don’t know much about VEREIT, but did a quick look and didn’t like what I saw. It seems they did a big divi cut in 2015 and then turned around and did a raise next year. Total dividend payout is still lower than pre-cut level. I guess, trimming is a good move.

Adding to CVS is a solid move. Just look at those double digit divi increases year after year. It is currently trading at a recession level valuation, so you got a great deal at a current price.

I need to get some of CVS too, but I want at least a 3% yield. Please get a bit lower CVS, and then I will buy you too.

    Stockles · November 9, 2017 at 7:11 am

    Hi Mr.ATM,

    Interesting. Going to check it out right now. Thanks for suggestion it! (aslo, glad that our friend Tom agrees with me).

    VER is a special case, a so called turn-around case.. New management, new ideas. You can read more about it here: https://seekingalpha.com/article/4111092-vereit-estimating-legal-costs

    Glad that you accept my buys in CVS. It´s now 5% of my portfolio, and just thinking of that CAGR over time will be insane. One note: You say that CVS is at recession levels in regards of pricing, still you want it to be even lower. Are you sure that´s rational? I think that if you find the price okey, just buy! Over time, it´s the fundamental that accounts for most of the returns, not small percentages in price =)
    Just a though tough.

    Always glad to talk to you Mr. ATM,

    Take care!

      Mr. ATM · November 9, 2017 at 8:36 am

      I know. But l don’t have to be rational all the time 🙂

      There is speculation of amazon getting into pharmacy distribution business, so could be problematic for CVS down the road. Merger with Aetna is also a huge deal, one of the biggest in healthcare, too early to know how it’s going to go.

      Healthcare is a risky business here in the US, too much uncertainty on what govt will do to it and then you throw amazon in the mix, and you got a perfect storm.

      l would like more discount in price as there is less visibility ahead on CVS.

      Regarding Tom’s article, I should have said , you would find supporting arguments for your CMP decision. He is planning to sell it for tax harvesting and then buy it back after the wash period. Sounds like a good strategy if one wants to get in for the next up cycle, while getting some tax benefits in the short term.

        Stockles · November 9, 2017 at 9:31 am

        For sure. Entry of Amazon would put pressure on CVS the same way it´s pressured CAH down several % the last months. However, I feel that CVS should be able to maintain it´s position, but you never know with disruptive technology + big mergers. I´ll keep the shares I have now, but going above the 5 % position rule for CVS will not happen.

        Interesting. The future cash flow for CMP should start to increase significantly once the new investments starts to function. But I don´t feel “possible future cash flow” is enough to keep a stock when there are other better options, like Omnicom.

        See you!

      Tom @ Dividends Diversify · November 9, 2017 at 3:22 pm

      Thanks for the mention Mr. ATM and thanks for checking out my site Stockles. Hope you checked the comment section over the past 2 weeks on my discussion about CMP. Mr. ATM added a lot of good input to the investment decision and thought process in his comments. I’m not familar with VEREIT, but it seems like these moves are conservative in nature with markets at all time highs. I am of the same general line of thinking as you. Tom

        Stockles · November 10, 2017 at 6:47 am

        I sure did and I found it revarding. Great stuff from both of you, and cool that we have reached the same conclusion. As of VEREIT, it´s the legal probelms that causes the share price to be bellow $10. Once those problems are gone, I might increase again (2020 ish).

        Good discussion amigos!

Knap · November 9, 2017 at 1:11 pm

Hey Mr. Stockles

Thank you for sharing – will we also see your thoughts on the buy of At&T. How do you see the current situation with with T-Mobile pushing prices and the huge pile dept building up if the aquisition of Warner pulls through?

And a wish – it would be super awesom if we could see your entry dates in your portfolio.

    Stockles · November 9, 2017 at 1:46 pm

    Hi Knap!

    Good point. Haven´t written a post about that. Will do it ASAP.

    Sure, I can do that!

The Beta Post · November 10, 2017 at 9:04 am

Looking forward to your post about VEI! Will you compare it to AF Gruppen in that post? They posted their Q3 results this morning, with a sales growth of 9,3%. I haven’t looked at their full report yet, but will do so later today, and maybe purchase some shares before the ex. date on Monday.

DivHut · November 13, 2017 at 4:01 am

I can understand some of your recent moves. Selling CMP might make sense if you really see their new debt ratios being a problem. As for the REITs I like HCN a lot and wouldn’t mind adding to that name and others. The health REITs have not been doing so well recently and are looking more attractive. I guess it all comes down to what you are comfortable holding. Don’t like a debt ratio of a company let it go. Too many REITs trim them back a bit. That’s the personal part of personal finance. Thanks for sharing.

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