Thursday, August 9, 2018

Recent Buys: Boatload of stuff


Date
Ticker
Number of shares
Cost per shares
Total Cost
8/6/2018
HON
1
$154.53
$154.53
8/6/2018
KDP
4
$24.16
$96.64
8/6/2018
LEG
2
$43.67
$87.34
8/6/2018
TSN
2
$59.50
$119.00
8/6/2018
SBUX
1
$52.15
$52.15
8/6/2018
ITW
1
$139.99
$139.99
8/6/2018
GLW
2
$32.68
$65.36
8/6/2018
TAP
1
$69.33
$69.33
8/6/2018
DWDP
2
$66.29
$132.58
8/6/2018
ABBV
1
$96.26
$96.26
8/9/2018
WMT
1.668
89.9025
$150.00

I just did 58 hours of work in the past three days...I’m going to lay down for a bit.  Got today off and Walmart tomorrow. Forward annual dividend stands at $7,503.26.

Sunday, August 5, 2018

July Review: Tax-Free Back to School Weekend Edition


Recent Buys:
July 30, 2018

Ticker
Cost Per Share
Number of Shares
Total Cost
TAP
$64.10
1
$64.10
LEG
$43.97
2
$87.94
ORI
$20.98
1
$20.98
HON
$159.24
1
$159.24
DWDP
$68.28
1
$68.28
SBUX
$52.24
2
$104.48


July Dividends


Jul
AQN
$1.79
CAH
$16.15
CB
$4.46
FPI
$0.54
GPK
$7.73
HASI
$35.36
ITW
$5.57
KO
$92.83
LEG
$1.52
LTC
$10.02
MDLZ
$0.22
MDT
$51.00
MKC
$4.77
MO
$82.38
NKE
$0.60
O
$36.66
PM
$41.74
STAG
$4.64
STOR
$78.32
VTR
$110.28
WPC
$16.25
Total
$602.83

July Cash Flow


July
Cash
$56,087.96
Merill Edge
$187,767.30
Merill Edge Roth
$14,428.24
computershare
$7,074.96
401k
$99,274.57
Walmart 401k
$349.66
Total Portfolio
$364,982.69
M-o-M
$19,728.40


Full+partime job
$6,339.67
Bank Interest
$74.38
Dividends
$602.83
Total Cash Flow
$7,016.88


Utilities
$429.68
Car Bill
$435.45
Misc. Spending
$276.46
Total Liability
$1,141.59


Total Cash Flow
$7,016.88
Total Liability
$1,141.59
Gain/Loss
$5,875.29
Percent saved
83.73%

Summary and Updates.
  1. Dividends increased $224.75 ($7479.10-7254.35)
    • Total Needed to 2018 Goal: $520.90.
  2. Net wealth increased by $19,728.40 ($364.982.69-345,254.29).
    • Total Needed to 2018 Goal: $35,017.31.
  3. Granted more hours at Walmart since we’re so short staffed. Adding 5-10 hours of OT at $18.00 an hour per paycheck.
  4. Enrolled into Walmart’s 401k with 100% contributions going into the Blackrock Russell 1000 Index Trust (ZBGRIT); company match is 100% up to 6% of income.
    • Goal is to fund both my 401k (main+walmart) to $18,500 as quick as possible.
  5. Still Contributing $150 per paycheck to buy Walmart Stock. Will drop to $100 per paycheck after 100 shares.
  6. Current Distribution of net worth;
    • 15% Cash;
    • 27% into 401K/S&P 500;
    • 58% into Individual Stocks.
All in all on track to reach goal by the end of the year. My goal for the rest of the year is focusing on the industrials sector of my portfolio and getting as many positions as possible to 100 shares. Tech is still out of reach and UTEs are still overvalued. Industrials are finally falling back to historic PE due to the trade war. Pharm stocks have been on a silent bull run beating even tech in July. Buy what you can when you can get it. This year I plan on strengthening the core of my dividend portfolio with high cash producing dividend stocks. I don’t know when the next market crash/recession is coming; but, when it does I’ll be ready. Forward income stands at $7,479.10. Portfolio updated.

Friday, July 27, 2018

Unlocking gains by investing in spinoffs

Wanna see a magic trick? Watch me turn two companies in six. And you can follow along at home.

Honeywell


Honeywell is the steady Eddie. Honeywell is a congomulate manufacturer involved in five sectors; Aerospace, Homes and Building Technology, Performance Materials and Technologies, and Safety and Production Solutions. Think Honeywell as a well ran General Electric.

In Q4, Honeywell will be spinning off its Home and Global Distribution and Transportation System and keeping the faster growing aerospace and materials sectors.



But will shareholders receive junk or gold post spinoff? A review Honeywell’s Q2 indicates more of the latter instead of the former. In Q2, Honeywell’s Transportation Systems grew 7% year-over-year and Home and Global Distribution grew 3% year-over-year. Whereas the Aerospace sector grew 8% with Defense and Space growing at 13%, Transportation grew 7%, Commercial grew 7%, but Aftermarket was down 4%. In my opinion Honeywell is spinning off two valuable companies with one growing at moderate rate and the other at a slower rate. Having received junk in the past (UNIT from WIN), I’m always cautious as to whether companies are trying to unload junk with failing revenue and lack of organic growth. In this case a review of the spinoff sectors indicate two slower growing companies that could create value over time albeit a slower rate. But I’m all for slower growing companies that I don’t need to constantly keep an eye on.



As of this article, Honeywell has yet to announce the spinoff ratio or split date. A review of its finance indicates Honeywell is trading at 19.2-19.01x forward PE in-line with the rest of industrial sector (excluding GE). It’s also trading at 16.5x free cash flow. With the threats of future tariffs, interest rate hike, WW3, Amazon, etc, etc. I’m hoping Honeywell stays around this area for the rest of the year. What the future dividend of Honeywell will be post split is also unknown, but knowing management it will probably (not guaranteed) pro rata split among the companies. All hail the great Honeywell.

DowDuPont

DowDuPont has bipolar disorder. DowDuPont was created from a merger of two companies in 2017; Dow Chemicals and DuPont. Immediately they cut the dividend (if you owned Dow Chemicals pre-split) and then decided to split the company in three with the split off concluding in Q3 of 2019. That’s right, DowDuPont merged together and like 50% of Americans decided to split off in two years. The three new companies are; Corteva Agriscience, new Dow, and new DuPont .



Corteva Agriscience will be composed of DuPont Pioneer, DuPont Crop Protection, and Dow Agroscience. The company will focus mainly on seed and crop protection. Per slideshow in 2017 Corteva made $14 Billion or 18% of DowDuPont revenue.



New Dow will be composed of the material science division focusing on packaging and specialty plastics, industrial intermediates and infrastructure, and performance material and coating. In 2017, new Dow made $43 Billion or 55% of DowDuPont Revenue.



New DuPont will be composed of the specialty products division focusing on Electronics and Imaging, Nutrition and Biosciences, Transportation and Advance Polymers, and safety and construction. In 2017, New DuPont made $21 Billion or 27% of DowDuPont Revenue.



So why is DowDuPont splitting into three companies? Apparently the two CEOs wanted to merge together to synergize cost and then split off to create even more value. DowDuPont’s current enterprise value is $167 Billion whereas post split the three companies will have an enterprise value of $234 Billion. Big words for it’s more valuable post split then together...somehow.

The split off ratio and date are currently unknown. What the new dividend policy is following the split is unknown, but I’m assuming it will probably be a cut with potential raises in the future among all three companies. Using its 2017 annual earnings of $3.40, DowDuPont is currently trading around 20x PE in line with the rest of the industry. The stock hasn’t moved much post-merger because most investors are confused of the merger and immediate split. Also, it should be noted that while Honeywell’s spinoff will immediately make money; DowDuPont is currently in a state of transition with their final goal post 2021. To be frank, DowDuPont is a long term investment while Honeywell will be more immediate.

My investment plan: continue buying Honeywell and DowDuPont before the split. Use fears of tariff or whatever to continue doubling down. I want 100 shares of Honeywell and DowDuPont pre-split, but I probably won’t reach it for Honeywell (I don’t have $16,000 in cash). By Q3 2019, I’m hoping to obtain six new companies by investing in two. These new companies will give me exposure to aerospace, transportation systems, home and global distribution, agriculture, packing plastic, and material and coating. And maybe one or more will merge or be bought out by other companies. Whatever happens I’m positive on the future of these six companies...or it might not even happen and I'm stuck with two companies...that's ok too.

Thursday, July 26, 2018

Recent Buy: More stuff

Random Picture

To summarize my recent buys
  1. July 26, 2018, 
  2. July 23, 2018, 3 shares of Corning (GLW) at $29.10 for a total of $87.30.
  3. July 23, 2018, 1 share of Molson Coors (TAP) at $62.51 for a total of $62.51.
  4. July 23, 2018, 1 share of Johnson and Johnson (JNJ) at $125.75 for a total of $125.75.
  5. July 23, 2018, 1 share of Old Republic (ORI) at $20.45 for a total of $20.45.
  6. July 23, 2018, 4 shares of Keruig Dr Pepper (KPD) at $24.60 for a total of $98.40.
  7. July 23, 2018, 2 shares of Leggett Platt (LEG) at $46.05 for a total of $92.10.
  8. July 23, 2018, 1 share of Kimberly Clark (KMB) at $104.80 for a total of $104.80.
  9. July 23, 2018, 1 share of Visa (V) at $140.50 for a total of $140.50.
  10. July 23, 2018, 2 shares of DowDuPont (DWDP) at $65.88 for a total of $131.76.
  11. July 23, 2018, 1 share of Honeywell (HON) at $152.86 for a total of $152.86.
  12. July 23, 2018, 4 shares of Keruig Dr Pepper (KDP) at $24.68 for a total of $98.40. (My Bank of America Auto Rewarded the same day and gave me $100.00. I decided to continue building my KDP position to reach 100 shares) 
  13. July 17, 2018, 1 share of Kimberly Clark (KMB) at $105.41 for a total of $105.41.
  14. July 17, 2018, 2 shares of Leggett Platt (LEG) at $45.23 for a total of $90.45.
  15. July 17, 2018, 2 shares of Molson Coors (TAP) at $66.60 for a total of $133.20.
  16. July 17, 2018, 1 share of Old Republic (ORI) at $20.20 for a total of $20.20.
  17. July 17, 2018, 1 share of Honeywell (HON) at $146.51 for a total of $146.51.
In summary I'm alternating between $1000 buy weeks and $500 buy weeks. With a take home of $2,400 gross i should have $900 per paycheck for spending and bills. How can I do this you ask? Why become crazy and work two jobs for people who hate you! If I continue on this path I should have invested $39,000 by years end. It's not much, but it's the best this body can do.

Forward dividend stands at $7,445.60.