Monday, May 18, 2015

Recent Buys: OHI and MSEX! And other stuff.



Recent Buy

On May 18, 2015, I bought 28 shares of OHI at 36.00 per share with a total cost of 1015.00. This is my third purchase of OHI this year giving me a total of 82 shares. Nothing changed since my last purchase and I just got paid. This will increase my forward 12 months dividend by $60.48.  

Recent FLIP

I did an analysis on my portfolio last Saturday. I am way too heavy on reits, financials, and basic materials. I decided to add some stability to my holdings by buying 1 share of the Middlesex Water Company (MSEX). This will increase my forward 12 months dividend by $0.77. I will continue using my flip option to buy this company until I reach 100 shares. Unfortunately I just missed the ex-date. Darn.  

Rationale:

        1)     Dividend Champion/Aristocrat. 42 years of increase dividends.
        2)      High starting yield: 3.5%.
        3)     P/E, P/S, and PEG are all below industry average.
        4)     Payout ratio is 64.2%
        5)     3 years dividend growth rate is 1.4% which is slow. MSEX is akin to T. 
        6)     Better balance sheet than the majority of other water companies. Take a look at Aqua America and feel the horror of debt.
        7)     MSEX is a small company that is growing organically on both earnings and EPS.
        8)     Thompson Reuters rates MSEX a Positive 9 with a strong buy recommendation and a 12 month target of $26 for high, low, and mean.
        9)     Yahoo analyst rates the company as a 1.0 strong buy.
        10) But most of all it is SAFE! Better than 90% of my current holdings.

My forward 12 month dividend stands at $1,851.85-$1,875.85


Sell Order Limit

I placed a sell order limit for 9 shares of Brk.B at $150/share. There is nothing wrong with the stock or warren buffet. I am currently too heavy on financials and Brk.B is making me too money at the moment. I could wait 50 years and see those 9 shares become 200k each but I am trying to retire early and not wait until I’m 76. I will still own 1 share of Brk.B for sentimental values.
Potential Buy Order

I will probably use the funds to buy NSC, MSEX, UNP, JNJ, or TROW; depending on the price.

Monday, May 11, 2015

ROTH IRA BUY: WPC





On May 11, 2015, I added 15 shares of WPC at $63.99/share for a total of 966.85 into my ROTH IRA. My Roth IRA is now maxed out for 2015. This purchase increased by forward 12 month dividend by $57.15.

If you haven't please read Dividend Mantra's analysis.

Below are some fun pictures I found researching WPC (all stolen from Seeking Alpha of course).







I am currently satisfied with my reit positions and won't be adding anymore soon. 
  1. WPC--international reit
  2. OHI--healthcare reit  
  3. LTC--healthcare reit
  4. CORR--specialty/gas utility leasing reit
  5. HASI--specialty/renewable energy utility leasing reit   
Unless of course the feds increase interest rates...I'll be hoarding O like bad sweaters after Christmas.

My forward 12 month dividend current stands somewhere between $1823.04-$1847.04. (those mutual funds are ruining my estimate).







Tuesday, May 5, 2015

Recent Sell: WIN & CSAL. Recent Buy: SBUX



Recent Sell: WIN & CSAL

I suffer from social anxiety. In other words, I hate situations that put me in awkward positions I can’t control or predict. I hate going to restaurants because I can never tell if I’m just supposed to sit down or wait for somebody to walk me to my seat. I hate waiting in line because there is always a stalker breathing heavily down my neck. I like to live as anxiety free and stress free as I can. The last thing I need is a stock giving me nightmares. I prefer the old buy and forget about it method. Maybe check once every 2 weeks to put in a trade or once a month to adjust my FLIP plan. When a stock gives me anxiety, it has to go.

On April 4, 2015 I sold my entire holdings in WIN and CSAL. 
 
        Sell of 15 shares of WIN at $11.35:   $170.25
       Sell of 18 shares of SCAL at $30.35:  $546.30
       Sell of a partial share of WIN:             $6.00
       Sell of a partial share of CSAL:            $6.01
       Total WIN Dividend received:             $91.00
       Total:                                                           $819.56
       Cost of buying 91 shares of WIN:       ($894.53)
          Total Loss:                                                 ($74.97)

Rationale for selling WIN and SCAL

    1)     Dividend cut. I was receiving $91.00 a year prior to the spinoffs and reverse split. Post spin off it went down to $53.70. A dividend cut of $37.30.

    2)     WIN CEO, the guy that proposed the spinoff and promised to guide the company post-split, stepped down. WIN is currently leaderless.

    3)     Unpredictable future. I read the transcript of WIN’s first quarter result. Instead of talking about profit and revenue, it was exclusively about how WIN was trying to stop the money hemorrhaging.

    4)     CSAL only tenant is WIN. They must be cooking the books to somehow make CSAL and WIN new payments feasible since their last payment came from borrowing debt.
I bought WIN during the beginning of my investing career based on a “hunch.” Now I learned the hard way that you should never listen to hunches. Do your research and learn about the company before making stupid moves. Will the WIN-CSAL spinoff be successful? Maybe but I won’t be part of it. Many people talk about a sleep well at night fund. WIN-CSAL were my nightmares.

Recent Buy: SBUX

Shifting gears, I bought 15 shares of SBUX at $49.50 for $749.05. Why? Because I’m crazy. 

Financials:

    1)     SBUX is currently trading at 30.00 P/E TTM.
    2)     SBUX forward PE is 27.00
    3)     It currently yields 1.3%.
    4)     M*, S&P, and yahoo all give SBUX a 12 month target of $54.00.
    5)     SBUX is not cheap and currently trading at a premium both to the S&P and historic values.

So why on earth did I buy a stock that causes value investors so much grief? I believe SBUX will become one of those sleep well at night stock in the not far off future. 

    1)     SBUX has a 26% dividend growth rate over the past three years.  26%! That’s 26x my pay increase last year.

    2)     Average payout ratio over the past three years has been 44%. Lots of room to grow.

    3)     Growth in Asian countries. This year Japan will experience the cult of Starbucks.

    4)     African and South American countries have yet to discover the cult of Starbucks. 

    5)     Starbucks is moving to new products like Teavana and alcoholic beverages (in Canada). I wouldn’t mind having some warm spiced wine.

    6)     Oh did I mention OPRAH partnered up with Teavana? I think she’s popular or something.  

With this I now own 20 shares of SBUX between my loyal3 and Scottrade accounts. My forward 12 month dividend increased by $9.60. More importantly, I can sleep at night without thinking that my company is going to declare bankruptcy tomorrow.  SBUX is probably more growth than dividend but there is nothing wrong with pumping up your portfolio. If SBUX drops, I’m going back in!

Forward 12 months dividend current stands at  $ 1,699.28-$1,723.28

*I would also like to note that this is the first time I had sold a stock before a crash and bought a stock during a crash. Normally I would buy a stock and have the market crash 300 points the next day. I must be getting good at this stock thing.

Friday, May 1, 2015

Buy and April Review

April Roth IRA BUY

I sold my entire mutual fund holdings and bought 2434.036 shares of Franklin Income Series Class C (FCISX) for a total of 6036.40 at a cost of 2.48 per share. It current yields 4.46%. 

FCISX is a monthly paying mutual fund that has been paying since 1995. It is a conservative fund with a 4 Star rating from M*. On average it will pay anywhere from $20-22 per month. It has a 1.11% expense ratio which is a bit high but no front end cost and a 1% back end cost if I ever sell the fund (which I won't).

Overall I'm happy with this buy. My previous fund was another mutual fund that paid a petty 1.8%.

This will increase my forward 12 months dividends by $240-264.

MAY SCOTTRADE FLIP

On May 1, 2015, I bought 2 shares of KO for a total of $81.76. I currently own 35 shares of KO and will continue adding under $41/share until I get 100 shares.
  
APRIL RESULTS

What just happened? I thought it was still March.

April Dividends
BAX
$27.04
OHI
$0.36
HASI
$13.52
PNY
$4.62
WIN
$22.75
TROW
$26.00
GE
$11.73
NRZ
$1.14
LTC
$3.57
PEP
$2.74
KO
$5
KRFT
$5.11
Total
$123.58

Income
Salary
$3176.37
Interest
$7.54
Dividends
$123.58

Total: $3307.49

Expenses
Car payment
435.45
Gas bill
67.96
Water Bill
111.46
Electric Bill
113.75
QuikTrip
94.22
Food/snacks
44.04
Discretionary spending
407.83
Total
1274.71

61% saving rate


Recap of Buys

Loyal3

First Half of April Buys
Symbol
Amount Invested
Shares
KO
$50
1.2349
PEP
$50
.5186
SBUX
$50
.5285
DIS
$50
.4687
WMT
$50
.6245
KRFT
$107
1.2158
SBUXS
$50
.5285
DIS
$100
.9417



Second Half of April Buys
Symbol
Amount Invested
Shares
Kraft
$5.11 (drip)
.0597
SBUX
$100
1.9775
KO
$200
4.8924
WMT
$100
1.265
DIS
$100
0.9093
KO
$500
12.3335


Taxable Scottrade Buys
Symbols
Amount Invested
Shares
OHI
$1005.40
26
TIS
$77.26
3


Roth IRA Buys
Symbols
Amount Invested
Shares
OHI
$989.55
27
FCISX
$6036.40
2434.036


Net Worth was of April 30, 2015
Scottrade
$31,404.95
Loyal3
$5,278.63
Roths
$6,986.49
401k
$11,376.40
Bank Accounts
$7,916.84
Total
$62,963.31


Monthly Updates:
       1)     I receive my annual pay raise. I went from $48,000 to $50,000. That is a 4% raise or an extra $100 after tax per paycheck (with overtime).  

       2)     I increased my 401k contributions to $625.00 a paycheck. I still expect $3,000 after taxes per month. I’m going to max out my 401k even if it kills me!

       3)     I have been buying a lot of Starbucks this month. It’s a bit pricey so I’m dollar averaging it. Many of my coworkers are suffering from Starbucks withdrawal symptoms. Not coffee but Starbucks. Crankiness, irritability, hatred of bright lights, and overall increase in anger. They buy K-cups to ease their pain…but it doesn’t work…even though it’s the Starbucks K-cups.  Apparently Starbucks put nicotine in their drinks or something. I just found out Starbucks and Panera have off the menu items for their gold members. Rumors are there is a secret Platinum membership for a select few. Starbucks is a cult now…

       4)     This is my first time calculating my net worth. I thought I was closer to 30k.

       5)    My Dividend increases
a.       OHI: $0.53 to $.054
b.      JNJ: $0.70 to $0.75
c.       UL (decrease since euro to dollar trade)
d.      AAPL: $0.47 to $0.52
e.       CORR: $0.13 to $0.135

        6)    My dividend decreases/freezes
a.       GE: still deciding if I should sell this or not. Maybe if the price went up to 28-30 and I’ll use the funds to buy T. Dividend yield is nice but I don’t trust management.
 
        7)    Stock Splits and Mergers:
a.       Win split off into two companies. WIN and SCAL. I am still waiting for an opportunity to sell WIN and SCAL off. Or I’ll see it at the end of the year and harvest my losses. One of my first sucker yield stock…along with ARCP.
                                                               i.      I now own 15 shares of WIN that pays $0.70/year.
                                                             ii.      And 18 shares of CSAL that pays $2.40/year.

b.      SBUX split 2:1. Since I owned .5 shares at the time I received 1 whole share after all said and done. 

        8)     My forward 12 month dividend current stands at $1743.38---1767.38.


That’s all I have for this month. I will continue doing the mid months buys unless I more free time. You readers get back to work unless you want your boss to find out about all this dividend investing and financial freedom talk. That’s crazy talk for crazy people.