Monday, October 26, 2015

Recent Sell: PNY; Recent Buy: SO


On October 26, 2015, I sold my entire holding of PNY (14 shares) at $57.75 and bought 22 shares of the Southern Company at $45.58.

There is nothing wrong with PNY. It's a great utility but I distrust DUK. I could have waited for the $60 buyout but the buyout is closing in 2016 and my taxes will probably go over the 25% range next year so I took it for tax avoidance (being single sucks).

DUK's problems
  1. high debt
  2. corruption. I mean a lot of corruption 
    1. Ohio lawsuit
    2. Coal ash in people's water
    3. edwardsport plant
    4. etc.
Total dividend fund stands at $2169.14 + FCISX distributions.

Monday, October 19, 2015

Recent Buy: CMI


I am going on a two week business trip so I took an advance on my paycheck for some fun (meaning I took money from my savings and will add back to it this Saturday when I receive my paycheck). As a side note I hate big rigs. I hate how they drive up to me on the highway during rush hour and how they refuse to let anyone pass them. On that note


On October 19, 2015, I bought 10 shares of Cummins (CMI) at $108.70. Total cost + fee is $1094.00. This will add $39 dollars to my dividend fund.


Fundamental


1. What is a Cummins?


Cummins Inc. designs, manufactures, distributes, and services diesel and natural gas engines, and engine-related components. It operates in four segments: Engine, Distribution, Components, and Power Generation.


2) Valuation


  • P/E: 11.52x ttm; 
  • Forward: 10.38x
  • PEG: 0.60x
  • P/S: 0.98x
  • TTM ROE: 22.2%
  • Debt/equity: 0.21% 
  • DGR: 
    • 1 yr: 24.9 %
    • 3 yr: 28.5 %
    • 5 yr: 32 %
    • 10 yr: 25.1 %
  • Dividend yield: 3.5%
  • Dividend payout ratio: 33%
  • Number of year dividend increased: 10 (CMI has split 2:1 twice in the past ten years)



CMI
MachineryAverage
Industry Percentile
Market Cap
$21.53B
$6.91B
99th
P/E (Trailing Twelve Months)
12.66
15.61
29th
P/E (5-Year Average)
14.46
20.05
18th
PEG Ratio (5-Year Projected)
1.23
--
29th
Enterprise Value
$21.35B
$22.57B
97th
Price/Cash Flow (Most Recent Quarter)
8.96
11.10
52nd
Price/Cash Flow
9.81
11.77
41st
Price/Sales (Most Recent Quarter)
1.07
1.36
55th
Price/Sales
1.10
1.39
57th
Price/Book
2.80
09/11/2015
3.04
71st
Book Value
44.22
06/30/2015
21.18
100th

Growth Est
CMI
Industry
Sector
S&P 500
Current Qtr.
13.40%
1.50%
79.90%
4.80%
Next Qtr.
4.70%
42.10%
65.30%
7.80%
This Year
10.10%
13.60%
30.70%
-0.10%
Next Year
8.70%
16.70%
25.70%
10.60%
Past 5 Years (per annum)
7.02%
N/A
N/A
N/A
Next 5 Years (per annum)
10.30%
13.09%
13.11%
6.89%
Price/Earnings (avg. for comparison categories)
11.84
12.23
14.97
12.12
PEG Ratio (avg. for comparison categories)
1.15
1.47
-2.36
-1.26
article from SA here


3) Fair value
  • Simply wall Street: $115 
  • S&P capital:
    • $143.50 fair value; 
    • $180 12 month target ; 
    • 5 stars Strong Buy
  • Yahoo: $131



4) Future Goals


CMI is working on and selling near zero emission natural gas engines which will help companies follow EPA and state clean air acts. Sales have been depressed because of the low cost of oil but natural gas engines are the future. I highly doubt there will ever be a solar powered big rig in my lifetime.  


CMI also has a “hedgehog” in its pipeline for 2016. What is hedgehog? Imagine a really big engine that can be used for trains, boats, and basically anything not drivable on highways. More horsepower and efficient.  


Weaknesses:


Every stock has weaknesses.


  1. Forex: 50% of CMI’s business is overseas.
  2. Economy: Slow downs destroy all industrial stocks.

If i happen to get more cash I'm hoarding CMI to make a full position of 50 shares. My dividend fund is now $2,135.65 + FCISX distribution. I updated my 2015 goals, forward dividends increase to $2,200.00. See you readers in 2 weeks.



*you know the rule. I'm not a lawyer, financial adviser, etc. Don't follow my advice.

Thursday, October 15, 2015

Recent Buy: $1083 of WMT



Blood on the street. People running and screaming for shelter and the largest drop of WMT in a decade. Just another day on the market.



Buy 1

On October 14, 2015, I bought 16 shares of WMT at $61.00 per share in my Scottrade account. Total cost/fee: $983. This buy adds $31.36 to my dividend fund. 

Buy 2

On October 15, 2015, I bought the following in my Loyal3 Account.

$100 WMT
$10 KO
$10 PEP
$10 KHC
$10 DIS
$10 AAPL
$10 K
$10 UL
$10 SBUX
$10 HSY
$10 DPS

Wish I had held out for cheaper prices but I don't mind buying WMT at $61. I'll continue hoarding WMT until it reaches $63 which is my quick calculated fair value using the updated earnings and profits.

We buy stocks because they thrive during good times. EMR, CAT, DE, etc. We often neglect stocks that makes its stride during bad times; Dollar tree, Walmart, and Dollar General. While people freak out during the next recession/depression, I'll be sitting in my home collecting WMT dividends.

Seriously though. I wish dollar tree paid dividends. I basically lived off that store during college. 3 cups of noodles for a buck. frozen veggies combo pack + turkey "steaks" for Thanksgiving and tiramisu for when I finish finals. Everything for a freaking dollar and it taste exactly the same as name brands!

My forward dividends stand at $2096.65 + FCISX distributions. $4 more dollars till $2100 and I'm stilling waiting for the CORR and T dividend increase!

Thursday, October 1, 2015

September Review



I did it. I survived September. 14 more years to go.


Sept
BBL
$105.40
ESV
$1.35
CVX
$20.33
ADM
$12.60
COP
$5.18
TROW
$6.76
JNJ
$48.75
MSEX
$0.77
MCD
$8.50
AFL
$6.63
UL
$13.28
ORI
$6.48
GILD
$4.73
LTC
$3.57
K
$3.19
PEP
$3.88
WMT
$1.40
NSC
$6.49
HSY
$0.60
VTR
$18.98
CCP
$3.42
FCISX
$26.04
Total
$308.33

Cash flow


Salary
$3,532.80
Dividend
$308.33
Interest & online
$77.85
Total
$3,918.98


Deductions


Gas Bill
$36.17
Electric bill
$182.86
Water Bill
$136.66
QT
$105.16
Discretionary
$231.45
Car payment
$435.45
Total
$1,127.75


Calculation

% saved
71.22%


Safety Net Total

Bank
$3,533.92
Scottrade Tax
$36,981.11
Scottrade ROTH
$1,838.29
Loyal3
$8,064.99
401k
$17,923.59
Edward Jones Roth
$6,684.74
Total
$75,026.64

Summary

  1. Overall not a bad month. I increased my wealth by $4,000 via fresh capital+capital appreciation+dividends.
  2. I spent more on discretionary and QT (quiktrip) this month than any other month. I took a couple of weekend vacations driving around in the midwest.
  3. I will create a watchlist when I get the chance. Lots of things to do not enough time.

I made a few flips and dividend reinvestments behind the scene. My forward 12 months stands at $2,053.82. Portfolio updated.

Happy Halloween everyone. Grab some popcorn, eat some candy*, and listen to spooky ghost stories.

*note to my readers. Visit your dentist 2x a year or cavities will murder you later in life.