March 2019 – Watchlist

March 2019 - Watchlist

March 2019 – Watchlist

Hey everyone

Hope you all are having a fantastic month. I have been so far. The sun is shining and the snow and ice are melting. Its a great time of the year. Unfortunately the market has also been hot lately. This may be good for some people, but for us I’d rather it be lower since we are in the accumulation phase.

Anyways there are a couple stocks I’d love to buy these days, lets check them out.

Bank of Nova Scotia – BNS

Isn’t this one on most of the lists? I love what the Bank of Nova Scotia is doing but the market doesn’t. They are making some nice acquisitions in some big growth markets. They are one of Canada’s Big 5 Bank’s but they are the most internationally diversified. This is huge for my portfolio as I try to diversify myself even better both with sector’s and geographically. Most of the bank’s reported some “meh” results last quarter and the market’s didn’t get to excited about it. (BMO did report a great quarter though!)

My position in BNS is actually down 3% overall. This doesn’t seem like much, but I thought they were a steal before and here we are with a higher yield (after their last dividend raise) and a lower price. I currently have 51 shares and would need 84 total to enable a drip next month at current prices.

BNS currently has a P/E ratio of 10.9 and a dividend yield of 4.65% and a 50.08% payout ratio (based on trailing 12 months of earnings) Morning star currently has a 3 star rating and a fair value of $72.03, not much upside based on morning star.

All these number’s look great and once those acquisitions are fully integrated BNS shouldn’t be at these levels anymore.




Transcontinental – TCL.A

Transcontinental is a massive printing company making its way into the packaging business. Let’s face it traditional print media is a dying business. I’m sure there will always be some need for it, but their shift toward packaging is what gets me a little excited. With their solid history in the print business, I would think they can pull the transition off. With the rise in e-commerce packaging seems to be the obvious way for them to go.

I started my position with them late last year and after their recent quarterly report the stock has tanked. Management doesn’t seem to concerned as they continued to raise their dividend by 4.8%. This is the 17th year in a row they have raised their dividend.

My original position is down 12% which I believe to be short term noise. Its now trading just above its 52 week low at 17.34 but way off its 52 week high of 32.89. Transcontinental sports a P/E ratio of 8.2 times… pfft and also comes with a hefty 4.91% yield. The payout ratio is %38.95

Morning star currently has a 5 star rating on them and fair value at $23.12 representing a potential 29% increase to fair value from today’s price.

The numbers all look good as well but this is probably a riskier buy as you wait for the transition to come to fruition.

CVS Health Corp – CVS 

Well here is a stock that has absolutely been crushed lately. Sure a lot of health care stocks have taken a dive after the change in U.S narrative but come on. CVS got killed. Now the last 2 days the stock has came up quite a bit but it is still trading low!

They took on a lot of debt with the aetna deal. There is no question about that. Was it a good move? I think so. You now have a massive health care pharmacy that will provide health insurance as well. Talk about a good fit, and also a nice shield if amazon were to move into the business.

They have stalled their dividend raises though, to focus on paying down some of that debt load. This sucks in the short term as a dividend growth investor, but the potential especially at this price seems great.

Currently Cvs has a p/e ratio of 15.33 times, a dividend yield of 3.66% and a payout ratio of 36.38%. Morning star has it at a 5 star rating with a fair value of $79.93 suggesting it’s currently %41.29 under fair value.

Abbvie – Abbv

Another health care stock. Abbvie’s price hasn’t really changed at all since all the drug talk in the states like cvs. Basically it has went down all because of Humira. Sales fell as similar products in Europe ate away at their profits. This is still a massive drug, that will continue to funnel money Abbvie’s way. They have a bunch of new drugs in the pipeline some are already showing great results while some big key ones are slated for an fda approval decision in April this year.

Abbvie currently has a higher P/E ratio than the others mentioned at 21.7 times earnings. It does come with a %5.44 dividend that they have not been shy in raising the last couple years. The dividend growth rate will surely slow as humira sales fall overall though. It’s payout ratio is now just north of 60%, while it is getting higher that is still a good number. Morningstar currently gives it a 4 star rating with a fair value of $98.75. If abbvie were to get to fair value that would be a 25% increase not including dividends, yeah not bad……

Conclusion

Well there’s the 4 stock’s I’m really considering adding this month. With the recent news with Boeing, I’ll be keeping an eye on them as well. Especially after both Canada and the U.S grounded flights of their 737 Max 8 planes yesterday. I would really love to get BNS dripping for us, but the other 3 are certainly tempting at these prices. 2 of these positions would add to our monthly dividends next month while the other 2 would start in May.

What are your thoughts? Anything you have been buying or watching this month?

Cheers!

*These are just my thoughts. Always do your own research or consult a financial advisor before making any investment decisions*

22 Responses

  1. Hey Buddy,

    BNS is always on your watchlist..haha

    I bought TCL (unfortunately I should have waited an extra week as the price dipped right after i bought)

    If I get a bigger than expected tax refund, I might plop an extra 100-200 shares of TCL into my RRSP

    Im curious to see what will happen with Boeing as well – maybe some huge lawsuits – depends what comes out in next little while
    [email protected] recently posted…Hi. My name is Jordan & I have an RRSP Problem.My Profile

    • Rob says:

      haha sup man

      Its definately the #1 stock id like to start dripping.

      tcl seems a great buy and might be taking my money. decisions decisions….

      yeah most likely huge lawsuits. Saw norweign air was taking legal action already. Im sure others will follow suit.

      Glad i didnt go away for march break. 1,000s of people will be delayed coming back.

      cheers man!

  2. John says:

    I have been adding to BNS on weakness for a few years. My ACB is somewhere in the high 50’s. They’re in a bit of a rough spot right now, but I believe in the overall growth strategy. Definitely a slightly different pick among the big 5!

    My most recent buy this month is a new position in IPL. Seems like a decent entry point!

    • Rob says:

      hey John

      nice man! Would love to have a average cost basis in bns in the 50 area!

      Ipl is a nice pickup. That is one I see alot of people buying lately. I added to them last month and got a full position in them for the time being.

      keep it up
      cheers!

  3. CVS looks really interesting, I am going to add it on my own watchlist! The dividend is safe in my opinion and the yield looks pretty juicy at the moment.
    Dividend Deluge recently posted…Recent Buy – Iron Mountain Inc.My Profile

  4. German says:

    Just be careful with TCL. The food packaging business has nothing to do with e-commerce. I would do more research there. They face big competition as a lot of food packaging comes from China. Way cheaper there. It would be nice for them to focus on shipping boxes to grow with e-commerce demand. Because anything that’s bought online has to be shipped in a box. It could be a nice short term trade since the price has tanked, but be careful.

    Boeing has a serious problem. Even if they fix the problem with 737 MAX 8, Airlines could easily cancel future orders and opt out for Airbus instead. Airbus A320 a rival to Boeing 737, is the safest airplane in the world. Assuming Boeing comes up with a fix and another crash happens then that will be the end of 737 MAX 8/9/ program. We’re talking thousands of orders in backlog. People will be afraid to fly in them and won’t book the flights. People were rebooking flights even before the 737’s were grounded. The airlines will chase the money.

    I like the BNS pick. It’s actually my pick as well for March 🙂
    German recently posted…Be grateful and appreciate the things you have!My Profile

    • Rob says:

      hey German

      great points about tcl and like i said it is probably the riskiest pick of the 4.

      Love the points on boeing and it reminded me of your youtube page. You know alot about airplanes.

      It will be interesting to see how this all plays out. Depending on how major the issue is, which we will soon find out.

      cheers German

  5. DivvyDad says:

    While I don’t currently own any, BNS looks quite attractive! I’m not a fan of CVS myself, as I’d like to see them start to manage that debt and the freeze on the dividend makes me shy away from opening a new position. All the best with whatever you decide to buy!
    DivvyDad recently posted…Dividend Income Report :: February 2019My Profile

    • Rob says:

      hey dd

      Great points and I agree completely. Their debt load is pretty huge and the dividend freeze does steer me away.

      cheers

  6. jukka says:

    Finally bit the bullet and bought MSFT.
    Next on the line is ROK.

    • Rob says:

      hey Jukka

      nice. Microsoft may be one Id add to my portfolio in the future. Its a solid tech stock (if thats such a thing)

      Curious why rok at current prices?

      cheers

  7. Thanks for sharing, Rob! I appreciate it because it has become harder to find cheap stocks again recently. I need to take a look at ABBV since I keep hearing it being talked about. Have a good one man!
    Reverse The Crush recently posted…Make Saving Money Your CareerMy Profile

    • Rob says:

      hey Graham

      No problem, you are right the market just keeps running and running. There are still some deals out there but you need to look for em for sure.
      cheers

  8. GYM says:

    Can’t go wrong with Canadians banks!
    I saw lots of ads for Abbvie products when I was in DC last week.
    GYM recently posted…What is a Margin Account? Risks and Alternatives to ConsiderMy Profile

    • Rob says:

      hey Gym

      Yeah those banks have all done very well for me, since owning them.

      Cool to hear your xp with abbvie. I dont go to the states much, so its nice to hear some prospective from down there.

      cheerz!

  9. Connie says:

    I just got an “offer to purchase for cash” from Power Corporation for the stocks that I have. I’m pretty new to buying stocks. Has anyone had this happen before? Do you have to accept the offer or can you hold the stock? Just curious what other people have done and how it affected their holdings.

    • Rob says:

      hey Connie
      I never knew power Corp was doing that. Pretty cool, they must think their stock is really undervalued. I have recently gotten letter’s from Brookfield Property Partners wanting me to sell my shares to them.

      Its a great sign if your a going to hold that stock for awhile. I don’t know your letter specifically but I had the option to sell for cash or hold my stocks. I choose to hold my stocks, as I feel this is a big sign management really feels their stock is too cheap. The buyback’s should help the share appreciation in the future.

      Hope that helps,
      cheers

      • Connie says:

        Thanks Rob! My intention is to hold the stock and not sell, but I had wondered if it would be detrimental in any way. I guess I’ll wait and see! Thanks again!

  10. Just doubled my position in BNS myself. Got in right before the ex-dividend date so should see the dividends roll in right off the bat. Everything else just seems too expensive right now so harder to find value.
    Dividend Daze recently posted…Dividend Update – February 2019My Profile

    • Rob says:

      hey daze

      Nice buy! I may of bought a bunch myself today. Love seeing those dividends right after you make the purchase. (well next month)

      Yeah this market is full of 52 week highs……

      cheers man!

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