March 2019 – Stock Buys

March 2019 - Stock Buys

March 2019 – Stock Buys

Hey, how its going?

Recently I decided to continue switching the portfolio up after creating a excel sheet and really seeing the power of dividend growth investing. As I pointed out last week, it was a big eye opener. The power of compounding combined with the raises from dividend’s is huge.

There was a couple stocks in my portfolio that didn’t meet the criteria and 2 stood out to me. One has gotten beat down and I feel a dividend cut is coming, and the other was such a small position that I don’t see myself adding to anytime soon.

SOLD

Let’s start this off with the sale’s….. Yeah I know more sales, my portfolio has been going over a shuffle lately and while the trading fees add up long term this shouldn’t be a issue. I started investing as just a dividend investor and now id like to switch over to a dividend growth investor. Typing that out, your like dam why didn’t you go for dividend growth first?

Well as I’ve mentioned numerous times I’m not a investing pro, and don’t think I am. I’m doing good with our finances, but there’s always room for improvement.




Sienna Senior (SIA)

Alright so first off was our sale of Sienna Senior (SIA). This is a company I like, they own a bunch of retirement home’s and with the baby boomer’s getting older and older this is a great place to be in the future. I picked them and extendicare up based on Canada’s lack of healthcare dividend stocks and the aging trend.

I now would rather get our healthcare exposure on the us side of things in the form of Abbvie, JNJ, Pfizer and maybe others. They have a better dividend growth background.

The sale of Sienna was easy. It was one of my original holding’s when I first start investing in $500 blocks. I had only 32 shares bringing in $2.40 a month. I didn’t see myself adding to this position. So I sold it all. This brought in $574.37. I was up about 8% and all the dividend’s I got the past 2-3 years.

Highliner

Ewww highliner… This has been one of my worst holdings. I originally bought them in Sept 2017 for 13.62 a share. I thought they were a steal at this price and a 4% yield on a food stock. It’s a great buy… Well I thought that.. It has left a fishy taste in my mouth and not even a tonne of tarter sauce can rid of it.

It had a 9 year dividend growth history but I really see a dividend cut coming for the company this quarter. They currently have a yield of 7.48%. That is crazy for a food stock. The fishing industry is getting harder and harder with more regulations and a declining fish population…. Even when I go to walmart I see less products of theirs on the shelves.

For some reason the stock crept up to 8$ a share a week or 2 ago.. I didn’t see any reason for it, but took it as a exit sign. So I sold my 150 shares for 7.78 a share. (Unfortunately I was hoping it would keep going up, but it started going down so I sold)

So I got about 125 bucks in dividends when I held it and sold for 1,157.00 so I lost $770.90 on this one. Yeah it sucked, losses happen, but I was glad to see the stock price pop up a buck over the last month. It could of worse… Let’s stick to those dividend growth stocks now =)

Well there’s the sales, while it sucks to take a loss learning lessons were made. Total dividend loss from these sales were $112.80

March 2019 – Stock Buys

I finally did it. I have been going on about BNS for awhile now. It’s a solid bank, and Canada’s most international banking operation. Last Friday we added 43 shares  to our portfolio. There was yet another short seller announcement on the Canadian banks and they dropped in price. I was happy to pick them up for 71.52 a share. This now brings our total shares of BNS to 94.

Each quarter we will now bring in $81.78 and enable the drip! Oh man do I love drips. Unless the stock really pops up and passes that number this will be a full position for us. I think we got a decent buffer though.

At the time of purchase BNS had a yield of 4.8% and a p/e of 10.7. These are some solid numbers from our banks.

I won’t really get into BNS too much as I have talked about them quite a bit. I feel their moves into latin America will be a great growth driver in the coming years. If Canada’s economy does slow down, the diversification will be huge.

This buy adds 149.64 to our forward income.

Shorts, Yield Curves, Housing Crisis

The banks have been surrounded by bad news for a long time now. People have been shorting them for years, only to be disappointed that they didn’t crash. Our housing is expensive but we are now basically going sideways with interest rates and there has even been rumor’s the Bank of Canada may lower the rate this year.

The liberal’s introduced new rules helping first time home buyers get their first house. This should help pop up or stabilize real estate a bit again. (I’m not a huge fan of this, but its another story)

With a stagnant or even lower interest rate housing will continue to climb and there should be less defaults. (At least in the short term)

I think the real issue is Canadian citizen’s overall debt level’s, this will be a issue for a long time to come. We got to stop living like the Jone’s!

Yield curve’s are a concern, but we have seen this in December right?

Finale

Well that’s our March 2019 – Stock Buys, it feels good to finally get BNS to a large enough position to enable the drip. I have always said I think banks run the world. Back in high school, I remember doing this business project and rbc basically offering to loan me money to do it. I was like 17-18!

BNS stock is currently 70.79 so yeah I could of gotten it at a better price, but its hard to time the market. Remember its time in the market, not market timing.

I broke Warren Buffett’s rule of not losing money on the highliner sale, but I think its a smart move long term. Overall from the 2 sales and new buy I added $36.84 to our forward dividend income. Not bad, but now BNS is a set it and forget it stock!

The financial sector of our portfolio is now in our top 3 sector’s, so I don’t see myself adding to the banks unless they really drop.

What are your thoughts? Good buy? Should I of held highliner/ Sienna? Is a cut coming?

Cheers!

26 Responses

  1. Caroline says:

    I guess it’s a good buy if you don’ t own too much bank in the rest of your investments?
    I have a few ETFs that are heavy on Canadian banks so except for a little cash in BNS specifically, I don’t own any other Canadian banks.
    Caroline recently posted…February 2019 – Income, Expenses & GoalsMy Profile

    • Rob says:

      haha you guess? But yeah i own quite a few bank shares now. Long term it shouldnt be a issue.

      The market is soo high now banks seem to be some of the best values out there at the moment.

      Most Canadian etfs top holdings are the banks. Thats why i stay away from etfs rather just buy the companies =)

      cheers Caroline

  2. Dividend Daze says:

    Has been hard to find value in this market. Everything is so high. But as you know, I picked up a few shares of BNS myself last week. Happy to be a fellow shareholder with you. Nice buy.
    Dividend Daze recently posted…Dividend Update – February 2019My Profile

  3. GYM says:

    I bought some Highliner fish in a box recently at No Frills, haha. It was cheap but I was like “hmmmmm I wonder if this is real fish?!”
    Cant’ go wrong with Canadian bank stocks!
    GYM recently posted…How to Get Rich in Canada: Be Glorious and FreeMy Profile

    • Rob says:

      haha yeah we used to get fish in a box (que justin timberlake) all the time. Something changed and now we dont eat much.
      (Maybe im bitter how crappy this stock has been lol)

      yeah the banks are pretty solid.
      cheers

  4. May says:

    I have more than 200 highliner and also wondering what to do with it. Have a loss of more than $1000. Maybe should just sell it.

    I have sold my SAP position in RRSP with a small gain as similar to your reasoning with Sienna Senior, I think Sysco on the US side is a better diary company. After I sold it, it was up again. Looks like every time I sold something, it will always be higher after that.

    Didn’t buy anything yet, everything looks so expensive other than banks. But I have too many banks already. I know it’s not good to have tens of thousands cash sitting around, hard to pull the trigger though.

    • Rob says:

      hey May

      yeah highliner is a tough one but this was the red flag for me from last quarters report. In the dividend section.

      The Board is continuing to review the Company’s capital structure to determine the prudent use of capital and will provide an update when the Company reports its financial results for the first quarter of 2019 in May.

      Sounds like they may cut it as sales have been declining…

      Interesting about sap, that is one ive debated starting a position in. so many acquisitions and arent they the world’s biggest chèese producer now?

      Either way almost everything is so expensive. Some deals on the us side but you lose 30% on the conversion.

      cheers May!

  5. May says:

    Sysco is much bigger than saputo. I have both, and last time Sysco raised dividend for 8% while Saputo only 3%.

    Yeah, it’s quite hard to convert Canadian dollars to US right now. But to invest only Canadian market is also quite dangerous.

    • Rob says:

      so true.

      I’ll be honest I dont know much about sysco but do recognize the name.

      Dividend growth is a big factor and 5% is a nice difference especially in the long term.

      what to buy… Always the million dollar question =)

  6. PCI –

    Nice job cleaning up the portfolio, pumped you now have BNS in that portfolio!

    -Lanny

    • Rob says:

      hey Lanny

      Thanks man, ive had bns for a bit but now have enough to actually drip it. Now its a set it and forget it stock!

      cheers man

  7. Can I throw in a lesson of mine??

    Number 1. Never listen to anybody’s advice, not even Warren Buffet! Your own knowledge is more important and if you feel like you need to make a change, you just do it. So, good job for switching from non dividend growers to a dividend grower like BNS! Just let that position grow by itself @ 1 drip per quarter. And all the bad rep about Canadian banks, I wouldn’t listen to that. Their are probably the ones who are shorting and want cheaper prices to cover their asses. I would stick to the banks because that’s what spins the whole financial system.

    By the way, what you think of insurance companies? I don’t have any in my portfolio but I will start looking at lifecos once my bank positions are complete. Insurance companies make all kind of passive income.

    • Rob says:

      hey German

      So true, but its always nice hearing what other peoples thoughts are as well. It was a big loss but im happy to of moved on.

      I like bns and glad to have a full position now.

      I used to have manulife but took my profits when that whole short seller thing happened. Dunno if thats resolved yet with the courts, as i dont follow them too much at the moment.

      Right now my financial sector is getting up there so I got to focus somewhere else, but I rather just own the banks then the insurer’s. Its good for diversification but these storms around the world are getting more and more common and severe. Also I just love those canadian banks!

      haha cheers German.

  8. John says:

    Hello Rob,

    Good choice on BNS. I run hot and cold on their execution, but I do appreciate that their Pacific Alliance strategy gives business exposure that is unique among the big five. Plus the banks generally are a bunch of profit and dividend generating machines! I generally have to stop myself from buying more of the Canadian banks, or else they would completely dominate my portfolio.

    Are you strictly a dividend investor in your holdings, or do you also hold some index funds for diversification? I vacillate between putting money into dividend growers and into VTI, XEF & IEMG/XEC. Diversification is good, but one set of equities seems to be a lot more fun than the other!

    • Rob says:

      haha hey John

      So true, I enjoy stocks more than etfs. I used to have one in our rrsp.

      I may eventually get one x north america that would be good for diversification. Especially since i dont follow much stocks outside the tsx and nyse.

      As for bns the pacific alliance move should do very well for them and adds more international exposure to my portfolio. They still have a very small exposure there (i think i read 6% of banking there) so theres lots of room for growth.

      I hear ya about those banks they are getting up there in my portfolio as well. Right now they seem to be the best value sector on the tsx so its tempting to add more for sure!

      cheers John.

  9. Jamie McIlroy says:

    Hey Rob,
    Found your blog while waiting for a flight. Wanted to leave you a comment regarding your highliner and AltaGas positions.

    Seems like you’re well on your way to building up great passive income. I was wondering if you’ve put thought into your risk management strategy? How you manage losses?

    There are dozens of ways to make money in the markets but all successful investors/traders share one thing in common: they manage their losses. My fear, for you, is that you’re willing to let losses run too long. Anything beyond a 10% loss from the original capital is, in my experience, unacceptable. You need to be incredibly disciplined (spoken by a former ALA shareholder who bought at 30 and sold 27 4 weeks later never having seen a single positive week)

    You might consider subscribing to Tom Connolly’s excellent dividendgrowth.ca if you haven’t already.

    • Rob says:

      hey Jamie

      Welcome and have a great flight.

      Interesting site, I just checked it out.

      Honestly I haven’t put much thought in my risk management strategy.

      Are you doing stop losses? or what do you use to sell or time/ justify a sale.

      Highliner was a extreme one for me and alta as well. Atleast with alta I think they got a good future.

      Highliner seems like a really long recovery with harder headwinds.

      You are right that I should of gotten out sooner though. (Or even doubled in in hindsight of altagas at 12$)

      Altagas was again one of my orginal holdings and is such a small position.

      Im going to focus on blue chip dividend growth stocks now, so the chances of this stuff happening again are minimized.

      cheers man!

      • Jamie McIlroy says:

        I don’t do stop losses through Investor’s Edge. I have a 10% rule. When any stocks in any of the portfolio’s approach 10% below the dollar cost average price, I keep a close eye on it. When it crosses 10%, I sell and then place a 30 day moratorium on purchasing that stock. I need a timeout. A chance to do my homework and decide if the original reason I entered the position is still valid. If so, I wait. I monitor the macd and once the slow line two moving averages cross from below, I decide if I want back in.

        I also won’t add to a position down more than 5% from my dca price for that stock. It’s a fool’s errand to add to a truly losing position and removes the clarity I need to assess.

        I disagree with your statement that this is minimalized, at least a 10% loss. I invested through 1999-2001 and again in 2008-2009. 10% for even the most sound businesses isn’t much.

        • German says:

          Had I placed stop losses of 10% across my portfolio, I would have been sold one on almost everything in december and then would miss all those gain of January. Stop loss strategy is really bad. Day traders can ride the stock down to stop-loss levels and trigger a steep decline and when the cover the stock goes back up. So whats the point of stop loss? I think its more important to study the company and if fundamental change or the growth stalls, then you sell and carry on.

          • Rob says:

            wow thats basically what i just wrote.

            Stop losses make sense I think on high growth stocks. ie amazon,google etc.

            With dividend growth stocks you just keep collecting those dividends and dripping them lower.

            But yeah he said he didnt use stop losses, I just presumed he did.

        • Rob says:

          hey Jamie

          Interesting. I could see myself doing that with some stocks but the bluechips I would be dollar cost averaging.

          If disney, jnj, pepsi or even the canadian banks dipped 10% you would instantly sell and then wait 30 days?

          I get the rational behind it but some stocks you need to enjoy the dip imo.

          The not buying stocks under 5% of your dca is something i will think about though… cvs is a prime example atm.

          Do you even apply this rule in recessions?

          Also i know 10% is not alot to bluechips in a recession, i wouldnt be a seller in a recession though.

          If you follow your 10% rule didnt you sell like 3/4 of your portfolio in dec and then miss the chance to buy them back before market bounced back mid jan?

          Always cool hearing others rules and techniques but seems maybe too hardlined…

          3m dipped to 180 not to long ago. would you of sold them too?

          cheers

  10. Craig says:

    Just sold my HighLiner today as well in order to pay off my vehicle. Took roughly a $600 loss, but no more car payments. My portfolio is now almost exclusively large-cap dividend growers. I like the div-growth cause you can usually depend on the dividend to get increased even when your down 10% on stock price.

    Personally I start looking to add when a stock goes 10% below my cost base. Not sell. If it’s a dependable dividend growth stock, you just get more yield per dollar invested.

    • Rob says:

      hey Craig
      Congrats man! No car payments are a great thing. Yeah the highliner loss sucks but its a cheap learning lesson in the bigger picture of things. Buy blue chips, stick to blue chips lol… I’ll be doing my best to stay the course and not deviate from the plan.

      I agree I like to buy stocks at lower prices and higher yields too.
      cheers Craig

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