Ritchie Bros – 52.88, 47.36, 41.39, 34.88 – SOLD
Ritchie Bros – 52.88, 47.36, 41.39, 34.88 – SOLD
Good evening. Today we added another new position to our portfolio. After looking through our current portfolio, I couldn’t find a bargain. Industrial’s are currently our lowest sector and I can’t just keep adding to Aecon. I needed another great industrial stock to add to the mix and wanted to get a solid dividend growth stock. Luck would have it one is on sale!
Ritchie Bros Auctioneers RBA.TO
Ritchie Bros Auctioneers Inc is a Canada-based holding company. The Company is an industrial auctioneer and used equipment distributor, selling used equipment and other assets. Its segments include Core Auction, which is a network of auction locations that conduct live, unreserved auctions with both on-site and online bidding, and Other, which includes its EquipmentOne and Mascus International Holding B.V. (Mascus) online services. (source – rbc direct investing) They also have that t.v show which documents the auction.
Well this is one of Canada’s best dividend Growth stocks having increased its dividend for the past 14 years. At $34.88 per share it’s just 43 cents off its 52 week low. Or 18 dollars off its 52 week high of $52.88 (set in November 2016) Cant find too many of the best dividend stocks close to their 52 week low can ya? At current prices I’d say its the best value in Canadian industrial stocks.
I have went to a Richie bros auction but didn’t purchase anything as the equipment went for too much that day. Well today they sold me. $3521.95 (including trading fee) for 100 shares. The current yield is 2.66% and equates to 17 cents per share per quarter (us) this will add 68$ per year in forward dividends.
A month ago the stock traded for $42.03 and I feel the pullback is a little unjustified. While the bear’s are beating on the stock Morningstar gives Ritchie Bros a fair value of $42.00 per share. Representing a potential increase of 16.95% to get to fair value. Add in the dividend’s and your sitting pretty!
Help Wanted
Well that’s it for now. I’m currently shopping round for a great consumer cyclical stock. Restuarant brands International and Corus are my only holdings at the moment but I’m skeptic of Chorus’s dividend and RBI is overvalued. Do you know one? Prefer a Canadian stock.
I also keep debating Algonquin power after its dip or adding either fortis or Canadian Utilities for the dividend security. Got any good picks I should look into? What you watching?
Cheers
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Congrats on your purchase PCI. It seemed like you picked up the stock at a bargain. I really liked the fact that you got it near it’s 52-week low. Also, 100 shares is a nice starting point and hopefully you will benefit from both the rise in share price and the increase in dividend payments. No wonder I like the DGI strategy so much.
Thanks port. I feel good about it just wondering if i bought at a floor or if its gonna keep going down! Guess thats the game. Cheers
Great addition…
Here are a few stocks to watch:
-HLF… even seems to be out of favor their fundamentals are great and the dividend is one of the best on the sector
-Rogers Sugar… I just added today 100 shares… good fundamentals and great dividend
-Maple Leaf… great fundamentals and no debt at all… if goes close to 30 will be a really good deal
-North West Company…the only food distributor in north of the country and good dividend
-AQN – great stock but wait for a price around 12… I own almost 400 shares in the stock but for now I will wait to get in
-Fortis… probably the best utility stock… just wait for a price between 40-42
-ATCO… owns 40% of CU… the best deal as now
-Hydro One… this is like an GIC investment… They will increase the dividend soon, to be over 4%… you need something less volatile in your portfolio
-Magellan Aerospace… good fundamentals
-CanWell Buiding… great dividend… stable fundamentals
Also, I believe that the oil will go close to 40 these days so, more opportunities will come.
Good Luck!
Wow thanks alot Cris. I posted about high liner awhile back but then stocked up on general mills. Im not a fan of hydro one. I actually sold my position. After lowering costs of hydro now they say rates wont go up over inflation for the next 4 years. Funny how you mentioned rogers sugar i have looked at that a couple times and like what i see. Other then dividend growth. Interesting about waiting for that for fortis and algonquin. I have been wondering about that. Others i will look into. Think i read that on fool.ca about atco. I have thought about buying 200 shares of cresent point to play the oil game. Thanks again cris
I forgot to mention… mostly the best value to buy in construction now is Stantec (STN)…
Aecon you have, Bird Construction will be ok under $8, SNC is overvalued.
I use to value the stock calculating the intrinsic value on a few different methods… here are my opinion about these companies: Aecon intrinsic value 16-16.5, SNC 50-52, Bird 8-8.5, STN 34-35
If you know other construction company let me know…
Hey Cris thanks again. Snc bird and aecon are the big 3 from what i understand
Instead of Richie Brothers, I own Catapiller (CAT). They have been doing quite well as of late. As for recommendations, I am keeping an eye out for fortis to pull back. If you are looking for dividend, also take a look at Emera.
Will do thanks Leo
Thanks
My pick, is a ‘Buy’ 1000 shares of Superior Pus on the TSX:SPB a nice 6.5% dividend at its current price, plus with the added benefit to sell 10 contracts (1000 shares) covered call Jan 2018 at $10 is paying $1+/share.
Yeah, I know too complicated for the average investor
Haha lil by lil im learning
John, I don’t have a vast experience in options but not a novice as well…
I am little confused of your pick.
Now SPB is trading for $11 and the trend is down. If you buy 1000 shares and sell them as covered call to $10 means that you are giving away $1 per share… means $1000.
Did you mean something else?
Just for clarification…Thanks
cris, with any stock – selling an in the money long covered call gets you the downside protection. A stock with dividends that has a beta of greater than 1 and a implied volatility of 50% or more are is generally better to do this with to get more option premium & for the downside protection.
Hey who would have thought ENB would swing so much & that is why either selling an in the money option + selling a out of the money PUT just makes sense to some folks.
Lets use SPB that traded at $11 & optioned Jan 2018 at $10 (its only 6 months). Buying 100 shares, the premium received is the difference between the $11 stock price to the option strike price of $10 which is $1 + any premium, in this case lets say $0.10 ($1.10 option money total) the few cents is important to cover commissions.
What I’m left with is an option at $10, $1 in my account, money at risk is $10, not $11, I have some downside protection. The dividend is now based on my money at risk of $10 which is better than a dividend on $11. This is the basis of why I sell options in the money. So, SPB dividend goes from 6.55% to 7% range
With the $1000 in my account I would likely buy 100 more shares after adding in $100 or so dollars. Now I have 1100 shares, 1000 optioned at $10, 100 at $11 to do whatever with, either hold or option the those 100 in the money, at the money or out of the money.
OK, so lets take a really long option such as Telus or similar. Three possibilities. on a sell a long Jan 2019…option trade – sell at the money, in the money or out of the money. For me as an option trader that wants a downside protection + the increased dividend based on the lower at risk stock price & is not a ‘buy & hold investor). I will sell ‘in the money’ ITM ($38) even if its just the difference between the strike price and what I paid for the stock+ a few pennies to pay commissions ), for the reason I want a higher dividend yield, also know that I wont get called till close to option expiry.
Now I have that option premium money in my RRSP (401K), TFSA (Roth) or brokerage account, so I will use that to buy more of the same stock (gives me even more dividends) & if I have enough money from the sold first time round option that will buy me at least 100 shares, I will option the second round of stock purchases. Or buy another lower priced stock that has dividends .
Or, with that first lot of option money simply buy a few more shares to get more (increased yield) dividends.
If my non-registered account is sufficient, I would also sell a long PUT out of the money.
The above is for those that want a higher dividend yield, dont care too much about holding the stock, basically selling an in the money option to protect the downside & to increase the dividend rate yield, even if it means getting called on option expiry date, I may repeat if the dividend yield is good.
Just wanted to add, on the recent CSCO purchase by PCI, the annual dividend is approx $1.16. The Jan 2019 $32 CALL option is paying $2.53/share. The Jan 2019 $25 call option is paying $6.90.
Which if any covered CALL option would folks sell ?
With 100 shares, would you sell the $32 call & pocket the $2.53/share, or sell the $25 call and use the $6.90/share option premium of $690 to buy more CSCO shares?
Depends if you want yield, money, are long, don’t care if where the stock price goes or not a hold on the stock
Check out:
http://personal.vanguard.com/us/funds/snapshotFundIntExt=INT&FundId=0955
Check out:
http://personal.vanguard.com/us/funds/snapshot?FundIntExt=INT&FundId=0955
Will do thx
I have a question for everybody… just for various opinions.
Everybody agrees that the market is quite up and at some point in the next months/years there will be a correction. How much? Nobody knows…
Q: How do you prepare for this correction? Are you moving your shares from more volatile stocks to more stable ones? Are you investing in bonds? Or bonds ETFs? Increase your cash position?
Here are some of my steps:
-I am looking to invest in some bonds ETFs?
-I am keeping more cash/sources of cash to allow me do more investments in a low market
-I invested 5% of my portfolio in preferred shares
Hey Cris. Good ideas
Me personally Im tring to buy companies at a good price and hold long term. With bonds giving 1-2% id rather get a 3% dividend. The risk of the stock going down in price is there. I just hope the dividends dont get cut other than that its just short term noise. I think if the markets start crashing they will fire up the printing press again and flood the market with currency again. I am keeping some cash though in case theres a great opportunity. Lots of people sold their positions before the trump bump since they thought the market was overvalued. Its been 3/4 a year in dividends missed and the market has set new highs. I dont want to sit on the sidelines and miss the dividends