Recent Sale activity:
I exited my entire position in Apple. This was probably the tech position that I had the least amount of conviction in. Apple’s growth profile is flattening out in my view. It will likely experience some margin compression as it rolls out “mini’s” and “cheaper versions” of all it’s flagship products. It will still continue to be a very profitable business, and have some good growth, but the nature of consumer electronics is that it’s a very fickle business.
I would have been happy to hold Apple for a longer period of time, but given my move to significantly ramp up my exposure to large cap US holdings in my 401k, I’ll be getting healthy does of Apple as part of that mix.
I sold all my 10 Apple shares for $521, realizing $5200 in proceeds and a nice gain of about $1k, plus about $100-$200 of dividends thrown in for good measure. Like most stocks, Apple enjoyed a nice ride up over the last year, certainly from where I bought at $410.
I slightly trimmed my rather large BP holding. I sold 115 shares at 45.70, realizing about $5k in proceeds. I still really like BP. I continue to believe that it remains undervalued. The significant discount from the legal overhang will pass in time.
But I was very exposed to the stock, probably too much so. It was the single largest position that I owned in my US portfolio. I took advantage of a 15% rise to sell off a small portion of my holding. I still have about $12k invested in the company. My single stock exposure was just a little too great here.
I had a small holding in Colgate, approximately $4k. Again, I really like the Colgate business. It’s a nice stable consumer staple. I really like the steady predictable demand from the company. But it’s run up….a lot. I acquired some Colgate just earlier this year at around $55. It’s shot up close to 20% since then. The elevated valuation, plus the fact that I’ll also be indirectly acquiring more of it as I ramp up my 401k investment prompted me to exit this stock.
Health Care Services Group (HCSG)
This is a new purchase for me. HCSG is an intriguing company. it provides laundry, maintenance services, housing keeping to hospitals and nursing homes, rehabilitation facilities and aged care facilities. I love businesses like these that have long term locked in contracts and ride a secular trend (in this case, the increasing “greying” of the baby boomer population in the US).
This is a large market segment that is experiencing good growth. Health Care Services Group has been growing at a good clip, with revenues exceeding 10%, and return on equity exceeding 20%. The dividend yield on offer is 2.5%. Best of all, it has no debt. I’ve wanted to bulk up my exposure to dividends in the healthcare space. This provides a nice avenue to do so. I purchased 150 shares at $25
I added to my position in United Guardian, in which I already have a reasonable stake. I was able to acquire another 55 shares at $25/share. I continue to like this stock. UG reported an increase of 14% in yoy EPS growth in it’s most recent quarter.
The more significant thing was Renacidin, United Guardian’s moneymaker pharma product came back in market after some supply disruption. The introduction of this product back into the market augers well for the future profitability for the company and for continuing dividend increases.
I acquired another 40 shares of Resmed stock at $50 share. Resmed missed quarterly earnings estimates last quarter and got spanked by the market. It dipped about 14% on the miss. Frankly, I viewed the earnings miss and stock reaction as an opportunity to load up. My outlook remains that this is a high growth business paying a modest dividend that will rapidly grow over time.
Female Health Company
I acquired another 100 shares of FHCO at $9.30 . I continue to like the Female Health Company from an investment perspective. It has a unique product, protected by IP in a rapidly growing market. Best of all, it’s another hidden gem.
Lastly, I bought some stock in Yandex, a Russian internet services business. You can think of Yandex as Google’s equivalent in Russia. Google operates in Russia, however Yandex is the market leader in search, with close to 62% market share. The key to Yandex’s success in my opinion is the language localization it provides which results in more targeted searches.
Yandex will leverage the shift in print to online ad spend that is occurring globally, as well as the increasing spending power of Russian’s as the Russian economy grows. I think Yandex will selectively expand globally over time. I bought 130 shares in Yandex @$35. Yandex isn’t a dividend payer, but I’ve decided to be a bit more open to high growth companies that aren’t currently paying dividends.
More on that later.
It’s been way too long since I did a Mid Week Money, and there’s been a lot of great stuff in that time.
Dividend Growth Investor had a great article on his retirement strategy for tax free income. This was a part of a 4 part series. I share many of the views expressed, particularly the need to explicitly focus on tax expense in an investment strategy. That’s part of the reason I’ve determined that maxing out our 401k could get us an extra $500k
Dividend Mantra wrote about why he enjoys when a stock he owns falls in price. I can’t say I’ve ever really enjoyed when this happens, particularly in 2009 when I bought heavily on margin and bled for days. I do understand his reasoning though.
Dividend Ladder had some interesting picks in China for dividends. I’m always interested to discover some interesting and exotic dividend picks that provide some exposure that i don’t have. China Mobile is one I put down for further research.
W2R updated his 2013 passive income goals. I like having dividend goals and investment goals myself. It helps give me something to aim for.
Passive Income Pursuit asked for help in identifying some good candidates for dividends!. I share his sentiment. It’s tough to find really compelling picks that one doesn’t already own…. and even there valuations are sometimes stretched.
Dividend Growth Stock Investing introduced his Dividend Academy. I look forward to finding out more when it’s open for business.
My Money Design had an interesting post on whether the search for early retirement could be ruinous. In my view, progress towards financial independence is helping me find my optimal balance in terms of energy spent at work. I’m still working hard, but the foot is gradually coming off the gas…