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September, 2011: 5 10 12 14 24 27
Disclaimer - IMPORTANT - Read this first!
| Investor's Journal is a diary focused strictly on investments and personal finance issues, primarily from a contrarian and retiree point of view. Follow along with an average guy's failures and successes as he learns, by trial and error, the fine art of value investing. |
9/5/11-Since the last entry (on 8/26/11), I sold all my shares of AHL from the Low Price to Book Value portfolio. Although AHL had not gained 50%, it had been held for at least two years, and I noticed that its dividend payout ratio had risen to 3000%, an unsustainable level. AHL had been only barely profitable, the gains just a fraction of a percent, after commissions (not counting dividends), since its purchase on 7/6/09. It shall be deleted from the open positions record for our Low Price to Book stocks. Its cost basis, purchase date, sale date, and redemption amount stats shall be recorded in the closed positions spreadsheet for that portfolio.
My currently favorite 5 low price to book value assets are AFG; FFG; FRS; LUB; and ZEUS.
My favorite among them is Frisch's Restaurants, Inc. (FRS) (recent price $19.72). It meets Benjamin Graham's bargain stock safety and value criteria.
Frisch's Restaurants, Inc. will be added to our nest egg at its market price in early trading tomorrow, Tuesday, 9/6/11.
I note that the recent jobs, political, debt, international, and overall economic news seems once again to be almost entirely negative. This is despite most companies being profitable, in many cases more so than prior to the 2008 to early 2009 financial debacle. From a contrarian viewpoint, this situation is apparently cause for optimism. It is interesting too that, though there was an unusually high amount of insider selling several weeks ago, just prior to the worst of the subsequent equity selling, lately insider buying has picked up significantly.
Notwithstanding "the sky is falling" headlines, all things considered, were I a market forecaster, I'd be tempted to say we shall have a nice rally between now and the end of January, 2012. Alas, I am instead just a one-stock-at-a-time amateur value investor, and so shall continue to seek bargains where I can find them and to buy some of them on market dips.
Besides those mentioned above, I also find these equities of interest, though they do not presently meet my strict criteria for either high dividend or low price to book Benjamin Graham value stocks: BRK/B (in fact - go figure - having a dream last night that it was time to buy more shares of this asset!), RVT, ETN, BRCD; E; DDIC; and PL.
I also like these (some also mentioned previously) now for our Ben Graham Dividend with Value portfolio: RTN; NOC; GD; INTC; and TOT.
9/10/11-Since the last entry there have been no stocks followed here with sell signals.
My current top 5 low price to book value assets are FLXS; OMG; PSEM; TX; and URS.
My favorite among them is Ternium, S. A. (TX) (recent price $23.53). It meets Benjamin Graham's bargain stock safety and value criteria.
Ternium, S. A. will be added to our nest egg at its market price in early trading on Monday, 9/12/11.
9/12/11-Since the last entry there have been no stocks followed here with sell signals.
With equities still down considerably over the past several weeks, today I used a screen for very low price to book value stocks: P/Bk 0.5 or less; P/E 4-25; D/E 0.33 or below. I chose today's picks from among the several results.
My currently favorite 5 low price to book value assets, then, are AMED; GRVY; KCLI; SCX; and SYA.
My favorite among them is Amedisys, Inc.. (AMED) (recent price $15.74). It meets Benjamin Graham's bargain stock safety and value criteria.
Amedisys, Inc. will be added to our nest egg at its market price in early trading on Tuesday, 9/13/11.
9/14/11-Since the last entry there have been no stocks followed here with sell signals.
There are many bargains available these days, but some of the better ones, it turns out, seem to be outside my till now several years old strict buy criteria. I have been excluding assets with debt to equity over 0.33 or with balance sheet info older than 6 months. As of today, I am changing that in both cases. From now, I shall seek the best value company shares with D/E of 0.5 or below and balance sheet info no older than 12 months. This will permit a larger field of candidates from which to choose the best picks. And I am finding ones worth purchase, in my opinion, now on an almost daily basis. Yesterday it was GILT that I noted as a good deal and so bought shares today.
This evening, I am placing an order to buy Arcelor Mittal (MT) (recent price $18.01). With debt to equity 42%, dividend of 3.70%, dividend payout 0.31, positive free cash flow, trailing P/E 8, forward P/E 5, P/S 0.31, PEG 0.26, and price to book value 0.45, this worldwide producer and marketer of steel products meets Benjamin Graham's bargain stock safety and value criteria.
Arcelor Mittal will be added to our nest egg at its market price in early trading on Thursday, 9/15/11.
9/24/11-Since the last entry, our Low Price to Book Value asset, KAZ, purchased on 4/4/11, has been reported as about to be delisted. Since delisted stocks are usually much less liquid, often traded just occasionally and via the "pink sheets," it is reasonable to assume the price will go down, perhaps markedly, before long. Accordingly, I sold our shares of KAZ, on 9/19/11, for at least a modest gain, 2.66% (a bit over 7% on an annualized basis). It will be deleted from the Low P/Bk assets' open positions spreadsheet, and its statistics for 4/4/11 through 9/19/11 will be added to the Low P/Bk closed positions record.
When the KAZ shares were purchased, there was the potential in the works for shareholders to receive special cash distributions, the first in the next several months and the second a year following a sale of its assets (which in fact closed on 9/19/11). In view of the sale of our shares at this time as a precaution against being caught with an illiquid asset, however, it is most unlikely we shall be eligible for the subsequent cash distributions. If by some chance such distribution(s) is(are) later received, it or they will be factored into the Low Price to Book Value portfolio closed positions proceeds.
My current top-five low price to book value stocks are: CSC; ENH; LNC; THG; and SYA.
My favorite from among them is Computer Sciences Corp. (CSC) (recent price $26.04). It meets Benjamin Graham's bargain stock safety and value criteria.
Computer Sciences Corp. will be added to our nest egg at its market price in early trading on Monday, 9/26/11.
As has been the case for at least a few months now, it is hard, simply reading the headlines, to be optimistic about the stock market. In fact, given the political impasse in Washington and the merry state of things in Europe, one could be forgiven for thinking that we might be on the eve of yet another meltdown such as occurred in 2008 to early 2009 and, as mentioned previously, that the present situation may have things in common with an economic depression and so could be with us for the medium- to long-term.
It seems best, however, to stay the value investing course, not becoming too obsessed with forecasts, but to simply keep investing in good Ben Graham type bargains, one stock at a time.
Though we have been disappointed that our net asset value has declined significantly (slightly over 10 percent overall, for 2011 to date), there is a bit of good news: thanks to equities' drop in market value and our gradually acquiring more shares at low P/Bk during the downturns, our total equities' price to book value is now approaching a bargain level, at 0.87. If this dreary trend persists, we shall probably have a P/Bk of 0.8 or below by year's end.
Meanwhile too, we have been acquiring a number of stocks in companies with evidently safe, significant dividends (adequately covered by earnings) and with reasonably low debt, so that, if necessary, we can meet most of our budget needs by relying on retirement plus equity income and so may avoid having to sell much principal at a loss.
9/27/11-Since the last entry, there has been activity in the Earnings Estimates Increase - 5% Plus experimental portfolio. I am reducing its holdings from five to two. While this increases the volatility of the portfolio, when considered by itself, it also reduces the trades considerably and, over the long-term, seems to have provided as good if not better returns. I think the added risk is warranted in view of other holdings or strategies that involve reduced risk, compared with the market averages.
As of this morning, a new holding for this portfolio, HITK, was added, while shares of CRDN, MIND, MPEL, and NX were sold. CVI, purchased on 9/1/11, is still being held in the portfolio along with HITK.
For the year to date, including open as well as closed positions, this portfolio has lost about 1%, not counting dividends but after commissions. While this is regrettable, it is a better result in the period than that for the S & P 500, down so far about 6.5% in 2011.
The new open position stats for HITK as well as the closed positions info of the assets sold today have been added to the portfolio spreadsheet.
Since 9/24/11, there have been no other redemptions or sell signals in stocks/portfolios being followed here.
My current top-five low price to book value stocks are: FVE; HMN; MT; SIGI; and TC.
My favorite from among them is Five Star Quality Care, Inc. (FVE) (recent price $2.59). It meets Benjamin Graham's bargain stock safety and value criteria.
Five Star Quality Care, Inc. will be added to our nest egg at its market price in early trading on Wednesday, 9/28/11.
Disclaimer and Disclosure Statement
Neither I nor Investor's Journal will be responsible for losses by anyone who obtained ideas from this site.
This diary is intended for personal interest and general information only. You are advised to do your own research (as well as to consult highly compensated professionals) before spending money on anything.
I know of no reason anyone should take my financial musings seriously. At best I am a dedicated amateur providing a bit of investment-related insight and entertainment, at worst an amusing diversion.
My wife, Fran, and I may at times own shares of some of the assets mentioned here. But neither of us receive any benefit from reference to them, unless you count the mutual misery when we get it wrong, or the opportunity to gloat when we get it right.