April Activity + Options

Hi folks,

April has been a busy month so far. I’ve done a couple of transactions.

1. I bought 10 additional Peugeot PSA shares at a price of €17,80 each. This is a very small increase but for tactical reasons. Almost 2 years ago I bought 90 Peugeot shares, without having DGI in my mind. I’ve been holding on since then but I would like to quit the position when the stock trades a little bit higher. My objective was to own 100 shares so I am able to sell covered calls on the shares. This way I can boost the profits a little. The transaction fees of around €10 should be covered multiple times by the option premium. Even if it’s only a profit of €20-50, it’s easy money.

2. Sold naked put 1 NN P MAY 2017 28,00 for a premium of €51,55. NN Group is a Dutch based insurance and investment firm. They were trading at a price of €28,85 at the moment of writing but I didn’t intend to buy them. I would rather keep the cash I have now. The option strikes in less than 30 days and my goal is to rack in the premium. It’s a solid company with a big dividend and good earnings. Next to this, I think NN Group did make a good deal buying Delta Lloyd.

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3. Sold naked put 1 AH P MAY 2017 18,00 for a premium of €24,55. Ahold Delhaize was trading at around €18,75 when I wrote the option. Once again I don’t intend to buy them, just to rack in the premium. Nonetheless I wouldn’t mind owning them at all. Then I would just sell covered calls…

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I’m just a bit short of available cash after my following buys which is why I rather keep the cash in my wallet for better opportunities. However I do like to place a little bet on the price of a stock.

4. Bought 12 shares of dividend aristocrat Johnson & Johnson. This buy was long, long overdue and a lack of them would be a stain on each DGI’s palmares. I took advantage of the small price drop after the earnings announcements last week to buy them at a price of $121,24. I should have bought them way earlier on, but hindsight is 20/20. It’s not a big position, but I’m trying to allocate my capital smartly and if the price would drop more, I’ll buy again. This will raise the net yearly dividend by $22,85. I expect them to increase the dividend soon because they already distributed the same amount for 4 quarters so the time has come.

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5. Initiated a small position of 7 shares W.W. Grainger. This industrial supplier company has taken a beating since the earnings report due to lower price settings. However, the MRO market seems to have enormous potential and plenty of room for improvement. The stocks were acquired for a price of $206 each. They have a history of increasing dividends for about 45 years. This adds a net $20,33 to my yearly dividend income. I expect them to increase the dividend next quarter too.

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6. Acquisition of 35 shares of chemical company LyondellBasell. However they do operate in a cyclical chemical sector, they manage to gather nice earnings and decent margins. They also buy back shares at a high rate and steady dividend increases are forecasted. For a summary of my reasons to buy the stock, I gladly refer you to LyondellBasell Analysis from The Investment Doctor on Seeking Alpha. It is worth reading. At a current dividend of $3.40/share, the net dividend addition comes in at $70,80. This stock too, is expected to raise its dividend next quarter.

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7. Last but not least: in March I had already sold 1 General Mills in-the-money Put OCT 2017 strike $67,50 for a premium of $922,5. I would like to own 100 shares of GIS to grow my dividend portfolio. Because the price dropped even further, I wrote another one but out-the-money this time. 1 General Mills Put OCT 2017 strike $55,00 was sold for $202,5. I don’t expect the stock to go lower than $55 and the premium can decrease my average costs on the first put option when exercised.

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I don’t have all the cash available right now if all options would be exercised. However, I will make sure the money will be available when the strike comes close.

Bonus: Unilever recently confirmed it is raising its quarterly dividend by 12%. This means, based on my 110 stocks, an increase of €11,86 without lifting a finger. Gotta love the game!

Dollar dividends converted, my future yearly dividend income should stand around €1,947.

How was your activity so far?

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7 thoughts on “April Activity + Options

  1. financialfreedomsloth

    Some very nice buys! And you have to love that side of options: already earning money on money you not yet have! i really loved that side: “mhh I would like to buy shares of X but do not have enough money to buy 100 of them now. I’ll write a put with expiry date 6 months from now and then make sure I do have the money saved up + the premium actually lowers my purchase price so I actually need to save less money: win!!”

    Liked by 1 persoon

  2. in10jaarfinancieelvrij

    Hi! Great buys yet again.

    I’ve already some shares in AH and hope to add more in the recent dip. A bit usure if the dip will end.

    I have been looking at JNJ for a long time, but also at Pfizer. Can you share insights as to why you went for JNJ?

    Like

    • When Do You Retire?

      Hey In10jFV,

      I like both JNJ and PFE but the former had my preference. Last year I was hesitating to buy PFE at $29 and decided to buy Allergan instead because of the merger and extra profit I would make. Turned out Obama blocked the transaction… Nonetheless PFE is a solid company.

      So why JNJ? I like the healthcare sector, but due to all regulatory obligations, patents and other regulations it is hard to find steady growers. JNJ is such a steady grow company trading at P/E +-18. I’ve been keeping my eye closely to the earnings, cash flow and past performances. Management is honest, capable and seems to care about their shareholders. Dividend king & share buybacks. Lots of cash and low debt. High profit margins.

      Next to this, JNJ is more than an ordinary healthcare company. They are also active in consumer goods such as Band-Aid, Listerine, Compeed, Aveeno… These are solid products. This stability is very welcome in a pharmaceutical company.

      I don’t expect to see the stock doubled in a year, but it is a buy-and-forget stock to put under your pillow for a very long time. I admit the share price is at historical highs, that’s why I didn’t buy too much at once.

      Like

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