New buys Q2 ’17

Brace yourselves, new positions incoming!
The new additions to the portfolio which were made during Q2!

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1) Scandinavian Tobacco Group: 170 shares. Cost basis: €2,488 . This is a Danish, rather small tobacco company which focuses on high quality, pipe tobacco. It’s no mass production but more for a middle- to high class public who know how to appreciate a good tobacco product.

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2) AB Inbev: additional 50 sharesCost basis: €5,366. I racked in some nice profits from a bold short put. I decided to reinvest them mostly in the company.

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3) Euronav: 100 additional shares, cost basis: €712. An oil tanker company of whom I had bought 100 shares when I started investing but they went downhill after the oil price drop. The company trades at around 25% discount to their book value and the management is doing good things, in my opinion. When the oil market starts to rebound, they will profit.

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4) 300 Ahold Delhaize Turbo’s @ stoploss 15,1Cost basis: €1,296. I bought them right before the Amazon-Whole Foods take-over which proves again that markets can’t be timed. This was a bold move to play on a temporary undervaluation and to rack in some quick profits. I couldn’t believe my own eyes when the stock took a deep dive after the Amazon news. This position will be closed when it rebounds. I need the money for other purposes, see later on. However I still think that Ahold is worth at least €20 a share, patience will reward.

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5) Bpost SA: 90 sharesCost basis: €2,065. This is comparable to UPS or another post/parcel delivery service. They are a Belgian dividend cash-cow and trade at very fair multiples.

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6) Resilux: 20 shares for a grand total of €3,042. This is a Belgian small-cap company that produces PET-forms for the consumer industry. They are quite small and therefore not influenced by big funds or investment companies, which I like very much. Attractive valuations and a family owned business. Buy tip! If I would have more cash, I’d for sure buy extra shares of them! In the next months they will distribute €16,30 per share in cash to the shareholders, tax free.

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7) Norcros PLC: 1,750 shares for a total of €3,536. The Company offers mixer showers and accessories; tile and stone adhesives; taps, bathroom accessories and valves; bathroom furnishings; ceramic wall and floor tiles; kitchen sinks; tile adhesives, pourable floor coverings and tiling tools through its United Kingdom and South Africa business. (source: google finance, it was pretty accurate). They are a small firm with a high cashflow and small market cap. There are some questions about their pension deficit but after some homework it was proven to be a non-issue. They are pretty undervalued and have the capability to expand in the future.

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8) LyondellBasell NV: 30 additional shares, cost basis: €2,235. This NYSE traded company stays an unpopular chemical company and is just unloved by Wall Street. It is however interesting for European investors because we don’t pay US or NL taxes on dividends. It has a troubled history concerning their bankruptcy in 2010, but those worries are part of the past and I think they are a very profitable business with capable management and good investors (Leo Blavatnik).

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9) General Mills: 72 shares, cost basis: €3,670. This is a $30 billion U.S. consumer foods company which raised many childs and adults. I like their Haagen-Dasz ice cream way too much!

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10) Gilead Sciences: 15 additional shares, cost basis €890. Mostly a dollar-cost averaging operation. This starts to become a pretty big position but I’m confident they will put their war chest to good use. Patience will pay off.

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11) W.W. Grainger: 13 additional shares, cost basis: €1,995. Part of dollar-cost averaging but a very solid MRO-company. Dividend growth history of more than 46! years. You just gotta love it!

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12) Cisco Systems, 40 shares. Cost basis: €1,150. The market is a bit skeptic but they have plenty, plenty of cash oversea which will come back eventually. Trump, tax holiday? 😉 Almost every human being is affected by Cisco products, even if not in a direct relationship. Might buy more if an opportunity represents itself.

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13) Altria Group: 18 additional shares, cost basis €1,030. After some new government regulations, the market became afraid and sold off the shares. I scooped them up at a nice discount. They also own 10% of AB Inbev.

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14) Hormel Foods Corp.: 45 shares, cost basis: €1,407. Very well managed, family-owned business in the consumer industry, meat processing to be more exact. Ultra low debt and a long dividend growth history.

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15) Pfizer: 15 shares. Cost basis: €445. Small position, how cute! Normally I don’t tend to initiate these small positions but it was better to spend the cash and transaction costs of only $5 were super low.

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16) Symphony International Holdings Ltd.: 5,500 shares. Cost basis: €3,963. Another big, new position. This holding operates in Asia and has many assets. They are investing in companies in particularly high-growth sectors; primarily healthcare, hospitality, lifestyle and branded real estate which will benefit from the rising disposable incomes of Asia’s increasing, and increasingly aspirational, population (source: corporate website). They trade at around $0,85 but their NAV is approximately $1,28. Their director recently bought 2 million shares himself and I think the discount to their NAV will narrow down a lot. Plus, it is a nice geographic diversification for my overall portfolio which yields a very decent 5% net in dividends.

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This was a massive investment quarter. But, there’s a catch.

Recently I found 3 investment opportunities: Resilux, Norcros PLC and Symphony International Holdings. I was too short on cash to make a decent investment in all 3 of them so I created a construction. I sold my entire stake of 80 shares in AB Inbev and 100 shares of Ageas. As I don’t wanted to sell them, I immediately bought 1 call option on each of them at a very low premium (loss of less than 1%). To buy the 100 shares of AB Inbev and 100 shares of Ageas, I only need €10,400 in cash because the premiums are already paid. I expect to complete these buys as soon as halfway November because I already have €2,900 in cash. This means a remaining cash deficit of €7,400.

After that, the cash balance will practically be reduced to zero. I don’t feel comfortable having almost no cash so after this construction I will save up some cash for opportunities.

I hope you enjoyed my new buys and additions to the portfolio! I’m curious to see the dividends next year.

Did you go on a shopping spree lately?

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8 thoughts on “New buys Q2 ’17

  1. financialfreedom sloth

    Impressive buying spree!
    But for AB inbev, Ageas. Why didn’t you sell puts? For instance 1 year out and a really high strike (like 120 EUR for AB inbev). Thanks to the high strike price you are certain to be exercised and have to buy the shares again. Option premium should compensate for the high strike price and actually give you a price a little bit lower than the current share price (due to the interest and volatility part that determine the premium price of an option). It’s one of the tweaks for dividend growers I am planning to do a post about (but yeah, being lazy …)

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    • When Do You Retire?

      Basically because I have no patience to wait a year before I’m assigned and because the assignment can come earlier than expected thus liquidating other positions to pay for it.

      I know the put option strategy is a better strategy, but I would like to be cash-neutral somewhere in November and have transparancy in my portfolio.

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  2. Mattias

    Symphony is an interesting addition, conglomerate style in East-Asia. I did not know it, but I am following Jardine Matheson which is pretty similar (listed in Singapore). Need to do some further research but looks promising. Need some clarity on the North Korea situation before committing in that part of the world

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