The Weekly Lineup: Mid March Shopping Edition

Shopping for stocks on saleBeing a guy, shopping isn’t exactly at the top of my priority list. But with a few thousand left from selling my index funds last week, shopping for dividend stocks was  just what I needed to get in the buying mood. In fact the last time I saw a grown group of men get excited over shopping, was last August when markets took a nose dive, and investors were backing up the truck on their favourite stocks on sale!  Unfortunately last week, stocks were certainly not on sale, with seven days of continuous gains. That was good news for my RRSP holdings, but not for the stocks I was eagerly awaiting to invest in. I’m not sure how the universal laws of money really work. All I do know is I had been watching these stocks for a few weeks, and then when I decided to make a move, it just happened to coincide with a nice market gain. Why do markets always rise when you want to buy stocks?

Manulife Financial (MFC-T) was one stock on my watch list, and I felt at $12 it was a good value play, and spent a couple of months deliberating to buy it. Over the last week however, MFC soared up to $13.71 per share just as I was about to buy. The reason of course was an increase in bond yields, which helps companies like Manulife to increase their earnings. But with two days of wide-gaps on a rising price, I’m hoping for a small pull-back and a lower price-point in the next few weeks to buy 100 or 200 shares.

The other company on my watch list Husky Energy (HSE-T) also rose from my $24 buy point to close on Friday at $25.99 per share.  Husky Energy is a stock I’ve been watching for a long time now. I picked it back in 2011 as one of my stock picks, chose it for the Dividend Growth Index, and again recommended it in my 2012 Stock Picks. Husky is a company I want to have in my portfolio as a core holding with its 4.6% dividend yield. I am currently waiting to buy 100 shares at $25.50 per share.

While I’d like to have Husky and Manulife in my portfolio, I’m looking at Bank of Montreal (BMO-T), Fortis (FTS-T), and Corby Distilleries (CDL.A-T) as other companies I’m interested to invest in. Corby Distilleries was also part of my 2012 Stock Picks. Although it is a small-cap company with only 456 million in market cap, and has virtually flat growth in share price, the sweet spot is the 3.8% dividend yield and special dividends. Every two years or so, Corby pays shareholders a special dividend with its surplus cash. Last year that special dividend was an extra $1.85 per share!

Other Posts around the Web

My Own Advisor (not really my advisor) took exception with Larry Swedroe in buying what you know makes sense. Dividend investors buy many of their holdings based on companies around them or products from companies they use. Index Investors generally consider buying what you know as a faulty investment strategy. You can read MOA’s post to learn more!

The Dividend Guy wrote an interesting post on why he feels a 100% dividend stock portfolio, is a safe portfolio. (I think I saw Dividend Mantra cheering in the comments :)). There’s two facets to the argument. The premise is that bonds are unsafe because of record low interest rates, and that they don’t keep up with the rate of inflation. Secondly, the premise he puts forth is that dividend stocks are safer than bonds. Only problem here is you have to be willing to stomach the volatility that occurs with any portfolio that is 100% stocks (dividends or otherwise). While bonds will lose value with increasing interest rates, they do give you a parachute during market crisis, and do indeed spin-off a nice monthly income.

The Canadian Couch Potato wrote about investing with multiple accounts.  As CCP points in terms of trading costs and complexity, in most cases, you should think of your assets as one large portfolio and manage it accordingly.

As with most Canadian Investors you have probably invested in the Canadian Banks. This recent article on Yahoo Finance explains the impact of the Volcker Rule on our banks, and how it will impact their profits in Canadian banks under fire.  Ultimately the results of the Volcker Ruling will impact the bottom line for Canadian Banks.

While I was busy selling my index equity funds last week, Vicky at Vix Money explained the three EEE’s in her portfolio, in EEE! Equity ETFs Explained.

The Ninja was also featured In…

The Dividend Ninja was also featured in the following websites and finance carnivals. Thank you!


Have a nice weekend everyone! :)

9 Responses to “The Weekly Lineup: Mid March Shopping Edition”

  1. Shirley

    Mar 18. 2012

    “Sometimes” it is a matter of compromise on the price, you wish to pay for a stock you are in love with.. / If you like the underlying business, as well as the fundimentals & ratios of the company – as well as their expansion plans, than a few cents here or there… won”t make much of a differance.
    Especially if the stock you wish to buy is a long term hold !! / I sold 294 shares of CM after 15 yrs of growth & dividends – to average down my original cost of “Husky” I purchased 4 yrs ago at $41 per share – I doubled my position to 1600 shares of Husky – at $26 per share on Friday – Way better growth prospects than CM over a long term.. / Just my own thoughts – Regards – Shirley

    Reply to this comment
    • The Dividend Ninja

      Mar 18. 2012

      Shirley Thanx for the comment. :) I think that is excellent advice! Stocks always move in both directions though, so I’m going to try for Husky a little cheaper, but if not I’ll just buy in.

      Cheers!

      Reply to this comment
  2. Poor Student

    Mar 18. 2012

    I too like shopping in the form of stocks, when I know that the money I spend will come back to me and then some. Too bad now isn’t the time to have some extra green kicking around.

    My favourite stock Suncor is still right around the price where I like it, so I might pick up more if the price is still low when I get my tax return. Unfortunately all the index ETFs I want to buy are all still high.

    Reply to this comment
    • The Dividend Ninja

      Mar 18. 2012

      Poor Student Thanx for dropping by! Make sure you have some diversification in your portfolio. So if you already have a significant position in Suncor, why don’t you add another company and even from a different sector? Diversification is the key. ;)

      Reply to this comment
      • Poor Student

        Mar 18. 2012

        I know diversification is the key to avoiding market volatility and to benefit from different good times in different sectors. I have had that idea engrained in me by just about every piece of investing reading I have ever read.

        But when toilet paper goes on sale for what you consider to be a great price you go and buy as much toilet paper as you can. I find Suncor very very attractive at its current price. As well, I do not know of any other stocks I am excited about at the prices they are.

        My next windfall of money is going to be when I get my tax return in April, so prices have a while to fluctuate before I am able to make a purchase. I want MG, TD, VUS, and either XEI or XIC. But I am not going to over pay for diversity when I have such a long time toride the waves of the markets.

        Reply to this comment
  3. Dan

    Mar 18. 2012

    I worked for Suncor Energy for a short period of time, I liked the share price (and of course the matching stock contribution @ 7.5%) when I worked for them (roughly $29-$30) I still think they are fairly priced. At the time I wondered how the merger would impact them, and they did about as good of a job as you can do with two giants merging. I really like their management and leadership. However, for me, there are better dividend paying stocks but that is just my 2 cents.

    Husky is another great company, I work in the oil field services industry and work extensively for them. I like their payout ratio. I’m going to keep my eye on Corby Distilleries.

    Great post,
    Dan

    Reply to this comment
    • Poor Student

      Mar 18. 2012

      I know that there are better dividend stocks but Suncor is not purely a dividend play for me. But you saying that Husky is a good option interests me. I would like their yield but I guess that I should diversify out of oil before getting a second oil company.

      Reply to this comment
  4. The Student Investor

    Mar 21. 2012

    Watching BNN (Business News Network), many people email or call in and discuss about the potential in Manulife Financial. It’s crazy how people just wanted to buy this cheap stock and ask experts on their opinions. The underlying problem is the low interest rates. In March, I read that the interest rates had slightly increase, which explains why MFC or the Financial industries were hitting the positives last week.

    Reply to this comment
  5. My Own Advisor

    Mar 22. 2012

    Thanks very much for the mention Ninja!

    It’s been a wild week and I’m behind in my reading, writing and responding!!

    Always appreciate the blog support :)

    Mark

    Reply to this comment

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