These are the books I have read and would recommend to any investor.
- The Intelligent Investor by Benjamin Graham
- Even Buffett Isn't Perfect by Vahan Janjigian
- The Little Book That Builds Wealth by Pat Dorsey
- Getting Back To Even by Jim Cramer
- Stay Mad for Life by Jim Cramer
- The 21st Century Economy by Randy Charles Epping
Sunday, July 25, 2010
Friday, July 23, 2010
My Current Portfolio
My current holdings are in COP, JNJ, GE, NVDA, NAL, C, EXC, QCOM, ALNY, and DAGVX.
Mid-Long-term: COP, JNJ, GE, EXC, QCOM, and DAGVX
Speculative: NVDA, NAL, C, and ALNY
TTM: Trailing Twelve Months
P/E: Price to Earnings Ratio
P/B: Price to Book Value Ratio
P/S: Price to Sales Ratio
MID-LONG TERM INVESTMENTS
COP: Conoco Phillips was a long-term play when I bought it in 2008, so if you are familiar with recent stock market events you know that I currently have an unrealized loss on my investment. I like the financials and the company's efforts to change up their core business activities. Conoco Phillips was even able to raise their dividend after 2008.
Read more at: http://quote.morningstar.com/stock/s.aspx?t=COP®ion=USA&culture=en-us
Company site: http://www.conocophillips.com/EN/Pages/index.aspx
My rating: BUY (lower than usual multiples, increasing dividend, business activity adjustments)
TTM P/E: 12.7
TTM P/B: 1.2
TTM P/S: .5
Current Dividend Yield: 3.9%
JNJ: Johnson & Johnson has not done as bad as COP since I bought it in 2008, but there are a lot of other major drug manufacturers that have just the same or better multiples and financials as JNJ, such as Abbott Laboratories and Novartis. JNJ has a great dividend and always maintains high ROE, ROA, and ROIC.
Read more at: http://quote.morningstar.com/stock/s.aspx?pgid=hetopquote&t=JNJ
Company site: http://www.jnj.com/connect/
My rating: BUY (if not JNJ, at least Abbott Laboratories or Novartis)
TTM P/E: 12.0
TTM P/B: 3.0
TTM P/S: 2.5
Current Dividend Yield: 3.5%
GE: General Electric is a diversified company that has been in operation for a very long time. GE always seems to have a ton of free cash flow for investment activities and dividends and buybacks. I personally believe that GE will try to build their dividend back up to where it was before the 2008 recession. On that note, GE increased their next quarterly dividend by 20% from .10 to .12 per share.
Read more at: http://quote.morningstar.com/stock/s.aspx?t=GE®ion=USA&culture=en-us
Company site: http://www.ge.com/
My Rating: BUY (sitting on cash, dividend history that is sure to return, diversified, profitable company for decades, high book value per share)
TTM P/E: 14.9
TTM P/B: 1.4
TTM P/S: 1.0
Current Dividend Yield: 2.6%
EXC, QCOM, and DAGVX will be covered in the next post.
Mid-Long-term: COP, JNJ, GE, EXC, QCOM, and DAGVX
Speculative: NVDA, NAL, C, and ALNY
TTM: Trailing Twelve Months
P/E: Price to Earnings Ratio
P/B: Price to Book Value Ratio
P/S: Price to Sales Ratio
MID-LONG TERM INVESTMENTS
COP: Conoco Phillips was a long-term play when I bought it in 2008, so if you are familiar with recent stock market events you know that I currently have an unrealized loss on my investment. I like the financials and the company's efforts to change up their core business activities. Conoco Phillips was even able to raise their dividend after 2008.
Read more at: http://quote.morningstar.com/stock/s.aspx?t=COP®ion=USA&culture=en-us
Company site: http://www.conocophillips.com/EN/Pages/index.aspx
My rating: BUY (lower than usual multiples, increasing dividend, business activity adjustments)
TTM P/E: 12.7
TTM P/B: 1.2
TTM P/S: .5
Current Dividend Yield: 3.9%
JNJ: Johnson & Johnson has not done as bad as COP since I bought it in 2008, but there are a lot of other major drug manufacturers that have just the same or better multiples and financials as JNJ, such as Abbott Laboratories and Novartis. JNJ has a great dividend and always maintains high ROE, ROA, and ROIC.
Read more at: http://quote.morningstar.com/stock/s.aspx?pgid=hetopquote&t=JNJ
Company site: http://www.jnj.com/connect/
My rating: BUY (if not JNJ, at least Abbott Laboratories or Novartis)
TTM P/E: 12.0
TTM P/B: 3.0
TTM P/S: 2.5
Current Dividend Yield: 3.5%
GE: General Electric is a diversified company that has been in operation for a very long time. GE always seems to have a ton of free cash flow for investment activities and dividends and buybacks. I personally believe that GE will try to build their dividend back up to where it was before the 2008 recession. On that note, GE increased their next quarterly dividend by 20% from .10 to .12 per share.
Read more at: http://quote.morningstar.com/stock/s.aspx?t=GE®ion=USA&culture=en-us
Company site: http://www.ge.com/
My Rating: BUY (sitting on cash, dividend history that is sure to return, diversified, profitable company for decades, high book value per share)
TTM P/E: 14.9
TTM P/B: 1.4
TTM P/S: 1.0
Current Dividend Yield: 2.6%
EXC, QCOM, and DAGVX will be covered in the next post.
Tuesday, July 20, 2010
My Investing Rules #2
My second investing rule is to always consider the dividend yield of a stock. Dividends are a company's way of sharing its profits with shareholders. Another way to look at it is that the company is paying the shareholder to hold its shares.
As an example I will use Exelon (EXC) to demonstrate the great return you could receive only from dividends.
Exelon's dividend history can be seen here: http://financials.morningstar.com/ratios/r.html?t=EXC®ion=USA&culture=en-us
Exelon's dividend has increased from $.88 a share in 2002 to $2.10 a share in 2009. So, I think you can make the assumption that Exelon will, on average, increase its dividend year over year.
Now, let's look at its current projected yield, which is 4.93% at its current price of $42.59 per share.
4.93% return over one year only from a dividend is great, especially from a great company with a lot of upside like Exelon.
Let's say you buy a $2,000 position in Exelon through 4 separate buys of $500 worth of EXC stock.
Now here are the possible purchases.
12 shares at $43.00 = $516 + $7 commission = $523
12 shares at $42.50 = $510 + $7 commission = $517
12 shares at $41.50 = $498 + $7 commission = $505
12 shares at $44.00 = $528 + $7 commission = $535
So, you end up buying 48 shares of EXC for a total of $2080.
In the following calculations we are going to assume that the price of EXC will not go up or down over the long-term. This means that the volatile ups and downs of the price will not change too dramatically.
We are going to be very conservative on this calculation by saying that the dividend will not go up from $2.10 per share even though based on EXC's dividend history it will go up year over year.
Here is the calculation:
10 year's of dividend payments will equal $1008. This is only from the $2.10 per share dividend.
So, after 10 years your investment would increase from $2080 to $3088. A gain of 48.5% or 4.85% per year.
It is easy to see why dividend paying stocks are so popular in 401k(s), IRAs, and portfolios of low-risk individuals such as those close to retirement.
Here are my favorite long-term dividend plays: EXC, JNJ, MCD, VFC, AZN, VZ
As an example I will use Exelon (EXC) to demonstrate the great return you could receive only from dividends.
Exelon's dividend history can be seen here: http://financials.morningstar.com/ratios/r.html?t=EXC®ion=USA&culture=en-us
Exelon's dividend has increased from $.88 a share in 2002 to $2.10 a share in 2009. So, I think you can make the assumption that Exelon will, on average, increase its dividend year over year.
Now, let's look at its current projected yield, which is 4.93% at its current price of $42.59 per share.
4.93% return over one year only from a dividend is great, especially from a great company with a lot of upside like Exelon.
Let's say you buy a $2,000 position in Exelon through 4 separate buys of $500 worth of EXC stock.
Now here are the possible purchases.
12 shares at $43.00 = $516 + $7 commission = $523
12 shares at $42.50 = $510 + $7 commission = $517
12 shares at $41.50 = $498 + $7 commission = $505
12 shares at $44.00 = $528 + $7 commission = $535
So, you end up buying 48 shares of EXC for a total of $2080.
In the following calculations we are going to assume that the price of EXC will not go up or down over the long-term. This means that the volatile ups and downs of the price will not change too dramatically.
We are going to be very conservative on this calculation by saying that the dividend will not go up from $2.10 per share even though based on EXC's dividend history it will go up year over year.
Here is the calculation:
10 year's of dividend payments will equal $1008. This is only from the $2.10 per share dividend.
So, after 10 years your investment would increase from $2080 to $3088. A gain of 48.5% or 4.85% per year.
It is easy to see why dividend paying stocks are so popular in 401k(s), IRAs, and portfolios of low-risk individuals such as those close to retirement.
Here are my favorite long-term dividend plays: EXC, JNJ, MCD, VFC, AZN, VZ
Monday, July 19, 2010
My Investing Rules #1
1. Based on Benjamin Graham you should try to invest in stocks that have a P/E of 15 or lower and a P/B of 1.5 or lower. When you multiply the P/E by the P/B the number must be 22.5 or less. *This is a very conservative rule that I will break many times, but I will always explain why.
Current Stocks that meet the above criteria based on data from http://www.morningstar.com/:
354 stocks passed the test of a P/E equal to or lower than 15 and a P/B equal to or lower than 1.5.
Of the 354 stocks these are my favorite long-term investments:
Banco Santander (STD) http://www.santander.com/
- Current Price: $12.53
- Current Projected Dividend Yield: 4.15%
- An international play that is considered a value stock. All I have been hearing this summer is how the most growth will occur outside of the United States and in the BRIC countries (Brazil, Russia, India, and China) and other emerging markets.
Navios Maritime Holdings Inc. (NM) http://www.navios.com/
- Current Price: $4.94
- Current Projected Dividend Yield: 4.86%
- This is a very speculative play that only the risk tolerant should make. So, this is for the younger crowd, or the risk tolerant. Instead of placing a couple bets on Sunday you should look at NM.
- An international play with a good dividend. Based in Greece with a port in Uruguay, NM is in the dry-bulk vessel business. Which means they are involved in international shipping.
Current Stocks that meet the above criteria based on data from http://www.morningstar.com/:
354 stocks passed the test of a P/E equal to or lower than 15 and a P/B equal to or lower than 1.5.
Of the 354 stocks these are my favorite long-term investments:
Banco Santander (STD) http://www.santander.com/
- Current Price: $12.53
- Current Projected Dividend Yield: 4.15%
- An international play that is considered a value stock. All I have been hearing this summer is how the most growth will occur outside of the United States and in the BRIC countries (Brazil, Russia, India, and China) and other emerging markets.
Navios Maritime Holdings Inc. (NM) http://www.navios.com/
- Current Price: $4.94
- Current Projected Dividend Yield: 4.86%
- This is a very speculative play that only the risk tolerant should make. So, this is for the younger crowd, or the risk tolerant. Instead of placing a couple bets on Sunday you should look at NM.
- An international play with a good dividend. Based in Greece with a port in Uruguay, NM is in the dry-bulk vessel business. Which means they are involved in international shipping.
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