What Did You Buy Today?

[crimsonghost747]

And regarding the airlines, I don't think the situation is that bad. It's certainly not pretty but it's not the end of the world.
I don't know for the airlines in the states, how much traffic is actually business travel and/or work related and how much is pure leisure?

Because I know that in Europe the very large majority is vacation travel, and that will get back on track VERY fast once movement restrictions are lifted. Business travel might be a whole different topic though, maybe finally people will suddenly come to the conclusion that with all of today's technology you don't need to fly several hours to have a half day meeting with someone else?

Also, again this is in Europe, but there are talks about "banning" the middle seat in aircraft. Just talks, nothing sure yet. I really don't know if that is plausible, because in the regular narrow body 3x3 seating that would mean a loss of revenue of 33% with 100% load factor. That is in no way a sustainable business model for airlines and basically putting a small wall of plexiglass or similar between the passengers would probably be about the same when it comes to safety.

But whatever the situation is, I think airlines that are not super dependent on business travel will survive just fine if they can get through the next few months.

[fenders53]

IMO it really is that bad for airlines right now. They are incinerating borrowed cash and paying employees they don't need soon. My bigger concern is who can possibly think it's a good idea to buy even one new jet without putting yourself a little closer to BK? That is going to trickle down through the US economy. What if the CV flares back up? We just started opening our economy back up because the death rate is slowing way down. Oh wait, that's not actually happening yet. Airlines are very speculative investments right now. They can't service anymore debt unless the economy is rocking. That is a ways off.

[Otter]

(05-04-2020, 02:07 PM)crimsonghost747 Wrote:

(05-04-2020, 11:17 AM)Otter Wrote: New positions in AXP, BCE, and BMY

BCE is an interesting  add.
I've owned BCE for several years, and honestly it's such a boring stock that sometimes I forget that I even own it. Nothing happens. Ever. Even the quarterly reports are things that I scroll through in 5-10 minutes because there is nothing interesting in them. I don't think I've even read a single Seeking Alpha article about them in the past year. I'm not even sure if the CEO goes to work. You can hear the analysts snoring during the conference call. 

Okay those last two might be SLIGHT exaggerations. But only very slight. 
It is downright the most boring stock I have ever owned, which is not necessarily a bad thing these days.

Yeah, that was kinda my rationale for investing. Boring Canadian dividend aristrocrat Telecom, which yields 5.2% even after the 15% foreign dividend withholding tax for Canada. Nice to have something in that sector other than just T and VZ.

[Otter]

(05-04-2020, 12:36 PM)divmenow Wrote:

(05-04-2020, 11:29 AM)fenders53 Wrote: Added ADM-IP-D-UPS

Just some 10-20 share pickups from my long list of limit orders.  I think most of them are going lower actually.

Also sold some puts, MO-KO-T-XEL so far.

I like UPS and D adds.... but ADM and IP.. Ewww 

No growth in either of those names. You mine as well have just put your money in PFE lol

At least ADM is an aristocrat. They are kind of like NUE. They somehow manage to raise the payout annually for decades on end, in a volatile commodity-based industry that has bankrupted more players than not. I like it with a 4%+ yield, but certainly don't expect it to be the growthiest holding in my portfolio.

[Otter]

(05-04-2020, 12:51 PM)fenders53 Wrote:

(05-04-2020, 12:31 PM)Otter Wrote:

(05-04-2020, 12:25 PM)fenders53 Wrote: Added some BMY shares and sold a put so I can be overweight if they blow earnings tomorrow.    

Seriously though, IMO it is probably the only big pharma stock that might be undervalued. We never know for sure until the drug trial results come in.  They have an important trial result coming in the next few weeks. It's rarely better than a 50/50 shot.  Their pipeline is as good as the competition.

GILD, MRK, and PFE also appear fairly valued. Not screaming deals, but fair value.

The only two stocks I have held 25+ years consecutive are PFE and XEL.  Guess which one isn't a 10 bagger?  I am wearing my "Pfizer Broken Dreams" T-shirt as I type this, so go tell your PFE lies somewhere else.     

I own over 500 shares of PFE.  Apparently I am a little slow lol.  I am overweight MRK.  I'd like to trim it but this is not the week.

PFE has grown earnings by an average of 4.85% annually over the past 20 years (as far as I can go back in FAST Graphs). 20 years ago, PFE traded at $45.15 with a P/E north of 43. Today it trades at $37.71, but with a P/E of around 13.2. If PFE had traded at a rational earnings multiple of 15 or less 20 years ago, investors would have enjoyed positive total return over the intervening 20 years (although not market-beating). 

The chart for PFE (and a lot of other bubble stocks from the late 90s) is a helpful reminder any time I am tempted to buy DG, MSFT, WMT, and many others I would like to own, at present valuations.

[fenders53]

(05-04-2020, 02:38 PM)Otter Wrote:

(05-04-2020, 12:36 PM)divmenow Wrote:

(05-04-2020, 11:29 AM)fenders53 Wrote: Added ADM-IP-D-UPS

Just some 10-20 share pickups from my long list of limit orders.  I think most of them are going lower actually.

Also sold some puts, MO-KO-T-XEL so far.

I like UPS and D adds.... but ADM and IP.. Ewww 

No growth in either of those names. You mine as well have just put your money in PFE lol

At least ADM is an aristocrat. They are kind of like NUE. They somehow manage to raise the payout annually for decades on end, in a volatile commodity-based industry that has bankrupted more players than not. I like it with a 4%+ yield, but certainly don't expect it to be the growthiest holding in my portfolio.

Exactly why I own it.  I don't prefer 50 exciting stocks.    When it dips too hard, I overweight it a bit, and collect a couple Divs while I am waiting to trim a little off.  They are dominant in the grain belt.  I should take a chance and go in deeper if they pullback much more.  We aren't going to stop growing corn here and some of it has to be processed.  We can't feed it all to the hogs lol.

[EricL]

(05-04-2020, 02:46 PM)Otter Wrote: PFE has grown earnings by an average of 4.85% annually over the past 20 years (as far as I can go back in FAST Graphs). 20 years ago, PFE traded at $45.15 with a P/E north of 43. Today it trades at $37.71, but with a P/E of around 13.2. If PFE had traded at a rational earnings multiple of 15 or less 20 years ago, investors would have enjoyed positive total return over the intervening 20 years (although not market-beating). 

The chart for PFE (and a lot of other bubble stocks from the late 90s) is a helpful reminder any time I am tempted to buy DG, MSFT, WMT, and many others I would like to own, at present valuations.

I get what you are saying completely, but not sure why DG is named there. It's growing EPS at a double-digit rate and has a PE of 23 on FY21 estimates of $7.52 in earnings. It's expensive, but not outrageously so considering its growth rate.

[fenders53]

(05-04-2020, 02:46 PM)Otter Wrote:

(05-04-2020, 12:51 PM)fenders53 Wrote:

(05-04-2020, 12:31 PM)Otter Wrote:

(05-04-2020, 12:25 PM)fenders53 Wrote: Added some BMY shares and sold a put so I can be overweight if they blow earnings tomorrow.    

Seriously though, IMO it is probably the only big pharma stock that might be undervalued. We never know for sure until the drug trial results come in.  They have an important trial result coming in the next few weeks. It's rarely better than a 50/50 shot.  Their pipeline is as good as the competition.

GILD, MRK, and PFE also appear fairly valued. Not screaming deals, but fair value.

The only two stocks I have held 25+ years consecutive are PFE and XEL.  Guess which one isn't a 10 bagger?  I am wearing my "Pfizer Broken Dreams" T-shirt as I type this, so go tell your PFE lies somewhere else.     

I own over 500 shares of PFE.  Apparently I am a little slow lol.  I am overweight MRK.  I'd like to trim it but this is not the week.

PFE has grown earnings by an average of 4.85% annually over the past 20 years (as far as I can go back in FAST Graphs). 20 years ago, PFE traded at $45.15 with a P/E north of 43. Today it trades at $37.71, but with a P/E of around 13.2. If PFE had traded at a rational earnings multiple of 15 or less 20 years ago, investors would have enjoyed positive total return over the intervening 20 years (although not market-beating). 

The chart for PFE (and a lot of other bubble stocks from the late 90s) is a helpful reminder any time I am tempted to buy DG, MSFT, WMT, and many others I would like to own, at present valuations.

I bought most of my early PFE shares then.  From about 30-40 IIRC. It actually looked like a sane purchase relative to the rest of the market.  Valuation always matters eventually.  If not for the dividends I'm not certain my return would have been back to even for 20+ years.  I just left it in my wife's 401K and forgot about it.

[fenders53]

(05-04-2020, 02:53 PM)EricL Wrote:

(05-04-2020, 02:46 PM)Otter Wrote: PFE has grown earnings by an average of 4.85% annually over the past 20 years (as far as I can go back in FAST Graphs). 20 years ago, PFE traded at $45.15 with a P/E north of 43. Today it trades at $37.71, but with a P/E of around 13.2. If PFE had traded at a rational earnings multiple of 15 or less 20 years ago, investors would have enjoyed positive total return over the intervening 20 years (although not market-beating). 

The chart for PFE (and a lot of other bubble stocks from the late 90s) is a helpful reminder any time I am tempted to buy DG, MSFT, WMT, and many others I would like to own, at present valuations.

I get what you are saying completely, but not sure why DG is named there. It's growing EPS at a double-digit rate and has a PE of 23 on FY21 estimates of $7.52 in earnings. It's expensive, but not outrageously so considering its growth rate.

WMT isn't bubblicious either.  Not a chance I would buy it now but many 90s blue chips were 300%+ overvalued.  We aren't even close to the insanity of that era IMO.  You can't even easily research the worst of it because they were gone or acquired cheap in a few years. I clearly remember the $1000 analyst price target for QCOM. Are we there yet lol? I also remember owning a couple hundred shares of $80 CSCO. It must have split three times. I was too greedy (actually inexperienced) to sell it.

[Otter]

(05-04-2020, 02:53 PM)EricL Wrote:

(05-04-2020, 02:46 PM)Otter Wrote: PFE has grown earnings by an average of 4.85% annually over the past 20 years (as far as I can go back in FAST Graphs). 20 years ago, PFE traded at $45.15 with a P/E north of 43. Today it trades at $37.71, but with a P/E of around 13.2. If PFE had traded at a rational earnings multiple of 15 or less 20 years ago, investors would have enjoyed positive total return over the intervening 20 years (although not market-beating). 

The chart for PFE (and a lot of other bubble stocks from the late 90s) is a helpful reminder any time I am tempted to buy DG, MSFT, WMT, and many others I would like to own, at present valuations.

I get what you are saying completely, but not sure why DG is named there. It's growing EPS at a double-digit rate and has a PE of 23 on FY21 estimates of $7.52 in earnings. It's expensive, but not outrageously so considering its growth rate.

DG has grown earnings annually by an average of 16.24% over the past decade, with the highest rate of earnings growth over that period concentrated in the first half of the 2010s. Current P/E of 25 is more than 35% higher than its average P/E over the same period of 18.48. Future earnings forecasts, while healthy, are for earnings about 25% below the historical 16.24% growth rate. BBB credit rating, while technically investment grade, doesn't leave them many notches above junk in the event that something disrupts their business model (have seen a lot of unanticipated disruption for other businesses lately, and I can't predict the future). All of that, plus an all-time-low dividend yield of 0.83% means that the company just doesn't pass my value screen. I'm okay with paying for growth, but there's a limit to the premium I will pay. 

[fenders53]

Hindsight is always fun to second guess. It looks clearly overvalued now but if you sold it early 2018 when it was overvalued you just missed a double. Nobody said this was easy.

[Otter]

(05-04-2020, 03:14 PM)fenders53 Wrote: Hindsight is always fun to second guess.  It looks clearly overvalued now but if you sold it early 2018 when it was overvalued you just missed a double. Nobody said this was easy.  

Past earnings and stock price are the only hard data we have. By P/E ratio, DG is presently valued above forecast 2023 earnings, using its historical averages. 

Chuck Carnevale's consistent position on looking for value within the DGI space has always resonated with me. If all that mattered to me was the dividend going up each year, I'd just sell my entire portfolio and buy VDIGX.