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What are you buying today?


LowIQinvestor

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BRK. Buy below $200 and sell at $208-$210. Rinse and repeat. 1.3xBV = $195. Below $200 looks like good value to me. Especially with its heavy focus on US economy; limited trade war exposure (compared to most large multinational companies).

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I bought more WFC today.

 

Wells is about 30% undervalued compared to my valuation estimate in the mid to high $60's per share. The company still has a return on equity in the low double digits, has a dividend yield of about 4%, and is buying back about 7% of its shares each year (at great prices), so even if the bank is unable to grow assets for several years (which I don't expect) a new shareholder today should be able to get a low double digit return over time. Success with the CEO search and removal of the asset cap would be upside to that base case. If the stock re-rates to my fair value estimate sometime in the next few years I should be able to capture a return in the high teen or low 20% range.

 

Mike

 

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Hi John - I follow Rosneft a bit as I have a large position in BP, but have not looked at it from the perspective of a purchase.  Have you and if so, thoughts?

 

Regarding Russion oil, I sold Lukoil, but still hold Gazprom. 

 

Also, I nibbled on AOS and wrote puts on TPR this afternoon.

 

Thanks

Lance

 

Hi Lance,

 

I just looked around Saturday afternoon now almost about two weeks ago because of the jump in Gazprom [, now up ~40 percent within a couple of weeks, ref. the Gazprom dividend release mentioned by TwoCitiesCapital in the OGZPY topic]. I think it must have been late 2013 I last time looked at Rosneft - I was then pretty much overworked and stressed in relation to running on full throttle downsizing for our two parents still alive. So I think I must have drifted away from it mentally because of that.

 

I was a bit surprised under the revisit to Rosneft - much larger than compared to my recollection from back then in 2013, likely based on anchoring in the Rosneft 2012 financials, not fully comprehending the effects of the TNK-BP deal between Rosneft and BP closely related to BP's situation after the Macondo Blowout. Rosneft appears to smoke every other large oil company with regard to reserve replacement ability, but I'm not sure I understand it correctly. I need to read some more to understand it.

 

Rosneft is somehow Mr. Putins puppy, but the shareholder presence of BP & Qatar Holding with a total ~40 percent ownership counters it somehow, I think.

 

I still hold all shares of Lukoil bought back in august 2013 & August 2014, and all shares of Gazprom bought May & June 2013. Mentally I think of it like the dividends received are repayments of invested principal, and then go somewhere else with the dividends. To me that's a way to mentally handle the political risk, combined with modest positions. Lukoil has worked out satisfactory, Gazprom not so far, but I think Gazprom will deliver much more going forward [Gas to China].

 

It's investing in "hold your nose"/generally out of favor/hated companies, operating in the "dirty"/"black" part of the energy space, based on good dividends.

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More CLF. Mexico tariffs? F you market, says Lorenco Goncalves, lets raise the dividend 20%...

 

I need to cycle back into refineries again. I bailed from MOC (at a small profit) and like Buffets former pick of PSX better, as it is better run (imo) with better capital allocation. It’s not cheap enough me to buy though, so I got some DOW instead.

 

CLF‘s dividend raise is supposedly trying to bolster confidence, but the yield is too small to matter and won’t support the stock, imo.

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More CLF. Mexico tariffs? F you market, says Lorenco Goncalves, lets raise the dividend 20%...

 

I need to cycle back into refineries again. I bailed from MOC (at a small profit) and like Buffets former pick of PSX better, as it is better run (imo) with better capital allocation. It’s not cheap enough me to buy though, so I got some DOW instead.

 

CLF‘s dividend raise is supposedly trying to bolster confidence, but the yield is too small to matter and won’t support the stock, imo.

 

Yea PSX and MPC are the ones I like. They're small, as are a lot of my positions, so I don't have to give myself grey hairs worrying about aggressively managing it. I try to find levels where things get interesting to build starters, and then just scale in on further pullbacks.

 

Agree on CLF, but if you listen to the calls, Goncalves has talked about his preferences for capital allocation. Given dividends are way down the list, I think this bodes well for what is being done with the others. They already ripped through about 10% of the shares outstanding since October if I remember correctly.

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Reestablished a position in BAC. Bought more BRK. Also started very small positions in West Fraser Timber and GM.

 

I got a 5-year auto loan from BAC at 2.79%. :p

This is on Friday (Now the rate is increased  by 0.35%)

Chase, on the other hand, is offering 4+%

And Wells is only doing it through certain dealership and so there is no quote.

 

 

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