Investments Trade Log

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George the original one
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Re: Investments Trade Log

Post by George the original one »

VZ & T are masters at working with debt, so I'm not too worried about it for them. VZ & T in the past year have become much different companies than what we used to think of them as and I think they both have good potential. Execution is what will matter in the long run; historically T is better at execution, but VZ seem to finally be getting their act together. Paradoxically, Mr. Market valued VZ above T for the past 7-8 years and are now removing the premium VZ enjoyed.

Basically, I think they're both a buy when their dividends are above 5%. Watch the upcoming year to see what they do with recent purchases and we can readjust our holdings as needed.

halfmoon
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Re: Investments Trade Log

Post by halfmoon »

These are encouraging words, as I also hold T (both long-term). I've been concerned about their payout ratios, debt and valuations. Holding now. :)

Dunkelheit
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Location: Somewhere in Spain

Re: Investments Trade Log

Post by Dunkelheit »

I have just found that IB only accepts dividend reinvestment plans for US-based companies :(

VZ sounds good, but unfortunately the €/$ doesn't help today. In Spain we have a similar one with high-yield, but smaller, Telefonica. They are trying to reduce debt without success since decades.

Greetings,
Dunkelheit

Chad
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Joined: Fri Jul 23, 2010 3:10 pm

Re: Investments Trade Log

Post by Chad »

If you buy VZ and/or T it is probably a good idea to plan on holding them until at least 2019 or 2020 when they are scheduled to roll out true 5G. Their spending, such as their bidding war the last couple weeks for Straight Path, will definitely be big during this time frame. However, 5G will be major improvement and will really be the beginning of broad adoption of "everything talking to everything".

T seems to be the best positioned for vertical integration of services with the DirectTV purchase, but I don't think either is bad long-term.

I'm probably going to purchase one or both of them in my taxable portion of my investments and add to my father's holdings of both at these levels.

halfmoon
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Re: Investments Trade Log

Post by halfmoon »

Because I received great input on VZ & T here, I'm going to angle for more. No good deed goes unpunished.

We hold GILD in two accounts (makes us twice as dumb?). I've been teetering on the verge of selling one of the holdings, but I keep thinking it should be a good long-term investment. I know they've suffered from actually curing Hepatitis C instead of just treating it...what were they thinking?? ;) Still (and even saying this makes me feel like capitalist scum), the rising heroin epidemic could bring a lot of new and repeat customers.

Scummy profiteering aside, the company has things I like: low P/E, pretty good dividend, low payout ratio, deep enough pockets for additional pipeline acquisition. Analysts on Fidelity somewhat favor it. Yet the stock price is in the basement, and it's pretty dark down here.

Thoughts? Cut and run or hold? Just don't say "buy more", because I already did that at 66.70. :oops:

jacob
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Re: Investments Trade Log

Post by jacob »

Since nobody has mentioned it yet, I will.

There's a reason that T and moreso VZ are dropping in price, namely that they have used debt (not earnings) to fund their big acquisitions (and growth) and therefore now hold large debt positions. These aren't quite the same companies they were a few years ago. In VZ's case, the current S&P report, for example, questions whether VZ's dividend is even sustainable at these levels. So the question is whether they will each be successful using this leveraged position on the plans Chad mentioned.

Since they aren't exactly selling bleach or cigarettes, it's not guaranteed that they can sustain this level of leverage.

Chad
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Re: Investments Trade Log

Post by Chad »

That's a valid point and both T and VZ are being squeezed by T-Mobile for customers right now. They are not without their warts.

cmonkey
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Joined: Mon Apr 21, 2014 11:56 am

Re: Investments Trade Log

Post by cmonkey »

The debt might not have been as big of a deal with ZIRP in place, but now that rates are rising its definitely going to put more pressure on them.

cmonkey
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Re: Investments Trade Log

Post by cmonkey »

cmonkey wrote:
Tue May 02, 2017 7:12 pm
Considering MOS after today's drop. Not sure it's the right time quite yet, but prices are firming and their cost management looks good. They also have a decent amount of cash on the balance sheet and so can support the dividend.
Glad I waited to see what they would do with that dividend. Putting my money elsewhere.

George the original one
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Re: Investments Trade Log

Post by George the original one »

I hope T and VZ will transform themselves. Telecom will be a small part of what they do in the future. At least that's the justification for the debt.

halfmoon
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Re: Investments Trade Log

Post by halfmoon »

Interesting point, George. Most successful tech companies are in the process of transforming themselves, and I like to think that T and VZ will be tech companies of a sort in the future. From what I read, 5G will be key to Internet of Things.

As long as I'm on the subject of hope-based investing: any thoughts on GILD?

cmonkey
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Re: Investments Trade Log

Post by cmonkey »

After seeing so much money flowing into growth away from value, its nice to see a reversal start!

User avatar
C40
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Re: Investments Trade Log

Post by C40 »

Bought some O in my Roth. (most of the money I used was from a conversion from Traditional to Roth, to start my ladder, and that all came from dividends from stocks in the Traditional).

And made these changes in my Traditional to push up my dividend income there:
- Sold a chunk of VYM. (I bought it in August last year. Gained 7% of capital gains, and 2.3% from dividends). And spent the proceeds evenly on these:
- OHI
- SBRA
- WPC

The VYM was yielding around 3%, and the ones I bought yield around 7%. These changes in my Traditional increase my dividends by $1,300 per year, and the O in my Roth gets me another $600/year.

George the original one
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Re: Investments Trade Log

Post by George the original one »

Verizon buying Yahoo is complete now and Marissa Mayer has resigned. Stock price is down something like 13% since Jan 1 if you're shopping. Here are some notes I've pulled from the Reuters article:

Verizon, the No. 1 U.S. wireless operator, is combining Yahoo with AOL, which it bought two years ago, to form a venture called Oath, led by AOL CEO Tim Armstrong. Oath's more than 50 brands include HuffPost, TechCrunch and Tumblr.

Reuters reported last week that Verizon planned to cut about 2,000 jobs, or 15 percent, of the 14,000 employees at its Yahoo and AOL units. Verizon is expected to make cuts as early as Wednesday. Yahoo cut 15 percent of its workforce last year and AOL cut 500 jobs.

On Friday, the remainder of Yahoo not acquired by Verizon will be renamed Altaba Inc, a holding company whose primary assets will be its 15.5 percent stake in Alibaba Group Holding Ltd (BABA.N) and a 35.5 percent holding in Yahoo Japan Corp <4689.T>.

Chad
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Re: Investments Trade Log

Post by Chad »

Verizon buying Yahoo and combining it with AOL will only really matter if the FCC and current administration manage to break the current open internet model.

cmonkey
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Re: Investments Trade Log

Post by cmonkey »

Any thoughts on SSW? Seems their biggest headwind might be the future of international trade agreements, but I don't know how much these concerns will pan out since Trump can't seem to get anything done. Revenues are higher than ever, but have plateaued a bit. EPS has gone down due to more shares being issued. P/E and P/B are very good.

distracted_at_work
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Re: Investments Trade Log

Post by distracted_at_work »

I really really want to buy SHOP. I've regreted missing the boat since I started following it from $30 last year. This one is listed in Canada and the U.S.A. Any thoughts?

Chad
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Re: Investments Trade Log

Post by Chad »

SSW is interesting. The short-term negative is the rise of populism and protectionism. It seems to be receding a little, but it's hard to count it out for good. The long-term negative is super cheap automated factories that can be easily retooled because of advanced AIs (not SciFi AIs). These factories will reduce the cost of labor to a point where it won't matter that much for many items and could make it more feasible to just build a bunch of small factories near or in the major population centers and economies of the world. This would cut out a portion of overseas shipping that SSW does.

I do like the valuation, dividend, and the fact that it actually makes money. They did cut their dividend recently, but that just brought it in-line with their current profit level. I would think shipping would rebound from the beating it has taken over the last two years, if populism and protectionism don't get in the way.

Chad
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Re: Investments Trade Log

Post by Chad »

I would rather buy AMZN that SHOP. I keep hoping for a nice 10-15% pullback on AMZN to buy some more. The recent pullback didn't quite go far enough.

A really good analysis of what AMZN does:
https://stratechery.com/2017/amazons-new-customer/

That does not mean I hate SHOP. I just think AMZN is the Standard Oil of the modern age and competes tangentially with SHOP. Though, I'm not even sure there is a historical comparison for what AMZN will probably become. Maybe the East India Company?

cmonkey
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Re: Investments Trade Log

Post by cmonkey »

I doubt you are going to get a pullback like that. This latest drop was probably one of the best you'll get. Maybe if some antitrust efforts get started? Seems likely at some point.

AMZN is pure bubble/speculation and the sky is the limit until their moat dries up, but since they keep making it deeper that is unlikely. 5K per share by 2020 if future P/E follows past.

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