This Week's Activity – January 11, 2014:
I have a conflict on Tuesday, so this Month’s
Meeting is this Wednesday, January 15, 2014 7:30 PM at my house.
A simple and very famous yearly investment
strategy is called the ‘Dogs of the Dow’ where the strategy is to buy the
highest dividend yield stocks from last year (2013) and hold them through this
year. This Wall Street Journal article
explains the ‘Dogs of the Dow’ strategy and performance: http://blogs.wsj.com/moneybeat/2013/12/30/dogs-of-the-dow-regain-some-bark/
As a fundamental value investor, I will never look
at dividend yield by itself without taking into account the other fundamental
value components that define a good company.
The top two ‘Dogs of the Dow’ from the Wall Street Journal list are T
and VZ. But these two companies have
huge Debt to Equity ratios AND huge Goodwill to Equity ratios.
Debt to Equity (my target is <80%)
T=164% , VZ=353%
Goodwill to Equity (my target is <50%)
T=139%
VZ=325%
These huge ratios at T and VZ mean those
wonderful dividends are being paid with borrowed money. How long can that go on? Maybe for many more years. But they can’t keep on paying their
shareholders a great dividend with borrowed money forever. I prefer that my dividends be paid from
earned money the company can afford to return to shareholders.
I ran my own version of ‘Dogs of the Dow’
using the ‘Short List’ targets and the top two companies on my list are CVX and
CSCO. I already own CSCO and will buy
more if it goes to $20. I do not own
CVX, but will buy if it gets to $110. I
will also check the PUT prices on these before actually placing a buy order.
Here is the link to the USF version of ‘Dogs of the Dow’
Excellent article from CNNMoney.com about the
high current market valuations and suggesting being in more cash right now.
This week, all of the world market indices
were mixed. I still think the markets
are overpriced and continue looking for good values on individual stocks of good
solid companies.
Click here to see our Summary Table of
Worldwide Market Index Closing values for this week: http://www.ultimatestockfinder.com/weekly_index_summary.GIF
Visit our website: http://www.ultimatestockfinder.com/
for more investing ideas,
links, training, tools and information.
This week I sold Cash Secured PUT’s on IQNT, MYGN
and PBR, and I sold a Covered CALL on my NOK shares. See the details below in (CALL or PUT) Sells for This Week.
I did my research on these stocks at Yahoo
Finance.
6 Year chart for IQNT:
10 year chart for MYGN: http://finance.yahoo.com/echarts?s=MYGN+Interactive#symbol=mygn;range=20040312,20140110;compare=;indicator=volume;charttype=candlestick;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;
10 year chart for PBR: http://finance.yahoo.com/echarts?s=PBR+Interactive#symbol=pbr;range=20031120,20140110;compare=;indicator=volume;charttype=candlestick;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;
10 year chart for NOK: http://finance.yahoo.com/echarts?s=NOK+Interactive#symbol=nok;range=20040507,20140110;compare=;indicator=volume;charttype=candlestick;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;
Next Monthly Meeting 2nd Tuesday of every Month:
Changed to Wednesday Jan 15 for this month
only, 7:30 PM at my house.
Here are my Stock BUYs for This Week:
Stock Symbol:
Buy Date:
Buy Price:
Target Sell Price:
Here are my Stock SELLs for This Week:
Stock Symbol:
Sell Date:
Sell Price:
Buy Price:
Buy Date:
Here are my Option (CALL or PUT) Sells for This Week:
I only Sell Covered CALLs or Cash Secured PUTs
Option: PUT
Stock Symbol: IQNT
Sell Date: 1/10/2014
Expiration Date: Jun 2014
Strike Price: $10
Option Price: $1.40
Option: PUT
Stock Symbol: MYGN
Sell Date: 1/6/2014
Expiration Date: Aug 2014
Strike Price: $20
Option Price: $2.35
Option: PUT
Stock Symbol: PBR
Sell Date: 1/6/2014
Expiration Date: Jul 2014
Strike Price: $13
Option Price: $1.40
Option: CALL
Stock Symbol: NOK
Sell Date: 1/9/2014
Expiration Date: Jan 2015
Strike Price: $10
Option Price: $.60
(I bought NOK at $8.50 in March 2011)
StockEvaluator ‘Short List’
‘Short List’ screens using 12 fundamental
value limits that I want to see in a stock before considering it as a possible
buy.
View our training video that shows how to
enter your preferred values for each of these ‘Short List’ screening limits:
View the ‘Short List’ screening criteria and
target limit values here: http://www.ultimatestockfinder.com/short_list_12_criteria.JPG
Stocks on the ‘Short List’ list this week are:
CAJ, CVX, PTR, CHA.
Stock Evaluator ‘Volatility Sort’
View ‘Volatility’ sort here: http://www.ultimatestockfinder.com/stockevaluatorvolatilitysort.xls
Stocks on the ‘Volatility Sort’ have Current
Price <5% above 52 week low, Volatility >3%, Profit>0%, <6 Red
cells in Stock Evaluator.xls.
Stocks on the ‘Volatility Sort’ this week are:
LQDT, SHOS
MutualFundEvaluator ‘Short List’
View ‘Short List’ here: http://www.ultimatestockfinder.com/mutualfundevaluator_short_list.xls
Mutual Funds that are within 3% of their 52
week low AND have less than 3 Red cells.
This week’s list has 41 funds. All except 1 (FRIFX) are Bond funds, which
are all still 3 to 8% above their lows from 2006 to 2008 before The FED dropped
interest rates to bring the U.S. out of the recession. When interest rates go down, bond prices go
up, and when interest rates go up, bond prices go down. These bond funds only pay a 3 to 4% annual
dividend and I think the bond prices will go down another 3 to 4% when The FED
finally lets interest rates go back to historic levels which mean 10 Year Bond
interest rate of at least 3.5% compared to today’s 10 year rate of 3.01%. I will continue to wait before buying any
bond funds because I do not want to lose a whole year’s worth of interest if I
buy back in too soon.
Visit www.ultimatestockfinder.com
to download all Stock Evaluator and Mutual Fund Evaluator spreadsheets, read
training articles and check out all our web links for investing information.
Please remember to send me any other
investing ideas, information or questions that you want to share with the group.
Thanks,
John D.
Disclosure: The author has no positions in any of the
stocks or mutual funds mentioned in this article unless clearly stated above. We
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compensation or other inducement from any party to produce this article. Please see our full legal disclaimer at: http://www.ultimatestockfinder.com/stockevaluator_disclaimer.html
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