Chowder

Acerca de D.
En unas semanas podremos ver en qué ha quedado la cosa.

“I suppose it’s panic time for some, a “damn” moment for others, and certainly a scatter situation to find a replacement for others. Jubilation for anyone who trimmed or sold D in the recent weeks or months. In some cases that would be justified.
I don’t see this as a doomsday action as of now, there still needs to be more clarity going forward, but from where I sit, taking a short term dividend cut does not justify a move on my part. If anything, depending on whether D drops enough in price, it will be a buying opportunity for me.
There are those who thought D overpaid for the SCANA acquisition. The amount of debt actually lowered their dividend safety number if folks can recall. Others were upset over D lowering the dividend increase projections to 2.5% in the coming years. Starting next year they are projecting 6% annual dividend increases. That’s a positive from my perspective.
I actually see several positives coming from this as long as I am willing to endure a little uncertainty and a short term dividend cut.
People wanted D to deleverage the amount of debt they have. This move helps in doing that. There is $5.7 billion in debt that will be retired. … Isn’t that a good thing?
D is also going to start buying back shares with the other $3 billion from the sale of their gas storage business, and with less shares available in the market, the lower their dividend payout goes as they plan on lowering their payout ratio to 65% from 86%. … Another good thing? I think so.
One of the biggest risks to utilities is their power merchant business which causes them to wander away from their regulated business. It’s the regulated part of utilities that provides their strength as good long term investments, and I know this is a good thing.
A year and a half ago I stated that the owner of this portfolio needed $100K per year in dividend income to live comfortably in retirement. I also stated my objective was to get it up to $200K per year, and that has been achieved. I received a good bit of push-back on that strategy with people asking why it was necessary to have so much more income when it wasn’t needed. Well, this year has shown why.
Due to the fact that I built an income margin of safety, 100% above what is needed, I don’t have to react to every dividend freeze, cut or suspension. It’s not going to have an impact on quality of life. I can now sit tight, get some more information, and allow it to play out before I make any decisions as to whether I should trim, hold tight, or add more shares. I don’t need to make any knee jerk reaction decisions.
There are those who aren’t on schedule, or haven’t achieved their required income number yet, and it may be in their best interest to make a move. I don’t know, I don’t know their personal situation.
I can’t speak for others who read this comment, I can only speak for myself. I see D coming out of this stronger than they are today unless new information comes to light that would indicate otherwise.
So that’s where I stand. I encourage others to do what they think is best for them.
[…]
Where your focus is on the dividend, I have always said my focus is on the company story. Often times a company has to take a step back in order to take two steps forward. This is why I don’t have all of my money in one company.
And I don’t count myself as the typical dividend investor. The typical dividend investor is too focused on every company meeting some expectation they have of it. I focus on the portfolio as a whole, knowing that I will have to go through ups and downs with companies.
D after the dividend cut will still be yielding more than WEC, NEE and XEL, all companies that I own. So from a dollars and cents point of view, I will still be receiving more dividend income from D than I am with the other 3 companies. I can live with that.
As I said in my comment above, others need to do what they think is best for them. You know what you need to do for you, so do it.”

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Me afecta el recorte. Pero coincido con él en que se reduce deuda, se recompran acciones y aún sigue dando un yield decente. ¿Podría ser un paso atrás para dar dos adelante? Yo ya anticipo que si se viene un desplome gordo de cotización venderé alguna put bastante abajo y a ver qué pasa.
No creo que sea una empresa para defenestrar aún, y menos para los que estamos pensando en reducir / eliminar exposición a las utilities patrias.
Ánimo!!!

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Young folk portfolio.

“Let me comment on an important aspect of investing, one you don’t hear about or see much of here on SA and most media spots.
To me, when I buy stock in a company it’s a real ownership investment to me. From my perspective, I am a silent partner in an ongoing business. Therefore, the first thing I look at is what a company does for a living.
I’m not looking at yields, dividend growth streaks, share price, valuations or any other piece of criteria people screen for unless I like what a company does for a living. I look for the one thing no screen is set up to do and that is the company profile.
When I looked at JNJ a number of years ago, it was their product line, their diversity, and their importance to society. I bought into the company profile. Therefore, when the company got in trouble with recall after recall after recall of their drugs, that didn’t chase me out of my position with JNJ because their profile didn’t change for me, I still liked what they did for a living.
A number of years ago TGT was in trouble, credit card security breach, a bathroom policy that didn’t go over well, competition from AMZN, their Canadian stores all shut down, but those things didn’t affect the company profile for me. I still liked what they did for a living, I liked their marketing plan.
Both of these companies are up 100% or more for me since I decided to hold on to them as opposed to selling them when others were disappointed by the results or company decisions at the time.
I have other examples I can provide as well, but here’s my point. You may not get the results you want, in the time frame you’d like to have them, but as long as you like what a company does for a living, it makes it easier to bite the bullet and allow the company time to turn around. Every company goes through bad business cycles, they always have, they always will, but if you are going to hop in and out like a whack-a-mole game all the time, all you end up doing is chasing your tail and not building anything of significance.
One of the reasons you see older folks playing whack-a-mole is because they didn’t invest early enough in life to build positions to where they provided 1000% or 2000% returns and more. And those who were fortunate enough to have positions with those sort of results weren’t trimming or selling when valuations were high, the economy was bad, or the company was going through a bad business cycle. They were silent partners in an ongoing business, offering a service or product they like and the public used.
If you don’t understand what it is a company does, or you don’t like what a company does, then don’t own it because the yield is high or because others are buying it. Think of it as a business you would like to own and run if you had the cash to buy the company outright, then fasten your seat belts and enjoy the ride. The seat belts are for the turbulence you are sure to face from time to time.
If you pick quality to begin with, you don’t have to play whack-a-mole, you continue to build your positions in both good times and bad. If you don’t have the confidence to buy more during bad times, then don’t buy the company to begin with. Own the type of companies you think could have a 50% correction and you wouldn’t mind holding and adding to them at those low levels. It’s as simple as that. The difficult part is getting your mind right. Getting your mind right requires a commitment. … Think about it! Then act upon it!”

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A mi me gustaban las varitas del capitan Pescanova :sweat_smile:

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Y a mí las ofertas de Dia.

Sí, tengo ese cadáver en mi armario.

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Acerca de CVX: Otras que se apunta al gas natural.

"I was waiting to add to CVX when I started to see the weekly rig count rising, but today CVX announced the acquisition of Noble Energy. I like this move and it increases CVX’s access to natural gas, so as far as I’m concerned, I wanted to add now while share prices are low and the industry is facing headwinds, and the yield is around 6%.

Having been through a number of boom and bust cycles in the oil and gas industry, the strong always survive, and the strong start to gobble up the weak. CVX just took a bite in an all stock purchase and to me, that shows strength."

Respecto al contaje de pozo de petróleo y GN: siguen descendiendo semanalmente. Mínimos desde 2005.

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¿cómo cuentas los pozos que están funcionando? yo he estado buscando sitios que publiquen algún dato de este tipo en US y no he encontrado nada que mantenga una publicación mensual o continua,

Hola, perdonad que me meta en la conversación. Sólo un matiz, no son pozos produciendo, son taladros de perforación que están actualmente activos perforando pozos nuevos. Es decir, da una idea del nivel de inversión en exploración y producción de las compañias de gas y petróleo ahora mismo. Menos taladros, menos pozos, menos inversión, menor ratio de reemplazo de reservas. El número de rigs normalmente sigue con cierto retraso al precio. Ahora se refleja en el número de taladros los efectos de los bajísimos precios del crudo de la primera mitad de año. Os dejo algunos links que os puedan interesar.

https://www.eia.gov/dnav/ng/ng_enr_drill_s1_m.htm


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Uso el contaje de Baker Hughes que ha puesto @fdiazb00.
También puedes verlo poniendo rig count en Seeking alpha, pero en definitiva informan el de Baker Hughes. Sale cada viernes.

Gracias por la corrección.

muchas gracias @luisg y @fdiazb00,

Having had extensive experience investing in the oil sector in the past (at one time I was 100% invested in oil service companies) I learned the time to invest during the bust cycle was when the rig count started to rise. That indicated an expected rise in demand, which should be an expected rise in performance.This was the first week the rig count has risen and it jumped by 10, which surprised me, I would have expected maybe 2 or 3.

What I will do now is wait for next Friday’s report, and if that report shows a rise in rig count, it’s at that time KMI will be my next add on purchase.I’m not trying to nail the bottom, I probably already missed that. I’m trying to catch the momentum indicating the energy sector may finally be coming to life.

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Parece que ADP está de moda. Cartera CQSS, Stock del mes de DVK y Chowder habla de ella también.

"I’ve had ADP in a number of portfolios for some time now. For those of you who pay attention to total return, it is up 139% in the Young Folk Portfolio that I blog about. It is a full position.

Those of you who are familiar with my work know that I talk about taking the ‘condition of the market’ into consideration when investing. Back around 2010 and 2011, those of us who used FAST Graphs wouldn’t consider buying a company whose price was above the orange line, yet below the blue line. The blue line representing historical PE. At the time, the common phrase was, there are better investments elsewhere and the focus was on deep discount to fair value. Being simply undervalued wasn’t good enough.

The cost basis for ADP in the young folk portfolio is $55 yet at the time, $55 seemed too much to pay for ADP. ADP hasn’t seen a price that low in 7 years. Since I believe the true value of a company is in the future, I ignored the warnings at the time that ADP was too expensive. My focus was simply on buying good companies that I wanted to own long term and build as I went along.

I will stipulate that I do believe ADP is fairly valued today at $132, and I believe the same thing at $132 that I did when it was at $55. The true value of a company is in the future. An example of how that will work.

For the past 10 years, ADP has shown a 15.78% compounded annual rate of growth, dividends NOT reinvested. If we lower that CAGR to just 8% over the next 10 years, today’s price of $132 will become $285, presenting a triple digit gain. And this is with cutting total return almost in half of what it has done in the past 10 years.

This is why I don’t give the same level of consciousness to valuations as many people do. It’s because I believe today’s valuation will be nothing more than a lump on the log 20 years from now. … The true value of a company is in the future.

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Esta semana también han tenido una interesante discusión sobre Water Utilities (AWK, AWR, WTRG)

https://seekingalpha.com/instablog/3035031-rnsmth/5301222-dgr-chit-chat#comment-86459027

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Ahora llego ahí. Hace unos 10 días también trataron el tema:

-AWK.
-AWR.
-WTRG.

Pongo trozos de la conversación ya que en unas semanas se borran los comentarios allí.

RON
“WTRG has a current yield of 2.55%. AWR’s is 1.82%
Dividend Saftey scores are very close, both in the Very Safe range.
Dividend growth rates are similar.
AWR this past year was 9%, 5 year is 7%, 20 year is 5%.
WTRG last year was 7%. 5 year is 7%, 20 year is 7%.”

CHOWDER
" I can understand from a dividend aspect where one could find WTRG more appealing than AWR, but from my perspective both are low yielding companies and when I look at lower yields I also consider capital gain potential.
I realize the numbers from the past may differ going forward, but it’s performance trend I look at, not the numbers per se. By performance trend I mean who has historically provided better total return than the other over various time frames, and how consistent has those differences been.
Total return, dividends NOT reinvested.

AWR … 3 yr. 54.3%
WTRG … 3 yr 24.0%

AWR … 5 yr. 101.9%
WTRG … 5 yr. 72.6%

AWR … 10 yr. 386.0%
WTRG … 10 yr. 130.1%

So since I look for total return trend potential in lower yielding companies, I have to look at AWR first.
One of the first things I looked at them anyway was coverage area. I have AWK for the east coast, I was thinking I may want something on the west coast, and AWR fills that need as well.
Again, I haven’t done a full review, I want to look into both companies a little deeper and see what business growth potential each has and who has the advantage there. "

DANIEL CLULEY
" The geographies are a good point. Here are geographies of each of the top 3:
AWK:www.amwater.com/…
WTRG (Aqua America):www.aquaamerica.com/…
AWR:americanstateswatercompany.gcs-web.com/…

AWR was historically mostly California but also has some mid-atlantic east coast and southern operations through agreements to provide services at and around U.S. Military bases. Good for diversification of the geographical footprint. I might look into starting a position in AWR just for that alone."

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Volvemos a los básicos.

"If something appears overvalued, and since we truly don’t know what a company’s value is, then I prefer to invest small where it doesn’t make much difference and then manage the position from there.

If it falls back I buy a larger dollar amount than originally purchased. If it continues to rise I continue to buy smaller dollar amounts.

There are people here buying in $500 and $1,000 lots and treating it as though it is the most important decision of their investing career. Fact is, it won’t mean nuthin’ 20 or 30 years from now when the position has been built to $30K, $50K, $100K or more. What will mean more is the continued building of share count."

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"We were discussing whether water utilities are profitable or not. We need to keep in mind that utilities are regulated for the most part. They are limited to how much profit they are allowed to earn. Utilities are generally allowed to have a return on equity (ROE) between 9% and 11%. That is the sweet spot.

Here are just some ROE examples:

  • SRE … 11.63%
  • WEC … 11.36%
  • XEL … 10.88%
  • SO … 10.05%
  • NEE … 7.06%
  • AWR … 14.99% (The little engine that could)
  • AWK … 10.32%
  • WTRG … 6.60%

The rest is up to management."

Una pregunta, alguna vez Chowder ha publicado su rentabilidad? Supera al índice? esas cosas tan picantonas vamos

No que yo sepa.
Una vez puso su cartera actual (la tenemos en este hilo).
Lo que tienes para referencia es la cartera de su hijo, donde pone la rentabilidad por posiciones y global (creo en 10 años el CAGR>20%).

Interesante las fuentes de información que usa y el valor que les da.

"By the way, I know others prefer free stuff and that’s okay by me, but for those of you reading this who might be interested in a subscription based newsletter, I subscribe to IQ Trends and Valuentum. Valuentum by far is the better value in my opinion. It offers much more than IQT.

I also use Simply Safe Dividends and FAST Graphs."

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