I made my first purchase in over a month today. I bought shares of ishares Dow Jones US Technology (IYW). This is a ETF or Exchange Trade Fund and the top ten holdings are Google, Apple, Microsoft, Intel, Cisco, Hewlett Packard, Dell, IBM, Oracle, and Qualcomm.
The investment seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Technology index. The fund uses a representative sampling strategy to try to track the index. The index measures the performance of the technology sector of the U.S. equity market. The index includes companies in the following sectors: software and computer services and technology hardware and equipment. It is nondiversified.
Shares were purchased at $60.98 and will most likely hold long term.
Wednesday, September 5, 2007
Friday, August 3, 2007
NEW TRADES
On July 27 I sold several long time positions. I think we are in order for a downturn in the stock market.
Sold positions
Gabelli Utility Trust (GUT) $9.55 Held for 1 year and 7 months for a 19.7 percent profit
Wasatch International $23.36 Held for 3 years 6 mo. for a profit of 98 percent
Wasatch Strategic Income (WASIX) $11.29 Held 5 months for a loss of 1 percent
Wasatch Ultra Growth $25.89 Held for 5 years for a profit of 77 percent
Third Avenue Real Estate (TAREX) $32.93 Held 3 years for a profit of 91 percent
Third Avenue International (TAVIX) $24.54 Held 3 year 6 mo. for a profit of 60 percent
Third Avenue Small Cap Fund $26.66 Held 5 years 6 mo. for a profit of 101 percent
Netflix (NFLX) $17.26 Held 1 month for a loss of 12.7 percent
Sara Lee (SLE) $16.11 Held 1 year 6 month for a loss of 2 percent
Johnson & Johnson (JNJ) Held 1 year 3 months for a 6.8 percent profit
New Buys
HRPT Properties Trust (HRP) $9.28 pays a 8.9 percent dividend
Wells Fargo Cap IX (JWF)$21.60 pays 6.4 percent dividend
Flaherty Preferred Income (PFD) $15.30 pays 6.6 percent dividend
Short Dow 30 Pro Shares (DOG) $59.87
As you can see I sold several long time positions, most at a nice profit. Many of the positions I sold were mutual funds. My exposure to the stock market has dropped rather dramatically, but I feel I need to take some profits now rather than watch them evaporate in this choppy market. I still own several stocks, mostly large stable companies like Coca-Cola and GE.
My new purchases are nice dividend payers. The Wells Fargo Cap IX (JWF) is a preferred stock which is more like a bond than a stock. Preferred stocks are mostly issued at $25 per share and have a call date in the future where the company can buy them back at $25 per share. The call dates are usually around 5 to 10 years out from the issue date. The payout on dividend is $1.38 per year, which means that when it was issued at $25 per share it's dividend payout was 5.5 percent. You can now collect 6.4 percent if you buy at $21.60 because the payout never changes and if you divide $1.38 into $21.60 you get 6.4 percent. Now the kicker is someday it will be called at $25 per share which represents 15 percent upside from this price. So you can collect 6.4 percent with a guaranteed 15 percent gain on top unless Wells Fargo goes bankrupt, which doesn't seem likely. Preferred stocks are great to buy in an enviroment like this because you can collect your Quarterly dividend while you wait to be called. The underlying price will go down if interest rates go up and they will rise if interest rates go down. But you can never lose if you hold them until they are called.
Short Dow 30 Pro Shares (DOG) is a bet that the stock market will go down.
A lot of money I made in my sold positions is now held in a Money Market account, I'll collect my 4.5 percent until I find some buys out there, but right now there seems to be too much risk in the market for my taste.
Sold positions
Gabelli Utility Trust (GUT) $9.55 Held for 1 year and 7 months for a 19.7 percent profit
Wasatch International $23.36 Held for 3 years 6 mo. for a profit of 98 percent
Wasatch Strategic Income (WASIX) $11.29 Held 5 months for a loss of 1 percent
Wasatch Ultra Growth $25.89 Held for 5 years for a profit of 77 percent
Third Avenue Real Estate (TAREX) $32.93 Held 3 years for a profit of 91 percent
Third Avenue International (TAVIX) $24.54 Held 3 year 6 mo. for a profit of 60 percent
Third Avenue Small Cap Fund $26.66 Held 5 years 6 mo. for a profit of 101 percent
Netflix (NFLX) $17.26 Held 1 month for a loss of 12.7 percent
Sara Lee (SLE) $16.11 Held 1 year 6 month for a loss of 2 percent
Johnson & Johnson (JNJ) Held 1 year 3 months for a 6.8 percent profit
New Buys
HRPT Properties Trust (HRP) $9.28 pays a 8.9 percent dividend
Wells Fargo Cap IX (JWF)$21.60 pays 6.4 percent dividend
Flaherty Preferred Income (PFD) $15.30 pays 6.6 percent dividend
Short Dow 30 Pro Shares (DOG) $59.87
As you can see I sold several long time positions, most at a nice profit. Many of the positions I sold were mutual funds. My exposure to the stock market has dropped rather dramatically, but I feel I need to take some profits now rather than watch them evaporate in this choppy market. I still own several stocks, mostly large stable companies like Coca-Cola and GE.
My new purchases are nice dividend payers. The Wells Fargo Cap IX (JWF) is a preferred stock which is more like a bond than a stock. Preferred stocks are mostly issued at $25 per share and have a call date in the future where the company can buy them back at $25 per share. The call dates are usually around 5 to 10 years out from the issue date. The payout on dividend is $1.38 per year, which means that when it was issued at $25 per share it's dividend payout was 5.5 percent. You can now collect 6.4 percent if you buy at $21.60 because the payout never changes and if you divide $1.38 into $21.60 you get 6.4 percent. Now the kicker is someday it will be called at $25 per share which represents 15 percent upside from this price. So you can collect 6.4 percent with a guaranteed 15 percent gain on top unless Wells Fargo goes bankrupt, which doesn't seem likely. Preferred stocks are great to buy in an enviroment like this because you can collect your Quarterly dividend while you wait to be called. The underlying price will go down if interest rates go up and they will rise if interest rates go down. But you can never lose if you hold them until they are called.
Short Dow 30 Pro Shares (DOG) is a bet that the stock market will go down.
A lot of money I made in my sold positions is now held in a Money Market account, I'll collect my 4.5 percent until I find some buys out there, but right now there seems to be too much risk in the market for my taste.
Friday, July 13, 2007
ETF IShares Global (IXC) (IOO)
I purchased two ETF's today. ETF's are Exchange Traded Funds and are basically like a mutual funds where they hold a basket of stocks but the expense ratio is much cheaper and the holdings typically don't change like a managed mutual fund. They are traded just like stocks. For example the IShares S&P Global Energy Index (IXC) which I bought today for $138.00 per share has a miniscule expense ratio of 0.48 percent. It holds energy companies and the top 10 holdings are Exxon, British Petroleum, Total, Chevron, Royal Dutch Shell, Schlumberger, ENI SPA, Occidental Petroleum , BG Group. . The other ETF I bought was IShares S&P Global 100 Index (IOO). Purchase price was $83.32 and the top 10 holdings are Exxon, GE, Citigroup, Microsoft, BP, HSBC, Total SA, Chevron, Proctor & Gamble, and Johnson & Johnson. This ETF holds the 100 largest Global companies.
ETF's are a great way to diversify, low expenses, and great liquidity.
ETF's are a great way to diversify, low expenses, and great liquidity.
Thursday, July 5, 2007
Ruth's Chris Steak House (RUTH)
I bought shares today in Ruth's Chris Steak House (RUTH) at $17.27 per share. It trades at a P/E of 16.40 and has $1.05 per share earnings. The 52 week trading range is $16.72 to $23.00.
I owned this company previously on a short term basis and made a nice profit in a short amount of time.
Ruth's Chris Steak House, Inc., together with its subsidiaries, operates a steakhouse company. It operates company-owned and franchisee-owned restaurants in the United States. The company's restaurants offer food, beverages, and other services. As of July 1, 2007, it owned and franchised 107 locations worldwide. The company was founded in 1965 and is headquartered in Heathrow, Florida.
The nation's largest upscale steak-house chain was based in New Orleans when it made its Nasdaq debut in early August 2005. Three weeks later Hurricane Katrina hit.
Shares that opened at $19.80 lost more than a fifth of their value by the middle of November of that year. Ruth's stock has struggled to remain above water ever since, despite offering a robust growth rate and a compelling valuation.
Ruth's, now based in Heathrow, Fla., has a total of 106 company-owned and franchised restaurants. Expansion plans put it on track to have as many as 250 locations in six to eight years, and those restaurants are extremely productive. Ruth's return on capital stands at 19%, according to Reuters data, more than three times that of Morton's (MRT: 17.87, -0.09, -0.5%), its nearest competitor, and well above the 14% industry average. Meanwhile, return on equity stands at a very healthy 40%, almost twice the industry average.
Furthermore, the long-term investment thesis sounds persuasive, based on brand strength and Ruth's ability to replicate its highly productive restaurants in a variety of markets, both here and abroad.
I owned this company previously on a short term basis and made a nice profit in a short amount of time.
Ruth's Chris Steak House, Inc., together with its subsidiaries, operates a steakhouse company. It operates company-owned and franchisee-owned restaurants in the United States. The company's restaurants offer food, beverages, and other services. As of July 1, 2007, it owned and franchised 107 locations worldwide. The company was founded in 1965 and is headquartered in Heathrow, Florida.
The nation's largest upscale steak-house chain was based in New Orleans when it made its Nasdaq debut in early August 2005. Three weeks later Hurricane Katrina hit.
Shares that opened at $19.80 lost more than a fifth of their value by the middle of November of that year. Ruth's stock has struggled to remain above water ever since, despite offering a robust growth rate and a compelling valuation.
Ruth's, now based in Heathrow, Fla., has a total of 106 company-owned and franchised restaurants. Expansion plans put it on track to have as many as 250 locations in six to eight years, and those restaurants are extremely productive. Ruth's return on capital stands at 19%, according to Reuters data, more than three times that of Morton's (MRT: 17.87, -0.09, -0.5%), its nearest competitor, and well above the 14% industry average. Meanwhile, return on equity stands at a very healthy 40%, almost twice the industry average.
Furthermore, the long-term investment thesis sounds persuasive, based on brand strength and Ruth's ability to replicate its highly productive restaurants in a variety of markets, both here and abroad.
Friday, June 29, 2007
NEW SELLS
I have decided to take some profits and sell several stocks today. I still hold positions in GE, Sarah Lee, and Gabelli Utility Trust and sold partial positions in them.
GE sold @ 38.24 for a 12.5 percent profit and held for 1 year and 10 months. Remember it pays a 3 percent dividend so I collected that while I held the stock so my real return was around 17 percent, when divided by 1 year and 10 months equals a yearly return of 7 .79 percent.
Sarah Lee (SLE) sold at $17.56 and held for 10 months for a 18.3 percent return. Sarah Lee pays a 2.3 percent dividend.
Gabelli Utility Trust (GUT) sold at $9.73 and held for 6 months for a 6.5 percent return. Gabelli pays a 7.6 percent dividend so real return with dividend is close to 10 percent on an anualized basis.
This one gets a little more complicated. I bought 100 shares of Philip Morris (MO) 9 months ago. While I held it, it spun off Kraft Foods (KFT) and I got 69 shares in the spinoff. So I now had 100 shares of Philip Morris and 60 shares of Kraft. I sold the MO at $70.44 and the Kraft at $35.48. My return was 20.3 percent over a 9 month period and this includes the dividend paid.
I am going to wait a while to invest the money and will hold it in my money market account until then.
GE sold @ 38.24 for a 12.5 percent profit and held for 1 year and 10 months. Remember it pays a 3 percent dividend so I collected that while I held the stock so my real return was around 17 percent, when divided by 1 year and 10 months equals a yearly return of 7 .79 percent.
Sarah Lee (SLE) sold at $17.56 and held for 10 months for a 18.3 percent return. Sarah Lee pays a 2.3 percent dividend.
Gabelli Utility Trust (GUT) sold at $9.73 and held for 6 months for a 6.5 percent return. Gabelli pays a 7.6 percent dividend so real return with dividend is close to 10 percent on an anualized basis.
This one gets a little more complicated. I bought 100 shares of Philip Morris (MO) 9 months ago. While I held it, it spun off Kraft Foods (KFT) and I got 69 shares in the spinoff. So I now had 100 shares of Philip Morris and 60 shares of Kraft. I sold the MO at $70.44 and the Kraft at $35.48. My return was 20.3 percent over a 9 month period and this includes the dividend paid.
I am going to wait a while to invest the money and will hold it in my money market account until then.
Wednesday, June 27, 2007
NETFLIX (NFLX)
I purchased Netflix on June 20 at $19.71 per share. Netflix has dropped about 25 percent this year and I think now is a good time to buy on weakness. Competition with Blockbuster's aggresive pricing model and competition from video-on-demand have hit the stock.
Netflix is the largest online movie rental service offering 80,000 DVD titles to 6.8 million subscribers. I like Netflix's business model by using the Internet to manage customers and the Postal system to reach them, Netflix has been able to build it's business without drowning in red ink. On each dollar of non-cash assets it generates more than $4.50 in revenues and .30 cents in operating income.
Netflix's balance sheet has $388 million in cash, no debt, and not one inventory or accounts receivable cost. During the past three years, it has spent $381 million on new DVD titles for it's library.
Reed Hastings, Netflix chairman and CEO, has been the visionary ever since he founded the company 10 years ago. He now owns $60 million in Netflix stock.
Netflix is the largest online movie rental service offering 80,000 DVD titles to 6.8 million subscribers. I like Netflix's business model by using the Internet to manage customers and the Postal system to reach them, Netflix has been able to build it's business without drowning in red ink. On each dollar of non-cash assets it generates more than $4.50 in revenues and .30 cents in operating income.
Netflix's balance sheet has $388 million in cash, no debt, and not one inventory or accounts receivable cost. During the past three years, it has spent $381 million on new DVD titles for it's library.
Reed Hastings, Netflix chairman and CEO, has been the visionary ever since he founded the company 10 years ago. He now owns $60 million in Netflix stock.
Monday, June 18, 2007
HRPT PROPERTIES (HRP)
I purchased more shares of HRPT Properties today at $11.02 per share. It pays a dividend rate of 7.6 percent and is close to it's 52 week low. Nice solid company to hold and reinvest the dividends and let it grow.
HRPT Properties Trust operates as a real estate investment trust (REIT) in the United States. It engages in the ownership and operation of real estate, including office buildings, industrial buildings, and leased industrial land. As of December 31, 2006, the trust owned 504 properties, including 351 office properties and 153 industrial properties. HRPT Properties Trust is elected to be treated as a REIT. As a REIT, it would not be subject to federal income tax, provided that it distributes at least 90% of taxable income to its shareholders
HRPT continues to diversify and build on its strategy of going into markets that aren't quite as high-profile. During the quarter, HRPT purchased four office buildings in South Carolina and Massachusetts, with 391,000 square feet and 96.3% occupancy, for $42.6 million at a very healthy 9.8% cap rate.
Although nationwide occupancy was slightly down, HRPT did see some positive trends. Management noted that competitors were pushing for stronger rental rates and fewer concessions of free rent. Tenant improvement dollars have largely stayed constant, but lessors are getting longer lease terms as a result -- which means, on a net basis, the landlord is getting higher rents.
HRPT Properties Trust operates as a real estate investment trust (REIT) in the United States. It engages in the ownership and operation of real estate, including office buildings, industrial buildings, and leased industrial land. As of December 31, 2006, the trust owned 504 properties, including 351 office properties and 153 industrial properties. HRPT Properties Trust is elected to be treated as a REIT. As a REIT, it would not be subject to federal income tax, provided that it distributes at least 90% of taxable income to its shareholders
HRPT continues to diversify and build on its strategy of going into markets that aren't quite as high-profile. During the quarter, HRPT purchased four office buildings in South Carolina and Massachusetts, with 391,000 square feet and 96.3% occupancy, for $42.6 million at a very healthy 9.8% cap rate.
Although nationwide occupancy was slightly down, HRPT did see some positive trends. Management noted that competitors were pushing for stronger rental rates and fewer concessions of free rent. Tenant improvement dollars have largely stayed constant, but lessors are getting longer lease terms as a result -- which means, on a net basis, the landlord is getting higher rents.
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