I put a buy order in this morning for Caterpillar (CAT). My trade executed at 63.00 per share. I have been watching this company for the past 6 months and have seen it come down to the lower end of the trading range on fears of the construction business slowing down. The 52 week price range is $57.98 to $82.03. The low 60's seems like a good entry point for a premier company like Caterpillar. It trades at a P/E of 12.39 and pays a dividend of 1.90 percent.
Caterpillar, Inc. manufactures construction and mining equipment, diesel and natural gas engines, and industrial gas turbines. The company operates in three primary lines of business: machinery, engines, and financial products. The machinery line of business designs, manufactures, markets, and sells construction, mining, and forestry machinery, such as track and wheel tractors, track and wheel loaders, pipelayers, motor graders, wheel tractor-scrapers, track and wheel excavators, backhoe loaders, log skidders, log loaders, off-highway trucks, articulated trucks, paving products, telescopic handlers, skid steer loaders, and related parts. It also offers logistics services for other companies. The engines business line designs, manufactures, markets, and sells engines for the company's machinery; electric power generation systems; on-highway vehicles and locomotives; marine, petroleum, construction, industrial, agricultural, and other applications; and related parts. The financial products line of business includes provision of various financing alternatives to customers and dealers for the company machinery and engines, and solar gas turbines, as well as other equipment and marine vessels. It also offers various forms of insurance to customers and dealers to support the purchase and lease of Caterpillars equipment; and invests in independent power projects using the company's power generation equipment and services. Caterpillar markets its products through various distribution centers and dealers worldwide. The company was founded as Caterpillar Tractor Co. in 1925 and changed its name to Caterpillar, Inc. in 1986. Caterpillar is headquartered in Peoria, Illinois.
Wednesday, January 31, 2007
Monday, January 29, 2007
WASATCH STRATEGIC INCOME FUND
I put new money to work today in a mutual fund named Wasatch Strategic Income Fund (WASIX). The Wasatch funds are a favorite of mine and I have been a holder of Wasatch Micro Cap for 7 years. It has returned an average of 17.45 percent a year for the past 5 years and 22.71 percent per year for the past 10 years. It is now closed to new investors and this is customary to the Wasatch group. They feel that to get the returns they want they don't want a huge amount of money flooding in because they can't put it to work and get the returns they want. So they close the fund and work with the money they have as very few investors cash in their shares because the returns are so good.
Occasionally they will open a new fund as they did last year with Strategic Income. The fund may invest in equity and fixed income assets, with at least 65 percent of assets in income producing securities. Stocks generally will account for most of the Fund's investments, with those chosen falling into three main categotries: Blue Chip, Dividend Growth, and Value.
I also have shares in Wasatch Small Cap Growth, Wasatch International Growth, Wasatch Small Cap Value, and Wasatch Heritage Growth. The only one open to new investors is Wasatch Heritage Growth which is a fairly new fund.
I think this is an excellent time to invest in a income-oriented type of fund. The current economic enviroment of slow but steady growth is one that historically has been positioned for dividend-paying stocks. As the Boomer population bulge continues to age, I think dividend paying stocks are likely to gain in popularity, which in turn could lead the prices of these stocks to rise.
Occasionally they will open a new fund as they did last year with Strategic Income. The fund may invest in equity and fixed income assets, with at least 65 percent of assets in income producing securities. Stocks generally will account for most of the Fund's investments, with those chosen falling into three main categotries: Blue Chip, Dividend Growth, and Value.
I also have shares in Wasatch Small Cap Growth, Wasatch International Growth, Wasatch Small Cap Value, and Wasatch Heritage Growth. The only one open to new investors is Wasatch Heritage Growth which is a fairly new fund.
I think this is an excellent time to invest in a income-oriented type of fund. The current economic enviroment of slow but steady growth is one that historically has been positioned for dividend-paying stocks. As the Boomer population bulge continues to age, I think dividend paying stocks are likely to gain in popularity, which in turn could lead the prices of these stocks to rise.
Friday, January 12, 2007
USO and Halliburton
I sold my shares of United States Oil (USO) on Jan 4 at $48.81. This compnay is basically an ETF (Exchange Traded Trust) that tracks the price of oil. Oil seems to be on a downward trend which is great when you go to fill up your car but not for an investment in USO. I booked a loss of 9.5 percent and am sticking with my rule of never losing more than 10 percent in any one investment.
To replace USO I bought Halliburton (HAL) on Jan 8th for $29.37.
The stocks 52 week range is $26.33 to $41.99 so I'm buying in at the lower part of the range. It has a P/E of 11.03 and a dividend of 1.1 percent.
Halliburton Company provides various services, products, maintenance, engineering, and construction to energy, industrial, and governmental customers worldwide. It operates in six segments: Production Optimization, Fluid Systems, Drilling and Formation Evaluation, Digital and Consulting Solutions, Government and Infrastructure, and Energy and Chemicals. Halliburton was founded in 1919 and is based in Houston, Texas.
I like the broad diversification of this company. It also helps that this is one of Jim Cramers (Mad Money) top three picks for 2007. Instead of betting on a pure oil play like USO this stock gives me exposure to the Energy market but not just to the commodity.
To replace USO I bought Halliburton (HAL) on Jan 8th for $29.37.
The stocks 52 week range is $26.33 to $41.99 so I'm buying in at the lower part of the range. It has a P/E of 11.03 and a dividend of 1.1 percent.
Halliburton Company provides various services, products, maintenance, engineering, and construction to energy, industrial, and governmental customers worldwide. It operates in six segments: Production Optimization, Fluid Systems, Drilling and Formation Evaluation, Digital and Consulting Solutions, Government and Infrastructure, and Energy and Chemicals. Halliburton was founded in 1919 and is based in Houston, Texas.
I like the broad diversification of this company. It also helps that this is one of Jim Cramers (Mad Money) top three picks for 2007. Instead of betting on a pure oil play like USO this stock gives me exposure to the Energy market but not just to the commodity.
YEAR END REVIEW
1996 was a great year for Stocks. My performance was 13.8 percent which I consider excellent considering my overall portfolio consists of about 60 percent stocks and 40 percent bonds , preferred stocks, and money market accounts.
The Dow Industrials returned 16 percent while the S&P 500 returned 14 percent. The NASDAQ's performance was 9.5 percent.
Using the rule of 72 my portfolio would double every 5.2 years if I could achieve a 13.8 percent return every year. I know this is unrealistic without taking on much more risk than I care to incur. So I will start the new year with the same approach I have used for the past 14 years, broad diversification throughout my portfolio and reinvesting dividends and interest.
The Dow Industrials returned 16 percent while the S&P 500 returned 14 percent. The NASDAQ's performance was 9.5 percent.
Using the rule of 72 my portfolio would double every 5.2 years if I could achieve a 13.8 percent return every year. I know this is unrealistic without taking on much more risk than I care to incur. So I will start the new year with the same approach I have used for the past 14 years, broad diversification throughout my portfolio and reinvesting dividends and interest.
Friday, December 29, 2006
HAWAIIAN ELECTRIC (HE)
I purchased Hawaiian Electric (HE) today for $27.18 per share. I have had a limit buy on this stock for about 2 weeks and it hit my purchase limit today. This stock is going to be part of my Blue Chip base. It has a narrow trading range $25.50 to $28.60. It's not a stock to buy looking for a huge gain in the short term, but a nice dividend paying stock $1.24 per share (4.5 percent).
Hawaiian Electric Industries, Inc. (HEI) supplies power to 93% of the Hawaii electric public utility market through its electric utilities, Hawaiian Electric Company, Inc., Hawaii Electric Light Company, Inc. and Maui Electric Company, Limited, and provides a wide range of financial services to individuals and businesses through American Savings Bank, F.S.B., the state’s third largest financial institution based on asset size. HEI has a long dividend history, paying dividends continuously since 1901. Currently, HEI pays a dividend of $1.24 per common share annually.
Hawaiian Electric Industries, Inc. (HEI) supplies power to 93% of the Hawaii electric public utility market through its electric utilities, Hawaiian Electric Company, Inc., Hawaii Electric Light Company, Inc. and Maui Electric Company, Limited, and provides a wide range of financial services to individuals and businesses through American Savings Bank, F.S.B., the state’s third largest financial institution based on asset size. HEI has a long dividend history, paying dividends continuously since 1901. Currently, HEI pays a dividend of $1.24 per common share annually.
Friday, December 22, 2006
BOYD GAMING & RIO
I sold my position in Boyd Gaming (BYD) today for $44.75 per share. I held it for 1 month and realized a profit of 2.8 percent. My hope was it would be the next takeover target in the Gaming industry but with it declining over the past week from the $46 range I felt I would get out now with a small profit and look to return if it gets down to the $40 to $42 range. I made out big with Harrahs and MGM and was trying for the trifecta with Boyd.
The other position I sold today was Rio for $29.03 per share. I realized a 10.8 percent profit over a 2 month period. Companhia Vale do Rio Doce (RIO) is a huge producer of iron ore as well as nickel, potash, gold, copper, and aluminum. I am a little scared of the minerals market right here as it has had a big runup this year and with the housing market in the tank I don't look for demand to be as strong.
The other position I sold today was Rio for $29.03 per share. I realized a 10.8 percent profit over a 2 month period. Companhia Vale do Rio Doce (RIO) is a huge producer of iron ore as well as nickel, potash, gold, copper, and aluminum. I am a little scared of the minerals market right here as it has had a big runup this year and with the housing market in the tank I don't look for demand to be as strong.
CENTRAL FUND of CANADA (CEF)
I want to highlight a company I have bought and sold 12 times over the past 3 years. A business summary will explain what this company does.
Central Fund of Canada Limited, is an investment holding company, it invests in gold and silver bullion primarily in bar form. As of October 31, 2005, the company’s gold holdings were 614,242 fine oz. of physical bullion and 5,349 fine oz. of gold bullion certificates; and silver holdings were 30,728,142 oz. of physical bullion and 245,572 oz. of silver bullion certificates. Central Fund of Canada was founded in 1961 and is headquartered in Calgary, Canada.
I have found this an ideal way to play the gold and silver market without the hassle of taking physical possession of the actual commodity. The stock trades under the symbol CEF. I sold my holdings in CEF today at $9.20 per share. I will be interested again when it trades below $9.00 per share. Below I will list the 12 trades I have made in this company along with the time frame I held and profit or loss.
4 months +22 percent $570 profit
2 months +4 percent $224 profit
1 month +11 percent $369 profit
1 month +21 percent $880 profit
1 week +6.1 percent $263 profit
3 months +4.4 percent $196 profit
3 months +15.4 percent $340 profit
6 months +7 percent $185 profit
2 months +10 percent $257 profit
2 days -6.5 percent $259 loss
1 month +3.4 percent $150 profit
1 month 2 weeks +28 percent $1189 profit
Grand total for 12 trades was a $4364 profit.
I illustrate this to show a strategy you can use on a stock that trades in a fairly predictable range. As you can see from the chart above the longest time I held the stock was 6 months and the shortest 2 days. Most were in the 1 to 2 month time period. I make it a rule to sell if I get down 10 percent to hold losses to a minimum.
Central Fund of Canada Limited, is an investment holding company, it invests in gold and silver bullion primarily in bar form. As of October 31, 2005, the company’s gold holdings were 614,242 fine oz. of physical bullion and 5,349 fine oz. of gold bullion certificates; and silver holdings were 30,728,142 oz. of physical bullion and 245,572 oz. of silver bullion certificates. Central Fund of Canada was founded in 1961 and is headquartered in Calgary, Canada.
I have found this an ideal way to play the gold and silver market without the hassle of taking physical possession of the actual commodity. The stock trades under the symbol CEF. I sold my holdings in CEF today at $9.20 per share. I will be interested again when it trades below $9.00 per share. Below I will list the 12 trades I have made in this company along with the time frame I held and profit or loss.
4 months +22 percent $570 profit
2 months +4 percent $224 profit
1 month +11 percent $369 profit
1 month +21 percent $880 profit
1 week +6.1 percent $263 profit
3 months +4.4 percent $196 profit
3 months +15.4 percent $340 profit
6 months +7 percent $185 profit
2 months +10 percent $257 profit
2 days -6.5 percent $259 loss
1 month +3.4 percent $150 profit
1 month 2 weeks +28 percent $1189 profit
Grand total for 12 trades was a $4364 profit.
I illustrate this to show a strategy you can use on a stock that trades in a fairly predictable range. As you can see from the chart above the longest time I held the stock was 6 months and the shortest 2 days. Most were in the 1 to 2 month time period. I make it a rule to sell if I get down 10 percent to hold losses to a minimum.
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