Tuesday, January 19, 2016

Extra stock bought January 2016: K+S


K+S, a German potash and salt miner

The share price of K+S have kept dropping with the rest of the market. I still stick with the argument that I used before which is that the biggest competitor were prepared to pay 41 € per share then anything below that value is cheap. The EPS after three quarters are up at 1.93 € (after LARGE hedge losses) and with a 40-50% pay out ratio I hope to receive 1.1 € in dividend which would be around 5% on YoC which I can live with.

Potash is a commodity that took a bad beating some time ago when Uralkali decided to break up the agreements between the potash producers. Lately the potash price have made an additional dip by around 5 to 10% which is a lot but then again a lot less than many others.

Fertilizer is still needed. Decreased oil prices leads to decreased production costs for the potash miners, it leads to cheaper freight costs for shipping and transporting the potash and it leads to lowered costs for the farmers that are spreading it out on their fields.

I therefore decided to buy 45 more shares in K+S at a total investment of 1,029.54 € (including fees). This now gives me a total of 240 shares that I have received by investing 5,196 € including fees which means that I have paid 21.65 € per share.

My broker arrived with the decision to increase the fee from 7.9 € to 8.9 € so a 12.5% increase for buying stocks over their platform. I am not happy with this and I have therefore started to look around and have found that DeGiro seems to be the cheapest one however there are too many things that I do not like with using a broker that is not classified as a bank. I now have two options... either I start up a new broker account and start to do all my new investments there (with or without transferring the stock portfolio) OR I decide to make larger investments in blocks of 2k € instead of the 1k € that I have made. This would sometimes mean that I will not make a monthly investment because I would have to save up.

Still one have to laugh at my brokers incompetence. Their counter offer for increasing the fee was that there is no cost for cancelling orders which previously costed around 5 €. To me this is an incompetent attempt to increase the amount of orders placed. If you want people to do more orders then the correct approach is to DECREASE the fee ON THE ORDER. If the price would be around 2 € as for DeGiro then I would have no problem to make several 500 € orders instead of the 1k € that I have been doing. Now, most likely, I will end up pushing up the value of each order and make less of them instead of more. Cause and effect... cause and effect... I only wish that Nordnet or Avanza would decide to step into the German market so sort things out.

To find out more regarding K+S then please visit analysis of K+S 2015.

If you want to see my current Stock Portfolio then click on the link but the portfolio will not be fully updated until the end of the month.

2 comments:

Matthias said...

8.9€ from a Broker is really a joke. I pay 9€ per Order at DKB Bank

Fredrik von Oberhausen said...

It is far too expensive in Germany. To place an order with Avanza you pay 0.1 €. I mean... back in the days people were actually sitting there doing things today no human is involved in the entire process so why should I pay 9 € for that? Anyway... in Germany today the options are few.