Stock bought February 2016: IBM

IBM is one of those American giants that are today strongly disliked by the market. Each quarter the revenue is dropping, the earnings drop and yeah, the margins are not increasing still... I can buy this company today at a P/E of 9 with a dividend yield of 4% which correspond to 37% of their earnings. And well... Ginni Rometty are by some considered to be a bad manager but that is in my opinion wrong. She is excellent and as sharp as a titanium needle. Wall Street are crying about the IBM buyback program but for crying out loud. Should you run out and buy small IT companies at a P/E of >40 or simply convert (educate) your workforce into the new service business while buying back your own shares at a P/E of 9? I know that Wall Street wants things to be fast so they would for sure favour acquisitions like mad on one side and downsizing on the other. That is to me, to put it bluntly, stupidity in a nutshell.

No, no, she is doing everything correct. She allows the process to take the time it takes. The market hates them ok, then we increase the value for our shareholders by paying an excellent dividend + buying back shares. As a shareholder I do not complain that I am getting so much value (dividend + buyback) for each euro I put into this massive oil tanker.

For me IBM is an easy investment. It is an excellent company with an excellent management. IBM made 13.2 billion USD in earnings last year and that was not a great year for IBM. If a company are having those kind of cash flows during bad years then what will it look like in a good one?

I therefore decided to buy nine more shares in IBM and I paid in total (including fees) 1024.81 €. This means that I now have 25 shares in IBM and I have made a total investment of 3274 € which comes down to around 130.96 € per share including fees.

To find out more concerning IBM then please check out analysis of IBM 2016.

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.

Analysed requests from 2013

I decided to take a look at the requests that I have received over the years and how the development, in terms of share price, have been of those companies. First out will be the requests that I received during 2013 on the Analysis Requests page as it can be seen above. I have received many more requests over email and on twitter but I will stick to that what posted on that page.

This reflection is not only to take a look at the suggestions arriving but, maybe more importantly, I also look at and judge the buy or not buy comment based on Grahams formula as well as my own personal feeling concerning the specific company.

Should it stay or should it go?

This is an attempt of a survey to find out what you guys thoughts are concerning my current holdings. I start to have many of them and I have on numerous occasions already realised that I am not able to follow them all as well as I would have liked. By this I mean that I would love if all the companies would only arrive with annual reports for me to read and not a report each quarter but now that they do arrive with them then I should also read them. Sometimes months can pass before I realise that one of my companies arrived with a new quarter report. Good, bad? I cannot tell but I do not like that I am obviously not able to keep track of them all.

So the four questions are:

• Which three companies in my stock portfolio should I increase my holdings in?
• Which three companies should be kicked out from my stock portfolio?
• One company that should enter my stock portfolio?
• Why? and that goes for all the three above questions

I will not make a promise and say that I will run out and sell the companies, increase or add a new holding but I can promise you that I will keep it in mind for the future. Oh, and for February I have already decided what to buy so it will not influence the very near term decisions.

Hmmm... first I was thinking that I should start and give my own thoughts to it but that would be bad and could give an influence so I just leave it as it is.

Dividend from Deere: February 2016

My second dividend for the year has now dropped in to the broker account and even more interesting is that it is my first dividend payment from Deere. I stepped in as a shareholder a couple of days after the x date and for this reason I never got something during the autumn.

I have 30 shares in Deere and each paid out 0.60 USD. Those 18.00 USD that I got was converted into 16.52 €. From this I had to pay 2.48 € in taxes and as cash on my broker account I got 14.04 € that I can do as I please with. If everything remains as it is for the next couple of quarters then this gives me a YoC of around 3.1% which is fully acceptable however currency effects can be large.

To find out more about Deere then please visit analysis of Deere 2015 and the Stock Dividend page has now been updated if you want to follow my dividend progress.

Analysis of BP 2016

Company: British Petroleum 

ISIN GB0007980591 | WKN 850517 

Business: A British oil giant. They are divided into two business units which are: Upstream (extracting gas and oil) and Downstream (fuels, lubricants and petrochemicals). They currently have five brands: BP(oil and gas), Aral (gas stations where I buy all my petrol), Castrol (lubricants), ampm (convenience stores) and Wild Bean Café (cafés). 

Active: 80 countries world wide employing around 84,000 people (they still claim this on their homepage)

P/E: -14.2 (P/E5: 7.9)