Do you factor in exchange rates when making purchases?
May 13th, 2017 12:13 pm
May 13th, 2017 12:39 pm
see post #1675rodbarc wrote: ↑Apr 9th, 2017 1:39 amNo, I have zero consideration to what the FX gain might be. My US stocks are in RRSP only, so they are not subject to withhold taxes (and I get a bit of diversification, since I'm heavily invested in Canadian stocks on my taxable account). I contribute to my RRSP at every paycheque and reinvest the dividends where I find appropriate. Therefore, I dollar-cost-average the conversion to US (which is done only once, dividends settle in US$ and I do further conversion until withdraw times come). I see the current premium on potential currency depreciation as the cost to be exposed to good companies, that has a longer record of resilience regarding dividend growth, and which belongs to a stronger economy .
My setup is US dividend growth stocks (investing) in RRSP + Canadian dividend growth stocks (investing) in taxable account + US and Canadian stocks for trading (dividend and non-dividend) in TFSA.
May 19th, 2017 8:53 am
This never made it on my radar, probably because the ticker got renamed after they acquired BIN. At a glance it seems a good quality company. I will do more research and post my thoughts.
May 19th, 2017 4:53 pm
May 21st, 2017 10:46 am
May 21st, 2017 11:44 am
I didn't look into these specific companies, besides the fact that CVS has better estimates and prospects than TEVA. The whole industry has been affected lately and the pressure should continue until next year. I've gathered the following from S&P Global research, which might help to understand why price might remain disconnected from fundamentals for sometime, and like the energy sector a few years ago, this might present an entry opportunity to acquire quality companies.babu928 wrote: ↑May 6th, 2017 12:59 amHi Rod,
I am wondering what you think about CVS and TEVA?
They are both trading far from 52 week highs and seems interesting as they are giants in their respective fields.
(I added 100 shares of CVS @ 80.86 as I have no exposure to the healthcare sector right now)
Historic P/E for CVS seems to be around 20, and it is at 16.xx right now... has grown its dividend for 10 years in a row...
Thank you for your valuable insight to this forum!
May 21st, 2017 3:20 pm
One thing that drove down the share price this week was rumors that Amazon is going to enter the sector (both CVS and WBA were down about 5% this week).rodbarc wrote: ↑May 21st, 2017 11:44 amI didn't look into these specific companies, besides the fact that CVS has better estimates and prospects than TEVA. The whole industry has been affected lately and the pressure should continue until next year. I've gathered the following from S&P Global research, which might help to understand why price might remain disconnected from fundamentals for sometime, and like the energy sector a few years ago, this might present an entry opportunity to acquire quality companies.
"Our fundamental outlook for the pharmaceuticals sub-industry for the next 12 months is positive. Top-line pressure from patent expirations on many top-selling drugs bottomed in 2015 and we anticipate a modest sales increase of 5.2% in both 2016 and in 2017. We see a smaller adverse impact from foreign exchange in 2016 compared to 2015, but believe the firming of the U.S. dollar in late 2016 may lead to a more negative impact in 2017. We also see expanding sales of new innovative drug therapies and margin improvements accruing from cost restructurings and merger synergies. EPS comparisons should also benefit from common share repurchases.
While we see the Affordable Care Act (ACA) continuing to negatively affect industry margins, we see benefits, including improved sales demand, from the significant expansion of the insured population. According to the Department of Health and Human Services, approximately 22 million people obtained insurance since the law was enacted in 2010. However, with the Presidential election of Donald Trump and the Republicans retaining control of Congress, we are uncertain if the ACA or components of it will survive, particularly the Individual Mandate and the Medicaid expansion. Republicans have repeatedly threatened to repeal and replace the ACA, but have yet to propose concrete replacement plans.
Despite adverse effects from patent expirations and regulatory pressures on high drug pricing, we still think long-term prospects for the industry remain favorable. Pharmaceuticals remains one of the widest-margin U.S. industries, with prospects enhanced by demographic growth in the elderly (which account for about 33% of industry sales) and new drug discoveries. FDA approval of new molecular entities in 2015 rose to a robust 45 approvals, the most since 1996 when a record 53 were approved. This follows robust approvals in 2014 when 41 were approved (up from 27 in 2013 and 39 in 2012).
We expect prospects for the generic/specialty drug group to remain favorable as a large number of major drugs lost patent protection over the past few years, providing significant opportunities for this group. We favor companies with rich generic pipelines, especially those with first-to-file generics with the potential for 180 days of marketing exclusivity, and competence in litigating complex patent issues. But we note ongoing price pressure for generic drugs. In 2015, the S&P Pharmaceuticals Index rose 3.7%, versus a 1.0% decline in the &P 1500 Composite Index. Year-to-date through December 9, 2016 the S&P Pharmaceutical Index declined 6.5% vs. an 11.8% rise in the S&P 1500 Composite Index. "
May 24th, 2017 10:51 pm
Jun 1st, 2017 2:18 pm
Jun 8th, 2017 9:27 pm
Jun 8th, 2017 10:50 pm
Jun 11th, 2017 8:45 pm
TD is fairly valued in my opinion:
Jun 11th, 2017 8:51 pm
VZ is more undervalued than T, but it's facing more challenges than T as well. For a long term perspective, considering dividend growth, and the stability that telecom provides overall, both present good opportunities. I like T better (higher estimated ROR, higher yield), but the recent investment in VZ might payoff better in the long term. So I'd go with both.
Jun 11th, 2017 9:00 pm
OTEX is a bit ahead of itself, but I don't know if the historic low multiples are parameter moving forward. Technology companies are being seen more and more as the strategic partner that will help traditional companies to disrupt and innovate if they want to continue stronger. So perhaps paying higher multiples (that are considered fair by Graham's standards), make sense. From that perspective, OTEX is fairly valued today. But if low valuations get revisited (and they might if OTEX miss a quarter or two), then it would make it overvalued today, producing an estimated annual ROR of only 2.7% for the next 2 years. So I'd put half now and half if it drops more due to lower guidance or missing results. That comes at the risk that the other half might have to be purchased at a higher multiples.kyogyk wrote: ↑Jun 8th, 2017 9:27 pmHi Rod,
It's good learning to read your post regarding "investing" and thank you for all your contribution and sharing your knowledge in this post.
I allocate part of my saving for CCP portfolio for a while, and currently start to have some saving to follow your model and slowly go with this. Beside Energy and Financial sectors, I'm still looking for chance to enter the other sectors in order to diversify the portfolio (slow process for me now). When you have chance, do you think OTEX and EMA are still fairly valued at this moment?
Jun 11th, 2017 9:01 pm
I'll post the details this week. The plan is to buy SJ, REF.UN and T for the Canadian Port and T and WFC for the US Port.