Investing

Investing Idea - Dividend Growth

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  • Oct 22nd, 2017 5:04 pm
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Deal Guru
Aug 2, 2010
10853 posts
2145 upvotes
ottofly wrote:
Oct 12th, 2017 11:55 am
I find the reaction overdone, never seen or heard of this portfolio manager. There was also a downgrade in there from Scotia so this has played a part. What's also interesting, this is having almost as bad as an effect as the arbitration battle with the founders that was potentially worth over 40% of the entire market cap. I would imagine some clients will move with her, money has already been flowing out of the company for a while now. Could be she has connections to wealthy Asians clients she has brought in? Ultimately, if she is replaced by another manager I'm sure he/she may also bring in high net worth clients. This was trading @ $7.00 in the financial crisis with less than 1/2 the AUM and today is just $16.00, I would call that undervalued. Raised the dividend right through as well and the current dividend will be raised now that the arbitration cloud has passed. I wouldn't expect any special div for a while, a big one was paid last week. At the end of the day, this company will be taken over for it's client books so I purchased more today.
Yes it's overdone. It's trading at 16 P/E right now and that's including the call option of the performance bonus dividend. She was not a person with connections to wealthy Asians and was not even involved in marketing to clients. FYI another person involved in portfolio management is also leaving with her and going to the same firm that she is going to. GS has the profile to attract the best and brightest to its PM team. They can easily replace and augment.
Newbie
Aug 2, 2015
63 posts
31 upvotes
Nepean, ON
What do you guys think about DF or DFN? The only downside about it seems to be that the dividend does not grow, but it holds a stable ~10%+ dividend over a long term, including crashes. Might be a good idea for a cash park, but also an opportunity for capital gains when you do buy them during crashes (like 2008 or the 2016 oil price crash)
[OP]
Deal Addict
User avatar
Dec 14, 2010
4239 posts
3158 upvotes
eonibm wrote:
Oct 12th, 2017 11:30 am
There's a big difference between your website & MDJ as the latter does not charge for subscriptions but makes his money from ads. When people are shelling out money every month for a subscription they look at things differently. Also, what I noticed from RFD is a lot of people just want to be spoon fed your recommendations and have little patience or interest in learning on their own. There is a significant overhead in reading all the books and articles you recommend and understanding charting fundamentals. Worse is most just don't get that emotional intelligence in disregarding Mr. Markets grumpy days and near term results and not being swayed by social proof are the most important assets. Btw, if you look behind the curtain of the Mr. Million Dollar Journey it turns out a large part of his $1M fortune was derived from the sale of another website he started. On top of that, his returns aren't verifiable either. He could be some guy sitting in Nigeria touting his investment returns (while he isn't sending emails out offering people half of a hundred million dollar fortune sitting in a Swiss bank account). Lastly, does anyone really think that if he actually does not have that $1M anymore he is going to admit it? Hardly! That would result in his website traffic and hence revenue plummeting like crazy. Since he is not held accountable his results could be one big fairy tale.
I agree with you, and I'm trying to figure out a way to be useful for the non-RFD crowd. The performance results of the paid models (and the free one) are published by a 3rd-party, porrfolio123, which I cannot modify. So there is that accountability. But I agree there is more than can be presented to give one the confidence to give it a shot. I'm also open to ideas on how to do that. These models are designed to the ones that don't want to spend their time with research, and the rules are explained to give one a comfort level that it's not just a black box.


Rod
Everything about my Investing and automated Trading strategies to boost your income: https://boostyourincome.ca
Deal Addict
Jan 20, 2016
1214 posts
436 upvotes
Burlington, ON
wussok wrote:
Oct 12th, 2017 12:33 pm
What do you guys think about DF or DFN? The only downside about it seems to be that the dividend does not grow, but it holds a stable ~10%+ dividend over a long term, including crashes. Might be a good idea for a cash park, but also an opportunity for capital gains when you do buy them during crashes (like 2008 or the 2016 oil price crash)
Yield chasing didn't work, mostly.
over the last 10y (5y will be quite same picture):

TD with 4% has ~+100% price and ~+40% divs, that's 140% (arithmetic for sake of simplicity) and ~10% CAGR afair
DFN has -38% and +110%=+70%, just 100% underperformance, and 0 growth of dividends
Deal Addict
Nov 9, 2013
1850 posts
639 upvotes
Edmonton, AB
eonibm wrote:
Oct 12th, 2017 11:12 am
Well if all he is interested in is spreading knowledge then why is he now managing money again? He claims to have returns double that of Warren Buffett over 20 years, closes the funds and gives back all the money, refuses to provide any proof to anyone of his returns except from his own mouth, then decides to write a book and run a website only to get back into money management using his past unverifiable track record? Wow, I wasn't born yesterday but I do understand most people are pretty gullible! We should all do the same as Greenblatt. Btw, the return on even the best of his Gotham funds are less than 1/3rd of the 20 year returns he touts from his previous 'track record'. And this during a great bull market.
People are complex - it's generally not all or nothing. Interests and hobbies are dynamic and what a person enjoys doing or finds fulfilling changes with time.

I think approaching everything with a healthy dose of skepticism is important, but at the end of the day does it really matter what his past return is? His ideas are what are important, his performance is what is used to try and justify his ideas - to get people to "buy in" to his thinking (i.e. marketing). You can still have good ideas with or without execution. What's that old saying? Those who can, do; those who can't, teach.

I agree with you his funds are underperforming. Ultimately, if you don't like Greenblatt or think he's a lying kook that's fine. I personally like his ideas, independent of his past / present fund performance. The two do not need to be mutually exclusive.
Newbie
Jun 28, 2017
44 posts
7 upvotes
wussok wrote:
Oct 12th, 2017 12:33 pm
What do you guys think about DF or DFN? The only downside about it seems to be that the dividend does not grow, but it holds a stable ~10%+ dividend over a long term, including crashes. Might be a good idea for a cash park, but also an opportunity for capital gains when you do buy them during crashes (like 2008 or the 2016 oil price crash)
DF's NAV is dangerously close to $15, at which point it stops paying a dividend. If you do want 15% yield, DGS is a safer bet right now. I think it can be worth it for short term gain, but you'll be better off longterm by dumping the distributions into other stocks. I bought it on margin, because I know I'll be able to pay the interest on the loan and still get some money every month while being fairly sure the price won't drop substantially. So far, I've made money but I would have been considerably better off buying TD.
Deal Addict
Sep 2, 2004
1754 posts
81 upvotes
Congratulations on getting your website launched and for reaching 2,000 posts in this thread!
Member
Jul 27, 2017
443 posts
103 upvotes
GTA
asa1973 wrote:
Oct 12th, 2017 12:48 pm
Yield chasing didn't work, mostly.
over the last 10y (5y will be quite same picture):

TD with 4% has ~+100% price and ~+40% divs, that's 140% (arithmetic for sake of simplicity) and ~10% CAGR afair
DFN has -38% and +110%=+70%, just 100% underperformance, and 0 growth of dividends
+1 it definitely is dividend chasing.

Take a look & compare what 25% investment in each of the following look like

SRV.UN
KEG.UN
ENB
TD

Use Morningstar to compare the performance, results, yield & dividends

http://quote.morningstar.ca/Quicktakes/ ... &ops=clear

And remember - 'past performance is not an indicator of future returns/results'
Newbie
Oct 28, 2008
52 posts
11 upvotes
Toronto
CDN Graham portfolio is only public portfolio on website everything else is premium when I checked lat time !!!

Thanks,
Sr. Member
Dec 3, 2014
987 posts
170 upvotes
Ontario
Rod, what businesses are we partnering with for October?
Member
Aug 18, 2010
408 posts
129 upvotes
Richmond Hill, ON
EQB looks to be undervalued.
Given its estimated growth prospects with excellent analyst coverage, and fairly low payout ratio, I would like to hear from fellow dividend investors some thoughts on a partnership with Equitable
[OP]
Deal Addict
User avatar
Dec 14, 2010
4239 posts
3158 upvotes
boyohboy wrote:
Oct 3rd, 2017 9:28 am
Any though on HLF lately? Thinking of adding more...
This is a small cap with little coverage. It's presently very close to the average buy price of the portfolio created with this thread, so I'd be ok to add half now and half if it drops further:

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Rod
Everything about my Investing and automated Trading strategies to boost your income: https://boostyourincome.ca
[OP]
Deal Addict
User avatar
Dec 14, 2010
4239 posts
3158 upvotes
Salomon1260 wrote:
Oct 3rd, 2017 10:12 am
What will you do with your PJC.a shares?
There are 2 options:

Under the terms of the Transaction, Jean Coutu Group shareholders will receive, at the election of each such shareholder, either (i) $24.50 in cash or (ii) 0.61006 common share of METRO for each Jean Coutu Group Share held, subject in each case to pro ration, such that the aggregate consideration paid to Jean Coutu Group shareholders will consist of 75% in cash and 25% in METRO common shares. The common shares of METRO issued in connection with the Transaction represent a pro forma ownership of approximately 11% of the combined company. Giving full effect to the pro ration, the consideration of each Jean Coutu Group Share represents $18.38 in cash and 0.15251 common share of METRO. Moreover, two Jean Coutu Group nominees will join Metro's Board of Directors.

The METRO common shares issued to Jean Coutu Group shareholders in connection with the Transaction will be issued based on a reference price of $40.16 per METRO common share, representing the volume weighted average price of the METRO common shares for the 20 trading days ending September 26, 2017, the day prior to the public announcement that METRO and the Jean Coutu Group were engaged in advanced discussions relating to a possible combination transaction.

Transaction voting will be in November, and closing is expected for first half of 2018.

I will choose to receive MRU shares, since MRU has a better valuation than PJC.A and MRU is on my list:

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Rod
Everything about my Investing and automated Trading strategies to boost your income: https://boostyourincome.ca
[OP]
Deal Addict
User avatar
Dec 14, 2010
4239 posts
3158 upvotes
heatx- wrote:
Oct 14th, 2017 5:57 pm
EQB looks to be undervalued.
Given its estimated growth prospects with excellent analyst coverage, and fairly low payout ratio, I would like to hear from fellow dividend investors some thoughts on a partnership with Equitable
I'm adding more to EQB. One of the best value out there now, they continue to do fine, estimated to grow, and price has been disconnected from fundamentals for a while, despite their earnings and ROE growth. HCG is also trading significantly below book value, and the consensus that I've seen is a target price between $15 to $17 as a discount to their book value of $21 until they are in a position to grow assets and be profitable again. Both HCG and EQB are undervalued, but HCG carries more risks and it will take longer to recover than EQB. HCG's new management will have exceed a lot of expectations to recover quicker than the current expectation.

Image

HCG graph isn't pretty, but keep in mind that it's currently trading much lower than book value, and since there has been some positive development from the worst point, including reverting a real liquidity risk, there are good chances for management to succeed in the long run:

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Rod
Everything about my Investing and automated Trading strategies to boost your income: https://boostyourincome.ca
Member
Aug 18, 2010
408 posts
129 upvotes
Richmond Hill, ON
Thanks Rod. Appreciate your input.
Yeah personally I’m not comfortable with HCG and its risk.
Btw, great to see your website is up and running!

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