I know what your thinking, "c'mon mix it up a little bit, same 'ol, same 'ol." While I don't blame anyone for thinking that, I can't promise the companies I've been actively purchasing will change anytime soon. KHC and BAYRY are two positions I have been adding to quite frequently it seems as of late. KHC may not be an aggressive growth stock with a corresponding high dividend growth rate, but it does remain a cash cow with a yield getting closer to 5% week by week it seems as overall market valuation continues to decline.
With respect to BAYRY, nothing has changed with my rather strong conviction concerning what I believe to be a rather significant price discrepancy between Mr. Market's perceived risk associated with the company versus the potential long term reward with owning the stock. My plan to continue to make purchases of BAYRY remains in tact so long as the valuation remains at unusually depressed levels.
Purchase: 10 shares x $52.45 = $524.50 (+$0 trade fee).
Total share count in KHC now stands at 100 shares.
Dividend Income: $25 annually ($2.50/annually; paid quarterly in Mar, Jun, Sep, and Dec)
Dividend yield > 1.5x S&P yield: Yes, 4.77% vs. S&P's 1.94%
Comments: Remain stats that I typically include haven't changed much since my most recent purchases which can be found here and here. My current position in KHC is about were I initially intended it to be, however, I will continue to add shares in much smaller amounts than my initial purchases reflected if valuation remains at current levels.
----- Bayer AG (BAYRY) -----
Purchase: 24 shares x $18.70 = $448.80 (+$0 trade fee)
Total share count in BAYRY now stand at 144 shares.
Dividend Income: $20.67 annually ($0.8614 paid annually in May or June)
Dividend yield > 1.5x S&P yield: Yes, 4.6% vs. S&P's 1.94%
Comments: My last purchase of BAYRY can be seen here. Since my last purchase BAYRY released their Q3 earnings which can be read here.
Some takeaways from the latest earnings release include:
With respect to BAYRY, nothing has changed with my rather strong conviction concerning what I believe to be a rather significant price discrepancy between Mr. Market's perceived risk associated with the company versus the potential long term reward with owning the stock. My plan to continue to make purchases of BAYRY remains in tact so long as the valuation remains at unusually depressed levels.
----- The Kraft Heinz Co (KHC) -----
Purchase: 10 shares x $52.45 = $524.50 (+$0 trade fee).
Total share count in KHC now stands at 100 shares.
Dividend yield > 1.5x S&P yield: Yes, 4.77% vs. S&P's 1.94%
Comments: Remain stats that I typically include haven't changed much since my most recent purchases which can be found here and here. My current position in KHC is about were I initially intended it to be, however, I will continue to add shares in much smaller amounts than my initial purchases reflected if valuation remains at current levels.
----- Bayer AG (BAYRY) -----
Purchase: 24 shares x $18.70 = $448.80 (+$0 trade fee)
Total share count in BAYRY now stand at 144 shares.
Dividend Income: $20.67 annually ($0.8614 paid annually in May or June)
Dividend yield > 1.5x S&P yield: Yes, 4.6% vs. S&P's 1.94%
Comments: My last purchase of BAYRY can be seen here. Since my last purchase BAYRY released their Q3 earnings which can be read here.
Some takeaways from the latest earnings release include:
- Group sales up 1.9% on a currency and portfolio adjusted basis
- Net cash provided by operating activities in continuing operations rose by 7.8 percent to 2.051 billion euros, due mainly to a greater decline in cash tied up in working capital.
- Bayer reduced its net financial debt to 36.524 billion euros as of September 30, down 18.3 percent from the end of the second quarter. This decline was mainly attributable to the proceeds from the divestments to BASF being used to partially repay the bridge financing for the acquisition in the agricultural industry.
- In connection with the crop protection product glyphosate, lawsuits from approximately 9,300 plaintiffs have been served in the United States as of October 30. "We continue to believe that we have meritorious defenses and intend to defend ourselves vigorously in all of these lawsuits," underlined Baumann. Speaking about the Johnson case, he said that the verdict is a single judgment by a court of first instance and is not binding for the other proceedings. Bayer considers the decision to be incorrect and will therefore file an appeal with the California Court of Appeal. Glyphosate is safe for use when used according to label instructions, as confirmed by more than 800 scientific studies, decades of practical experience with glyphosate and the assessments of regulatory authorities in over 160 countries.
- Bayer aims to pay out a dividend per share for 2018 that is at least at the same level as in the prior year [payable in May or June of 2019].
As I've noted in comments included in previous posts concerning my purchases of BAYRY, it is the subject of the fourth bullet point above, the herbicide glyphosate and the approximately 9,300 plaintiffs suing Bayer, that has really spooked Mr. Market in recent months and thus causing a significant decline in BAYRY's valuation. Since initiating my purchase in BAYRY I have come across additional publications of other large asset management companies and hedge funds who has also expressing their own opinions on the these lawsuits. David Eihorn of Greenlight Capital opined that "Bayer fell victim to a 'runaway jury' as a California jury awarded $289 million to a plaintiff...The scientific evidence indicates it is unlikely glyphosate causes cancer. We expect the California verdict will be reversed or the damages greatly reduced, and the company will fare much better as the litigation develops."
No comments:
Post a Comment