I sold my IP today. My dividend portfolio just is not working. IP was essentially a wash. I may pare it down by another position or two before the end of the year, and look at either MFI dividend stocks or else spreading the funds into either other buckets or the dividend ideas I think are the best. Looking at my names, I think SBS and ABR are also on my potential sell list.
I did increase my position in GTAT by 28% today. They had sold off by about 7% due to issuing additional stock and taking on additional debt. I believe in the long term story, so I increased my position. It does make GTAT my single largest holding by a fair amount. But I think this is a theme I want to continue. Outside of MFI I think I need to consolidate my holdings a bit. I have 34 stocks. 16 of those are MFI. I'd suggest that all I need are perhaps 12 to 14 other positions. I just need to clear my brain and decide which are the best stocks and focus on them, rather than spreading too many chips on the table, which really just moves you towards average.
So when I look at my 18 non MFI stocks and rank them, what do I think?
- GNW - in two + years I think they start to approach book value! perhaps $22. So again 40%.
- KLIC- one of the stocks I am more bullish on. I think if they signal smart usage of cash and if there is a rebound in their space (quite likely in my opinion) there is 50% upside in two years to $18.
- TGONF - this is a weird one. First they are very ill liquid. So selling will actually be difficult. You have to go to their European website to understand why I own them. At the end of October, their NAV was 15.49 yet their share price was 10.03. That is 35% under NAV. This is clearly (to me) an investment to be patient about. I would say two year up side is over 50%. So this is actually one of my most positive positions, even if not liquid.
- GTAT - I think they have a very good chance of being $13 in 2+ years! which is a 40% move.
- CS - large Swiss bank. They trade at just 5% over book value. My thesis is as European economy improves that can expand to 125 or 130. At same time, they should be able to grow BV by 8 to 10% a year. So I see 40% upside unless the Swiss do something silly regarding banking regulations and solvency requirements.
- SBS - this is Brazilian water company. Always a little difficult to value as they are volatile and exchange rates move a bunch as well. But they are trading at only about 7x earnings. I gotta think that 10x is more normal, plus you still have some growth in Brazil. So 40% upside before thinking about forex seems reasonable.
- TC-PT- wow, wish I knew the answer here. It might be time to back up the truck as this stock (and TC) have been in a tailspin. I have always maintained these guys are all about the price of copper and molydenbreum. Who knows where those prices will go? My guess is that if your time horizon is more than a year, up. So I do not think this is a stock to sell and one to actually consider adding on weakness. If/when those prices rebound, this is a $19 stock, so 35% upside before consideration of another $3 of dividends (with that 50% upside). Buying them will take some resolve.
- HIG-WT - I think these warrants have reasonable 100% upside from here until they expire in June 2019. This seems like one to buy on weakness and not sell.
- BAC-WTA - ditto to HIG warrants. I only put the conservative upside here at 83% through January 2019.
- HIMX - if the google glass takes off, this stock could easily rise by 50% in two years. There is certainly downside risk here though.
- BBEP - not a sexy company, but should be a steady eddy. I think really you can expect is 12% appreciation per year, so say 25% in two years. Not much downside risk, unless the bottom drops out of oil prices.
- AOD- I own this CEF because it trades at a 17% discount to NAV (stunning). While it is not sexy, this is not something one should sell at 83 cents on the dollar. Realistically in two years, they could cut that discount in half and pay 16% in dividends for a gain of 24%.
- CSCO - probably a longer time line on CSCO. They have a lot of headwinds. I think $24 is realistically the best I could hope for in 2 years. That is 13% plus dividends is 20%.
- INTC - pretty much the same as CSCO. Probably 20% upside over next two years.
- CSQ - like AOD, trading at a 11.4% discount. So in two years with dividends looking at 20%.
- ABR - I have lost a little faith in this REIT. They are trading at 87% of BV. But as interest rates rise, their BV should drop. Over next couple years, perhaps I can make 15% here.
- GA - as GA has a buyout offer at 11.75, I think a realistic gain from here is $12 (includes upcoming dividend). So only 7% upside! but limited downside. However it does not make sense to sell, unless some unbelievable usage of funds comes along.
- TCRD - while this has been a decent performer, I can not honestly say they have a terrific future. Their NAV is 13.34 and they trade at 16.69. So upside over two years might be 15%.
O and OIBAX are two smaller holdings. They are a carry over from my wife's account and selling them will be a bit of a mess, so I will hold for the time being.
So that was helpful.