Tuesday, February 24, 2015

Chump IRA Historical Dividend Growth Graphic...Very Pretty

I've been messin' with excel's graphing features again... here is the result:

This is a nice visual of the yearly dividend growth.  Each quarter and full year are shown.  The total annual dividend has grown at a rate of over 17% annually since 2011.  I love to see the growth in each quarter, as well as each year, I find this very motivational ;-)

My recent sale of Walmart, and addition of better growers will only enhance this growth in 2015.



More on My GE Purchase Yesterday

Interesting insider activity at GE, from today's SA:



  • It’s always a good idea to keep track of the insider buying activity.
  • General Electric’s director purchased 800,000 shares of the company for nearly $20 million.
  • General Electric’s shares haven’t moved yet.
  • Could this be an opportunity for investors?
Peter Lynch, the iconic hedge fund manager at Fidelity Investments and the author of two of the most widely recognized investment books "One Up On Wall Street" and "Beating The Street", wrote:
Insiders might sell their shares for a number of reasons, but they buy them for only one: they think the price will rise.

Monday, February 23, 2015

Selling Walmart, and a Few Additions

After a long weekend of consideration, I've decided to sell my position in WMT today.  I closed the position with a gain of around 13.5%, over 2.5 years...pretty anemic.  The final straw was their measly $0.01 dividend raise announced last week, coupled with the announcement they are going to pay their employees more money.  I don't mind the increase in wage, but they said it would cost $1B!!  Ouch.   For Costco, who sells higher end products with high margins, they can pay their employees better, but at the worlds's low cost seller, they can't.  Low yield, slow to no growth, no growth in the dividend...I'm better off owning other names, including utilities....

More on the adds soon, started a 1/3 position in GE (3.6%Y), added to DOV(2.1%Y) and SO(4.6%Y).  And I still have some cash left over.

Here are the FASTGraphs:

First GE:

A few comments on GE:
  • I've owned it in my taxable account for over a year...its pulled back some recently, and presents a good value at current prices
  • GE has a yield of 3.7%, and has been on the rise every year since the financial crisis
  • GE is rated AA+ by S&P, and has sold off their financial business making them less risky
  • GE is huge, global, and into so many markets and countries....a great conglomerate for the long haul.
Next is current holding DOV:

A few Dover comments:
  • Dividend Aristocrat, with raises in the dividend for 59 consecutive years!
  • Price has pulled back some recently due to a rare sales and eps reduction in 2014
  • Slightly underweight position in the portfolio, decided to add a small amount here
Next is utility SO:

A few SO comments:
  • I've held Southern in the chump IRA for 2 years or so, very low Beta of 0.16
  • Yield is 4.6%, and on a Price/Cash Flow basis, the stock is a bit under valued
  • Nice safe utility, with good yield and steady slow growth
  • Added a small additional amount to increase the the portfolio income


Thursday, February 12, 2015

Cisco (CSCO) Crushes Expectations

Cisco is hitting on all cylinders...up over 9% today based on solid earnings and revenue.  CSCO is around 3.8% of the Chump portfolio... From Morningstar:

Cisco Systems Inc


Cisco remains a dominant force in data networking.

Analyst Note 02/12/2015
Cisco struck an overwhelmingly positive tone in releasing fiscal second-quarter results, with CEO John Chambers making numerous comments to the effect that the firm has never been better positioned to capitalize on the opportunities ahead of it. Cisco's performance during the quarter was at the high end of management's forecast, with revenue up 7% year over year. The firm expects to continue growing in the third quarter, forecasting revenue up 3%-5% year over year. We don't expect to materially change our fair value estimate, and we continue to believe Cisco is executing well and its competitive position remains strong.
Cisco saw strength across several key markets during the second quarter, including switching (revenue up 11% year over year) and the data center segment (up 40%). Within switching, the Application Centric Infrastructure platform, Cisco's response to software-defined networking, continues to gain adoption, with ACI/Nexus 9000 customers reaching 1,700, roughly tripling over the past two quarters. The service provider market remains the biggest source of weakness, with service provider video sales down 19% year over year and routing sales up only 1%. However, service provider orders were down only 1% versus a year ago, the best result in six quarters. Emerging markets continue to show signs of stability, with orders up 1% year over year. Sales in China and Russia, as should be expected, are still very weak.
Efforts to streamline the company produced solid profitability during the quarter. The gross margin expanded slightly versus a year ago to 61.7%, while the operating margin expanded nearly a percentage point to 28.4%. Head count declined 3% during the quarter, bringing the total reduction to 5% since the end of fiscal 2014. Free cash flow was stable versus a year ago at $2.6 billion during the quarter despite a $1 billion unfavorable swing in working capital resulting primarily from the return to revenue growth.

Below is a 20Year FastGraph for CSCO:

Even at today's price of $29.40, I estimate fair value for CSCO to be around $35, so the stock is still a great value.  I'll continue to hold.


Wednesday, February 4, 2015

AFLAC Results (AFL) - Solid Company, Undervalued

Aflac had a nice Q4 earnings report yesterday, here is a summary:

Aflac is a dividend champion, with a 32 year streak of dividend increases.  I consider it a core position in the Chump portfolio, and plan to hold the position.

Below is a recent FastGraph for AFL which shows where I bought the stock and when:

As the graphic shows, AFL is trading at a significant discount to fair value.  As I write this, the stock is at $60.88.  Fair value per the above is in the range of $95 - $100 per share.

AFL presents a nice buying opportunity today.