Recent Buy and Sale

I normally do not sell the securities that I’ve purchased in my Portfolios as I’m into it for a very long haul and buy them only after careful consideration, unless, there are some exceptional circumstances as below:

  1. A significant drop or total elimination of dividends
  2. A display of inappropriateness by the company, be it management, or otherwise
  3. An apparent fraud or even outright cooking of accounting books

I’d recently purchased Seagate Technology (STX) in Feb of this year and during that time, things looked to be going in right direction. Although, I was not fully convinced about it but thought that such a marquee company will be able to right the ship with the changes. However, in the technology world, even a year or even few months, can be a light year away. I still think STX has good story going for it, but, looking at the accelerating secular trends of drastic price reduction with each newer version of disks, storage and not to speak of cloud storage, I think it is too much risk to hold STX as a long-term duration security.

As a result of this learning experience, I’d add an additional point in above list: Watch for the secular trends in the area where the company operates. Technology is one field where predicting even for a year is a difficult proposition, probably best left to astrologers or talking heads on TVs.

I sold all my 40 positions of STX on 5/04 at $19.81. Now that, I’ve some ammo to fire for few buys 🙂  That’s what I exactly did: I bought below companies.

1) Bank of Nova Scotia (BNS)

I’d recently bought BNS and this was 5th addition to that. I added 10 positions in BNS on 5/09 at $47.62. It’ll add $28.80 of passive dividend income on an annual basis. BNS got the honor of my first buy of 2016. Bank stocks have nicely recovered and started to appear a bit on the expensive side in my opinion.

2) Eaton Corp, plc  (ETN)

Eaton Corp plc is a power management company providing energy-efficient solutions for electrical, hydraulic and mechanical power. The company operates across 4 segments: electrical systems and services, hydraulics, aerospace and vehicle. The company was founded in 1916 and is headquartered in Dublin, Ireland. ETN has a current market cap of $24B.

ETN has dividend yield of 3.75% and trading at $60.87, dropping from 52 week high of $73.82, about 20% drop. I initiated 5 positions in ETN on 5/09 at $61.11 in my taxable account. It will add $11.40 of passive income annually that I do not need to work for.

3) Welltower, Inc. (HCN)

Real Estate Investment Trusts (REITs) have been pulled down due to concerns about Fed raising interest rates and their impact on the earnings of these REITs, though they started rallying in recently months. The yield of 4.79% is simply juicy.

I bought 5 positions in HCN on 5/13 at $71.74. It’ll add $17.20 of passive income on an annual basis.

Full Disclosure: Long on above mentioned securities.

Thanks for reading.

What do you think about these buy and especially sale?

8 thoughts on “Recent Buy and Sale

    1. Hi Investment Hunting,

      Yeah. BNS is a great company that I want to hold for a long term: it has gone up a lot in last few months, look to add few more when the price come down a bit.

      Thanks for stopping by as always!

  1. Can’t blame you for selling STX. The changes in all tech companies is too great for a long term portfolio in my opinion. That’s why I don’t hold any tech. I have to say that I like all three of your buys this time. Each is a great name and with all the negative news around HCP I think the HCN buy is less risk.

    1. Hi DivHut,

      I’ve been reluctant to buy technology companies and did not expect to see the cycle change for STX, however, things change so fast in tech space; many times it is too late before you take action and by the time substantial capital can just evaporate into thin air.

      Thanks for stopping by and commenting!

    1. Hi EasyDividend,

      I know the feeling of selling a company without being able to make some money however, sometimes it may be the best thing to do under the circumstances. I pulled the plug and cut the daily pain of watching capital deterioration at the accelerated pace. It is possible that STX comes up with a new product and a turnaround story but, you never know. Too great a risk to take. Best on your journey.

      Thanks for stopping by and commenting!

  2. Thanks for sharing! I think it is important to review one’s buy and sell criteria from time to time. I think I’ll do that again soon for DivGro. The buys look interesting, and I’m particularly interested in ETN. Looks like a great stock to consider!

    Take care
    FerdiS, DivGro

    1. Hi DivGro,

      Appreciate the likes. I prefer to stick to quality companies, having watched the carnage in STX, ARCP, and KMI. Problem is that consumer staples and discretionary are at multiple years high and provide less margin of safety. With elevated P/E ratio, I’m a bit careful in buying equities now. Once the market goes down some, would look to pull some more triggers.

      Thanks for stopping by and commenting!

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