Selling Finning

Finning (FTT.TO) has been a moderately well performing stock, up 2.9% since I bought it at the end of May.  However, the earnings growth forecast has fallen from 14% in May to under 7% today.  This means that the stock no longer meets my criteria as a core position.  It’s time to sell.

  • Sell FTT @ $23.56

I purchased the stock for $22.89, for a gain of 67c.  It also paid a dividend of 15.2c  during that period, for a total gain of 3.6% in 4.5 months (an annualized return rate of almost 10%).  This was a good call.

 

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Portfolio Update – Up 2.26% in September 2013

My portfolio balances at close of trading on 30th September were:

Ticker Price (C$) Price Change Percentage Industry
POW.TO $ 29.05 0.55% 6.7% Finance, Specialty
FTT.TO $ 23.61 12.86% 6.9% Industrial Services and Supplies
TCK-B.TO $ 27.68 4.37% 6.3% Basic Materials
DII-B.TO $ 37.06 2.94% 6.4% Consumer Cyclical
IFC.TO $ 61.71 1.21% 6.6% Finance, Insurance
LB.TO $ 44.71 0.86% 6.7% Finance, Diversified
BRK-B $ 117.01 -7.48% 7.0% Finance, Insurance
S&P Fund $ 148.23 0.47% 12.2% US Equities
Bond Fund $ 220.83 0.50% 33.1% Bonds
Cash 8.1% Cash
Total 100.0%

Overall my portfolio is up 2.26% since last month. There were no cash contributions. For comparison my TI Index is up 0.67%, the DOW is up 2.16% and the TSX is up 1.05%.

My investments are up considerably. They performed very well against the TI Index, the TSX, and the DOW.

Winners this month include Finning (FTT.TO) which is up 12.86%, Teck Resources (TCK-B.TO) up 4.37% and Dorel (DII-B.TO) up 2.94%.

Losers include Berkshire Hathaway (BRK-B) down 7.48%.

Let’s take a look at my value stock portfolio.

Ticker Cost Basis 8/30/2013 Price Now Gain This Month Gain Total
TCK.B $27.03 $26.52 $27.68 4.37% 2.40%
POW.TO $26.20 $28.89 $29.10 0.73% 11.07%
IFC.TO $58.60 $60.97 $61.78 1.33% 5.43%
LB.TO $44.30 $44.33 $44.74 0.92% 0.99%
FTT.TO $22.89 $20.92 $23.69 13.24% 3.49%
DII.B $41.01 $36.00 $37.50 4.17% -8.56%
BRK.B $112.48 $111.22 $113.51 2.06% 0.92%
XRX $8.90 n/a $9.80 n/a 10.11%
Average 3.83% 3.23%

In summary, my value stocks are up 3.23% since purchase, and up 3.83% this month.

My bond holdings are at 33.1% which is close to my target of 33.5%.  I have 8.1% cash which I can use to add new positions if prices fall.

Screen Shot 2013-09-30 at 10.14.08 PM

Portfolio Update – Down 1.03% in August 2013

My portfolio balances at close of trading on 30th August were:

Ticker Price (C$) Price Change Percentage Industry
POW.TO $ 28.89 -2.17% 6.8% Finance, Specialty
FTT.TO $ 20.92 -5.34% 6.8% Industrial Services and Supplies
TCK-B.TO $ 26.52 10.22% 6.2% Basic Materials
DII-B.TO $ 36.00 -4.23% 6.8% Consumer Cyclical
IFC.TO $ 60.97 0.93% 6.7% Finance, Insurance
LB.TO $ 44.33 -1.60% 6.8% Finance, Diversified
BRK-B $ 126.48 n/a 7.2% Finance, Insurance
S&P Fund $ 147.54 -0.38% 45.8% US Equities
Bond Fund $ 219.72 -0.62% 0.0% Bonds
Cash 6.9% Cash
Total 100.0%

Overall my portfolio is down 1.03% since last month.  There were no cash contributions. For comparison my TI Index is down 0.24%, the DOW is down 4.45% and the TSX is up 1.34%.

My investments are down modestly.  They performed poorly against the TI Index and the TSX, but well against the DOW.

Winners this month include Teck Resources (TCK-B.TO) which is up 10.22%.

Losers include Finning (FTT.TO) down 5.34%, and Dorel Industries (DII-B.TO) down 4.23%.

Let’s take a look at my value stock portfolio.

Ticker Cost Basis 7/31/2013 Price Now Gain This Month Gain – Total
TCK.B $27.03 $24.06 $26.52 10.22% -1.89%
POW.TO $26.20 $29.53 $28.89 -2.17% 10.27%
IFC.TO $58.60 $60.41 $60.97 0.93% 4.04%
LB.TO $44.30 $45.05 $44.33 -1.60% 0.07%
FTT.TO $22.89 $22.10 $20.92 -5.34% -8.61%
DII.B $41.01 $37.59 $36.00 -4.23% -12.22%
BRK.B $112.48 $115.87 $111.22 n/a -1.12%
XRX $8.90 n/a $9.80 n/a 10.11%
Average -0.36% 0.08%

In summary, my value stocks are up 0.08% since purchase, but down 0.36% this month.

My bond holdings are at 0.0% after I reallocated funds to my S&P Fund.  I will return them to my target of 33.5%.  I have 6.9% cash which I can use to add new positions if prices fall.

Screen Shot 2013-08-31 at 12.06.26 PM

Portfolio Update – Down 2.80% in June 2013

My portfolio balances at close of trading on 30th June were:

Ticker Price (C$) Price Change Percentage Industry
POW.TO $ 28.22 -3.02% 6.8% Finance, Specialty
FTT.TO $ 21.65 -4.46% 6.6% Industrial Services and Supplies
TCK-B.TO $ 22.47 -18.85% 6.8% Basic Materials
DII-B.TO $ 36.70 -11.03% 7.0% Consumer Cyclical
IFC.TO $ 59.25 -3.42% 7.0% Finance, Insurance
LB.TO $ 43.94 -0.48% 6.8% Finance, Diversified
XRX $ 9.54 4.68% 7.4% Technology
S&P Fund $ 144.63 0.69% 13.4% US Equities
Bond Fund $ 220.71 -2.06% 33.5% Bonds
Cash 4.8% Cash
Total 100.0%

Overall my portfolio is down 2.80% since last month. There were no cash contributions. For comparison my TI Index is down 3.63%, the DOW is down 1.36% and the TSX is down 4.12%.

My investments have performed well against the TI Index, which was dragged down by gold and prices, and the TSX, which was dragged down by commodity price sensitive stocks (e.g., miners). It did not perform as well against the DOW.

Winners this month include Xerox (XRX) which is up 4.68% (partially due to a strengthening US dollar) and my S&P fund (again due to strong US Dollar).

Losers are manifold and include Teck Resources (TCK-B.TO) which is down 18.85%, Dorel (DII-B.TO) down 11.03% on poor bicycle sales, Finning (FTT.TO) down 4.46%, Power Corp (POW.TO) down 3.02%, and Intact Financial (IFC.TO) down 3.42%.  Also, Bonds are down 2.06% on fears that the US will reduce fiscal stimulus (i.e., bond buying).

Let’s take a look at my value stock portfolio.

Ticker Cost Basis 5/31/2013 Price Now Gain This Month Gain – Total
TCK.B $27.03 $27.69 $22.47 -18.85% -16.87%
POW.TO $26.20 $29.10 $28.22 -3.02% 7.71%
IFC.TO $58.60 $61.35 $59.25 -3.42% 1.11%
LB.TO $44.30 $44.15 $43.94 -0.48% -0.81%
FTT.TO $22.89 $22.66 $21.65 -4.46% -5.42%
XRX $8.90 $8.79 $9.07 3.19% 1.91%
DII.B $41.01 $41.25 $36.70 -11.03% -10.51%
Average -5.44% -3.27%

In summary, my value stocks have lost 3.27% since purchase, and lost 5.44% this month.  This monthly loss is greater than the 4.12% that the TSX lost, which is worrying.  However, I am a patient investor and this is a good time to add to my positions (using some of my remaining cash).

My bond holdings are at 33.5%, which is right on my target of 33.5%. I have 4.8% cash which I can use to add another new position if prices fall.

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Adding Finning as a Core Position

ImageFinning is one of the stocks meeting my screening criteria.  The price has been advancing quite a bit recently, but pulled back today allowing me to get in.

Finning is a Canada-based Caterpillar dealer that sells, rents and services Caterpillar equipment.  It is goegraphically diversified through operations in Western Canada, the UK, and South America.

Due to it’s focus on Western Canada and South America, Finning has a strong concentration in mining and oil sands operations, which means that it is somewhat correlated to commodity prices (copper, gold, coal, oil and so on).  This is a consideration when looking at the diversification of my overall portfolio.  I already own Teck Resources, which is similarly correlated to commodity prices.  I probably don’t want to buy another miner right now.

Screen Shot 2013-05-31 at 11.11.44 AMI have analyzed the stock using my usual procedures. The results are as follows.

  • The P/E Ratio is 12.05, which is much lower than the average historical P/E of 18.50 (excluding 2007 and 2008, which were extraordinary) and the Graham Number is $19.73
  • The Dividend Yield is 2.66%, and the coverage is 311%.  I’d prefer a bigger yield, but Finning is a serial dividend increaser so I will be patient.
  • Forecast Growth Rate is healthy at 13.94%
  • The Gordon Return (Dividend + Growth) is 16.61%

The Margin of Safety at current prices is -1%.  I would have preferred to pay  $21 for this stock, but I think the stock is well priced here as it has pulled back.

  • Buy FTT.TO @ $22.89