Sold my BGG trading shares at 30.60 and my long-term shares at 30.87 this morning. The LT shares had a gain that was the equivalent of 6 quarters of dividends and I've seen this one get above 31 not too long ago only to erode back down to 27+. Not going on that ride again. If I buy it again in the LT account, it'll be in the 28's. And will try to learn the short-term pattern a bit better and trade it more frequently in the trading account.
Also got out of F at 7.91 and may stay away although I do still have it in the IRA.
Not seeing any other compelling trades yet, though FMT is the one I'm watching most closely. Have it in the LT account and am about the least underwater I've been on it. There are still two more shoes to drop. Earnings and divi announcement. They might be good shoes. I'm not quite sure how the math works that they sold $4B worth of loans and are taking a $140MM charge on the sale. I'm coming up with 3.5% as the effective amount of damage done to them by non-performing loans. Other companies have reported as much as 20% of their sub-primes being in default, but I don't know how much they lose dumping such homes on the market. Anyway, 3.5% damage to half their business works out to a 1.8% haircut they should've taken. We'll see. They're about 60% down from their 52-week high. I bought when they were down a little over 50%. And even with as much as they've recovered, the dividend is good if it holds.
Speaking of dividends, WPL. 8.5% and trading about half their 52-week high. Tanked when execs resigned and hasn't really recovered with the return of their founder. My bet on this one is that with the quick return of their founder, the folks who left didn't take as many clients with them as normally would happen.
Two others to mention one or neither of which may not qualify as "Value Investing" discussion. BME, which I own mostly as a relatively safe dividend-payer and ELN which has been really volatile in the past but a lot less so recently. I used to trade it a lot; sometimes multiple times in a day. Now I can hold a position (long or short) for weeks in it. I think Tysabri sales are doing better than we know and it's a roll of the dice that AAB-001 (their Alzheimers compound) may get through clinicals successfully. And I think nanosphere technology is a sleeper that could become a very substantial portion of their business.
Opinions? Other positions I've got that're only barely worth mentioning are JPM in my LT account an HMB in my speculation account.
Any other decent dividend payers out there on sale? That's the focus of my LT account and there's a lot of dry powder in that account that's just earning 3.5% in bonds.
Edit: Regarding FMT, the big unknown to me is how much they typically earn from their sub-prime business, which is a part of their business they're exiting. I don't understand this market very well. Whether they're one of the ones who typically sell loans as soon as they make them or if they keep them and reap the benefits of the performing ones, which I would think would be very substantial. |
