Category Archives: Live Trades

EIS and BLD

The momentum appears to be over in TopBuild (BLD) and the valuation is rich, so I sold today at $61.38. This secures a 61% gain from my purchase price of $37.91.

I also purchased 25 shares of an iShares Israeli ETF, EIS at $48.33.

PLEASE NOTE: The information provided on this site is not financial advice and it is for informational and discussion purposes only. Do your own homework. Full disclosure: my current holdings.  Read the full disclaimer.

Low CAPE Indexing: EPOL, EWS, EWZ, ERUS, TUR

earth

After deliberating the issue for the last month, I decided to go ahead and deploy my cash balance and place 10% of my portfolio into global indexes boasting a low CAPE ratio. Today I executed the below trades, which places 10% of my portfolio into the five country indexes boasting the lowest CAPE ratios in the world:

Poland – EPOL – 36 Shares @ $27.245

Singapore – EWS – 39 shares @ $25.215

Brazil – EWZ – 23 shares @ $42.625

Russia – ERUS – 29 shares @ $34.0795

Turkey – TUR – 23 shares @ $41.935

PLEASE NOTE: The information provided on this site is not financial advice and it is for informational and discussion purposes only. Do your own homework. Full disclosure: my current holdings.  Read the full disclaimer.

UIHC & FNHC

I sold my positions today in UIHC and FNHC today.

Both are Florida based insurance companies. I bought them last year because they were cheap in the wake of Hurricane Matthew. They are both well-run insurance companies and all they had to do to realize their value was for Florida to avoid another hurricane. With a category 5 hurricane on a direct course for Miami, it seemed prudent to sell both positions.

Last year after Hurricane Matthew, FNHC dropped 25% and UIHC dropped 35%. I’m down in both positions, but I decided to cut my losses short as catastrophic insurance losses in Florida seems very likely.

I got out of FNHC at $14.28 this morning. This was a good price because it later plummetted to $12.82 as investors realized the magnitude of the losses it is about to face. I got out of UIHC at $14.43. It closed at $14.77.

This brings my cash position up to $12,800.99, or 26.4% of my IRA. I evaluated my screens this weekend and couldn’t find anything that really excited me. It is a bit frustrating as my preference is to be fully invested. We’ll see if something comes along, otherwise, I’ll wait til I do a major rebalancing in December.

I’m also considering paring back my position in TopBuild, but I decided to stay put for now.

PLEASE NOTE: The information provided on this site is not financial advice and it is for informational and discussion purposes only. Do your own homework. Full disclosure: my current holdings.  Read the full disclaimer.

SAFM

I sold my 29 share position in Sanderson Farms this morning at a price of $143.88. After commission, proceeds for the sale were $4,165.47. This results in a gain of 63.61% from when I purchased the stock last year.

I purchased Sanderson Farm last December because I thought chicken prices could increase and the stock already had an attractive earnings yield. The gains in chicken prices exceeded my expectations and fueled SAFM’s earnings higher.

Sanderson Farm doesn’t have much of a competitive advantage or “moat”. It sells a commodity: chicken. As a cigar butt value investor, I don’t look for enduring franchises, just value. Sanderson was a good value at the beginning of the year, but the increase in chicken prices doesn’t look sustainable to me and I decided to take my profits and move on.

In terms of relative valuation, Sanderson Farms now exceeds the valuation of its competitors. When comparing relative values, I like to look at the price to sales ratio. Here is where the metrics currently stand:

Sanderson Farm: 1.0

Tyson: .6

Pilgrim’s Pride: .9

Sanderson 5-year average: .6

It seems like a good time to take my profits off the table now that Sanderson exceeds the valuation of its competitors and is 66% higher than its typical valuation. If this were a taxable investment account, I may have waited until I reached a full year to take advantage of long-term capital gains. As this is a traditional IRA, there is no reason to hold onto the stock any longer than I feel is necessary.

This sale brings my cash position up to $8,333.90, or 17% of my portfolio. I would like to avoid timing the market so I would like to deploy this soon into new equity. I am considering adding to my position in Gamestop or Dillard’s, but I’ll evaluate some other possibilities this weekend over a bottle of vintage 2017 Coke Zero.

Some possibilities I’m considering that I will research more in depth this weekend:

Companies below tangible book:

Atlantic American Corp (AAME)

Appliance Recycling Centers of America (ARCI)

High earnings yields:

Genesco (GCO)

Foot Locker (FL)

Francesca’s Holding Corp (FRAN)

Interdigital (IDCC)

If anyone has any thoughts on any of these companies, I would love to hear them!

PLEASE NOTE: The information provided on this site is not financial advice and it is for informational and discussion purposes only. Do your own homework. Full disclosure: my current holdings.  Read the full disclaimer.