Transaction Alert

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Transaction Alert

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U.S. Dividend Watch List: October 24, 2014

Top Five Watch List Performance Review

In our ongoing review of the NLO Dividend Watch List, we have taken the top five stocks on our list from October 11, 2013 and have checked the performance one year later. The top five companies on that list can be seen in the table below.

Symbol Name 2013 Price 2014 Price % change
IBM IBM 176.85 162.08 -8.4%
XOM Exxon Mobil Corp. 87.97 94.49 7.4%
SCG SCANA Corporation 47.62 53.33 12.0%
CAT Caterpillar 84.77 99.44 17.3%
VMI Valmont Industries, Inc. 138.02 132.06 -4.3%
      Average 4.8%
         
DJI Dow Jones Industrial 15,570.28 16,805.41 7.9%
SPX S&P 500 1,759.77 1,964.58 11.6%

Watch List Review

IBM (IBM) was at the top of our list last year but shares fell 8.4% since we published our watch list. One October 18, 2013 we said the following about IBM shares.

According to our valuation model, the stock is priced just below fair value of $180. Our model indicates that the stock should be undervalue at or around $150. We’d look for more weakness to come.

IBM shares are trading a $160 which is slightly above but given that the company lifted the EPS guidance, we wouldn’t be surprised if our fair value estimate should be reduced.

We highlighted Exxon Mobile (XOM) and alerted our readers that we took position in the stock prior to the ex-dividend date. We booked a gain of 14% from the transactions while the market gained 5%. The stock however has given some ground in recent weeks due to weakness in the oil price. If the stock retraced back toward the 52-week low, you can be certain that we will look to accumulate shares again.

U.S. Dividend Watch List: October 24,2014

After what appeared to be a minor correction in a short period of time, the market roared back and regained some ground. The S&P 500 rose 4% for the week. Based on that information, we would assumed that less companies will show up on our list and that was the case. The total number of companies that fit our criteria rose dropped to 101. Such figure is still a large number thus we will highlight 24 companies that are trading within 6% of the 52-week low. Continue reading

Quick Take: Carbo Ceramics

Review

On August 6, 2012, we purchased Carbo Ceramics with the following rationale:

“Carbo Ceramics (CRR) has been mentioned by us on several occasions.  CRR first appeared on our February 10, 2012 U.S. Dividend Watch List (found here) and was trading at $85.94.  An Altimeter was run on CRR which indicated that the stock would be undervalued at $62.40 (found here).  However, as CRR has experienced a dividend increase of 12.5% since our May 28, 2012 Altimeter, the stock is now considered undervalued at $70.  While we do expect approximately 20% downside risk from the current price, we are comfortable with adding to our position when such a decline takes place.”

As it appeared that Carbo was undervalued between $62.40 and $70, we used 5% of our portfolio to purchase the stock. After August 6, 2012, Carbo Ceramics fell as low as $63.03 and increased as much as $156.

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Update

Below are the updated numbers for Carbo Ceramics after the decline from the most recent peak of $156.  We will cover both aspects of CRR based on Gould’s Altimeter and Speed Resistance Lines.  First, the qualitative review based on the Altimeter.

Gold Stock Indicator: October 17, 2014

In the last week gold managed to eek out a gain while gold stocks declined nearly –3%.

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