Below is the 6-year performance of our Dividend Watch List from November 11, 2011 to November 9, 2017 as compared to the Dow Jones Industrial Average.
Posted in NLO analysis, Performance Review
Below is the 5-year performance of our Dividend Watch List from November 9, 2012 to November 8, 2017 as compared to the Dow Jones Industrial Average.
Posted in NLO analysis, Performance Review
Below is the 4-year performance of our Dividend Watch List from November 8, 2013 to November 7, 2017 as compared to the Dow Jones Industrial Average.
Below is the 7-year performance of our Dividend Watch List from October 22, 2010 to October 20, 2017 as compared to the Dow Jones Industrial Average.
Posted in NLO analysis
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 November 4, 2014 and have checked the performance one year later. The top five companies on that list can be seen in the table below.
| Symbol | Name | 2015 Price | 2016 Price | % change |
| CLX | Clorox | 113.35 | 128.11 | 13.0% |
| KMB | Kimberly-Clark Corp. | 112.29 | 110.79 | -1.3% |
| PBI | Pitney Bowes Inc | 14.25 | 11.25 | -21.0% |
| DBD | Diebold | 21.10 | 18.35 | -13.0% |
| RLI | RLI Corp. | 54.79 | 58.95 | 7.6% |
| Average | -3.0% | |||
| DJI | Dow Jones Industrial | 17,888.28 | 23,539.19 | 31.6% |
| SPX | S&P 500 | 2,085.18 | 2,587.84 | 24.1% |
Prior Year Performance Review
The top five companies from last year's list were outperformed by the market. The strength of this bull market has propelled the market to its all-time high. We believed that Clorox (CLX) and Kimberly-Clark (KMB) were quality companies worth considering as income producing asset while Pitney Bowes (PBI) should be placed under speculative category. Reviewing the performance table above and we believed our initial assessment was accurate.
The other two companies we mentioned were CVS Caremark (CVS) and Nike (NKE). Despite some negative news on Nike, the company performed well while CVS fell 16% for the year.
U.S. Dividend Watch List: November 3, 2017
It appears that nothing can slow or stop this bull market from marching forward. Growth and momentum stocks are in the range while value strategy is left in the dust. That's precisely the situation we are in. Despite that, we remain true to this strategy and will continue to seek quality company at a reasonable price. Below are 63 companies trading at or near its yearly high. Continue reading
Posted in Dividend Achiever Watch List, Dividend Achievers, Dividend Watch List
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Below is the 3-year performance of our Dividend Watch List from October 24, 2014 to October 24, 2017 as compared to the Dow Jones Industrial Average.
Posted in Dividend Watch List, NLO analysis
Below is the updated Gold Stock Indicator as of October 31, 2017:
Performance Review
This is the performance from the October 1, 2016 Nasdaq 100 Watch List:
The entire watch list average a gain of +2.43% compared to the analyst estimate of +8.70%. The watch list categories had the following performance:
The performance in the last year was horrendous for the expectations that we set on the Nasdaq watch list. Compared to the Nasdaq 100 gain of +27% the above watch list gained a meager +2.43%. Adding insult to injury was the section labeled “Sell the Principal” where stocks that seemed to have excessive gains were thought by us to have warranted selling the principal.
Massive gains in the five listed stocks averaged a gain of +73.74% in the last year. That leaves little to debate in terms of the success or failure to the idea of selling the principal.
In our August 2017 Interest Rate Monitor, we said the following:
“…we’re holding to the idea that the current range in the trend will remain, until proven otherwise.”
As seen in the chart below, the range that we spoke of is holding strong, for now.
Performance Review
From our October 2016 Insurance Watch List, we have the following performance of the entire watch list.
| symbol | name | % chg |
| CNO | CNO Financial Group, Inc. | 56.67% |
| THG | The Hanover Insurance Group, Inc. | 24.84% |
| HALL | Hallmark Financial Services Inc. | 12.98% |
| ORI | Old Republic International Corp. | 6.44% |
The average change for the list was +25.23% as compared to the iShares Dow Jones Insurance Index ETF (IAK) gain of +22.51%. Below is the performance of the same stocks relative to the analyst estimates:
How’s this for a stunner? Take a look at the performance Old Republic Title (ORI). What in the world is that all about? The analysts called for a +6.44% gain and that is exactly the amount the stock has increased one year later. Let’s dare them to do it two years in a row.
The stock that we highlighted was Hallmark Financial Services (HALL). We pointed out the downside target however only one ($9.68) was achieved. The underperformance of HALL was expected and therefore continues to put the stock in the position of being undervalued at the current price.
In our section titled “Sell the Principal” we highlighted the stocks that we thought investors should consider selling the principal. Below is the performance of those stocks.
| symbol | name | % chg |
| GNW | Genworth Financial, Inc. | -32.67% |
| STC | Stewart Information Services | -17.39% |
| KFS | Kingsway Financial Services Inc. | -2.65% |
| NATL | National Interstate Corporation | 0.25% |
| ENH | Endurance Specialty Holdings Ltd. | 1.19% |
| CRD-B | Crawford & Company | 1.97% |
| HTH | Hilltop Holdings Inc. | 9.72% |
| PFG | Principal Financial Group Inc. | 30.14% |
| SYCRF | Syncora Holdings Ltd. | 36.30% |
| UNM | Unum Group | 44.21% |
| LNC | Lincoln National Corporation | 58.14% |
Four stocks exceeded the average return of the iShares Dow Jones Insurance Index ETF (IAK). The average change of the entire list increased by +11.74% as compared to the iShares Dow Jones Insurance Index ETF (IAK) gain of +22.51%.
October 2017 Insurance Watch List
Below is the latest list of stocks that we’re watching and the analyst estimates for the stocks:
Below is the data of Dow Jones Industrial Average declines in the period indicated as a recession according to the National Bureau of Economic Research (NBER) from 1902 to 2009. The percentage change is arrived at by taking the first trading day of the month indicated as the beginning of a recession and the last trading day of the month indicated as the end of the recession.
Posted in NBER, recessions
In an article dated October 24, 2017 on BNN, Eddie Lampert, CEO of Sears Holdings complained that “Sears Canada could have avoided liquidation.”
Lampert, who has been lauded as the next Warren Buffett, seems to think that Sears Canada executive chairman Brandon Stranzl made a mistake when he introduced his “Sears 2.0” strategy in 2016. Lampert, through his ESL Holdings held a large stake in Sears Canada and said that, “ESL believed that [Sears 2.0] strategy was highly risky and unlikely to succeed.”
Let’s look at the failings of Brandon Stranzl at Sears Canada and Eddie Lampert at Sears Holdings by comparing the stock prices of the respective companies. As Warren Buffett’s mentor Benjamin Graham said, “in the short run, the market is a voting machine but in the long run, it is a weighing machine.”
Brandon Stranzl tenure at Sears Canada:
Eddie Lampert tenure at Sears Holdings:
There is such a refreshing difference between the Lampert years at Sears Holdings compared to the job done by Stranzl. The primary difference is that Sears Holdings was already in a rising trend in the stock price before Lampert took over. Therefore, we cannot necessarily attribute the near doubling in price to the fact that Lampert did anything revolutionary at the company.
Ultimately, Lampert, when faced with challenges, was not equal to the task, as reflected in the subsequent decline in Sears Holdings. Contrast Lampert’s good fortune of taking over when the company stock price was already in a rising trend to the challenge of Stranzl who took over Sears Canada after the stock price had been in a multiyear declining trend.
If the passage of time truly weighs the impact of stock value then Lampert’s years have proven to be of little merit to the shareholders of Sears Holdings. Meanwhile, Stranzl’s two year history at Sears Canada was merely a vote of no confidence as a result of prior lack of leadership.
Below is the 2-year performance of our Dividend Watch List from October 23, 2015 to October 26, 2017 as compared to the Dow Jones Industrial Average.
Posted in CSL, NLO analysis, Performance Review, SIAL, WWW
In a recent Vanity Fair article by William Cohan, DoubleLine Capital bond manager Jeffrey Gundlach is interviewed regarding his take on bonds.
Gundlach’s answer is straightforward, “Why would anyone invest in bonds?” Seldom does anyone get such a contrasting view on an investment that is counter to their own best interests. And yet, somehow, Gundlach manages to go downhill from there.
Posted in Gundlach, interest rates
In the period from 1920 to 1989, the Dow Jones Industrial Average would consistently be undervalued or overvalued at set Altimeter levels (15 and 30, respectively). An investor could almost count on these general points to accumulate and sell stocks without fail. Note the various dates when a “sell” or “buy” indication was given. All points until after 1987 were useful indications for market under or over valuation.
After 1987, the Altimeter for the Dow Jones Industrial Average started to change. What has changed that made the Altimeter vary so much from the normal levels? We think it has to do with the selection of companies that are included in the Dow Jones Industrial Average with less of an emphasis on dividend payments, lower dividend yields and lower relative payout ratios. In addition, inclusion of companies like Visa, Apple, Microsoft, Intel and Cisco Systems has shifted the course of the index which might more appropriately reflect the changing nature of the U.S. economy, as seen in the chart below.
Posted in bull market, Dow Altimeter, Rank