Below is a chart of Northwest Natural Holdings (NWN) from 1973 to 2021 reflecting the year-over-year (YoY) percentage change.
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Category Archives: NWN
Northwest Natural Holdings 10-Year Targets
Below are the valuation targets for Northwest Natural Holdings (NWN) for the next 10 years. Continue reading
Northwest Natural Gas 10-Year Targets
Below are the valuation targets for Northwest Natural Gas (NWN) for the next 10 years. Continue reading
Northwest Natural Gas 10-Year Targets
Below are the valuation targets for Northwest Natural Gas (NWN) for the next 10 years. Continue reading
Dividend Watch List: July 5, 2013
Below are the 12 companies on our U.S. Dividend Watch List that are within 11% of their respective 52-week lows. Stocks that appear on our watch lists are not recommendations to buy. Instead, they are the starting point for doing your research and determining the best company to buy. Ideally, a stock that is purchased from this list is done after a considerable decline in the price and rigorous due diligence.
Gaining More by Limiting Our Gains
One of the biggest challenges to buying and holding a stock for the long term is the wait through thick and thin for the expectations of a particular stock to materialize. In a process of elimination, the New Low Observer team has narrowed down the steps to determining quality stocks by relegating it to those that have increased their dividend every year for at least 10 years in a row. Furthermore, we only seek out those high quality dividend paying stocks, as well as Nasdaq 100 index constituents, when the companies are within 20% of the 1-year low. Having these requirements allows us to select quality companies at (potentially) ideal times to invest.
However, once we have decided on the company that we're interested in investing and we've committed money to, we are still at the whims of "Mr. Market." Although it might seem surprising to some, we are incredibly risk averse and always try to avoid losses whenever we can. We are so risk averse that we have a general rule that if the investment in a particular stock exceeds the gains of the market over the last 100, 50, 25, or 10 years on an annual basis (after expenses) then we tend to sell that stock to seek alternative investment opportunities. If nothing else, we secure the exceptional gains and bide our time until the next "undervalued" opportunity arrives.While the buy-and-hold crowd cries foul at the thought that we're speculating rather than investing when buying and selling high quality stocks at arguably undervalued prices, we have noticed a pattern that keeps emerging from our strategy that sets apart our approach from merely speculating. One of the best recent examples of the value in our investment philosophy is the case of Meridian Biosciences (VIVO).
On March 17, 2010, as the Dow Industrials and Dow Transportation Average were confirming the Dow Theory trend to the upside, Meridian Biosciences (VIVO) was dropping like a rock on news that the future earnings would have to be revised lower. In one fell swoop, Meridian Biosciences (VIVO) erased 9 months of hard earned gains in the stock price. I say 9 months because after our recommendation to sell VIVO, the stock increased in value an additional 27% in 3 months at the peak in September 2009.
At the time of our sell recommendation, Meridian Biosciences had risen 11.75% from our Research Recommendation on March 26, 2009. We were content in our gains and smug at being so smart at selling while the going was good. However, we watched, in almost horror, as the stock continued to climb higher going from our sell point of $20.35 all the way up to $26. We began to wonder if selling a company that we were convinced was of the highest quality was the best choice. After all, Meridian Biosciences (VIVO) is one of the only Dividend Achievers to match the gains of Google (GOOG) on a percentage basis from the date of Google's (GOOG) IPO to the peak in late 2007/early 2008.
With a tinge of regret we moved on hoping that our next investment would make up for our blunder of selling VIVO at such a cheap price. In the nine months since our sell recommendation of Meridian Biosciences (VIVO) we've made eight Investment Observations that were followed by Sell Recommendations. Below are the stocks we mentioned and the percentage gains that were secured since our sell recommendation of VIVO on June 12, 2009:
- Cardinal Health (CAH) +23%
- Abbott Labs (ABT) +16.80%
- SuperValu (SVU) +11.87%
- Nor'wst Nat (NWN) +10.53%
- AquaAmer. (WTR) +10%
- Cephalon (CEPH) +13.41%
- Mattson (MTSN) +24%
- Monsanto (MON) +22%
With the reduction of earnings estimates and the subsequent collapse of Meridian Biosciences (VIVO), the stock has fallen below the level of the original sell recommendation that was given on June 12, 2009. In addition, we've highlighted eight companies that have provided double digit returns in a complete buy and sell cycle all within a nine month period. The chart below illustrates the recommendation dates in green and the sell dates in red with the post-collapse price in yellow.
Today the New Low Observer team breathes a sigh of relief, not in the lose that has afflicted current Meridian Biosciences shareholders but based on the fact that we stayed the course with our investment philosophy which provided gains that, to this point, have gone beyond our expectations by actually limiting how much we are willing to accept on the upside.The lesson that should be learned about Meridian Biosciences is that although the price is nearly the same as a year ago doesn't mean that there was no movement or activity. In fact, the stock went up as much as 44% in 5 months. This is the hard lesson that most buy-and-hold investors should have learned about where the major indexes have gone over the last 10 years. Within all the drama that occured since 2000, many opportunies presented themselves but may have never been realized if holding for the long-term was the only investment strategy. For most investors, the real challenge becomes whether or not to sell a stock after exceptional gains.
Our Current Take on Meridian Biosciences
In our sell recommendation of Meridian Biosciences at the $20.35 level, we said that VIVO would easily go to the $23.33. Since the peak in the price at $26.20 in September 2009 and the recent decline to $19.60, Dow Theory indicates that for this stock, the upside move should take the price at least to the $23 level before going back to the old high of $26.20 or back down to the $19 range. Our expectation that a reaction of 11% to 13% upside move would not be unusual.For those who are interested in justifications of Meridian Biosciences (VIVO) as an investment candidate (since the negative news is already out), there are several compelling factors to watch for.
First and foremost is the recent confirmation of the bullish move of the stock market according to Dow’s Theory. This gives the investor that chance to make mistakes without paying a hefty price. More specific to Meridian Biosciences (VIVO) is the fact that the company is selling 16% below the 8-year average price-to-earnings ratio according to Morningstar.com. VIVO is also selling 3% below the average price-to-cash flow ratio over the last 10 years. Bolstering the case for VIVO is the fact that the company carries little or no debt. We will be watching Meridian Biosciences (VIVO) closely for any indication that the stock will decline from the current level. Our hope, as it always is, is to buy the stock at a much lower price and take reasonable gains in the shortest period of time possible. It is our hope that others can see the value of our approach of taking gains that exceed the historical average annual return and seeking alternative investment opportunities whether it is in cash or another quality stock that is at or near a new low.
- Don't know the historical average annual gains for 100, 50 or 10 years. Go to Moneychimp.com's CAGR of the Stock Market Calculator. Pick just about any time frame and see what you've been missing (even on an inflation adjusted basis).
- Want more info about the strategy mentioned above, then go to our article title "When Timing Meets Opportunity" on SeekingAlpha.com. The article was posted in July of 2009 and has more relevancy than ever before.
- Our article titled "Seeking Fair Profits" outlines Charles H. Dow's philosophy of fair expectations when investing in the stock market. Charles Dow was the co-founder of the Wall Street Journal and the Dow Jones Indexes.
Tell a friend about us. Thank you.
3 Stocks Back on the Dividend Achiever Watch List
There are three stocks that I wish to bring to your attention that are on our Dividend Achiver Watch List. The most important element of these three stocks is that they were individually recommended by our team in the past and are now worth re-examining at this time to verify their respective merits.
First on our list is Matthews International (MATW). Matthews International was initially recommended on March 31, 2009 near the lows of the bear market. At the time, according to Dow Theory, we felt that the company had upside targets of $31, $40, and $49. On August 4, 2009, we issued a sell recommendation of (MATW) when it was trading at $31.95. Subsequently, (MATW) was able to get within $0.50 of the $40 target. After hitting the $39 range, (MATW) has fallen to the current level of $32.50. (MATW) has increased the dividend for 14 consecutive years in a row.
According to Value Line, (MATW) has a book value of $14.32. If we assume the lowest quarterly earnings during the worst of the economic crisis from Q4 2007 to Q1 2009 and project those earnings (the most conservative estimate) into the future, we get a Q1 2011 P/E ratio of 16.92. Value Line also considers (MATW) at fair valuation around $41.86 or 13 times cash flow per share. Using the most optimistic scenario according to Dow Theory, (MATW) is considered fairly valued at $35.77.
The next company of interest on the Dividend Achiever Watch List is AquaAmerica (WTR). For what it is worth, our team recommended (WTR) at one of the lowest points in 2009 on October 31, 2009. Our December 16, 2009 sell recommendation achieved a gain of 10% in 46 days. After hitting the high of $17.89, (WTR) has fallen to the current level of $16.59.
According to Value Line, (WTR) is considered at fair valuation when it trades at $19.30. If we take the worst period of earnings during the market decline from Q4 2007 to Q1 2009 and project those earnings into the future, AquaAmerica would have a P/E ratio of 37.70. Again, we're seeking the worst case scenario in our future projections. This allows us to better assess the risks we are about to take. As long as WTR can stay above the $14 low of 2008, the fair value should be around $18.70.
Finally, the stock with the most potential among the three is Northwestern Natural Gas (NWN). NWN was recommended on October 3, 2009 when the stock was trading a $40.94. At the time the recommendation was made the stock was at a relative low and proceeded to move higher. In the research that I did on (NWN) I found that since 1970, the stock has typically bottomed in the first four months of the year 72% of the time. Additionally, NWN has bottomed in the month of February eleven of the last 39 years or 28% of the time. This makes the decline from December at the price of $46 all the more interesting. We issued a sell recommendation of NWN on December 21, 2009 when the stock was selling around $45.25.
According to Value Line, NWN is considered to be fairly valued at $36.66. This implies that (NWN) has further to fall. However, with the consistency of hitting bottom in the first quarter of the year, especially in February, NWN is worthy of consideration at these levels. Suffice to say, I am most tempted by NWN and will continue to follow this stock for ideal entry points.
-Touc
Sell Northwestern Natural Gas (NWN) at the Market
It is now time to recommend that Northwestern Natural Gas (NWN) be sold at the market. The stock has performed moderately since the research recommendation was issued on October 3, 2009 (. It is highly recommended that anyone who bought the stock based on my research should re-read the posting. Unfortunately, just as it was not possible to buy my AquaAmerica (WTR) recommendation it was the same for my recommendation of NWN, the price only went up from the date recommended.
NWN's stock price has gone nothing but up since the recommendation. However, in the pursuit of "seeking fair profits" the returns that this stock has provided within the last 80 days say that it is necessary to consider alternative opportunities.
NWN was recommended when it was trading at $40.94. As of December 21, 2009, NWN was quoted at $45.25. This equals a return of 10.53%. Selling this stock now generates a return of 2.6x greater than the amount of the dividend yield. Additionally, the 10.53% gain exceeds the return on a 30-year treasury purchased on October 2, 2009 by 2.63x.
Those not interested in following through with my sell recommendation can feel comfortable knowing that NWN is a great long-term holding with a 10.53% cushion since our research recommendation of October 3, 2009.
As I have indicated in the purposes and function of this site, the goal is to:
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maximize the annual yield of each trade.
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reduce time between buying and selling of each stock.
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exceed the annual yield of government guaranteed alternatives in each trade.
Research recommendations and investment observations are intended to be a starting point for investigating a quality company at a reasonable price. It is hoped that after doing the background research you can buy the stock at a lower price. Ideally the stock should be held in a tax deferred account and should not consist of less than 20% of your holdings. Personally, I prefer holding only 2-3 stocks at a time.
Sell recommendations are intended to deal with the short term reality of the market. The tracking of the Sell recommendations are the worst case scenario if you happen to have bought a stock at the time the research recommendation was made (please avoid making this mistake.) I aim for mediocrity in my returns, therefore I am happy with 9-12% annual gains. However, since codifying my approach to investing in 2005, I have had annual returns of 20% and above every year since.
It is always recommended that when selling a stock, one should not place stop orders, limit orders or orders after hours. This leaves the seller in the position of being vulnerable to the whims of the market makers. Instead, place your sell orders only as a market order during market hours. Some would complain that a market order during market hours might leave some profits on the table. However, I would rather leave some money on the table rather than have it taken away from me by the trades that are placed by institutions and market makers. -Touc
Posted in Northwest Natural Gas, NWN, Sell Recommendations
Northwest Natural Gas (NWN) at $40.94
As I attempt to gather as much information on Northwest Natural Gas (NWN) before deciding to actually buy NWN, I found one bit of information that was almost astounding. As I have mentioned before, NWN has increased it's dividend every year for 53 years in a row. I have also talked about the fact that NWN will probably do everything in its power to maintain that dividend increasing history. So it is no surprise that the company announced on October 1, 2009 that will be increasing the dividend for the 54th year in a row.
In today's research recommendation of NWN, I will cover the issue of cyclicality, the Coppock Curve, natural gas prices, and Dow's theory as it relates to the stock. I have compiled this information as I consider buying NWN. It is hoped that you thoroughly review NWN from all angles before committing any money to this accomplished Dividend Achiever.
When someone asks me about any cyclical stocks that I might be able to suggest, I often stammer at the thought. In fact, I'm clueless as any true cyclical stocks. However, after a considerable review of NWN, I can prove that it is definitely a true cyclical stock. First, NWN has exhibited a pattern of hitting a relatively low price between the months of January and May since 1970.
The stock hitting a low during the first five months of the year occurred 87% of the time. New lows during the months of February, March and April took place 78% of the time within the period from January to May. The month of February comprised 33% of the new lows between January and May. From the numbers that I ran, February and April are the most optimum month to consider buying this stock.
Next up is the Coppock Curve for NWN. In the chart below, you can seen that the Coppock Curve along with a 14-month trendline. After falling below the zero line, the rise crossing over the trendline indicated a ideal buying point on the first day of November 1994 at an adjusted price of $7.67. Subsequently, the stock reached an adjusted high of $16.74 in December of 1997.
The next point when the Coppock Curve was crossed by the 14-month trendline was in February 2000. If you bought the stock on the first day of March 2000 at the adjusted price of $12.70, you would have seen the shares rise to an adjusted price of $52.19 on September 18, 2008. The rise from March 2000 to September 2008 is in spite of the bear market which began in October 2007. Currently, NWN's Coppock Curve has just crossed above the 14-month trendline. All indications are that this is a buying point based on the Coppock Curve.
Next up is the natural gas wellhead price from 1977 to the present. In the chart below, I have indicated the points where, based on the Coppock Curve, the price crossed above the 14-month trendline. It appears that the Curve accurately called the bottom in the price, almost to the very lowest point possible. From this indication, it appears that the natural gas wellhead price is about to rise from here.
Finally, we'll look at the prospective upside and downside targets for NWN based on Dow's Theory.
Upside:
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$42.31
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$48.01
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$53.71
Downside:
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$36.20 (fair value)
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$30.30
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$18.50
All of the data points that I have mentioned should be included in your fundamental analysis of this stock. Pay particular attention to the downside targets since this is your best gauge of the risk you might be taking.
It appears that management feels confident about the prospects for the company down the road based on the most recent dividend increase. However, as the number of years of consecutive dividend increases ratchet higher the probability of a dividend cut increases. I am putting this stock on my personal watchlist so that I can buy it at the most optimal price, hopefully lower than the current level. Touc.
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Posted in Northwest Natural Gas, NWN
Northwest Natural Gas (NWN) Altimeter
Today's altimeter is on Northwest Natural Gas (NWN) and there is a lot to appreciate when we exam the pattern that has been established so far. NWN has increased its dividend for 53 years in a row. With such a history of dividend increases, I think NWN will do everything it can to avoid cutting or leaving the dividend the same. At the price of $42.29, NWN is within 16% of the 52-week low.
NWN has a challenging altimeter to decipher until you take a closer look. The pattern that has been established since 2000 until the present is an exact replication of the move from the period 1995 to 1997 (shown in the inset.) After the 1995 to 1997 moves we can see that the stock traded in a wide range until the ultimate low in 2000. From the 2000 low the stock traded in a narrow ascending range, offering several clear opportunities to buy and sell the stock.
Although I have taken artistic license on the interpretation of this altimeter, I do believe that the possibility may exist that NWN will not go materially below the March 2009 low. With the recent decline in natural gas prices, NWN offers a reasonable investment opportunity with a long history of dividend increases and a fair payout ratio. NWN is definitely worth investigating at the current levels. Let us hope that the stock price declines while you're doing the research on this company. Touc.
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Posted in Altimeter, Edson Gould, Northwest Natural Gas, NWN