Gold and gold stocks have been treading water since January 2017. While a trading range has been established, there are ominous signs on the horizon.
Bitcoin has been on a wild ride of late. While surprising to some, with estimates of how much you would be a billionaire if you held from the inception, we’ve been providing upside and downside targets that have been achieved with relative ease and accuracy well in advance of the move (see our January 1, 2017 posting).
Recently, Bitcoin has managed to rise as high as $2,476.30 on a closing basis according to Coindesk.com’s Bitcoin Price Index. The closing high is actually well below the intraday high of $2,791.69 set on May 25, 2017. We’re going to provide upside and downside targets based on the indicated closing high.
Posted in Bitcoin
Previous Year Performance Review
In our ongoing review of the NLO Dividend Watch List, we have taken the top five stocks on our list from May 27, 2016 and have checked the performance one year later. The top five companies on that list can be seen in the table below.
| Symbol | Name | 2016 Price | 2017 Price | % change |
| CALM | Cal-Maine Foods | 45.74 | 40.65 | -11.1% |
| HFC | HollyFrontier Corporation | 26.96 | 24.77 | -8.1% |
| CAH | Cardinal Health | 78.15 | 73.10 | -6.5% |
| NPBC | National Penn Bancshares | 10.72 | 10.72 | 0.0% |
| TIF | Tiffany & Co. | 62.54 | 86.18 | 37.8% |
| Average | 2.4% | |||
| DJI | Dow Jones Industrial | 17,873.22 | 21,080.28 | 17.9% |
| SPX | S&P 500 | 2,099.06 | 2,415.82 | 15.1% |
The S&P 500 rose +15.10% in the last year. However, the top five companies on our watch list gained only +2.40% due to underperformance of 4 companies. The worst performer was Cal-Maine Foods (CALM) which is a major producer of eggs. We thought that the bottom was near at the time but we were proven wrong. Falling not far behind was HollyFrontier (HFC) which fell -8.10%. We didn't believe the company was providing enough margin of safety until it traded below book value. Refining is a difficult business but the utilization rate is approaching full capacity (100%, see data) which suggests that pricing should firm up in the near future. We are not suggesting an outright buy at this level but a purchase here is clearly better than last year.
U.S. Dividend Watch List: May 26, 2017
Another week and it's another all-time high for the S&P 500. The index rose +1.40% for the week. We ended the week with 37 companies on our watch list this week. Continue reading
Posted in Dividend Achiever Watch List, Dividend Achievers, Dividend Watch List
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Performance Review
Below is the performance of the Nasdaq 100 Watch List from May 2016:
| symbol | name | 2016 | 2017 | % chg |
| SRCL | Stericycle, Inc. | 97.47 | 82.4 | -15.46% |
| WBA | Walgreens Boots Alliance, Inc. | 77.32 | 81.25 | 5.08% |
| SYMC | Symantec Corporation | 17.34 | 29.61 | 70.76% |
| BBBY | Bed Bath & Beyond Inc. | 44.58 | 34.85 | -21.83% |
| GILD | Gilead Sciences Inc. | 86.97 | 64.5 | -25.84% |
| AAL | American Airlines Group Inc. | 31.42 | 48.74 | 55.12% |
The analyst estimates for the stocks are indicated in the following chart:
Looking at the performance, we can see that the analysts got the general direction of 4 of the 6 stocks. The stock that exceeded analyst expectations was Symantec (SYMC) while Gilead Sciences (GILD) underperformed by a wide margin on the downside.
May 2017 Watch List
Few are aware of the colorful history of the real estate investment trust industry. Much of the mystery in the industry has to do with changes to company names and legal definitions of what a REIT actually is, thereby rendering the history to the realm of the forgotten.
A quick look at the REIT Share Price Index in 1979 (Brody, Michael. Sounder Ground. Barron’s. May 21, 1979. page 4.) should shed some light on an industry group that, from 1960 to December 1971, had experienced two jarring routs of –60% and –80%. The REIT Index below has not survived to the present as a majority of the companies (greater than 80%) simply don’t exist after their failure/bankruptcy or forced mergers.
The reasons for the decline in the period from 1972 to 1974 are many. Surprisingly, investment analysts at the time were simultaneously arguing that falling and rising interest rates were the threat to the REIT industry. As we enter a secular rising interest rate environment, REIT investors should check the foundation that their investments are build on.
see also: U.S. Realty: 1921-1939
Posted in crash, real estate, REIT
Currently, there is evidence to suggest that a new era in property investment has emerged. Well managed and capitalized real estate investment trusts, more popularly known as REITs, are able to access the capital markets for funding malls, office buildings, hospitals, apartment building and mortgage financing. Long-term income is generated for investors and retirements are secured through the investment in REITs.
However, the history of real estate investment trusts is obscured by legal entanglements, trust busting, name changing and bankruptcies. With a goal of unveiling the industry and its murky history, we’ll be posting stock price performance of REITs in some of the most volatile periods.
The history of REITs can be broken into several distinct periods:
We’ll highlight anecdotal data from various companies from each respective period with added insight about how and why some of these companies, as reflections of the REIT industry, didn’t do as well as expected. The goal of these articles is to give potential investors the needed perspective for proper risk assessment.
Posted in REIT, U.S. Realty & Improvement
Below are the price projections based on analyst earnings estimates for our recent U.S. Dividend Watch List dated May 12, 2017. These estimates project the price change for the respective stocks over the next 12 months and the risk profiles associated with the estimates.
Performance Review
Below is the performance of our Canadian Dividend Watch List dated May 25, 2016:
It appears that the analyst call on Cameco (CCO.TO) was quite accurate. All other stocks on the list fell short of analyst expectations. When compared to the Toronto Stock Exchange gain of +11.84%, the watch list from last year severely underperformed with an equal weighted decline of –5.82%.
One stock that we had particular interest in was Gluskin Sheff (GS.TO). At the time, we said the following of the stock:
“…we believe that GS.TO is in a general range of undervaluation and should be considered at the current price. Additional attention should be paid to the worst case target of the stock falling to the $7.25 price. Our fair value target price from the current level is $20.87 or approximately +27% above the current price.”
On two occasions in the last year Gluskin Sheff approached, but never achieved, our fair value target price. Once on September 6, 2016 at an intraday high of $19.45 and again at $19.93 on February 14, 2017.
Merely approaching our fair value target is sufficient to warrant the sale of some/all of the stock in a qualified retirement account. However, the stock would have failed to trigger a sale of the stock in a non-qualified account. With GS.TO sitting slightly below last year’s price we are publishing an updated Altimeter for a perspective on where the stock might be on a dividend/price basis.
Prior Year Performance Review
In our ongoing review of the NLO Dividend Watch List, we have taken the top five stocks on our list from May 13, 2016 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 |
| WASH | Washington Trust BanCorp. | 35.00 | 49.20 | 40.6% |
| HFC | HollyFrontier Corporation | 28.12 | 27.64 | -1.7% |
| STBA | S&T BanCorp. | 24.33 | 34.89 | 43.4% |
| CAH | Cardinal Health | 76.25 | 72.90 | -4.4% |
| FFIC | Flushing Financial Corp. | 19.57 | 28.95 | 47.9% |
| Average | 25.2% | |||
| DJI | Dow Jones Industrial | 17,535.32 | 20,896.61 | 19.2% |
| SPX | S&P 500 | 2,046.61 | 2,390.90 | 16.8% |
Watch List Review
The average gain for the top five companies was 25.2% driven mainly by regional bank. The three banks gained more than 40%. The worse performer was Cardinal Health (CAH) which declined 4.4%. Our perspective then was that financial sector was near the bottom and urged our readers to assess ETF. In addition, we provided our readers with several companies to consider. Those companies combined for average gain of 15% where the S&P 500 gained 16.8%.
U.S. Dividend Watch List: May 12, 2017
The bull run continued to push forward and them market touched its all-time high this week but closed the week slightly down. There are 35 companies on our dividend watch list this week. Continue reading
Posted in Dividend Achiever Watch List, Dividend Achievers, Dividend Watch List
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On January 12, 2017, after Bitcoin achieved our prior downside target of $772.12, we said the following:
“Those who wish to speculate on Bitcoin should assess the risks and consider buy[ing] at [the] current level.”
Anyone who bought based on our work should have known that on January 1, 2017, we had the following upside targets:
What is important about our upside targets, issued on January 1, 2017, is that we emphasized a downside assessment was necessary after a parabolic run-up. We expected that the price would need to experience a large decline before any material rise could ensue. Shortly afterwards, on January 12, 2017, our downside targets were met.
On May 10, 2017, Bitcoin has achieved a new high of $1,750. If this level can be sustained, we think that the extreme upside target of $2,316.35 is possible. However, we have to acknowledge the downside targets that come with a parabolic increase.
Serious speculators (as opposed to investors) in Bitcoin should consider the inevitable decline that is to come as a reaction to the parabolic rise. Yes, there is a good chance that our target of $2,316.35 will be achieved. However, if, as a speculator, you have enjoyed some or all of the run-up since our January 12, 2017 recommendation, then you probably want to be able to enjoy it. We recommend selling now and watch for the ascending downside targets.
After spending months trading in range, it appeared that the market is ready for a breakout to the upside as the S&P 500 closed the week at its all-time high of 2,399. It is going to be an interesting week as the market look to break above 2,400. Below are 30 companies on our watch list this week. Continue reading
Posted in Dividend Achiever Watch List, Dividend Achievers, Dividend Watch List
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Since the Coppock Curve flashed a buy indication at the end of March 2016, the Dow Jones Industrial Average gained +18.41% while the S&P 500 gained +15.7%. Our strategy of purchasing Guggenheim S&P 500 Equal Weight ETF (RSP) has proven well timed and we gained 16% on our investment. Below is an update to the Coppock Curve. Continue reading
On April 24, 2017, we executed the following transaction(s):
Performance Review
Below is the performance of our Canadian Watch List from April 2016:
On the whole, the watch list underperformed with a –0.10% decline, this is contrasted with the Toronto Stock Exchange +17.70% change in the same period of time.
While the analysts got a majority of the calls wrong, estimates for Shaw Communications (SJR-B.TO) and Canadian Real Estate Investment Trust (REI-UN.TO) exceeded estimates on the upside. Our call on Imperial Oil (IMO.TO)was short of the mark in the final analysis. However, looking at the intra-year performance below, we can see that Imperial Oil rivaled the performance of the Toronto Stock Exchange (^GSPTSE).
Canadian Dividend Watch List
Prior Year Performance Review
In our ongoing review of the NLO Dividend Watch List, we have taken the top five stocks on our list from April 22, 2016 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 |
| BF-B | Brown-Forman Corp. CL 'B' | 46.63 | 46.26 | -0.8% |
| NPBC | National Penn Bancshares | 10.72 | 13.00 | 21.3% |
| MAC | Macerich | 76.81 | 65.05 | -15.3% |
| AXS | Axis Capital Holdings Ltd | 54.74 | 66.20 | 20.9% |
| STBA | S&T BanCorp. | 25.89 | 34.84 | 34.6% |
| Average | 12.1% | |||
| DJI | Dow Jones Industrial | 17,977.24 | 20,547.76 | 14.3% |
| SPX | S&P 500 | 2,091.58 | 2,348.69 | 12.3% |
The average gain of the top five companies from the prior year was +12.10%. This is comparable to the S&P 500 index. With that being said, we stated clearly that there was little case to be made for this list but emphasized that the financial sector provided good risk / reward. As such, if we excluded the two non-financial companies from the top five, Brown-Forman (BF-B) and Macerich (MAC), we end up with an average gain of 25%.
U.S. Dividend Watch List: April 21, 2017
The market continue to trade in a narrow range. However, the 50-day moving average appears to be a short-term resistance line. More volatility is expected in the coming weeks as earnings are announced. This is a good opportunity to take the time to study companies on this list that came off of bad earning reports. A one-time hit to the stock has proven to be an opportune time to accumulate shares for the long run. Below are 26 companies on our list. Continue reading