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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.

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 →

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.

Philip Morris (PM) was the worst performer with a loss of -0.9%. Last year, analysts' estimated that PM profits would rise by +10%. The actual result didn't pan out and the net income was virtually flat while shares remained at 16x earnings.  A change in the expectation of profits was the likely cause for sub-par performance.

On the opposite end of the performance spectrum was Macerich (MAC) which gained +17.4%. When our watch list was published, the company was expected to grow their bottom line by +4%.  Currently, analysts are expecting the profits to rise by only +1.4%.  Even if the profits weren't expected to grow, shares can still outperform the market. Even more interesting is the fact that Macerich is an independent real estate investment trust or REIT.  The key attribute for the increase in price can be point to multiple expansion for the stock.

We highlighted the low valuation of C.H. Robinson (CHRW) and price rose by +9.7% while earnings were expected to rise by +12%.

U.S. Dividend Watch List: September 26,2014

It was a volatile week for the market as the S&P 500 shed -3% and the volatility index (VIX) rose +46%. The Russell 2000 has broken a critical support level and is trading at the 52-week low. The Dow Jones Industrial Average has erased all the gains for 2014. The large number of companies on our watch list is an indicator of market weakness. With that said, we are starting to see good values as prices continue to fall. Our watch list expanded to 163 companies but we will display 37 companies that are of strongest interest to us.

Continue reading →

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 September 27, 2013 and have checked the performance one year later. The top five companies on that list can be seen in the table below.

Our top five didn't perform as well as the market. However, we did highlight a company that we took position in on our watch list at the time. That company was Sysco (SYY), a major food distributor. We said the following one year ago:

"We’ve a taken position in Sysco (SYY). This major food distributor is no stranger to our team. We believe the stock offers great value at the current level but we cautious that downside risk remains. As such, we’ve allocate a two part purchase for the stock if the price should drop. The current purchase is timed right before the ex-dividend date thus we will be compensated with the dividend in the coming month."

The stock has risen by +17% excluding dividend. Incorporating dividend payment in and the total return is +20.50%.

U.S. Dividend Watch List: September 26,2014

The market closed the week down -1.40% as volatility has risen. The VIX Indicator (a measure of volatility) was up +22.6%. Consolidation around the 2,000 level for the S&P 500 and 17,000 for the Dow Industrials appears to be the direction the market is headed, on a short-term basis. However, stronger signals of market weakness can be seen with the Russell 2000 index which is still struggling and our expanding watch list of stocks. At the end of the week, the total number of companies that met our criteria to be on the list expanded to 111 companies and 51 of them are trading within 5% of their 52-week low. Continue reading →