We executed the following transaction(s): Continue reading
- Japan
- Market Indicator
- Price Momentum Indicators
- Richard Russell
- Silver
- Speed Resistance Lines
- U.S. Dividend Watch List
U.S. Dividend Watch List: June 12, 2020
Prior Year Watch List Review (June 14, 2019)
The best performing strategy from last year was high P/B which fell 7% for the year. This was driven by a gain of 12.3% for Kellogg (K) and 11.5% gain for W.W. Grainger (GWW). However, that gain was offset by a loss of -46% from Nordstrom (JWN). Chasing high yield companies was detrimental with Alliance Resource Partners (ARLP), which at the time yield 12.30%, as it lost -76% in a year. Occidental Petroleum (OXY) with yield of 5.80% lost -62%.
| June 14, 2019 | ||
| Strategy | High | Low |
| Yield | -48.3% | -19.2% |
| P/E | -28.4% | -27.4% |
| Payout Ratio | -12.8% | -17.3% |
| P/B | -7.3% | -28.3% |
| Closest to Low | -10.0% | |
| S&P 500 | -5.1% | |
| Dow Jones Ind | -1.9% | |
| Top 5 companies except for Index | ||
U.S. Dividend Watch List Jun 12, 2020
This market swing from March low pushed many companies above 10% of the low and leaving us with only 5 companies on our dividend watch list despite broadening our criteria to include negative payout ratio. Continue reading
Posted in Dividend Achiever Watch List, Dividend Achievers, Dividend Watch List
Tagged members
Consumer Sentiment: June 12, 2020
With today’s announcement from the University of Michigan’s Consumer Sentiment Survey we have updated our June 11, 2020 posting and contrasted it with the Dow Jones Industrial Average from 2007 to 2020.
The recent reversal in the survey is reflecting what we saw in the low of the Dow Jones Industrial Average which occurred on March 23, 2020. This implies that the stock market (subject to zero revisions) leads the sentiment survey by more than 60 days. Whether this reversal is the low will be determined in due time.
Posted in Consumer Sentiment, Dow Industrials
Fed Balance Sheet Unwind and Market Rise
In the period from 2013 to 2019, the Federal Reserve was actively in the process of unwinding their balance sheet with what we can only imagine was their non-core “assets.”
In the period from 2013 to 2019, counter to the claim that the Fed is THE reason the market has increased from the 2009 low, the stock market, as represented by the Dow Jones Industrial Average, increased +74.10%.
This assessment goes along with our prior work on this same topic making the point that the increase in interest rates would result in a stock market and gold price increase.
See Also:
Posted in Federal Reserve Bank, interest rates
Consumer Sentiment: June 2020
We keep going back to our August 4, 2019 posting where we said the following of consumer sentiment:
“A trend doesn’t define the future prospects. However, we believe that the [consumer sentiment] declining trend has not completely played out. This means that we expect that the economy and stock market will languish, in the best case scenario.”
The Economy
The Stock Market
With the stock market at a zero percentage change from the August 5, 2019 level and the Industrial Production Index at crash worthy lows similar to 2008/2009, we think that our targets have been achieved. However, we’re still very concerned about the risks going forward. Continue reading
NYT Recession/Depression Index
On June 8, 2020, the National Bureau of Economic Research (NBER) officially declared the U.S. economy in recession. This follows the prior call of a recovery in the U.S. economy in June 2009. What does the New York Times Recession/Depression Index look like?
We have put blue arrows to show the points of interest to us. We believe that we’re in the early stages of the recession which should see an intermediate drop in the indicator before another spike to a new high level. That spike should be at or above the 300 level and the peak would mark the end of the recession (+/- month).
See Also: August 2009: The Recession is Over
Transaction Alert
We executed the following transaction(s): Continue reading
NLO in Review: Week 23
The following is the breakdown of the Dogs of the NLO based on our January 3, 2020 watch list, compared to other fundamental ratios. The purpose of this work is to confirm or deny the claims proposed of the Dogs of the Dow theory as outlined by Michael O’Higgins in his book Beating the Dow. Continue reading
DJIA in Review: Week 23
Below is the year-to-date (YTD) performance of various major indexes and from December 31, 2019 to June 5, 2020.
The following is the breakdown of the Dogs of the Dow (found here) in week 23, compared to other fundamental ratios. Continue reading
TSX 60 in Review: Week 23
The following is the breakdown of the Dogs of the TSX (here) in week 23, compared to other fundamental ratios. Continue reading
Coppock Curve – Berkshire Hathaway (BRK-A)
The recent market rally has pushed the market (S&P 500) near break even for the year. However, shares of Berkshire Hathaway (BRK-A) remain -11% below the price at the start of the year. This drop in value could potentially be a buying opportunity and today we apply the market timing strategy of the Coppock Curve to Berkshire shares.
It’s a rare occurrence when the Coppock Curve for Berkshire reach negative territory. For 40 years, there are only 8 times (once every 5 years) we get a buy signal. We haven’t receive a proper buy-signal yet but let’s review what it did in the past.
The table below shows a summary statistic of all 7 signals from the past. 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
RLI Corp. 10-Year Targets
Below are the valuation targets for RLI Corp. (RLI) for the next 10 years. Continue reading
The Gist: REIT Data Review
On August 23, 2016, the folks at Hoya Capital Real Estate provided data on the real estate investment trust (REIT) sector that we believe is bearing fruit.
In the table below, the apartment sector of REIT’s is covered. The data columns include AFFO/G, current AFFOx, and forward AFFOx ratios.
We took the current AFFOx column and looked at the performance of the REIT that had the highest and lowest ratios and ran a simple comparison of the REIT charts to determine the performance from August 23, 2016 to May 25, 2020. Our goal is to see if, on a spectrum of highest to lowest AFFO ratios, which had performed better.
In this case, it was Apartment Investment and Management Co. (AIX) with the highest current AFFO ratio and Mid-America Apartment Communities Inc. (MAA) with the lowest AFFO ratio. Below is the performance of the two REITs from August 23, 2016 to May 25, 2020.
This is a single grab of data between only the highest and lowest current AFFO ratios within a narrowly defined subset of the REIT industry. However, the results, especially after the recent crash in the REIT market, are fascinating.
We think that the continued emphasis on the hard data by Hoya Capital will prove instrumental in understanding the complexities of the REIT sector. Furthermore, as the data grows with the passage of time, we expect that, in the realm of REIT investing, Hoya Capital is on the right path and we recommend reviewing their work for anyone serious about buying REITs.
Posted in AFFO, Hoya Capital, REIT
Digital Realty 10-Year Targets
Below are the valuation targets for Digital Realty Trust (DLR) for the next 10 years. Continue reading