Speculative Stock Portfolio

[aus_trader]

Here is the history of CQE's distributions. They've been pretty consistent, so if history is any guide, expect it around 27/28 Sep 19. They've also distributed identical amounts four times in a row, then the amount changes for the next year. So if that pattern continues, expect greater than 4 cents.

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Thanks Zaxon, it's the consistency of dividends/distributions that I based my investment decision on when I purchased. The upcoming dividends are usually declared in advance, for example with one of the other Charter Hall products called Charter Hall Long WALE REIT (CLW).

Anyway while waiting for them to respond to my query, I've been doing a bit more digging into the financials. It's a bit easier to do with a clear head since I can look at things kind of independently since my position is sold and my money is not involved since this is a real portfolio and not a hypothetical one.

I was looking at the same area that you were looking at and found that in the year that just passed, they have paid more in distributions than their earnings of 12c:



While they paid out 16c:



So I think it would be unwise to assume they will pay greater than last year's distribution. Something seems odd, will have to investigate and clarify before re-investing in it.

 

[Zaxon]

Thanks Zaxon, it's the consistency of dividends/distributions that I based my investment decision on when I purchased.
So I think it would be unwise to assume they will pay greater than last year's distribution.

That is interesting. The dividend payout ratio was 133%, which as you say, isn't sustainable. They did have a POR of 258% back in 2011, and yet the dividend still went up the next year. Whether they can perform that trick twice...remains to be seen.

 

[aus_trader]

That is interesting. The dividend payout ratio was 133%, which as you say, isn't sustainable. They did have a POR of 258% back in 2011, and yet the dividend still went up the next year. Whether they can perform that trick twice...remains to be seen.

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Companies especially in the growth phase which typically have a low payout ratio tend to have random spikes like that where POR can exceed 100%. The reason for the low POR is they keep a lot of the earnings for growth of the business. So when they don't spend all the retained earnings on growth or acquisitions over the years, they tend to dump a whole chunk onto the shareholders as a special dividend which can show a POR well into many 100% for that year.

But it's unusual for an income play such as this REIT which pays out most of it's earnings (typically 80-90%) to shareholders to have spikes like that. Let's see how much they'll pay in the next distribution cycle which may show up in the future since I can't find it in the upcoming dividends.

 

[aus_trader]

While Nickel price has been going up recently, my Nickel-Cobalt play CLQ has gone nowhere. It's too much in the spec end of the market to reflect the commodity prices I guess.

In the meantime the bigger Ni mining companies have rallied strongly such as WSA, IGO and MCR. I've been waiting for a while for any slow down in the price surge to join one of the major Ni players and MCR was chosen as the price eased back and some shares were bought for this portfolio.

I think from a long term view, the Ni price may be establishing an up trend that is coming up from a base:



Also MCR has been one of my proffered Ni plays on the ASX having met up with the management many years ago. They have a good establishment in the Kambalda region of Western Australia.

One thing that I was attracted to from the conversation was, when the MD at the time explained how MCR is able to turn mines off easily during Ni price weakness and be able to quickly return them to mining during favourable Ni price environments. This is quite different to a lot of the mining companies where they are unable to or reluctant to shut down mines during commodity downturns. And continue to produce the commodity which cannot even be sold for the cost incurred to dig it up, a recipe for losing money !

Open Portfolio:
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[sptrawler]

From what I have read aus-trader, there is a bit of oversupply issue with cobalt, not so nickel.

 

[aus_trader]

From what I have read aus-trader, there is a bit of oversupply issue with cobalt, not so nickel.

Oh I see, I need to look into that... cheers sptrawler.

and yes, Ni inventories are low from a historical standpoint and only been rising a bit recently from a very low base.

 

[aus_trader]

I looked into it sptrawler, and you are spot on. Ni will be in demand for batteries and Co not so , according to article:


Full article at:
https://www.fastmarkets.com/article...tery-adoption-cobalt-demand-unlikely-to-benef

 

[aus_trader]

Charter Hall Education Trust (CQE) has declared the quarterly distribution to be paid at the end of the month on last Friday but I wanted to think over what to do over the weekend i.e. whether to get back into the stock. What I have concluded was that I have to keep watch of the payout ratio going forward, to make sure they can afford to pay these high dividend distributions on an on-going basis.

Given the distribution amount was slightly higher than what was being paid previously, I decided to buy back today. Couldn't ponder around for too long since the up-coming distribution will be missed if I wait till the end of the week, see key dates below:


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I've been trying to sell SRV since Friday but sellers kept jumping in front of my offer with lower prices, so got rid of it first thing at the start of the market open. A lot of the open profit was given back on this one as it fell fast and I couldn't sell in time. One positive is there was a 10c dividend that was paid during the holding period which made up for the slippage in getting out.

Closed Positions:

 

[aus_trader]

Although I am interested in having some Gold and perhaps some Silver exposure through mining stocks, I didn't like the Gold/Silver charts in the short-term.




So WGX has been sold to lock in profits and SVL sold to capitalise the loss.

Closed Portfolio:

 

[peter2]

This dip in the gold price gives us some time to find a gold producer who's share price goes up quickly with the POG. A gold stocks that shows strength relative to the rest of the sector. We can buy one at a lower price now, that is, if you think the POG will rise again soon. (I do).

edit: Most gold stocks were sold off today. Might wait until they start to go up first.

 

[aus_trader]

This dip in the gold price gives us some time to find a gold producer who's share price goes up quickly with the POG. A gold stocks that shows strength relative to the rest of the sector. We can buy one at a lower price now, that is, if you think the POG will rise again soon. (I do).

edit: Most gold stocks were sold off today. Might wait until they start to go up first.

Hi Peter, I also agree Gold price will start rising again after a sell-off. In fact I will be looking to add to longer term Gold holdings via ETF's etc in the longer term portfolio at lower prices.

For buying back Gold miners, I would also like to see a rising POG again after this pull back. Just not sure if this is a simple pull back and I've sold at the bottom , or if it is a more complex pull back with a few waves in play.

 

[peter2]

As we post the POG has risen $20 after the poor US manufacturing report (worse report since 2009).
For someone with your longer term outlook, I'd suggest buying a partial position in the dip and then add when price goes up. You should be a great "buy the dipper".

 

[aus_trader]

As we post the POG has risen $20 after the poor US manufacturing report (worse report since 2009).
For someone with your longer term outlook, I'd suggest buying a partial position in the dip and then add when price goes up. You should be a great "buy the dipper".

Looking into it at the moment. For the longer term investing these short-term price weakness is a buying opportunity.

 

[aus_trader]

It's been a while since buying CLQ and it hasn't performed according to plan and I have run out of patience holding the stock. So it has been sold, but will monitor it's stock price going forward since CLQ's Sunrise project is of interest to me.

Closed Positions:

 

[aus_trader]

Bought a stock that has been in this portfolio around a year ago. It's the law firm that's fighting the good fight in my opinion. Where the little guy has almost no chance of going against the big bully corporations or the thugs of the society (even this forum owner Joe has had personal attacks if people have been reading about it in recent posts), this law firm will still put up a fight. It is Shine Corporate Ltd (SHJ), which still has Erin Brockovich as an ambassador who is promoting and endorsing what the company does. I am sure people know who she is, if not watch the movie "Erin Brockovich" starring Julia Roberts, the true story of how an ordinary person fought against the wrong-doings of large corporation for many years and finally won. Here is a quote from her taken from the Shine Corp announcements:



Anyway, the reason for buying is, I think this is one of the law firms that is having a very good balance sheet. And I have been looking at the few that are listed on the ASX and being tracking them over the years including those that went out of business and got de-listed such as ILH (or IAW before a name change prior to collapse). The other one that I mentioned when I bought Shine Corp last time was Slater & Gordon Limited (SGH), which was near collapse last time and has managed to stay affloat by doing capital raises followed by share consolidations followed by more capital raises etc. Recently did a massive capital raising from shareholders to plug holes and keep it afloat.

The reason I mentioned any of the other law firms was not to put a shine on Shine Corp, but to give reasons why I'd buy this one in preferrence of some of the other law firms and litigation funding firms that are on the ASX. To put simply, I would much rather buy a firm with a healthy balance sheet that is able to pay shareholders dividends than one that is raising funds from shareholders to repair it's balance sheet. Last time I bought it, I mentioned that I would not be putting emphasis on future dividends, but looking back it has been a very consistent little dividend player and recently been increasing the amounts as well:



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[barney]

It's the law firm that's fighting the good fight in my opinion.

I hope that is the case aus-t … and good luck with the trade

When the Law is used for good its one of the greatest "inventions" of the modern world. Its a pity so many law Companies are consumed by their obsession with billable hours and extracting money from all and sundry while most ethics are packed away in the boot and rarely see the light of day. Lets hope this Co. is one of the odd ones out.

 

[aus_trader]

I hope that is the case aus-t … and good luck with the trade

When the Law is used for good its one of the greatest "inventions" of the modern world. Its a pity so many law Companies are consumed by their obsession with billable hours and extracting money from all and sundry while most ethics are packed away in the boot and rarely see the light of day. Lets hope this Co. is one of the odd ones out.

Thanks barney, it seems that way at the moment . Hope they continue to operate fairly and always try and support the vulnerable. They have a "no win no fee" to help those that cannot afford to put up a case by paying up-front. Also the logo suggests their aim is to "Right... the Wrong"

 

[aus_trader]

With Australia's recycling crisis still on the cards, I thought to further research into buying some garbo stock that possibly addressed these issues. After all the take-over consolidations in this sector recently, I see two main competitors in this space that is listed on the ASX, namely CWY and BIN. One company that is currently addressing quite a few of these recycling issues is Bingo Industries Ltd (BIN), see below:







It is also experiencing growth at the moment organically and via acquisitions. BIN acquiring "Dial-A-Dump" recently is a perfect example of this. Some of the growth numbers can be seen in the 2019 highlights below:



BIN is also the smaller (in terms of Market Cap) and cheaper (in terms of P/E) of the two players in the sector. I like CWY as well but decided to buy BIN since I think it could grow faster starting from a smaller size.

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[barney]

Is that grass growing all over the building in Pic 1 ?
Must be a nightmare for the window cleaners

 

[Zaxon]

Is that grass growing all over the building in Pic 1 ?

That's what I thought! It looks like an abandoned building that's let go to ruin. Also, the other before and after pics don't even seem related to each other. Here is a very close up of a pile of garbage. Here is suddenly a massive road by the beach. Riiiiight.