Saturday, March 22, 2014

High Yield Reads 3/22/14

Happy Spring. Summary of recents posts and pieces of interest, sometimes enduring, to dividend investors:

  • From his fund, one of Neil Woodford's largest holdings was Astra Zeneca. From trailing its peers for years, in the last six months its stock has been on a tear. Yielding 4.4% it now trades much closer the richly valued Roche (another one from Woodford's stable). 
  • What is the world's riskiest stock market? No surprise here - Russia. So far this year $600M has exited Russian ETFs. At the end of February, the P/E for Russian companies is 6.5.
  • Jason Zweig shares the greatest investing cartoon of all time.
  • Dividend Growth Investor analyzes spirits maker extraordinaire Diageo. Its the kind of high quality company that unless we're talking 2008-9, never really trades for a cheap valuation. But the quality metrics are flat out great - 30+% Operating Margins, Return on Equity from the high 30 into the 40s. And its delivered growth - an annualized return of 12.4% over the last decade. They raised their dividend by 8.8% which makes 15 years of dividend increases. With a P/E at 17, that does not seem super high for the level of quality and sustained growth Diago provides
  • Todd Wenning sold Tesco for a loss. Like engineers, investors can learn a lot from mistakes, especially if there is a pattern that you can recognize and avoid in future. Losses are no laughing matter, but have to wonder if Todd was worried about Tesco's recent Red Headed League issue. (Note: Kidding)
  • Base Hit Investor on pricing power. Pricing power is a key factor in quality and its important to understand both its power and the limits - all good things must end 
  • Good story on Buffett & Quicken's Billion Dollar Bracket. Reilly estimates that Berkshire received $15M which Buffett indicated was close. The contest did not last long, all perfect brackets eliminated before end of the second day of the tournament.

No comments:

Post a Comment