Recent Purchase

    High Liner Foods Incorporated (HLF) is a Canadian company that is involved in the processing and marketing of prepared and packaged frozen seafood. Some of the company's retail branded products are sold in Canada, United States and Mexico. These brands of products consist of names such as High Liner, Fisher Boy, Mirabel,  and Sea Cuisine.  High Liner Foods offers its products to restaurants, institutions, food retailers and food service distributors under Icelandic Seafood  and FPI brands. The Canadian business includes 100 individual products sold under the brand High Liner.

 Information about Financials

    High Liner Foods Inc Revenue grew from $260.4 million in 2005 to $1.002 billion in 2015. This represents a CAGR = 14.43% over 10 years.

     HLF had earnings per share (EPS) has grown from an -3.93 in 2005 to $0.96 EPS in 2015.  The 2015 of EPS is after a 2:1 stock split on May 30, 2014.

   The Interest Coverage Ratio is ratio that is used to determine how easily a company is able to pay its debt. The interest coverage ratio is calculated by dividing earnings before interest and taxes (EBIT) by the interest expense over the same period.  HLF had an  interest expense in 2015  $16,102,000 and  EBIT of $36,310,000.  Therefore the interest coverage ratio is 2.25.  With an interest coverage ratio below 2.5, the company should not take on more debt and try to increase its earnings or pay down its debt some.

   HLF paid a dividend of $0.465 per share in 2005. The stock had a 2:1 stock split on May 30, 2014. Therefore on a split adjusted basis, HLF paid a dividend of  $0.2325. In 2016, HLF will pay an annual dividend of $0.56.  This represents a CAGR of 8.32% over 11 years.

Summary

    As people are encouraged to add more seafood in their diets for a variety of reasons such as Omega 3 fatty acids, along with increase in population, the demand for their product should continue. Although people would prefer fresh fish, it is not always convenient as we live busy lives.

    On Nov 23, I purchased 50 shares of HLF at $19.99 per share for a total cost $1004.62 including commissions.  Currently, HLF pays an annual dividend of $0.56 per share. The yield on cost of these shares is  2.79%.  This purchase of 50 shares increases my annual dividend income by $28.00.  

    HLF is set to pay a dividend on December 15 and the record date is December 1. The ex-dividend date is therefore November 28. As my shares were purchased prior to the ex-dividend date, I will receive the dividend on December 15.


    I will update my investment tab spread sheet in early December with purchase.

Disclosure : Long HLF

DISCLAIMER

I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.

Pathway to Retirement

     All individuals and couples all have one thing in common when it comes to retirement. We all have to have enough money to live off as people will be unable to work most jobs past a certain age. 

     This income in retirement can come from a pension, capital gains, interest, or cash flow. Some people think their only way to retirement is too win the lottery.  These lottery players think investing in stock market is gambling or that you need a lot of money to invest in the market. 

      I know of a lot of people play various lotteries every week.  These lotteries include scratch tickets, even splits, and the major lottery games. In Canada, one of the lottery games is 6-49.  The odds of winning are 1 in 14.3 million (1 / (49C6).  For those not familiar with math, 49C6 represents "49 Combination 6".  This game consists of 49 numbers in which 6 balls are randomly chosen by a machine. A bonus number is also drawn. If the number on these 6 balls are the same as the 6 numbers picked by the lottery player winner, then he or she wins the jackpot.  The lottery player can also win other ways, but the money will be a lot less.  The scratch tickets winning amounts are a lot less.  So if you add the amount of money paid to play various lottery games, it can add up. Personally, I think a person is better off playing bingo instead of playing these lottery games. If the bingo game has 400 players, then your chance of winning is 1 in 400.

       The pension can come in various forms. They can be small government pension for old age, a small government pension or a defined benefit pension.  The defined benefit pension is not an option for most people, as usually only government or crown corporation employees have this setup. Defined benefit pension a liability for the employer for as long as the pension receiver is alive.  So most companies have down away with them, and made the worker responsible for his or her own retirement by using a registered contributions plan.

      The downside of a contributions plan to a worker, is the money put in is not guaranteed to be there when you go to take it out.  These plans are called RRSP (Canada), 401k (US), super annotation (Australia) etc. are capital gain types of setups.  So as the value of these plans go up or down, corresponds to the same change in an investor's net worth at that given time. So an investor will have to withdraw money out of this account therefore reducing the balance.

   An individual could invest in investments that pay them either every month, quarter, semi-annual or annual. This pay is called cash flow. So the investment is paying a cash flow in the form of a dividend, interest, premium, distribution, or rent.  The goal of this is to have enough income coming in from your investments to exceed your expenses, which means the investor will be financially free.  Even if the investor is not financial free, the income from the investments will help cushion the blow in cash of a lay off at a job.

    Which is best?  The two best options are pensions and/or cash flow investments in my opinion.  In Canada, an individual can invest in non-registered accounts  or tax-free savings accounts.  These individuals can invest in other cash flow investments such as real estate or oil and gas.

     Most people in Canada have heard about Derek Foster.  Derek Foster let the rat race at age 34 by investing in dividend paying stocks, income trusts and REITS.  Derek used leverage of few times to aid is investing.  To find out more about Derek, feel free to check out his website www.stopworking.ca.

    In summary, an individual who thinking the best chance of retirement is, for lack of better word, is gambling with their life. The odds of winning is so high that an individual should only play the lottery once and awhile for entertainment purposes.

DISCLAIMER

I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.

     

Option Expiration Day - Nov 18

   I recently sold a covered call involving 3 contracts of IAMGOLD (Ticker Symbol IMG) with a strike price of $6.00 and option expiration day of Nov 18, 2016, which you can read about here.  The option has expired and was not assigned. As the seller of the option, I get to keep the premium I received.

   I also sold puts options involving 3 contracts of IMG with a strike price of $5.00 and option expiration day of Nov 18, 2016.  You can read about this transaction here.  I currently owned 300 shares of IMG, so by selling puts I was collecting premium while waiting to buy at my price target.  This option was assigned at the stock price for IMG was trading slightly below $5.00 at expiration. 
My brokerage charges an option assignment fee of $24.95.  So I now own a total of 600 shares.

   IMG does not pay a dividend, so I will be looking to sell all these shares either a direct sell or a covered call in the near future.

Disclosure:  Currently own 600 shares of IMG.

DISCLAIMER

I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.

Trading Account Update - Nov 19

As previously stated on this blog, that I have started a trading account with a balance below $1000.00.   I started to add $50.00 every two weeks but that has stopped due to a recent job loss.  The following table shows my stats from the start of 2016:

                                # of trades :                29
                               Total Capital added:    $250.00
                               Trading Acct Balance:  $3130.53
                               Average Drawdown:   $42.71
                               Average Loss:             $51.83
                               Average Accuracy:    89.66%
                               Average Risk:              $52.69
                               Average Reward:         $87.82
                               Average R/R :             1: 1.667

Click to Enlarge

     
       I have been trading penny stocks, stocks, REITS and options.  Any dividends that will be received from this account with stay within the account. The accuracy rate is high. Does this mean that I am a super trader? This does not mean that I am a super trader.  The risk to reward ratio states of every $1.00 of risk there is reward of  $1.67.  Ideally, a trader should aim for a 1:2  risk to reward ratio which causes the accuracy rate to be lower.

Note:  The trades are listed under the Trading Tab above with all the trades listed as of Nov 19, 2016

DISCLAIMER

I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.

Recent Purchase

         I had some money in my TFSA account that I wanting to put to work.  What to do with it? Buy a dividend growth stock,  a bond ETF, average down on a position, or dividend based ETF?

       I noticed an ETF that I previously held in my TFSA had been trading at a low price.  Horizon's Natural Gas Yield ETF (ticker symbol : HNY) was trading below $14.00 per unit.

 

Click to Enlarge

      The objective of this ETF is as follows :

The investment objectives of Horizons HNY are to provide unitholders with: (i) exposure to the price of natural gas futures hedged to the Canadian dollar, less the ETF’s fees and expenses; (ii) tax-efficient monthly distributions; and (iii) in order to mitigate downside risk and generate income, exposure to a covered call option writing strategy. - Source : Website

        The ETF pays a monthly distribution that is variable.  As per the chart above, you do not necessarily see the variable distribution.  The distribution is paid to 5 decimal places. So, I recently purchased 39 units of HNY at $13.60.  The distribution is approximately between $0.10 to $0.11 per unit per month.  My broker has zero commissions for most ETFs.

       I will update my investing tab spreadsheet in early December with this new purchase.

Disclosure:  Long HNY

DISCLAIMER

I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.

Potash Corporation of Saskatchewan - Covered Call

       I was completely shocked that the  markets were open on November 11.  In Canada, November 11 is Remembrance Day. On the 11 hour of the 11 day of the 11 month in 1917, World War I ended.

       On November 11, I decided to write a covered call in Potash Corporation of Saskatchewan (POT.TO) with a December 16, 2016 expiration day.  This stock trades on both the Toronto Stock Exchange and New York Stock Exchange.  When an investor or trader writes a covered call, they collect premium upfront for being the option seller.  Sometimes, people refer writing a covered call to "renting shares".

       Recently, POT announced a merger with their competitor Agrium Corporation.  On Nov 3, both of these companies voted separately in favor of the merger.  There are still a lot of hurdles to overcome before this merger happens in the future.

Summary:

Commission: $11.95
Option Assignment Fee : $24.95
# of Contracts :   2
Premium  = $60
Days to Expiration: 35

Scenario #1  - Option is not assigned

 Return =  ($60.00 - $11.95) / (2* $25* 100)
            =  0.96 %

This return is for 35 days only.  This is a lot higher than most savings accounts are today.

Annualized Return = $48.05 / $5000 *(365/35)
                             = 10.02%

Currently, my high interest savings account pays 0.80% per year. This is so ridiculous that it is laughable.


Scenerio #2  - Option Assigned

Adjusted Cost Basis currently = $4245.85
Money out = Sell Price + Premium Collected - Option Assignment Fee

Return : (Money out - Money in ) / Money in
           = ($5000 + $48.05 - $24.95 - $4245.85 ) / $4245.85
           = 18.31 %

EDIT:  For Scenario #2, the return would actually be higher if I included the dividends previously received.

 Disclosure:  Long POT

DISCLAIMER

I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.

Dividend Update - October 2016

      The month of October is another month of dividend income landing in my accounts. This money is used to help pay my expenses if it is needed. If the money is not needed, it is ALL used to purchase new investments to further increase my cash flow.

       The markets continue to go higher in the month of October.  The price of a barrel of crude oil continues to play a major role in market sentiment. The world has the eyes on the upcoming election for president of the United States. As Barrack Obama is not allowed to run for a third term, the US will have a new president elect on Nov 8.

      One thing for sure, is that I was paid dividends and distributions for being a shareholder or unit holder in  various companies or funds. In  Sept 2016, the Dream Office REIT will be counted as dividend income  for the first time.

 Non-registered Account

• Bell Canada Enterprises  (BCE) - $68.25
• Bank Of Nova Scotia (BNS) - $23.83     --- This is directly with transfer agent.
• Bank of Nova Scotia (BNS) - $14.80
• Enerplus (ERF)  -$ 5.58
• Dream Office REIT   (D.UN)  - $ 75.00
• Shaw Communications (SJR.B)    - $19.75
• Rogers Communications Class B (RCI.B) - $96.00

TFSA

• Boston Pizza  Royalties Fund (BPF.UN)   - $26.91
• Claymore 1-5 yr Laddered Corporate Bond ETF (CBO)  - $0.63
• Cominar REIT (CUF.UN ) - $20.46
• Dream Office REIT   (D.UN)  - $ 17.50
• Killam Properties REIT (KMP.UN) - $  15.10
• Transforce  (TFI) - $8.50

Total = $392.31

        As the amount of distribution from D.UN inside my margin account, will have a large impact on the comparison of dividend income from 3 months or from 12 months ago.  Therefore, I wil not compare October 2016 dividend income with that of 3 months and 12 months ago.

 Dream REIT has reduced the amount of distribution they pay monthly which was announced in February.  Recently, I wrote about purchasing more units of D.UN inside a margin account.  Starting in September, the distribution from this D.UN inside the margin account will be included in my dividend income.

     I will update my dividend income tab with the new amount. It is great to see money from passive income sources deposited into my brokerage account every single month.

How was your dividend income for October?

Disclosure : Long all securities above.

Photo Credit: www.mipaq,co.za

DISCLAIMER

I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.

Portfolio Update - Oct 2016

      The month of October 2016 is now behind us.  One of the major issues still facing the world is the low price of a barrel of crude oil and the upcoming US election for President of the United States.

      On Oct 3, I sold  1 RY.TO $79.00 Oct 28 2016 put option to collect a premium of $59.05 after commissions. This option was not assigned, but as the seller of the option I get to keep the premium. I currently do not have any option position in RY.

       On October 13,  I sold my position in Manulife Financial (MFC), which you can read about here.  This reduce my annual dividend income by $74.00. I still have my eye on this stock hoping the price will fall below by previous purchase price of $18.61 a share. 

       October 21 was option expiration day.  I had 3 options expire that day which involved POT.TO and IMG.TO.  I had 2 covered call contracts with a strike price of $23 expire worthless for POT.TO.  I got to keep the premium as I was the option seller. As there was pending meetings involving a merger of Potash Corporation of Saskatchewan and Agrium, I did not look to put on any more covered call positions involved POT.TO.  IMG.TO had been trading between $5 an $6 a share, so I previously sold a put option for $21 and a covered call option for $23 for 3 contracts each.  The price of IMG dipped well below $5 dollars but rose about $5 and was not assigned.

      As the price of IMG.TO was trading below $6 on October 21st, I decided to sell 3 covered call contracts with a strike price of $6 dollars and a Nov 18, 2016 expiration date. You can read about this transaction and the transactions of the previous paragraph, by clicking on this link.

      On October 24, I sold 3 put contracts in IMG.TO with a $5 strike price and Nov 18, 2016 expiration date.  I collected a premium of $47.05 after commissions. I did not write a blog post about this transaction.

      On October 28,  I purchased 140 shares of Westjet Airlines (WJA.TO) at $22.39 per share for a total cost of $3140.04 including commissions.  WJA.TO released its earnings a couple of days later and beat expectations. Regardless of this impressive earnings report, the federal government changes the ownership regulations for foreign ownership of Canadian airlines from (25% to 49%) to increase competion with our carriers.The latter, caused the stock price to become lower. WJA.TO currently pays an annual dividend of $0.56 per share.  This adds $78.40 to my annual dividend income. I did not write a blog post about this transaction.

   On Nov 2, I noticed the price of Canadian Imperial Bank of Commerce (CM) has fallen in price somewhat.  So, I decided to take an advantage of this opportunity to pick up some shares.  I purchased 28 shares of CM.TO for a total of $2747.65 including commissions. This Canadian bank does not get as much attention as the other 4 big Canadian banks.  CM currently pays an annual dividend of $4.84 per share.  The purchase of 28 shares of CM.TO adds $135.52 to my annual dividend income. I recently wrote a post, showing the annual dividend amounts going back to year 2000, which you can read about here.

       On Nov 3,  Potash Corporation of Saskatchewan and Agrium voted to merge the 2 companies with over each company voting over 97% in favor of the merger.  There is still a lot of hurdles that have to be dealt with prior to this actually happening.

 Shares Acquired Through DRIP

0.333221 Shares of BNS.TO @ $71.51 for a total cost of $23.83


As of Nov 6 2016, the value of the portfolio is $98346.53.  This is a 9.03% increase over last month's total.  The spreadsheet in the investment tab above has been updated.

Disclosure: Long  all mentioned securities.

Disclaimer:

I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should be NOT taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk