Portfolio Update - April 2018

The month of April is now behind us.

The price of oil for WTI barrel of crude oil is trading over $65 dollars. The price seems to have found some support due to the OPEC cuts made during the past several months. Currently, the ongoing dispute involving the expansion of Kinder Morgan'sTrans Mountain pipeline. The expansion of the this pipeline would triple the capacity of oil from the oil sands that will allow the product to reach foreign markets.

The expansion of the Trans Mountain pipeline have lead to dispute between Alberta and British Columbia. The federal government is said to have federal jurisdiction and says the pipeline will be built despite the objections of the BC NDP government and BC Green Party. They are also protestors trying to block this pipeline expansion as they are worried about a possible spill on land or on the BC coast. Also, the expansion of the pipeline will mean more tanker traffic on the southern coast of British Columbia. The Canadian segment of Kinder Morgan, has publicly stated they do not think the pipeline can be built due to all the "fighting" and protestors that are currently at play. Kinder Morgan gave a deadline of May 31, to be able to go ahead with the project.

The price of gasoline in southern BC have reached record highs. Recently, Alberta passed legislation that will enable it to restrict the movement of its resources out of the province of Alberta. Basically, we are currently seeing a trade war between provinces. They have no exercised restricting their resources as of this date.

Portfolio Activity

During the month of March, I wrote about an option trade in WestJet Airlines. On April 20 2018, the short put option in WestJet was assigned. When a put option is assigned, the net premium received is substracted from the cost of the purchase. I sold 2 put contracts with strike price of $23 the adjusted cost basis of my purchase is $4496.90.

     ACB = # of contracts *100 *strike price - net premium received + option assignment fee

My brokerage currently has a $24.95 option assignment fee. Some brokerages have an option assignment fee while others do not.

WestJet Airlines (WJA.TO) trades on the Toronto Stock Exchange. WJA.TO currently pays an annual dividend of $0.56 per share. This option assignment increases my annual dividend by $112.00.
I will sell cover calls on this position, but have not been able to find a reasonable premium to write a call.

On April 25, I purchased 33 shares of Brookfield Renewables Partners LP at a cost of $33.48 per share for a total cost of $1274.91. I purchased my shares inside my TFSA. Brookfield Renewables Partners LP (BEP.UN.TO) trades on the Toronto Stock Excange. The company is also listed on the New York Stock Exchange under the ticker symbol BEP.
 
BEP.UN pays a distribution in US dollars and is converted to Canadian dollars. BEP.UN pays a distribution of $1.96 per year in US dollars. At the time of purchase, this purchased added $83.07 to my annual dividend/distribution.

Shares Purchased Via DRIP

0.373068 unit of BNS.TO @ $79.0473 for a total cost of $29.49 (transfer agent)
 
BNS.TO currently pays an annual dividend of $3.28. This DRIP adds $1.22 to my annual dividend income.

 
Dividend Increases
 
On May 2, Cineplex reported earnings. All the financial numbers were down YOY. The 2 metrics that were up are box office revenues per patron and concession revenues per patron. Cineplex is in the process of transforming itself into an entertainment company which will include movies instead of just a movie company. These projects like The Rec Room has high upfront cost. Cineplex (CGX.TO) has announced small dividend increase of $0.06 per share per year. The dividend was increased from $1.68 to $1.74, which represents an increase of 3.57%. This increase adds $6.00 to my annual dividend income.
 
This increase of $6.00 is equivalent to investing $171.43 of my own money at a 3.5% yield.


Summary:

As of May 3, the value of the portfolio is $107516.98. This is a 1.159% increase over last month's total. The spreadsheet he investment tab above has been updated.
 
Disclosure: Long BEP.UN.TO,BNS.TO, CGX.TO
 
Please Note: All stocks are from the Toronto Stock Exchange except TTR which trades on the Venture Exchange.

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.