Thursday 2 July 2015

Recent Buy! July 2015

    Pulled the trigger today and put some money to work! The TSX and broader global markets have taken a bit of a beating recently as fears of the possibility of Greece's default and unprecedented exit from the European Union(EU) loams ever closer. At first it appeared that Greece was going to miss its loan repayment to the International Monetary Fund(IMF) if Greece refused to negotiate/cede to the European Central Bank (ECB) terms. With that fear, markets took a nosedive. Then there was hope that a last minute deal over the weekend would provide Greece with its much needed funds; which did not end up happening as their Prime Minister Alexis Tsipras turned down the terms. With that, as some may remember global markets fell roughly 2-3% from just about all sectors. Since then, Mr. Alexis has pretty much given into most of the terms put forth on him, but nothing is signed as of yet (to my knowledge).


    With those interesting global politics aside, I decided to take the opportunities to purchase 12 more shares of the Bank of Nova Scotia. Since this Monday the share price has fallen by 3.86%! That's $2.57 per share! Due to that pullback I was able to buy the 12 shares instead of the 11 I would have otherwise been able to purchase had I bought them last week. I am also relatively confident that BNS will be able to survive the trouble within Greece. Similiar to all the big banks in Canada, the bread and butter income base of BNS is safely nestled within Canada with subsidiary business in the States as well. For those reasons, and BNS's international exposure throughout the rest of the world I am not overly worried about one single country in particular and was very happy to take advantage of the market noise to get an almost 4% 'discount' on the stocks price from last week.

    Additionally, it is not often that such a reliable source of dividend growth and income is found with over 4% or higher dividend yields. At the time of purchase BNS has a dividend yield of 4.25% with its quarterly payout of CAD$0.68. Which means my purchase of 12 shares adds another $31.68 in annual dividends, in quarterly installments of $7.92.

    The 12 shares were purchased at $64.16 and brings the average cost of my now 58 shares to $63.30. Which provides a combined annual dividend of $157.76.

8 comments:

  1. Great purchase, DW. I just added to my BNS position a few days ago. Great company and quite undervalued....cant go wrong with adding those shares at these levels over the long run.

    cheers
    R2R

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    1. Thanks! And I saw that you did recently as well :) I'v been pretty happy to see the pullback on the stock, and it dropped just that little bit more today which allowed me to purchase 12 instead of 11 shares. I probably would have gone with a different one if it hadn't. Always feels a shame to not put it all to work you know.

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  2. I'm loving at BNS at these levels too. I've been adding slowly to my BNS position over the last week. I'll continue looking to add to BNS for the foreseeable future.

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    1. Seems like a pretty good way of smoothing out the chance of buying before a big drop or spike in the price. Personally I like buying in larger chunks to minimize trading cost, which isnt too hard with Questrades $5 trades, but I still like keeping the cost between half a percent and one percent of the trade value.

      Cheers!

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  3. No need to convince about about the Canadian banks. I still like them all but just mentioned how I'm looking at BNS and TD specifically in July among other names. No doubt the Canadian economy is headed for some rough road ahead.

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    1. Yup, even with a perception of an unstable economy, whether it really is or isnt, I am still all for them. And BNS/TD are still, IMO trading at a good price. A Canadian bank with over 4% div yield? Sign me up for some more! :)

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  4. I forget the name of the company, but I think there is a Greek bank whose stock is selling for 50% of its asset value. So if the bank goes bankrupt and gets liquidated, investors double their money! Pretty insane stuff, but since it's Greece I'm just staying away from it.

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    1. Thats pretty wacky. Although I wonder what those underlining assets are though. If any of it is stocks or businesses might not have been recently assessed for their full values, or how liquid they are to get their full asset value in a sale, you might have trouble getting that extra cash after all the other lenders. Still though, I am with you on staying away from that mess, wouldn't risk my precious cash on it. I always find it interesting how some stocks do occasionally just drop below their asset value.

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