Thursday, December 14, 2017

Stock bought December 2017: HM

Logo of H&M 2017

Well... what can I say... It was time to step into H&M. As so often Mr. Market have overreacted, in my opinion, when looking into the crystal ball and there the analysts foresaw a future that would be very hard for H&M moving forward. I disagree. As long as they keep pushing out 10% more stores per year, and they know how to do this on an international level, get their online services to provide higher margins as well as clean out some stores where there has been a bit of over exploitation then I only see a bright, bright future for H&M.

I therefore decided to step in, for me, fairly heavy and I bought 250 shares and in total I paid 4,948.84 € which includes a fee of 12.34 € for the purchase. 

I hope that this will become a long term investment but I have put the bar at 32 € per share.

To find out more about H&M then please click here.

Any changes will be brought into the stock portfolio upon the next update in the very end of the month.

Wednesday, December 13, 2017

Analysis of HM 2017

Logo of H&M 2017

Company: H&M

ISIN SE0000106270 | WKN 872318

Business: Fashion retail with H&M, & Other Stories, Cheap Monday, COS, Monki, Weekday and Arket. The currently have online offerings in 43 of their markets.

Active: They have over 4500 stores in 69 markets. They are pretty much half the size of Inditex which shows us how large they can become. The main markets are in Europe where they are well established but also in North America. They have few stores in South America, Asia, Middle East and Africa.

P/E: 17.6

For the previous analysis please see Analysis of HM.

Analysis of H&M 2017

The P/E is, for me, high with 17.6 as is the P/B with 5.4 which gives that Graham would not be much interested in this company. The earnings to sales have kept dropping and is now down at 8% which is not that good but the ROE is excellent with over 30%. The book to debt ratio is good with 1.6.
In the last five years they have shown a yearly revenue growth rate of 9.6% which is excellent and this then gives us a motivated P/E of around 25 to 27. 
They pay an excellent dividend in the size of 4.9% which correspond to 87% of their earnings which is a bit on the high side but H&M has been doing this for a long time now so they are able to handle it.

Conclusion: Graham says not but I say yes. Back in the days when I made my previous analysis I said that if it were to drop below P/E of 20 then I would be interested. It has dropped with means today that the P/E is good, the ROE is excellent, the book to debt is fine and the yearly growth rate is excellent. You probably realise why I made this analysis...

Tuesday, December 12, 2017

Stock sold December 2017: Deere

Logo of Deere 2017

My sales criteria for Deere was when Warren Buffet sold his shares. Today I would never put such a criteria in place and to be fair I correctly also ignored in when it comes to Deere as I am currently ignoring it when it comes to IBM. For me the Deere shares have reached over valuation and the value has gone from around 80 up to around 150 USD in less than a year without the earnings to follow up on that. If Deere would today have had "normal" earnings then they would be fairly valued but they are not yet there and I am not certain when they will be there but by the look of things the market has already priced them as if they would be there.

I have therefore left Deere as a shareholder and I sold all my 30 shares for, around 127.3 € per share, giving a total of 3,819.81 € and I had to pay -9.55 € in fees which means that I was left with 3809.81 € in cash on my broker account.

I bought it back in October 2015 and I sold it now in December 2017 which gives an unfortunately short holding time of only 26 months (my average of sold shares are at 36 months). During this period I made a profit of 82% and on top of that I have received 128.21 € in dividends.

To follow the journey of Deere then please click here.

Any changes will be brought into the stock portfolio upon the next update in the very end of the month.

Sunday, December 10, 2017

Summary of November 2017

Summary of November 2017

November was, as always a hard month. Budget, performance discussions, targets for 2018 discussions up and down and on top of that I have had to spend two days per week with my new group which is a 350 km drive back and forth each time and it means that I spend one night per week in a hotel. The team leader is difficult to work with but I have managed to turn him slowly towards the good direction. In 2018 we will accomplish great financial benefits for the business unit.

I spend a couple of days around Barcelona. The last time I was there was back in 2009 for my road trip and then the situation was seriously bad. Today, despite the current Catalan / Spain complication, one can really see how good the Spanish economy is. People have work, people have money and the fears have disappeared. Maybe in some cases that loss of fear even became hubris but that I am not able to judge that.

My work review was fairly good for the year so it will be interesting to see how the company will reward me. My line manager will, according to himself, do his best to push up my salary and bonus. It is working very odd in my company because there are only recommendations going up and still in the end it comes down to the remuneration board to set pretty much all salaries and bonuses. Utterly wrong in my opinion. My team should receive a pot of money based on our performance and then I should distribute that based on how much the team members contributed to those targets. Better still... there should be paid out no bonuses at all.

For the previous summary please visit Summary of October 2017 and here you can see my stock portfolio as it is.

Invested vs Current November 2017

The total invested value is now up at: 91,224 €. I made no new investments during the month of November.

Current investments November 2017

The value of the portfolio is today: 105,568 € and spread out I now have around 6,902 € in cash on the different accounts. I have a realised gain of 1,144 € and the combined realised and unrealised gain is now at: 14,344 € (16%) which is not as good as one would have liked.

Me vs DAX during November 2017

DAX did not to very well this month and decreased to 13,154 points which means that the it decreased by -1.7% which should be compared to my more modest decrease of -0.2%.

Conclusion: One of those rare months when my portfolio did better than DAX but that comes mainly from that Deutsche Bank have started to increase in value as of late. I hope it will continue in that direction because it is my largest, in invested value, investment.

Saturday, December 9, 2017

Dividend from Deere and Fast Retailing: November 2017

Logo of Deere 2017

For my 30 shares in Deere I received 15.43 € in dividends. From this was taken 2.31 € in taxes and I was left with 13.12 € in cash on my broker account.

To find out more about Deere then please click here.

Logo of Fast Retailing 2017

For my 6 shares in Fast Retailing I received 7.93 € in dividends. From this was taken 1.22 € in taxes and I was left with 6.71 € in cash on my broker account.

To find our more about Fast Retailing then please click here.

To see my total dividend flow then please visit the Stock Dividends page that will soon be updated.