Friday, August 24, 2012

Rise of a Millionaire Portfolio Update: Added to AD, Bought THI

With the new job and steadier income, I decided to increase my margin balance to $5000. I added Tim Hortons to my portfolio buying 10 shares in my TFSA and 30 shares in my broker account. I have long wanted to buy Tim Hortons but for reasons unknown was never able to pull the trigger. It’s been that annoying winner that I should have bought along with Lululemon and many others.

To me the stock is fairly valued given its future growth prospects and 30% return on equity. It’s an above average company with an average valuation. On top of that, every Tim Hortons I drive by on the way to work is lined up the wazoo and I don’t even start work during rush hour. Probably not the best reason for investing, but I find these simple, less technical methods of stock evaluation can be helpful and profitable. Just ask anyone who bought Lululemon 5 years ago because their wife or girlfriend loved the yoga pants – simple yet effective.
I also made a somewhat counter intuitive buy, increasing my position in Alaris Royalty. Alaris has been on a fantastic run since I purchased shares. Instead of adding to something that may have pulled back in my portfolio, I decided I would add to one of my winners. I also consulted the charts for this buy, noticing that the stock broke key levels of resistance on record volume about a month ago. I expect the stock to continue grinding to new all-time highs, although I realize I could be wrong and am willing to hold for the long term if the price pulls back. Alaris has a unique niche business model in private equity financing and in my opinion is one of the best small companies in Canada.
I still have about $2000 of cash on hand which will be put to work in the next coming days and weeks.

The performance of my portfolio has been sluggish, as I somewhat expected after such a great run at the end of last year. It’s been in a narrow trading range for some time now – in my opinion a normal consolidation. However, the portfolio is still benefiting from being relatively underweight commodities. Some stocks have been surprisingly awesome like K Bro Linen, MTY Group and Allied Properties, while others have been mildly disappointing like Imperial Metals and Asian Television Network. I expected consolidation in Imperial and ATN after fantastic runs, but Imperials correction was stomach churning and Asian Television Network has pulled back more than I expected. My long term belief and conviction in both names is still fully intact. Consequently, Imperial has been on a resurgence of late and I would expect ATN to have a relatively good 2013.
Margin Account
Company Name # of Shares Market Value
Westshore Terminals  135 $3,499.20
Saputo 129 $5,651.49
Asian Television Network 2750 $6,847.50
Allied Properties REIT 94 $2,951.60
Imperial Metals 316 $3,608.72
Black Diamond Group 260 $5,395.00
K-Bro Linen 123 $3,528.87
Computer Modelling Group 196 $3,567.20
SNC Lavalin  53 $1,958.35
Bird Construction 204 $2,829.48
New Look Eyeware  100 $925.00
Tim Hortons 30 $1,513.50
Arc Resources 119 $2,778.65
Total $45,054.56
TFSA Account
Company Name # of Shares Market Value
New Look Eye Ware 135 $1,248.75
SIR Corp 105 $1,384.95
Alaris Royalty 122 $2,904.82
Asian Television Network 469 $1,167.81
Tim Hortons 10 $504.50
Coast Wholesale Appliances 5 $20.50
MTY Food Group 109 $2,169.10
Total $9,400.08
Cash on Hand (approx) Total $2,100.00
Margin Amount (approx) Total $5,000.00
Margin Account Total $45,054.56
TFSA Account Total $9,400.08
RRSP Mutual Fund (approx) Total $800.00
Total Invested Assets $57,354.56

23 comments:

  1. I've done pretty good this year, up 19% YTD thanks mostly to SJ, PSN, HNL, CVL & GIB.B. ATN has been disappointing to say the least. I'm hoping it will get a lift based on the Score Media acquisition by Rogers.

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    1. Very nice. I was lucky enough to get into SAT At a good price so i have no problems waiting it out. However if 2013 isn't a good growth year for them i may sell my position. SJ and CVL are on my special watch list. If i had more money id own both. Eventually Im sure ATN will go the way of score and get taken out but there is more organic growth potential with ATNs business model than score. Time will tell...

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    2. I also have few on my watch list that I would love to add, namely ATD.B, BAD, ESL, and LLL. ESL has been basing since February, will break out soon. Very similar chart to CSU (I own) which just made a move to the upside last week.

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    3. I have ATD on my special list. Also CGX, PM. I hear esl a lot from people i chat to through the blog. Im not much into technology but no denying CSU track record, amazing performance.

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    4. I did follow CGX for while, never bought. I like the word monopoly but I wonder where growth will come from. Popcorn?? The novelty of 3D seems to be wearing off.

      What is PM? Philip Morris I like!!

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  2. ATN is one of only two pure-play broadcasters not gobbled up by Rogers & BCE. I'm thinking ATN is the next to go.

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    1. Now would seem like a good time for a Chorus Ent. or a telco to pounce on ATN with the recent pullback. As a shareholder Id want to wait it out for a couple more years. I think the potential is huge for ATN on their own with a long term time horizon.

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  3. I was thinking the exact same thing. It's not a question of 'if' but 'when' they get taken out. I don't buy a stock hoping it gets taken out but it does reafirm my evaluation methods.

    Over the last few years I've had a pretty good track record. I owned MSD, QUX and I had on my watchlist BWR, GCE, NEM, FGL and RCM when they got bought out.

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    1. How could we have both missed atd.b when were both huge Lynch fans?? lol He talks about convenience stores extensively in his books. Its so obvious when I reread his books - should have bought it. :(

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    2. I think we have only missed the first part of the move. Just because a growth stock has made a double it doesn't mean you should sell or shouldn't buy. Plenty of room to still grow. I have both ATD.B and LLL on my buy list.

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    3. Was it last year or the year before LLL missed expectations, the stock sold off because it had an issue keeping product in the stores. Nice problem to have. It might be a good entry point with the recent pullback and the Christmas shopping season just around the corner.

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    4. atd.b seems to be big on international expansion so Im sure there's plenty more of the story to come. My next buy is PM, but after that im thinking ATD.b

      LLL has doubled since then. All I remember hearing back then was about all the short sellers and the high p/e. Those yoga pants don't seem to be slowing down either.

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    5. I should taken my own advice and bought LLL last week.

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  4. Dang tremendous track record! I did own qux before the merger and made out nicely mostly on luck. My style is not so much a deep value, although i think its a big positive, more looking for those special growth situations at a fair price. Still learning to get better.

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    1. Thanks. I'm not a deep value guy either. But when you find a small cap company growing more 15% with a P/E less than 10 it only makes sense that it would be a takeover target. I don't buy because it may get taken out, it just happens.

      I was totally disappointed when RuggedCom was taken out, so much potential.

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  6. Hi John, I wanted to thank you for writing your blog. You're an amazing inspiration to a young investor such as myself. I've already learned so much from reading your posts, and have researched most of your company choices, and was amazed! Your mindset going into saving and investing is very much like my own. I'm in it for the long-haul, and I'm also a huge fan of Peter Lynch, that's how I found out about Dollarama :) It's very encouraging to see other young guys building wealth, and going against our culture of debt and spending. Looking forward to your next post! All the best!

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    1. That's Phenomenal. Thanks so much for the nice comments. The best thing that this blog could do is inspire people. I never really started it for that, but it makes me feel great that it really is inspiring people. Congrats on Dollarama! One I watch but missed, I wish I bought it. Most of my blog and insights is just regurgitated Peter Lynch/ Buffett wisdom from a Canadian stock perspective. It's all about the mindset and lifestyle especially if you don't make much money. Lets keep at it because eventually it will pay off huge. Only time is in our way. :)

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  7. Some interesting companies in this article about US growth stocks at a reasonable price. Lynch would be attracted to these for sure.

    http://www.theglobeandmail.com/globe-investor/investment-ideas/number-cruncher/top-stocks-for-growth-at-a-reasonable-price/article4481404/

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    1. Those little US bank stocks look awesome. Also love CBU on nyse. Those would be the type of US stocks I'd buy. I like some of those boring and weird sounding names too. Lynch would def like these.

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  8. Interesting article about possible takeover targets. SAT could get taken out "for a premium similar to that paid for Score of about 100 per cent, which would put the takeout price around $6 a share."

    http://www.theglobeandmail.com/globe-investor/investment-ideas/stephen-takacsy-a-discerning-eye-for-takeover-targets/article4534920/

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  9. Nice portfolio.

    I'd like to start a position in Tim's, THI is coming down in price which is nice. SAP in another stock I'd like to own. I don't own many consumer companies in Canada.

    I hope to increase my dividend income by another $100 per month before Christmas. Follow along next month, and you'll see where I am at.

    Back to you, keep up the good work.

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    1. Thank you. I really like tims for a conservative buy and hold type of stock. I wouldn't expect amazing returns but its solid with some growth. Similar feelings on Saputo. Both of them were relatively unaffected by the financial crisis so they fit well as passive core positions.

      Will keep an eye on your site. Great work as well! Lets keep it up.

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