Here's a short breakdown of the purchases I made.
T. RowePrice (TROW)
Buy 12 shares @ $76.44 at 7/6/2015
They manage US and international stocks, mutual funds, blended assets and bonds.
Main reason for buying this stock is their strong growth over the last decade.
The Great Recession obviously has hurt the stock price, but their funamentals never changed.
Despite the recession, even the 10-year growth numbers are double digits!
DGR-1, 15.8%
DGR-3, 12.4%
DGR-5, 12.0%
DGR-10, 16.6%
These numbers beat 20 of the 21 Financials in the CCC Aristocrat list. Pretty amazing if you'd ask me.
The yield of 2.68% is below the sector average of 3.16%, but with these growth numbers, I'm not worried at all.
Looking at the valuation of TROW, the numbers are looking very nice.
EPS - $4.46
Payout ratio - 46.64%
P/E - 17.43
This high EPS combined with a low payout ratio and a low P/E leads me to believe that the stock is currently undervalued. Theres definitely enough room for future growth. I'm new to valuating stocks, so I don't know what a fair price would be, but I am studying this subject.
Qualcomm (QCOM)
Buy 13 shares @ $62.81 at 7/6/2015
If you own a non Apple smartphone, the heart of your phone is probably manufactured by QCOM.
Their Snapdragon processor is widely used in the current generation of smartphones.
Qualcomm is my first holding in the Information Tech sector.
I'm not a huge fan of Facebook, because there is no product to sell. As with MySpace, Facebook could be worth nothing in a matter of a couple of years. Same goes for Twitter.
Apple seems to be overvalued to me. Will we keep buying an iPhone every 2 years until they release iPhone 27? I'm not sure.
I do think smartphones and other smart products are here to stay, so buying QCOM makes perfectly sense, despite not liking Apple so much from an investor point of view.
As with TROW, QCOM has some impressive growth numbers.
DGR-1, 23.8%
DGR-3, 24.5%
DGR-5, 19.2%
DGR-10, 21.7%
These numbers beat all the other 17 stocks in this sector for the Contenders section!
This amazing deal comes with a 3.07% dividend yield, which is above average.
EPS - $4.22
Payout ratio - 45.50%
P/E - 14.84
With these numbers, there should be more than enough capital to sustain current dividend payouts as well as a lot of money to be used to growth the relative new company. They have been raising their dividends for 13 consecutive years.
AT&T (T)
Buy 1 share @ $35.57 at 7/6/2015
After buying TROW and QCOM I had about $40 left in my account.
My broker does not support buying fractial shares yet, so I added 1 share of AT&T to my portfolio, as they went ex-dividend at the 8th of July.
What do you think of these purchases?
Thanks for reading!
Ciao DfS,
ReplyDeleteGot them in my PF too, they have a lot of pension related assets in their holdings so they are also quite "stable" under the clients point of view, something that not many companies have. I bought them out of their outstanding fundamentals too, in this market is not easy to find companies like these...
Ciao ciao
Stal
Hey Stalflare,
DeleteAbsolutely! While researching these.. I was wondering.. why didn't I pick these up earlier? Both stats and fundamentals are looking so good.
Glad to see you as a fellow shareholder!
Best wishes, DfS
Nice buys! I'm loving my TROW. Haven't pulled the trigger on T yet. I think it's out of spite based on how they treated me as a customer :)
ReplyDeleteHi Adam,
DeleteHaha. I guess that's an advantage of being a foreigner in this US investing business... I can't be a customer of AT&T. The payout ratio is very high, but that's not uncommon in the sector. The yield is just amazing. The stock is very affordable as well. It's worth starting a research session for!
Best wishes, DfS
Wow you sure have been busy so far in July. Congrats on the purchases, I think they're all very solid.
ReplyDeleteThanks Tawcan! I was happy with my progress as well, if I may say so, haha.
DeleteHave a nice day. DfS
Nice purchases, DFS. I know TROW is popular with other DGIs these days...and on the surface, looks like a good investment - even though I havent delved into the books deeply.
ReplyDeleteI am huge fan of QCOM...love the technology and the segments - chip business and the licensing business. Even in an Apple phone, there is QCOM technology - so you get a cut for licensing even if they dont use the chipset. Thats the beauty of QCOM that I love - no matter who wins in the competition, the common denominator is QCOM - always a winner.
Having said that - I have to point out that Apple is much more than a device company. Yes, iPhones bring in the most revenue for the company - but the innovation in the future will reside in software and the ecosystem. The full experience provided for users will keep the cash flowing for years to come.
Fan of AT&T as well - another one of my holding.
Long AAPL, QCOM & T.
Best wishes
R2R
Hi R2R,
DeleteThanks for this nice extra information on QCOM. I did not know that!
Of course I knew about their core business, but apart from that I primarily focused on the investing parameters :)
As you know, the phone market is very competitive, so it's nice to have a 'always win' company in our portfolio.
You are definitely right. Apple wouldn't be anywhere close to where they are today, if they were just selling iPhones. For all we know, they could have end up like Nokia did. Once the biggest mobile phone company worldwide, currently a small division of MSFT.
Have a nice day!
DfS
I am long on both TROW and ATT. I have QCOM on my Watch list forever since their debt is zero (or close to). They didn't have the competitive edge like they did during the CDMA days, but their patents portfolio is very strong. Like you say, their LTE chipset is in a lot of devices. So, in all, excellent buys!
ReplyDeleteDiv4son
Thanks for stopping by Div Son!
DeleteIt's much appreciated.
Yea the company is looking pretty strong from a valuation point of view.
We'll see what future phones will bring us. I have confidence!
Best wishes, DfS
Great buys. Don't own TROW but we do own AT&T and QCOM. Really like QCOM because all the cellphone business and LTE growth.
ReplyDeleteThanks for your continued support Tawcan!
DeleteAT&T has proven to be here to stay and I'm sure QCOM will be as well.
Best wishes, DfS