Share purchases February 2017

By | March 12, 2017

Author: Mr and Mrs DDU.

Disclaimer: Stocks mentioned on this blog are for general entertainment/documentation purposes only, following our own investment journey and decisions. Nothing in this article should be considered investment advice nor is intended to be investment advice. Please click here to continue reading our disclaimer. By viewing any page on this blog you are agreeing to the linked terms & conditions.

We shared what we bought in December and January in this post, so now we’re going to tell you what we bought in February 2017.

Here we go:

February 2017

What we bought: Ramsay Health Care (ASX:RHC). We bought 8 Ramsay shares at $67.46 each, with a dividend yield of 2.52%.

We are big fans of Ramsay, arguably Australia’s best dividend share, for a long time. It’s taken us too long to buy a small part of this great business.

What Ramsay do: Ramsay is one of the world’s top 5 biggest private hospital operators. It has a presence in Australia, the UK, France, Malaysia, Indonesia and Italy.

A few numbers:

Market Capitalisation: $13.5 billion

Dividend increase streak: 17 years

In its latest results for 6 months to 31st December 2016 it announced:

Latest dividend increased by: 12.8%

Latest core earnings per share (EPS) increase: 13%

Operating cashflow: $457m

Profit after tax: $285m

Why we bought Ramsay: Ramsay has been one of Australia’s best businesses over the last 15 years and with the ageing population of the western world it could keep growing strongly.

We like the sector it’s in, its strong financial performance and the potential to expand into more countries in the future. We will be looking to buy more Ramsay shares as time goes on.

Risks: The main risk we will monitor for Ramsay is its funding. Governments, private health insurance providers and patients will all want to keep a check on Ramsay’s costs. Hopefully anything that comes up will be temporary and be a good buying opportunity for us.

 

Another February buy:

What we bought: Washington H. Soul Pattinson (ASX:SOL). We bought 31 Washington H. Soul Pattinson shares at $16.50 each, with a dividend yield of 4.5%.

What Washington H. Soul Pattinson do: It’s an investment company that’s been going since 1903 and has been run by several generations of the same family. It owns large positions in a handful of companies it thinks will be good for long-term investment returns such as TPG Telecom (ASX:TPM).

A few numbers:

Market Capitalisation: $4.1 billion

(Ordinary) Dividend increase streak: 17 years

It reports its half-year results later in March.

Why we bought Washington H. Soul Pattinson: We love the long-term focus of their investments and the long-term management. It’s the type of investment we can buy and potentially hold for the rest of our lives. It has the joint record with Ramsay for how long it’s been increasing its (ordinary) dividend, which is exactly the type of business we want to own lots of. Their commitment to paying out increasing dividends is the type of business that fits our criteria precisely and will be great in FIRE.

Risks: Generally, the main risk is the same as affecting all markets, a crash would be bad. We also have to hope that management continue making good investment decisions (both of what to buy and when to sell), or else they may underperform the market – which wouldn’t be good.

 

Another February buy:

What we bought: Japara Healthcare (ASX:JHC). We bought 244 Japara Healthcare shares at $2.05 each, with a dividend yield of 8.78%.

What Japara Healthcare do: Japara is one of the largest aged care providers in Australia.

A few numbers:

Market Capitalisation: $485 million

Dividend increase streak: 0 years

In its latest results for 6 months to 31st December 2016 it announced:

Latest dividend decreased by: 4.3%

Latest earnings per share (EPS) decreased: 11.3%

Operating cashflow: $37m

Profit after tax: $14.6m

Why we bought more Japara Healthcare: We like the long-term idea of Japara – all of the elderly will have to be looked after somewhere. Japara will probably get a certain amount of the increase of aged care people.

Japara’s share price has been hit recently with concerns about funding from the government. Although it’s not great for our current shares, we thought it was a good idea to dollar-cost average down.

Risks: The main risk to Japara is funding. Whether from the Government or residents, funding needs to increase. In the long run it should be okay, but in the short-term it could stay rocky and volatile.

 

Another February buy:

What we bought: WAM Research (ASX:WAX). We bought 412 WAM Research shares at $1.60 each, with a dividend yield of 7.81%.

What WAM Research do: It is a Listed Investment Company that has produced market-beating returns for a number of years. It turns a good portion of those investment returns into a big dividend for investors. It keeps a large cash balance on hand for protection and for opportunities. It generally focuses on the smaller end of the Australian equity market.

A few numbers:

Market Capitalisation: $298 million

Dividend increase streak: 8 years

In its latest results for 6 months to 31st December 2016 it announced:

Latest dividend increased by: 5.88%

Latest earnings per share (EPS) decreased: 20% (This looks odd, but it’s simply that they didn’t grow the portfolio as much as in the previous period).

Operating cashflow: $45.3m

Profit after tax: $16m

Why we bought WAM Research: We are fans of LICs or indexes managing a portion of our money, getting the benefits of good diversification (by industry/geography) and/or providing good returns. The companies that WAM Research is invested in is almost entirely not the type that we invest in individually, yet it produces great returns and pays out a great growing dividend (the share price is going up nicely too). As long it keeps growing its dividend and outperforms the market we are very happy to have the WAM entities be a decent portion of our portfolio.

Risks: The main risks to WAM Research are if they underperform the market, there’s a market crash or some of their high-performing investment team leaves.

 

Final thoughts

So that’s it – our purchases for February. These four are much more typical of what most of buys will look like going forward and we’re very happy that we bought all 4 at the prices we did.

We’ve already bought something in March. We’ll be doing a monthly purchase update from now on, seeing as we plan to buy at least one share a month for the foreseeable future.

 

Did you buy any shares in February?

 

Thanks for reading this article about our investing journey Down Under.

Onwards and upwards!

24 thoughts on “Share purchases February 2017

    1. Dividends Down Under Post author

      Thanks BHL. We like the Wilson entities, great performance and good diversification. I’m sure we will add more as the years go by.

      Mr DDU

  1. Team CF

    Your title should have been: “warning, FI shopping spree”. 👍😋
    Good logic in you stock choice, hope they will pay off!

    1. Dividends Down Under Post author

      Haha CF – that’s the idea! We bought significantly more than our planned $1k in February.

      Hopefully they do pay off, in the long-run! Thanks for commenting as always.

      Mr DDU

    1. Dividends Down Under Post author

      Yes they are pretty small buys. We would love to have bought $2k in each instead, but we don’t have that amount of cash yet! We use CMC, which means we are only paying $11 per trade – we’re happy to pay $11 on brokerage on good share buys than buying lunch for work. Over time our buys will become larger.

      Mr DDU

  2. LadyFIRE

    Nice work, sounds like a great saving/shopping spree!

    I’ve got the same question as The Wealthy Bogan – what sort of brokerage are you paying (or not paying)? Looking at the WAM shares you bought $659.20 worth of shares. For me that trade would cost ~$30 in brokerage which is spending 4.5% on brokerage.

    Assumedly you’ll make it back on within six months on the dividends payments, but I’m wondering if you have a better brokerage deal than I do?

    1. Dividends Down Under Post author

      Thanks LadyFIRE.

      Yes we have much cheaper brokerage than that! We use CMC which costs us $11 per trade, which isn’t much when you compare it to something else like a Subway meal instead. It is a reasonable amount per buy as a %, but we don’t have $8k to invest all at once and we deemed each purchase to be a buy that we didn’t want to miss out on. Over time our buys will become larger so that the % is less.

      Mr DDU

  3. Our Frugal Escapades

    Great shopping spree! You are building a very diverse portfolio as well. Looking forward to seeing what you will be picking up next! 🙂

    1. Dividends Down Under Post author

      Thanks OFE 🙂 We’re glad you like the buys that we did. You will find out what we have bought in a month’s time!

      Mr DDU

  4. wealth from thirty

    Wow. Did Christmas just come and go early?! Nice work.
    Might be worth upping your parcel sizes to reduce brokerage costs as a % of purchase?

    1. Dividends Down Under Post author

      Thanks WFT 🙂 We are loving the buys we’re making. We’re only paying $11, which is worth it to us to pay to split our money and get the opportunities that we don’t want to miss out on.

      We are going to be making bigger investments in time. All of the above ones are around $550, whereas last year we were making $500 investments sometimes paying $20 brokerage each time.

      Mr DDU

      1. wealth from thirty

        $11 is far better than $20. NAB do $14.95 on US & Euro stocks (plus an exchange fee). Not too bad. Glad you’re happy w it! O&U

  5. DivHut

    As usual I’m at a loss for all your buys as every company is unfamiliar to me. Still, it’s nice to see the buying continue in earnest among our investing peers in the U.S. and abroad. Despite record highs and seemingly less value to be found we are continuing to make purchases and add to our snowballs. February saw me adding to a couple utilities in my portfolio along with a consumer stock. Thanks for sharing.

    1. Dividends Down Under Post author

      The Aussie market isn’t quite at record highs, there are still some bargains to be found here and there. Glad to hear you’re still building your portfolio up in this bull market, hopefully interest rate rises will take the pressure off dividend stocks for some more bargain prices.

      Mrs DDU

  6. SMM

    Looks like you had a busy month of buying. Have you considered using the Robin hood mobile brokerage. You don’t have to pay any commissions for your trades and can buy and sell from your smart phone. I’ve used them and have no complaints so far. You could save a little $$$.

    1. Dividends Down Under Post author

      I did have a little google about the app, it doesn’t seem to be fully up and running in Australia yet. There’s also a few other features we require that I don’t think Robin hood will offer as it is a “stripped down” broker, which I’m sure is great for a lot of people! The free trades is very interesting though, I’m very curious about how they will make a profit.

      Mrs DDU

  7. Jimandjen

    Seems your portifilo is overweight healthcare…

    1. Dividends Down Under Post author

      Hey Jim and Jen, thanks for visiting our blog and commenting.

      You’re right, we do have a lot of healthcare stocks. We deliberately avoid some industries like resources and materials. We are biding our time on financial stocks because they’re generally cyclical (we think it’s best to buy them at cyclical lows not cyclical highs). Those are the main two sectors on the ASX sadly, which we are steering clear of.

      We like healthcare because it’s defensive, consistent and growing – particularly businesses such as Ramsay. We are trying to buy when things appear good value to us, which us healthcare over the last few months, I’m sure it will change later this year or next year which will change the stocks we’re buying.

      Mr DDU

  8. Dan

    You have made few nice purchases! Especially with SOL and Wilson Asset Management stocks. I have bought RHC at the same price as you, and have lots of expectations! Also own WAM and WAX too. Missed out SOL before yesterdays rally though.

    I would look at a margin lending facility to increase the parcel size as the commission eats up most of the gains isn’t it? With high dividends and the growth stocks, margin loan will be beneficial in my opinion. Why not gain 3-4% gain on banks money even after paying the interest.

    Just a thought. Not a financial advice. I cannot be liable for any loss mate! LOVE YOUR BLOG. I READ EVERY POST.

    1. Dividends Down Under Post author

      Hi Dan, thanks for the comment and I’m glad you also have several similar holdings that we do 🙂

      I get where you’re coming from and it may perhaps boost our overall return in the long run, but we are deliberately avoiding debt of all kinds except for when we buy a property. We don’t mind paying a bit of commission ($11 from CMC) to spread our risk over different buys and we also thought each of our buys were worth making.

      I’m very sure that in less than a year from now we will be making each purchase bigger than $550ish (which we have upped from $500).

      Cheers for the disclaimer haha, thanks for reading our blog 🙂

      Mr DDU

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