Share purchases: June 2017

By | July 16, 2017

Author: Mr DDU & 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’re into month 6 of our new investment strategy. Now that we’ve been successful with our IVF, we’ve decided to put at least $1,000 a month towards buying shares.

So, let’s get into it:

What we bought: National Veterinary Care (ASX:NVL). We bought 221 shares at $2.46 each.

What National Veterinary Care do: They aim to be one of Australia and New Zealand’s largest vet groups.

A few numbers:

Market Capitalisation: $131 million

Dividend increase streak: Not started yet

Latest result: 6 months to 31st December 2016

Latest dividend increased by: No dividend declared

Latest earnings per share (EPS) increase: 772.6%

Operating Activities cashflow: $6.4m

Net Profit after tax: $2.86m

Why we bought more National Veterinary Care shares: We said in (reasonable) detail in our first purchase about why we considered National Vet Care, even though it’s not paying a dividend yet. We are investing for dividends for the long-term, not just the next year. So we want dividend shares that in a few years will have grown nicely and will still have a lot of growth left. National Vet Care’s strategy of remaining a vet-only business and its rapid expansion plans could make a good dividend payer for us eventually. We really like the long term growth aspect of the business too.

Risks: As long as the number of pets in Australia/NZ keeps rising then there shouldn’t be that much risk. Management will need to be careful about the price they’re paying for acquisitions but the strategy is working so far.

Another June buy

What we bought: Washington H. Soul Pattinson (ASX:SOL). We bought 33 Washington H. Soul Pattinson shares at $16.78 each, with a dividend yield of 4.3%.

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: $4.2 billion

(Ordinary) Dividend increase streak: 17 and a half years

Latest result: 6 months to 31st January 2017

Latest dividend increased by: 4.8%

Latest earnings per share (EPS) increase: 56%

Operating Activities cashflow: $123m

Net Profit after tax: $162.5m

Why we bought more 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. The recent share price pull back into the $16s seemed like a good price to add a little more to our holdings. As long as we’re buying with a yield (before franking credits) of above 3%, then we can be happy with that.

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.

Final thoughts

So, there are our 2 June buys. We invested a total of $1,097, nicely beating our goal of $1,000 a month. We like both of our investments and they’re quite different. National Vet Care is a brand new business with exciting long term potential while Washington H. Soul Pattinson is one of the oldest companies and has one of the best dividend growth histories on the ASX. Hopefully both can be successful parts of our portfolio for many years to come.

As always, this is just sharing our own decisions and isn’t a suggestion in any way about what you should invest in. In-fact, what do we know? You would be much better off researching your own ideas.

What investments did you make in June?

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

Onwards and upwards!

6 thoughts on “Share purchases: June 2017

  1. Strong Money Australia

    Good job guys!

    Soul Patts is a wonderful investment company, especially for dividend focused investors!! Some call it the Berkshire of Oz. They certainly have a great track record of outsized returns.

    Should be a very long-rewarding purchase 🙂

    Reply
  2. wealth from thirty

    Nicely done Mr & Mrs DDU – I think SOL is a very nice purchase, lumpy earnings make it hard for me to value but it’s on my watchlist should it’s price fall substantially in the short term, I’d seriously consider it.

    Looking forward to hear what you might have bought in July!

    Reply
  3. Brian

    Always nice to see someone paying themselves first. Keep that up and it will pay big dividends (pun intended) . Keep on ‘plugging’.

    -Brian

    Reply
  4. Pinkypie

    I notice that you tend to purchase each holding at $500 increment. Considering the cheapest brokerage is $11, do you think pooling the $$ for larger purchase is better to minimise fee percentage?
    I am in two minds actually, i am very impatient saving till i have larger chunk for each share purchase, but not too keen on paying $11 per small trade either

    Reply

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