Recent Buy – B2Gold Corp

Whenever I make a purchase, I like to share my buys to document my journey towards financial independence. As regular readers are aware, I have broken from the pack of DGI and sold some of my investments to move to a cash position. I shared details on my motivation to do so in this post. In that post, I have indicated that I am bullish only on one sector currently — the resource/materials sector, and more specifically gold and silver.

I continued adding to my precious metals equity sector as I still see tremendous value. Earlier this week, I added to my position in B2Gold Corp (BTO.TO) (also trades as NYSE:BTG) with 300 shares @ C$3.42. This is the third transaction to for this particular company in my portfolio. The company does not pay any dividends.

I usually present my thesis on why I bought a particular investment security and present the risks associated in the Recent Buys posts. In this case, I will simply link to my original post on B2Gold purchase. Note that there was one major event that occurred on Tuesday which caused the stock to take a ~12% hit after which I added to my position. More on this after the link below.

Recent Buy – B2Gold Corp

New Risk Event for B2Gold

The event was related to the Government of Philippines DENR (Department of Environment and Natural Resources) announced the results of the nationwide audit of metallic mines. This is a new added risk to the Masbate Gold mine that B2Gold operates and provides significant portion of B2Gold’s revenue. It is also a very economical mine in B2Gold’s arsenal where All-In Sustaining Cost (AISC) is a lowly $595 /oz. The audit definitely throws a wrench in the works and will add some complication and added risk — which the management assures shareholders will be handled and de-risked appropriately. We will have to wait and see how things progress.

Valuation

I believe B2Gold is attractively valued even after considering the above risk. In addition to the growing revenue and earnings expected from B2Gold in the coming years, there is also added tailwind from the rising gold prices (which I am bullish on). Following infographic from Simply Wall St (read my recent review here) illustrates the valuation. Note that the infographic represents the US-listed stock NYSE:BTG and in US$.

AMEX:BTG B2Gold Intrinsic value by Simply Wall St

AMEX:BTG B2Gold Intrinsic value by Simply Wall St

Full Disclosure: Long BTO.TO. My full list of holdings can be found here.

Recent Sell – Bank of Nova Scotia

Another sale from my portfolio. Regular readers may be aware that I have been liquidating a lot of my portfolio as this market enters the nosebleed section. Valuations are at all-time highs and the world of finance looks just as dangerous as last decade, if not worse. I am of the opinion that holding large positions of cash going into the next crisis is a better strategy than trying to stay invested and trying to squeeze out an extra 1% or 2% in dividends or capital gains.

Last week, I sold 45 shares in Bank of Nova Scotia (BNS.TO) @ C$71.00 and closed my position.

Recent Sell Decision

  • I have been selling for a variety of reasons — including market valuations, herd mentality from other investors, simplicity focus I desire and SWAN reasons. I have detailed all these thoughts in this post.
  • While the valuation of this particular stock is fine — its not overpriced by any measure, I decided to simplify my life and reducing the number of holdings. I want to follow a more concentrated approach to investing and betting big on a smaller set of companies.  So, the decision came down to whether I want to own two Canadian banks (the other one being Toronto-Dominion Bank (TD)), which have the similar exposures operating and competing with each other. After some consideration, I decided that I want to own just one. TD’s balance sheet, risk-profile and growth prospects are better in my opinion. This led me to decide to liquidate BNS and exit the position.

Total profit (including dividends during holding period of ~2 years): 12.47%

Full Disclosure: Long TD. Our full list of holdings is available here.

Simply Wall St Review

I recently came across a new (new to me) financial data visualization called Simply Wall St. Right away, the interface was addictive from this Australian fintech start-up — providing a quick visual of how a company is currently positioned – based on something called a snowflake – a great visualization which shows investors how a company is currently valued based on various categories (more on this below). I try a lot of different financial tools available on the internet, but so far have been fairly disappointed with most and there are only a couple that stand out. Now, the other tools will have to fight hard for my subscription dollars after I tried and am honestly hooked on Simply Wall St.

Full Disclosure: I have signed up as a user on Simply Wall St and please note the links included in this article are affiliate links. You can still sign up for a free version, and if you choose to upgrade to a paid version, I will earn a small percentage of the sales generated. With that disclosure out of the way, lets get on to the review. I have also added an image linked on the sidebar, so if you are planning on signing up, please consider using the link on the sidebar.

Simply Wall St Review

Snowflake

First thing that the users will notice is something that Simply Wall St calls a snowflake – a blob that has two aspects to it – color and shape. The snowflake changes colors based on each company’s strength or weakness in each category. The snowflake comes in different shapes based on the following five categories: (i) Value, (ii) Expected future performance, (iii) Past performance, (iv) Financial health, and (v) Dividend income.

Continue reading

Norfolk Southern Dividend Stock Anlaysis

NSC

Norfolk Southern Corp (NSC) is the fifth largest publicly traded railroad company in North America. The company commands an impressive 20,000 miles of rail network serving 22 states and 40+ ports. The following system map image demonstrates the scale and reach of Norfolk Southern. Norfolk Southern operates and services the east coast of the US and directly competes with CSX Corp (CSX).

Railroads are the pulse of the economy. While crude shipments are on their way to a recovery thanks to the rise in oil prices, coal remains in a secular downtrend. NSC sees continued pressure as coal made 17% of total revenue opportunity in 2015. NSC expects further weakness as coal volumes continue to drop. This article provides a detailed stock analysis for Norfolk Southern Corp.

nsc-sws1

Continue Reading Here >

Broken Fed

Thanks to the Fed not raising interest rates this week, we can keep this party going for a few more weeks/months. We keep hearing in some small corners of the media that the Fed’s model is broken. But what does that really mean? I came across this video recently and thought it was a gem and addresses this point. Its a long video, and for the most part, its a very dry subject and theoretical (I skipped most of it myself). But one section from Dr. Jason Cummins, who is an ex-Fed member, really stood out and was very refreshing to hear. He turns it into more of a rant, but makes some very good points of how the Fed is working with a broken model and needs to be addressed. I invite you to watch this video (about 25 minutes long) that we can all understand and relate to .

Bio: Jason Cummins joined Brevan Howard in 2004 and is the Head of Research and Chief US Economist. Jason is also a member of the US Treasury Borrowing Advisory Committee, a government appointed panel of external experts that has served the country for almost half a century. Formerly, Jason was a Senior Economist at the Federal Reserve Board, where he ran the Macro Forecasting team. Jason began his career in 1995 as an Assistant Professor of Economics at New York University and also taught at Harvard University. Jason earned a Ph.D. in Economics from Columbia University and graduated with high honours from Swarthmore College.