2 Recent Buys – JNJ, GOOGL

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A quick update on two purchases in my portfolio. As with the last iteration, this one also includes a new position in the portfolio.

  • First purchase: I added 20 shares of Johnson & Johnson @ $127.50. During the mayhem of Aug 23, thanks to Trump’s tweets and escalation of trade war, I was able to pick up a few shares of JNJ. JNJ has been undergoing a bit of a weak performance due to ongoing litigation (which later turned into a $572M fine), and some expected revenue drop this fiscal year. However, top line growth should return back to normal starting next year, so I have been adding to my shares in this position over the past few months. The stock yields 2.96% and adds $76.00 in annual dividends.
  • Second purchase: I initiated a new position in one of the largest companies in the world; with 3 shares of Alphabet Inc (GOOGL) @ $1,184.00. There are a lot of reasons to own GOOGL – one of the most forward looking companies, founder-operated, arguably best tech talent in the world, largest online ad platform, wide moat (can you imagine life without Google…not just as consumers, but also as a business?), good capital allocation and reinvestment in business, optionality play on unmonetized segments that will sooner or later get commercialized (Alphabet’s subsidiaries include Calico, CapitalIG, DeepMind, Google, Google Fiber, GV, Jigsaw, Loon, Makani, Sidewalk Labs, Verily, Waymo, Wing, and X). This is a starter position in what I expect to be a core holding for years to come, and will continue adding shares in coming months.

What are your thoughts on these purchases. Share a comment below.

Full Disclosure: Long JNJ, GOOGL. Our full list of holdings is available here.

2 Recent Buys – BAM, TWLO

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A quick update on two purchases in my portfolio. A correction seems to be ongoing and I decided to put some capital to work. One new company added to my portfolio in this iteration of purchases.

  • First purchase: I added 50 shares of Brookfield Asset Management (BAM.A.TO) @ CAD$66.95. Brookfield has been gobbling up assets across the world at a record pace. With alternate assets in demand and blue sky outlook over the coming years and decades, BAM is still a great buy at these levels. The stock yields 1.32% and adds US$32.00 in annual dividends.
  • Second purchase: A new position and my first SaaS stock. I opened a new position with 25 shares of Twilio Inc (TWLO) @ $124.84. This will be a bit more speculative on my part as it deviates a bit from my usual type of investments. Twilio is a programmable communication platform, with no direct competition and rapid growth in revenue (85% YoY revenue growth as of Q2 2019) and a ‘Rule of 40’ of 76%. The company boasts 162K businesses as customers, with more being added each quarter. The company makes extremely sticky software that has high switching costs (read: wide moat), but comes with risks based on current valuation. I have been tweeting about this company over the past few weeks — see this thread for more info.

What are your thoughts on these purchases. Share a comment below.

Full Disclosure: Long BAM.A.TO, TWLO. Our full list of holdings is available here.

3 Recent Buys – KMI, RACE, CSU

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A quick update on three purchases in our portfolios. It is getting harder and harder to find good value plays as the market seems be pushing the boundaries on the valuation front. With a lot of stocks trading close to 52-week highs, pickings have been pretty slim. However, due to an oversized cash position, I decided to pay up and put some capital to work.

  • First purchase: I added 200 shares of Kinder Morgan Inc (KMI) @ $19.97. I wrote more about my KMI decision during my last iteration in March. Click here to read about the reasoning. The stock yields 5.0% and adds $200.00 in annual dividends.
  • Second purchase: I added 25 shares of Ferrari N.V (RACE) @ $165.35. I wrote more about decision to buy this company earlier in July. Click here to read about the reasoning.
  • Third purchase: I added 6 shares of Constellation Software (CSU.TO) @ $1,252.00. Constellation continues to execute well and aggregate small VMS companies led by a brilliant leadership team. A small dividend is paid (yield of 0.4%), but this is a growth-focused stock.

Full Disclosure: Long CSU.TO, KMI, RACE. Our full list of holdings is available here.

3 Recent Buys – BAM, BIP, CU

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A quick update on three recent purchases in my portfolio. No new companies in the portfolio in this edition, but continued adding to my existing positions where I saw relatively good valuation.

  • First purchase: I added 50 shares of Brookfield Asset Management (BAM.A.TO) @ CAD$63.70. BAM continues to acquire high quality assets all around the world and is arguably the best alternate asset manager in the world. The stock yields 1.32% and adds US$32.00 in annual dividends.
  • Second purchase: I added 50 shares of Brookfield Infrastructure Partners LP (BIP.UN.TO) @ CAD$57.10. The stock yields 4.6% and adds US$100.50 in annual dividends.
  • Third purchase: I added 100 shares of Canadian Utilities (CU.TO) @ $35.95. CU currently yields 4.7% and this purchase adds a further $169.00 in annual dividends.

What are you thoughts on the purchases above. Leave a comment below.

Full Disclosure: Long all stocks mentioned. Our full list of holdings is available here.

Recent Buy – RACE

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A quick update on a recent purchase in my portfolio. This time, another new position in my portfolio.

As I read and learn more about investing and valuation models, I have come to realize that paying higher attention to Return on Invested Capital (ROIC) (and other similar metrics such as ROE, FCF etc) and qualitative aspects of a company present a better probability of finding compounding machines. A good read on this topic is a blog post from Intrinsic Investing about finding the next ROIC machines. As outlined towards the end, investors should look for companies that have economic moats, owner-operators, intrinsically understandable & sound business model, and value accretive to all stakeholders. I believe this new addition to my portfolio checks all those boxes and is a good candidate for a long term compounder.

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