3 Recent Buys – KMI, RACE, CSU

BuySell

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.

Recent Buy – RACE

BuySell

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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