When I was a kid, one year I had a baseball coach who told me the key to winning was eliminating unforced errors. Fast forward to today and I try to eliminate unforced errors in my investing. Its one thing if a company turns out to be a dud despite doing my due diligence, its another if I make a mistake when I know better. Well, this week I paid the price for an unforced error.
Back in May 2021 I bought my first cryptocurrency – Ethereum (ETH). It was my first venture into cryptocurrencies, so I only invested a small amount (C$ 200). I bought as much Ethereum as I could for $200 in my Wealthsimple crypto account. The price was C$ 5088.2 per coin so I ended up with a small fraction of 1 coin.
Soon after, the cryptocurrency market started to fall when the Chinese government cracked down on crypto miners. I wasn’t concerned about the drop, but I figured I would sell my Ethereum, let the crypto market fall some more and then buy back in once the price of Ethereum had stabilized. I sold my Ethereum four days after I bought it, when it was worth $3928.46. Classic buy high, sell low mistake but I was going to buy back in at a lower price for a bigger gain when the price of Ethereum inevitably rose, and make up for the initial loss.
Unfortunately, I did not actively monitor the price of Ethereum and Wealthsimple does not have a means of sending out alerts when the cryptocurrencies reach a certain price point, nor does Wealthsimple allow what are known as limit orders (an upper limit on how much you’ll pay on a buy order). I use both tactics when investing in companies in my TD Direct Investing account. I would periodically check the price of Ethereum, but the price stayed around C$ 4000.
Today when I checked, Ethereum had jumped up considerably, so I decided I’d better get back into Ethereum. I ended up paying to C$ 6137.23 for 0.02842 of 1 Ethereum coin. Not my finest investing moves buying high, selling low, then buying higher. So far, I’ve managed to turn C$ 200 into almost C$ 164. Sigh!
My unforced error was thinking I could time the market to make a few extra bucks. Rather than holding onto the asset (Ethereum, in his case) like I did with stocks during the stock market crash of March 2020, I sold during a drop and never bought back in until the asset was worth more than I originally paid. If I’d followed my buy and hold strategy, I’d be ahead nearly 50%. Instead, I’m down almost 22%.
My takeaway from this: stick to a buy and hold strategy and don’t try to time the market.
It was a busy week with over twenty companies across the three portfolios reporting their quarterly earnings (this coming week is worse). Lots of press releases to read and sift through the spin, but overall, most of the companies are doing fine. One of the benefits of a buy and hold philosophy is I do not put a lot of weight on one quarter’s (three-month period) performance. I look for anything glaring in the reports to be aware of and move on. Speaking of moving on, lets look at the week that was …
Market News
Another strong week for the four major North American markets as the October rally continues into November. The Toronto Stock Exchange (TSX) got back on the positive side with nearly a 2% gain, setting a record high on Friday. The TSX was propelled higher by a decent employment report, the curbs lifted on financial institutions ability to increase their dividends, upbeat quarterly earning reports, and higher oil prices.
In the US, it is a fifth straight week of weekly gains for the S&P 500, Dow Jones Industrial Average (DJIA) and NASDAQ Composite (Nasdaq) Indexes, with each of them closing this week at record highs. The three Indexes were lifted by positive news regarding Pfizer’s Covid-19 anti viral pill tests; airlines, cruise lines and other travel companies that rose as a result of people being expected to travel more now that a Covid-19 pill is available; a US Labor Department report showing increased employment; strong corporate earnings; and higher energy stocks lifted by the rise in oil prices. A strong week of third quarter earnings seems to have rewarded companies that beat estimates and increased their outlook going forward while investors punished companies that missed their estimates.
Portfolio News
Another good week for all three portfolios with a third consecutive positive week for portfolios 1 & 2, and the fourth consecutive week for portfolio 3. Not as good as the American Indexes but any positive week is a good week.
Weekly Portfolio & Index performance for the week ended Nov.5, 2021
Companies on the Radar
Rivian anticipates its shares going public on November 9 in the range of US$ 72 – US$ 74. Other than Rivian, no other companies came across my radar this week. Most of the time was spent reading Quarterly reports. I’m keeping an eye on Roku (NASD:ROKU), and Nvidia (NASD:NVDA) otherwise the radar was quiet this past week.
Portfolio Update
Portfolio 1
Portfolio 1 for the week ended November 5, 2021: UP
I like buying stocks in complimentary combinations such as FuboTV and Visa. FuboTV is the more volatile, high growth company with lots of opportunity. Visa is a mature company with decent growth, tremendous opportunity, and provides a bit of dividend. Both are technology companies so there is little diversification other than a young company and a mature company. I am OK with that since both are in large and expanding markets, FuboTV in streaming TV and Visa in payment processing.
Activity
Bought:FuboTV (NYSE:FUBO) This is the second purchase of Fubo in less than a year. While the share price has only gone up approximately 20%, I feel the business has improved since the initial purchase. As the business grows, the share price typically follows. Even though the share price was higher for this second purchase, the price to sales ratio (where price is the numerator and sales is the denominator) was better on this purchase than on the initial investment. This means the sales must be better to get a lower number. It is costing me less for each dollar of FuboTV’s sale (which is what I want).
A couple of things led to this second purchase. I looked at the second quarter presentation, and it showed a growing number of paid subscribers and advertising revenue. The tipping point was seeing FuboTV ads on cable TV. I take it as a positive sign for the company if FuboTV is expanding into Canada and advertising on Canadian cable networks.
Bought: Visa (NYSE:V) This is the second purchase of Visa. While Visa does not come to mind as a top growth company, Visa is the global leader in payments technology and is part of the financial technology industry that is waging a ‘war on cash’ (movement towards a cashless society) and changing the way people pay for products and services.
Dividends
Dividends Received this week for the following companies:
Companies followed by DRIP (Dividend Re-Investment Plan) indicate additional shares were purchased with the dividend. Any cash leftover was added to the cash balance.
Generated total revenues of approximately $53.9 million in the quarter, representing a 57% increase from the prior year’s third quarter
Generated total revenues of approximately $145.6 million for the nine months ended September 30, 2021, compared to approximately $79.8 million for the same period in 2020, an increase of 82%
Paid a quarterly dividend of $1.50 per share on October 15, 2021, to common stockholders of record as of September 30, 2021, representing an approximately 28% increase over the third quarter 2020’s dividend
Third quarter 2021 total revenue was $27.5 million, a 5.4% increase year-over-year
Flag ship product illumin third quarter 2021 revenue was up over 42% sequentially to $7.4 million, or 27% of total revenues in the quarter
Net Income was $3.4 million for the three months ended September 30, 2021; a 265% increase compared to net income of $0.9 million for the same period in 2020
Revenue of $131.9 million for Q3 2021, up 116% from Q3 2020
Net loss of $24.3 million in Q3 2021, for a loss per share of $0.18, compared to net loss of $10.5 million, for a loss per share of $0.10 in Q3 of 2020
Consolidated operating revenues and other income increased by 6.8 per cent over the same period a year ago to $4.3 billion
Net income of $358 million increased by 11.5 per cent over the same period last year and basic earnings per share (EPS) of $0.25 increased by 4.2 per cent
Free cash flow of $203 million increased by $42 million or 26 per cent over the same period a year ago
Total TELUS technology solutions subscriber base of 16.6 million is up 5.9 % over the last twelve months
Trisura Group Ltd. (TSX:TSU)
Selected highlights from their third quarter 2021 review presentation on November 5, 2021
earnings of $16.1 million, an increase of 145.7% over last year
a 20.4% return on equity
third quarter adjusted earnings per share of C$ .41
Portfolio 2
Portfolio 1 for the week ended November 5, 2021: UP
Activity
No significant activity to report this week.
Dividends
Dividends Received this week for the following companies:
Companies followed by DRIP (Dividend Re-Investment Plan) indicate additional shares were purchased with the dividend. Any cash leftover was added to the cash balance.
Revenue was $94.8 million for the three months ended September 30, 2021, a 27% increase from $74.6 million for the three months ended September 30, 2020
Gross profit was $64.0 million for the third quarter of 2021
22,806 tests to clinical customers and 4,839 tests to biopharmaceutical customers in the third quarter of 2021, representing an increase of 35% and 58%, respectively, over the third quarter of 2020
Mitek Systems Inc. (NASD:MITK)
Selected highlights from their third quarter 2021 review presentation on November 4, 2021
Q4:
Total revenue increased 9% year over year to a record $33.3 million
GAAP net income was $2.2 million, or $0.05 per diluted share
Cash flow from operations was $12.3 million.
Transactional identity verification revenue continued its solid performance growing 33% year over year, and deposit solutions grew 23% year over year as consumer adoption further expands
FY21:
Total revenue increased 18% year over year to a record $119.8 million.
GAAP net income was $8.4 million, or $0.19 per diluted share.
Full year cash flow from operations was a record $37.4 million.
earnings for third quarter 2021 were $1.0 billion or $0.99 per common share compared to $893 million or $0.95 per common share in 2020
declared a quarterly dividend of $0.87 per common share for the quarter ending December 31, 2021, equivalent to $3.48 per common share on an annualized basis
Consolidated operating revenues and other income increased by 6.8 per cent over the same period a year ago to $4.3 billion
Net income of $358 million increased by 11.5 per cent over the same period last year and basic earnings per share (EPS) of $0.25 increased by 4.2 per cent
Free cash flow of $203 million increased by $42 million or 26 per cent over the same period a year ago
Total TELUS technology solutions subscriber base of 16.6 million is up 5.9 % over the last twelve months
Portfolio 3
Portfolio 1 for the week ended November 5, 2021: UP
Once again Portfolio 3 was lifted by the tech stocks Shopify, Microsoft and Cloudflare. I expected robust growth from Shopify and Cloudflare as they are both relatively young companies in their strong growth phases and both are riding the tailwinds of e-commerce and cybersecurity, respectively. Microsoft is an older, more stable company by comparison, so I am surprised to see it growing almost as fast as the two cloud-based companies.
Activity
No activity to report.
Dividends
Dividends Received this week for the following companies:
Companies followed by DRIP (Dividend Re-Investment Plan) indicate additional shares were purchased with the dividend. Any cash leftover was added to the cash balance.
Selected highlights from their third quarter 2021 review presentation on November 3, 2021
During the quarter, generated a record $436 million in total loan originations, up 52% compared to the $287 million produced in the third quarter of 2020
Net income in the third quarter was $63.5 million, compared to $33.1 million in the same period of 2020
Diluted earnings per share of $3.66, compared to $2.09 in the third quarter of 2020
Return on equity during the quarter was 32.7%, compared to 34.7% in the third quarter of 2020
Third quarter 2021 total revenue was $27.5 million, a 5.4% increase year-over-year
Flag ship product illumin third quarter 2021 revenue was up over 42% sequentially to $7.4 million, or 27% of total revenues in the quarter
Net Income was $3.4 million for the three months ended September 30, 2021; a 265% increase compared to net income of $0.9 million for the same period in 2020
Revenue of $131.9 million for Q3 2021, up 116% from Q3 2020
Net loss of $24.3 million in Q3 2021, for a loss per share of $0.18, compared to net loss of $10.5 million, for a loss per share of $0.10 in Q3 of 2020
This past week wrapped up a good October for all the portfolios and the 4 leading North American markets. This week saw a number of companies present Quarterly Reports, indicating how they performed during the July through September period, as well as provide insight on how their plans going forward. Without further ado, lets see what happened in the markets and the impact on the portfolios…
Market News
It was a mixed bag for the Toronto Stock Exchange (TSX) this past week. The week started off strong but on Wednesday the TSX posted it first lower close since Oct. 4, snapping a 14-day winning streak, rebounded the next day and finished off the week on a down note, for .8% loss for the week. However, for October the TSX rose 4.8%. Higher oil prices boosted energy stocks while financial stocks acted as a drag on the TSX.
South of the border, all three American Indexes had a positive week, the fourth straight positive week for each of them. Mid week, after the S&P 500 and Dow reached fresh peaks earlier in the week, on anticipation of earnings reports from mega-cap stocks Tesla, Apple and Amazon, the Nasdaq Composite reached a record high. However, after disappointing earnings from Amazon (predicting lower holiday sales due to labour shortages) and Apple (the impact of supply chain disruptions), both stocks declined. A number of companies set new highs the past week, including Tesla and Microsoft, with Microsoft surpassing Apple as the most valuable US company.
For the month of October, the technology heavy Nasdaq Composite led the way with 6.40% gain for the month of October, followed by the S&P 500 (5.70%), the TSX (4.40%) and the Dow Jones Industrial Average (4.35%).
For the Year to Date, the S&P 500 continues to lead the way, up 22.61%.
Portfolio News
Another week of gains for all three portfolios. As shown on the chart below, the technology heavy Nasdaq index had the best weekly performance, followed by Portfolios 2 & 3. Both hold Microsoft with Portfolio 2 getting a boost from MongoDB and Portfolio 3 getting a boost from Cloudflare. The TSX Index is more heavily weighted with Financial sector companies (banks) than the US indexes, and the Canadian banks did not have a strong week.
Weekly Portfolio & Index performance for the week ended Oct. 29, 2021
* Note: a cash withdrawal was made from Portfolio 1. The Oct. 25 opening balance was lowered by the corresponding amount to reflect the portfolio’s organic weekly performance.
Companies on the Radar
Rumour has it the Rivian IPO will be around November 25. The latest company to come onto my radar is Digital Ocean (NASD:DOCN), a cloud computing platform providing on demand computing services. Their financial metrics look good (but why would they make them look bad?) and based on the glassdoor reviews it looks to have good leadership and a good corporate culture. Everything looks good other than they appear to compete directly with the big 3 in cloud computing: Amazon, Microsoft and Google. I need to take a closer look to see how they are competing against the big 3 and what makes them a better alternative.
As with previous weeks, I’m considering adding shares to the following companies, in no particular order:
Portfolio 1 for the week ended October 29, 2021: UP
This past week was not as busy on the buying front with one addition to the portfolio and more shares to an existing company. Most of my time was taken up reading up on seven Quarterly Reports. Otherwise, a number of companies set record highs this week, including well known companies like Tesla (electric cars), Nvidia (semiconductors), Home Depot (home improvement retailer), and less well-known companies such as Cloudflare (cybersecurity), Celsius Holdings (energy drinks), IIPR (medicinal marijuana real estate), and DataDog (network and systems monitoring). I always like to see companies hit new highs, even better when they constantly keep hitting new highs. 😊
Bought Innovative Industrial Properties (NYSE:IIPR) Founded in December, 2016, IIPR was the first publicly traded company on the New York Stock Exchange to provide real estate capital to the medical-use cannabis industry. The company focuses on purchasing specialized industrial real estate assets for the regulated medical-use cannabis industry. It has an experienced management team; a strong balance sheet; consistent growth of net income, share price and dividends; and is part of an industry expected to grow to over $45.9 billion by 2025.
IIPR has done very well since it was first purchased and is one of the top performers across all of the portfolios. Purchasing a few more shares of IIPR was a no brainer for me, I just wish I’d bought those shares before it started its latest run up in early October.
Dividends
Dividends Received this week for the following companies:
Companies followed by DRIP (Dividend Re-Investment Plan) indicate additional shares were purchased with the dividend. Any cash leftover was added to the cash balance.
GAAP net income of $3.6B or $1.65 per share and non-GAAP net income of $3.5B or $1.62 per share
Net revenues of $6.6B, an increase of 29%.
Fiscal Full-Year Results:
GAAP net income of $12.3B or $5.63 per share and non-GAAP net income of $12.9B or $5.91 per share
Net revenues of $24.1B, an increase of 10%
Other Highlights:
Indexed to 2019, fiscal fourth quarter payments volume, cross-border volume and processed transactions all increased from fiscal third quarter levels
Returned $3.7B and $11.5B of capital to shareholders for fiscal fourth quarter and full-year, respectively, in the form of share repurchases and dividends
The board of directors increased Visa’s quarterly cash dividend 17% to $0.375 per share
Achieved EBIT-Adjusted of $2.9B as we continue to develop solutions to mitigate the impacts of the semiconductor shortage
Expect to be approaching the high end of the $11.5-13.5B EBIT-Adjusted guidance – delivering results significantly higher than the $10-11B original EBIT-Adjusted guidance shared in February
GM Financial continues to deliver strong results
Results highlight the strength of GM’s full-size pickup and full-size SUV franchises, which GM plans to leverage as they roll out their EV portfolio
Consolidated revenue increased 2.1% year-over-year to $1.38 billion.
Net income increased 44% to $252 million
Fiscal 2021 consolidated results include adjusted EBITDA1 growth of 6% and free cash flow of $961 million
Fiscal 2022 priorities include supporting the closure of the transaction with Rogers and planning for the benefits that the combined entity will provide to Canadians
Portfolio 2
Portfolio 2 for the week ended October 29, 2021: UP
Another solid week for this portfolio, led by Microsoft and MongoDB, both achieving record highs.
Activity
No significant activity to report this week.
Dividends
Dividends Received this week for the following companies:
Companies followed by DRIP (Dividend Re-Investment Plan) indicate additional shares were purchased with the dividend. Any cash leftover was added to the cash balance.
Selected highlights from their third quarter 2021 review presentation on October 29, 2021
Q3 ADJUSTED EARNINGS PER SHARE C$0.64
Q3 EARNINGS PER SHARE C$0.63
2022-2026 CAPITAL PLAN OF $20 BILLION ANNOUNCED, REPRESENTING 6% RATE BASE GROWTH
EXECUTION OF 2021 $3.8 BILLION CAPITAL PLAN ON TRACK WITH $2.6 BILLION INVESTED THROUGH SEPTEMBER
Portfolio 3
Portfolio 3 for the week ended October 29, 2021: UP
After Shopify’s strong third quarter earnings report, the share price rose by up to $135 before closing the day around $118. Not only was it great to see this much of a run in one day, but the move was twice as much as the original purchase price of the Shopify shares. It’s always great when a stock runs up in one day more than the price paid. 😊 It was also great to see Microsoft and Cloudflare reach new highs.
Activity
No activity to report
Dividends
Dividends Received this week for the following companies:
Companies followed by DRIP (Dividend Re-Investment Plan) indicate additional shares were purchased with the dividend. Any cash leftover was added to the cash balance.
Another positive week for the markets and all the Portfolios. Each of the portfolios can report new additions, while Portfolio 1 had a busy week increasing ownership in existing companies in the portfolio. Yes, I know the ownership is extremely small, but I can say I do own a bigger piece of them. 😊 Lots of activity this week so lets get at it…..
Market News
The Toronto Stock Exchange’s Composite Index (TSX) edged higher for the 13th straight day to end the week at a record high. The Energy and Financial sectors led the rise, while the Technology sector pulled back a little from recent gains.
In the US, all three indexes put up a third straight week of gains with the S&P 500 leading the way, followed by the Dow Jones Industrial Average (DJIA) with Nasdaq (NASD) bringing up the rear. The DJIA was propelled by strong earning in the Financials sector, while both S&P 500 and Nasdaq indexes were held back by the Technology and Communications sectors.
Here are the growth number for the four indexes since January 1, 2021:
Portfolio News
Continuing with the rising tide lifts all boats theme from last week, the continued rise in the markets lifted all three portfolios with Portfolio 2 leading the way. This week only Portfolio 2 beat the four major North American indexes. Cash in Portfolio 1 was once again deployed to buy additional shares in the better performing companies in the portfolio. The new shares have much greater growth potential than cash sitting on the sidelines. 😊 Portfolio 2 had another good week, led by MongoDB and Guardant Health. Finally, Portfolio 3’s increase was powered by a strong week from Cloudflare, goeasy and Brookfield Asset Management but that wasn’t enough to keep it from coming in last place.
Weekly Portfolio & Index performance for the week ended Oct. 22, 2021
Companies on the Radar
Rivian remains on the radar while waiting for it to go public. The rumoured IPO date is November 25 but I haven’t seen anything definitive. While Rivian has almost $1 Billion in debt, it does have a state of the art manufacturing plant, backing from Amazon and Ford, and supposedly over 145,000 pre orders (but who knows how many will turn into actual sales) .
Otherwise, it has been a busy week with 3 companies coming onto the radar and two of them making into two of the portfolios. I bought iAG Financial (TSX:IAG) for Portfolio 2 early in the week and International Petroleum Corporation (TSX:IPCO) for Portfolio 1 late Friday. The reasoning for each purchase is in the respective Portfolio Activity sections. The third company remaining on the radar is Crew Energy (TSX:CR).
I did not expect to look at another Oil & Natural Gas company, let alone actual invest in one, but while the world transitions to alternative fuel sources there has been a growing demand for oil with practically all oil companies benefitting. I might be a bit late to the party, but I hope to capitalize on the growing demand for oil and natural gas, especially as we enter the colder winter season.
When Crew Energy was brought to my attention, it sounded interesting so I decided to look a little deeper. As with most oil and gas companies, their price had been in decline for a few years but has continued to rise since March 2020. With unreliable renewable power supplies causing problems in Europe and low storage levels globally, the demand for natural gas is increasing. The company has experienced management with 12% insider ownership, so the leadership has skin in the game. While the world transitions to renewable energy supplies, there is still a need for oil and gas.
As with last week, I’m looking to add shares in the following companies, in no particular order:
Portfolio 1 for the week ended October 22, 2021: UP
It was busy week for the portfolio with one new company entering and adding to six companies already in the portfolio.
Activity
BoughtSEA Limited (NYSE:SE) This is the second purchase of SEA Limited. It’s a founder led, leading global consumer internet company with three core businesses: digital entertainment (Garena), an e-commerce platform (Shopee), and digital financial services (SeaMoney). These three businesses continue to grow while at the same time they provide tremendous optionality. SEA Limited has a dominant position throughout South East Asia (where the SEA comes from) and is expanding into Latin America & Europe.
BoughtCloudflare (NYSE:NET) This is the second purchase of Cloudflare in less than a year. The company continues to be a founder led as it rides the growing cybersecurity market. Its strong revenue growth has led to strong share price growth. As the world goes more and more digital there will be a growing need for cybersecurity and Cloudflare has quickly become one of the leaders in this field with it’s focus on “delivering secure, programmable network solutions that our customers rely on.”
BoughtTrisura (TSX:TSU) In just over a year the share price for Trisura more than doubled and then had a four for 1 split. Not bad for an insurance company, albeit a specialty insurance company. The Canadian company continues has long term growth plans to continue expanding into the US as well as globally. As Trisura is not a Technology sector company but has strong growth, it made sense to increase the investment in it to balance the additional investment in the high growth Technology sector companies.
BoughtHome Depot (NYSE:HD) Home Depot was purchased earlier this year, as a counterbalance to the purchase of Cloudflare and to diversify the tech heavy portfolio. While it’s share price has not increased at the same rate as Cloudflare or some of the other technology companies, Home Depot has continued to grow revenue and net income and the share price tends to follow earnings. As with Trisura, I like to use Home Depot to add balance and diversification to this portfolio. And a decent dividend doesn’t hurt.
Another factor in Home Depot’s favour, every time I have a home project or need a part for the home, Home Depot is the first, and usually last, place I go to get what I need. Judging from what I see in Home Depot I’m not the only one who thinks of Home Depot when something is needed for the home or a DIY project. Home Depot continues to benefit from sustained growth in home improvement, be it DIY or professional renovations.
BoughtTrade Desk (NASD:TTD) Trade Desk is a leader in digital advertising, a relatively new and fast growing industry. The company continues to perform, posting increased revenue, net income and earnings per share. I like owning leaders in any industry but in a new and growing industry there is lots of room for Trade Desk to continue to grow and increase market share. My initial purchase of The Trade Desk was back in May and thanks to their strong performance the share price has gone up considerably since then.
BoughtCrowdstrike (NASD:CRWD) Crowdstrike is another leader in their industry – cybersecurity. As with Cloudflare, cybersecurity is an expanding industry and of growing importance as the world goes digital, so lots of runway ahead. Utilizing Artificial Intelligence on its cloud-based platform, Crowdstrike has a rapidly expanding customer base, including a majority of the Fortune 100 companies and 14 of the top 20 banks. As well, it has strong customer retention, rapidly growing annual recurring revenue, and customers are increasing their IT spend on Crowdstrike module subscriptions.
BoughtInternational Petroleum Corporation (TSX:IPCO) When Crew Energy was brought to my attention I immediately thought of IPCO which I’d heard of thanks to Motley Fool. This Canadian company is a spin-off of Sweden based Lundin Petroleum, with many of IPCO’s senior management coming over from Lundin. As with Crew Energy, with the rise in oil prices, the company has started to perform with revenue more than doubling in the first 6 moths of fiscal 2021 compared to 2020; and the company is net income positive again after being net income negative in 2020.
The same reasoning behind Crew Energy applies to IPCO, as the world transitions to renewable energy sources, there is still strong demand for oil. The reason I like IPCO compared to other oil companies is that its being managed for free cash flow and the judicious use of the cash (as pointed out by Motley Fool Canada).
Dividends
Dividends Received this week for the following companies:
Companies followed by DRIP (Dividend Re-Investment Plan) indicate additional shares were purchased with the dividend. Any cash leftover was added to the cash balance.
Selected highlights from their Q3 2021 update on October 20, 2021
Cash:
Operating cash flow less capex (free cash flow) of $1.3B in Q3
Net debt and finance lease repayments of $1.5B in Q3
In total, $164M decrease in our cash and cash equivalents in Q3 to $16.1B
Profitability:
$2.0B GAAP operating income; 14.6% operating margin in Q3
$1.6B GAAP net income; $2.1B non-GAAP net income (ex-SBC1) in Q3
Operations:
Record vehicle production and deliveries in Q3
Started roll out of FSD City Streets Beta to a wider population in October
Portfolio 2
Portfolio 2 for the week ended October 22, 2021: UP
Activity
Of the three portfolios, Portfolio 2 is probably the least invested in Technology companies, but it seems to outperform the other two. Hmmm. Didn’t expect that. In any event, I ventured into the Financial sector for the latest addition to this Portfolio.
BoughtiA Financial (TSX:IAG) I saw this Canadian company mentioned in a September 27 Globe and Mail newsletter (I’m not a subscriber so I couldn’t see the article but the company sounded interesting). It turns outs iA Financial Group is a multi-faceted financial services organization providing individual and group insurance; individual wealth management; group savings and retirement services; auto and home insurance; and insurance operations in the US. On the financial side they have a strong Balance Sheet, showing no long-term debt with plenty of cash and equivalents; despite a blip in 2020 (didn’t most companies have a blip in 2020?) revenues continue to steadily rise; and they are cash flow positive. iA Financial has highly regarded, experienced leadership, and a very positive workplace culture (per Glassdoor).
Dividends
Dividends Received this week for the following companies:
Companies followed by DRIP (Dividend Re-Investment Plan) indicate additional shares were purchased with the dividend. Any cash leftover was added to the cash balance.
Portfolio 3 for the week ended October 22, 2021: UP
Activity
This week I decided to move a TD mutual fund from the TD Bank TFSA to the TD Direct investing TFSA, so all investments will be in one account. The mutual fund, TDB661 – TD US Index Fund, holds mainly large cap US stocks. The value of the mutual fund when it entered the portfolio was added to the starting total for the week in order to display the organic growth of the portfolio, otherwise the growth for the portfolio would have been misleading.
Dividends
Dividends Received this week for the following companies:
Companies followed by DRIP (Dividend Re-Investment Plan) indicate additional shares were purchased with the dividend. Any cash leftover was added to the cash balance.
As I was in a buying position, the week started off going in the right direction – down. Figuring I had let the prices of a few companies come down to the price I wanted to pay, I decided to sit out one more day. Ooops, bad move. Not only did the markets head up, but the companies I planned to buy went up sharply. Once again, I plan, the markets laugh. Sigh!
Market News
Led by higher oil prices and the move into a seasonally strong period for the market, the Toronto Stock Exchange (TSX) hit a record high of 20,928.10 thanks to a strong surge of 2.5% this past week. Financials and Industrials also gained this past week, but it was largely the energy sector, which touched its highest point since May 2019, that propelled the TSX.
Earnings from the big US banks led the American Indexes higher, providing a strong start for the markets in the fourth quarter. The Dow Jones Industrial Average (DJIA) had its biggest weekly jump since late June, while the S&P 500 had its best week since late July.
In the chart below, you can see that September was not a good month for any of the indexes but they’ve all reversed course in October. The surprise for me is the TSX has taken the lead from the S&P 500 and is leading the charge back up.
Here are the growth number for the four indexes since January 1, 2021:
TSX: 20.05%
S&P 500: 19.04%
DJIA: 15.32%
Nasdaq: 15.59%
Portfolio News
In the vein of a rising tide lifts all boats, while it was a good week for the markets, it was also a good week for all three portfolios. All portfolios outperformed the US indexes and two beat the TSX. An impressive performance by Shopify was the likely driver of Portfolio 3 to the top performer of the week. In second place was Portfolio 2, buoyed by the only energy company in any of the portfolios, TC Energy Corporation (TSX:TRP). Finally, the rise in the markets that turned out to be a double-edged sword for Portfolio 1. While Portfolio 1 rose with the markets, that same rise prevented me from acquiring additional shares in some of the best performing companies in Portfolio 1.
Weekly Portfolio & Index performance for the week ended Oct. 15, 2021
Companies on the Radar
Last week there were two companies on my radar. Copperleaf Technologies (TSX:CPLF) has taken a spot in Portfolio 1. Rivian is still on the radar because it has not gone public yet. While there is some information about the company on the website, the only financial information is from their Rivian’s S-1 Prospectus on the Securities and Exchange Commission website.
As with last week, I am looking to add shares in the companies listed below. I think these companies will be able to grow their respective top and bottom-line numbers over the next five years and since I purchased them, they have shown a strong percentage gain in share price, and compound annual growth rate. In no particular order:
Portfolio 1 for the week ended October 15, 2021: UP
While I was glad to see the markets move higher, I wish they had waited another day before they started their climbs, so I could have bought shares in some of the companies on my radar. On Monday, October 11, SEA Limited dropped to US$ 316 and by the end of the week it closed at US$ 354. Crowdstrike was another company that jumped $30 during the week. The share prices never pulled back and my limit orders always were a bit too low. However, I was able to add shares to two existing companies and add 1 new company to the portfolio.
Activity This Week
Bought:Nuvei (TSX:NVEI) I made my first purchase of Nuvei in June 2020. Since then, it has grown revenue, and net income. Plus, it is part of a growing electronic payment transaction industry.
Bought:Copperleaf Technologies (TSX:CPLF) I started a position with Copperleaf. The company uses Artificial Intelligence and big data (2 hot areas) to help companies improve their capital and operational decision making. In addition, it has strong, experienced leadership and, based on the Glassdoor ratings, appears to have a decent corporate culture. I want to see growing revenues and net income before investing more into the company.
I’ve had good success investing early in Canadian technology companies in the past (Lightspeed Commerce, Nuvei and Docebo) and buying additional shares once the company proves it deserves more of my money. Hopefully, Copperleaf will continue this streak.
Bought:Celsius Holdings (NASD:CELH) Celsius surprised me with the 2nd highest percentage increase in share price and the highest compound annual growth rate of all the companies in Portfolio 1. That this is a consumer defensive sector company rather than a technology company really caught my attention. Most of the other companies I am adding to are in the technology sector so investing more in Celsius was almost automatic. Strong revenue and net income growth the last few years would indicate they are executing their growth strategy and consumers are buying into their energy drink products they market as “… a lifestyle brand which offers unique, proven benefits, to accelerate metabolism and burn body fat.”
Dividends
Dividends Received this week for the following companies:
Companies followed by DRIP (Dividend Re-Investment Plan) indicate additional shares were purchased with the dividend. Any cash leftover was added to the cash balance.
Portfolio 2 for the week ended October 15, 2021: UP
Activity This Week
No activity for the past week.
Dividends
Dividends Received
Companies followed by DRIP (Dividend Re-Investment Plan) indicate additional shares were purchased with the dividend. Any cash leftover was added to the cash balance.
Portfolio 3 for the week ended October 15, 2021: UP
Activity
No significant activity to report this week.
Dividends
Dividends Received this week for the following companies:
Companies followed by DRIP (Dividend Re-Investment Plan) indicate additional shares were purchased with the dividend. Any cash leftover was added to the cash balance.
After a very rough start to the week with all 4 indexes down significantly on Monday, the markets recovered throughout the week as investors bought the dip. The potential of reduced economic stimulus and fears of rising energy prices that could boost inflation caused the volatility in the markets throughout the week.
On the TSX index, while tech stocks led the index to its lowest level in two and a half months on Monday. Energy and bank stocks led the Index back into positive territory to end the week in the black.
In the US, all 3 markets started the week off with a sharp drop on Monday but rebounded to end the week in positive territory, despite a slight dip Friday afternoon. The markets were led upward by Microsoft, Amazon, and the other big tech companies during the week, but a disappointing jobs growth report caused the slight dip on Friday.
Portfolios
When I checked the portfolios Monday afternoon the portfolios had fallen by as much as 10%. Not a great way to start the week. However, as all 3 portfolios are tech heavy (arguably too heavy), as the tech companies rebounded so did the portfolios. While 2 of the portfolios lost ground for the week, it was good to see Portfolio 3, thanks to gains by Shopify, Microsoft and Cloudflare, up for the week, even beating the Nasdaq.
Weekly Portfolio & Index performance for the week ended Oct. 8 2021
Companies on the Radar
Two new companies I investigated this week were Copperleaf Technologies (TSX:CPLF) and Rivian Automotive. Copperleaf is a developer of decision analytics software to help companies manage their assets and make better investment decision. I’m impressed by their claimed 100% client retention rate, the land and expand strategy to grow annual recurring revenue, continued revenue growth, and that they have large clients throughout the globe. The company appears to have a strong, experienced management team that has created a strong corporate culture (a company employees enjoy working for). And Copperleaf is riding growing importance of ESG (Environmental, Social, and Governance) where companies need to improve the capital and operational decision making.
Copperleaf went public on October 6 at $15.00 per share. The first trade was made at $17.25, quickly moved above $20, and currently sits in the $24 range.
Rivian is a builder of electronic vehicles, specifically a pickup, an SUV and a delivery van. Both the pickup (R1T) and the SUV (R1S) are targeted at consumers looking for a vehicle that functions well in the city and even better off road. Amazon will be their first customer for the delivery vans with an initial order of 100,000 vans to service the ‘last mile’ of Amazon’s delivery process. Rivian also plans to build out their own charging network.
Rivian is founder led with a vision to “… shift our planet’s energy and transportation systems entirely away from fossil fuel.” The company is riding the huge trend towards electric vehicles with a fast-growing market. The founder and other senior executives, along with Amazon and Ford, among others, all have at least a 5% stake in the company so they have skin in the game. The company also seems to have a strong culture (per Glassdoor). What isn’t so great is when I looked at the numbers – zero revenues and almost a billion in losses. However, Amazon’s order for 100,000 delivery vans, plus almost 50,000 pre-orders (requires a US$ 1,000 deposit) for the R1T and R1S so sales aren’t a concern for me. They will also be able to generate money from selling regulatory pollution credits to other automobile makers. Selling credits has proved beneficial to Tesla so it should help Rivian.
Rivian shares will be available on NASDAQ with the ticker RIVN but neither an initial price nor when the company will go public has been announced. I expect a high level of interest in Rivian and the shares to jump accordingly.
During the week I looked at the companies in Portfolio 1 for the purpose of adding to the winners and the following companies caught my attention. The criteria I was looking at included the objective metrics percentage gain in share price, and compound annual growth rate, both since purchased. On the subjective side I wanted companies that would be doing well at least 5 years into the future. I also wanted some non tech companies and a mix of young, high growth companies and mature growth companies to keep the portfolio relatively diversified. In no particular order:
Portfolio 1 for the week ended October 8, 2021: DOWN
Activity
Bought: Boston Omaha (NYSE:BOMN) Boston Omaha first came on my radar in early 2019 when it was recommended by Motley Fool. I liked that it was run by the 2 founders whose interests are aligned with shareholders. It is a holding company which includes outdoor advertising, real estate, and broadband services, among other assets. I made an initial investment in May, 2020 and the share price has since doubled. I feel the company will continue to perform well for at least 5 more years.
Dividends
Dividends Received this week for the following companies:
Companies followed by DRIP (Dividend Re-Investment Plan) indicate additional shares were purchased with the dividend. Any cash leftover was added to the cash balance.
Portfolio 2 for the week ended October 8, 2021: DOWN
Activity
No significant activity to report this week.
Dividends
Dividends Received this week for the following companies:
Companies followed by DRIP (Dividend Re-Investment Plan) indicate additional shares were purchased with the dividend. Any cash leftover was added to the cash balance.
Portfolio 3 for the week ended October 8, 2021: UP
Activity
No activity to report
Dividends
Dividends Received this week for the following companies:
Companies followed by DRIP (Dividend Re-Investment Plan) indicate additional shares were purchased with the dividend. Any cash leftover was added to the cash balance.
