Friday, November 6, 2015

Recent Buys - Kinder Morgan, Alaris Royalty & Omega Healthcare

I feel like the below post should come with a disclaimer for any first time or casual readers of my blog. It's highly unlikely you'll ever see me make six transactions in a week (or even a month) again. I usually make about 10 trades a quarter. This week was highly abnormal for me.

Since mentioning that November could be quite busy in my watch list post, I made the most of the first week of the month. As indicated in my updated Investment Holdings page, I took the opportunity to go overweight in both Kinder Morgan and Alaris Royalty this week, while completing my position in Omega Healthcare Investors.

After reading various blogger, Barrons, and Seeking Alpha posts of Kinder Morgan, reviewing their Q3 10-Q, and doing my own analysis, I decided to add another 100 shares to my position at $26.  Before doing this transaction, I craved and paid $30 for 3-months of “fair” exchange rates from my broker.  

With the $30 sunk cost incurred, I decided to complete my position in Omega Healthcare Investors today. The threat of a possible US interest rate hike in December is playing havoc on US REITs, so I completed my position in OHI in my RRSP.

Earlier this week, when Alaris Royalty slipped below my strike price of $27, I doubled my position in the company. Quite simply, at a P/E of 15X, with a 6% dividend yield, and a history of dividend increases, I decided to increase my position in my favorite Canadian dividend grower.  There was a great article in the Globe and Mail on Alaris last week, in which their CFO stated “My job is to just keep on increasing that dividend”.  Makes me want to hug the guy!

In the interest of full disclosure, I also completed two short-term trades this week in my RRSP that generated several hundreds of dollars of profits. I again sold my position in Canadian Utilities. After qualifying for the dividend, the stock increased to a point (mid $35) that I’m not that interested in it.  Additionally, I picked up some shares in H&R REIT on Wednesday when they were on sale for $20.60, and sold the next day after they unexpectedly released strong Q3 results.  I continue to maintain my position in H&R in my TFSA.

With six transactions under my belt, I can assure you that the rest of November will be quieter.

Did you buy anything in the US REIT sell-off today? 

2 comments:

  1. How do you feel about Alaris' recent earnings report?

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    1. Thanks for the question Kyle. Obviously I'm biased, and used this morning as another opportunity to add to my position, but I feel like the positive aspects of the Q3 report were completely overlooked. In particular, more than doubling their revolver at a low rate will allow the company to be even faster responding to future investment opportunities. I like that the reported payout was about 80% as well, leaving them a nice cushion if things go south with any partners. Lastly,the great majority of their partners are trending toward the high end of their distribution rate, with only a couple heading toward the low end.

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