Wednesday, January 13, 2016

3 Recent Buys - Royal Bank, National Bank & Suncor

As my recent tweet indicated, I am absolutely LOVING this bear market! I did not even have enough time to post a stock watch list this month, as many of the companies I was interested in saw their share prices drop 5-10% in the first week of 2016. Instead of sitting on the sidelines and trying to pick a bottom, I jumped in with both feet adding shares in three fantastic companies.

After appearing on my October, November, and December stock watch lists, I was finally able to add shares of Royal Bank in my unregistered account for under $70. Buying the second largest bank in Canada at a trailing P/E of about 10X and with a 4.5% dividend yield was a no-brainer for me. The purchase also allowed me to complete my position in Royal Bank in my unregistered account, so that I can now sell the offsetting position in my RRSP (after waiting a month to avoid tax implications). 

I used some of my monthly cash contribution to my portfolio to add to my position in National Bank in my TFSA. With a trailing P/E of less than 9X, a dividend yield of 5.5%, and an 8% dividend growth rate in 2015, I was happy to close out my position in this Quebec-based bank. There are still likely to be two additions to my TFSA holdings in 2016, hopefully in February if this lovely bear market continues.

After publicly acknowledging how much I regretted not owning Suncor for the long-term, I initiated a small position in the company in my RRSP. Despite the continued decline of oil prices, I see Suncor as the best in class integrated oil company in Canada. My assertion is based on the company's ability to generate free cash flow, their aggressive management (i.e. trying to pick-up Canadian Oil Sands at a cheap price), and the ever high price of gasoline ($0.969 per litre today at the station near my house) that helps protect the company's profit margins. 

My Investment Holdings page has been updated to reflect these three recent purchases. As a long-term investor, I sincerely hope that this bear market continues for years, as it allows me to purchase shares in strong companies at lower valuations than I had imagined possible.

Have you made any recent stock purchases or are you waiting for further market declines?

3 comments:

  1. Hey DH! Wow, nice buys. 100% agree with you on all three. Correct me If I'm wrong but RY is still the largest bank in Canada. And then comes TD. JS, mate... just saying! ;-)

    I almost went all guns blazing for Suncor and then held my guns. The whole energy sector sort of scares me a little bit. Having said that... I might just make a move down the year.

    So, all in all, great buys!

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    1. Welcome back from your vacation! J'espere que tu as profite d'un semaine au sud? Est-ce que tu es alle a Cuba??? J'aime vraiment Cuba.

      Although Royal is the biggest Canadian bank by market capitalization, TD has more assets. Guess we're both right? :P

      I'm very happy to have FINALLY bought Suncor, and don't mind at all that it's a tad lower this week. I'm looking to increase my holding as a long-term hedge against gas prices, so I'm hoping it stays lower til March when I figure out how much I can add to my RRSP.

      Tu etais vraiment occupe ajourd'hui sur la bourse! Tu as achete ENB et Suncor?? Deux bonnes companies pour la long-term!

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  2. Oui, je suis allé à Cuba. C'était vraiment bien!

    Et oui, encore une autre journée occupée pour moi à acheter des titres en bourse. J'ai acheté 25 actions de Enbridge à environ 40$ et 30 actions de Suncor à plus ou moins 27$...

    It's for the long term... It's hard to buy in that kind of environment but remember the say : be greedy...

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