January 18, 2011

New stock additions to my TFSA (Tax Free Savings Account)

Last year I was able to beat the TSX and DOW with my portfolio. The total return was about 25%. Not bad. I treated the portfolio very conservatively last year by purchasing a lot of solid dividend companies like Shaw Communications (SJR.B) and Utilities company Emera (EMA). I expect these companies to be held year over year and indefinitely as they can be easily DRIP'ed.

Now that another year has begun, I have another $5000 to play with. At the moment I am focusing on deep value net-net type of companies. With the Canadian dollar currently trading higher than the United States dollar, it makes purchasing stocks on the Nasdaq and NYSE that much more cheaper for me.

As there are no restrictions on what stocks can be placed inside a TFSA, I have added a few companies in the portfolio.

Without further ado, these are the stocks that I've added since the new year:

VVTV (ValueVision Media)
GRVY (Gravity Co Ltd)
CCME (China Media Express Holdings)
SOLR (GT Solar International)

In the coming weeks I will write the value argument for each of these stocks.

January 17, 2011

Reviewing a previous pick: Danier Leather (TSX:DL)

Here's an interesting business. Last year in May the company offered shareholders the option to tender their shares for $6.25. The stock has since gone on a tear in finishing up around $13-14 a share. The good news is that the company has been actively purchasing shares through a normal course issuer bid. The current normal course issuer bid will expire in May but I suspect the company will probably issue another one in the current year.

If this happens, this will be a great catalyst for the stock, and ultimately for shareholders.

As of Q1, the company has $9.3 million in cash. The current market cap of the business is $65.9 million.

Some of the risks of this company are that the industry is highly cyclical. For example most of the revenue the company makes are in the winter months. Between the April and September months, the cojavascript:void(0)mpany usually operates at a loss.

With a P/E of 12.59 it is slightly below the industry ratio of 18.9.

I like the fact that the company is actively repurchasing and canceling shares with their extra cash. Admittedly I would like to see them return some fo the cash to shareholders in the form of a special dividend. However at least they are making smart use of the cash by repurchasing shares.

If you look at the last 2 normal course issuer bids, the purchases have been very beneficial.

In the last year the stock has appreciated over 100%. In the year prior to that, their average purchase price for the issuer bid was $4.25. Seeing as the stock is currently over $14, I would say that was a very wise move.

Management appears to be very shareholder friendly.

Disclosure: Still: Long Danier Leather.

August 17, 2010

Update on SINA Corporation

On August 2nd, I sold SINA for a decent return. Since then it has been on a wild ride rising to over $45.00 and then with the recent fears of a double dip recession, it has taken a beating. I'm going to patiently wait this one out and have put in a stink bid under $40.00 should it dip. I still view this as a good play long term, but I sold out earlier this month to lock in some gains.

Patience is the key word here.

 
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