Recent Buys – GE, INTC, BRK-B, Sale – GILD

Some activity today:

Purchased 86 shares of GE at $31.50 for a total of $2,709.00

  • GE is one of the largest and most diversified industrial firms in the world–with products and services ranging from aircraft engines, power generation, water processing, and household appliances. The firm continues to transform its portfolio to reduce its exposure to financial markets and is making smart investments in digital in the form of the Industrial Internet of Things.
  • I think GE has a fair value of $32, making this stock fairly valued at the current time.
  • As Warren Buffett said when making his early investments in IBM: “We should wish for IBM’s stock price to languish.” Similarly, I like very much the turnaround efforts at GE, and have a longer term horizon here, and seek to build a longer term position. I do not believe there is a lot of stock price appreciation that will happen in the short term here (but could certainly be wrong), but my strategy here is different than my growth stock portfolio.
  • Reduced reliance on GE Capital Corp and my bullishness on the IIOT (industrial internet of things) and partnership with MSFT, as well as their performance last quarter has led me to conclude this is a stock I want to hold for 20 years.
  • Though investors may not have been pleased with GE’s quarterly report, GE’s massive backlog is evidence that its businesses remain as durable as any other point in its 120+ year history.
  • GE sports a nice dividend yield near 3% which is safely covered by future cash flows.

Purchased 43 shares of INTC at $35 for a total of $1,505. 

  • Intel designs and manufactures digital technology platforms which are used in PCs, autos, factory systems, and medical devices.
  • Intel has an estimated fair valued of $42, making it somewhat undervalued at the current time
  • Intel is also navigating the difficult PC market well, and strength in data center, the Internet of Things and programmable solutions will pave the way for ongoing company-wide expansion.
  • Trading at less than 15 times current-year non-GAAP earnings estimates, Intel is a rare bargain in today’s overheated equity market and has a nice ~3% dividend yield to boot. The company last upped its dividend payout 8%+ in January of this year, and there should be many more years of dividend increases to come.

Purchased 14 shares of BRKB at $144.27 for a total of $2019.78

This has been a non-dividend company I’ve been wanting to buy for a while.

Sold 25 shares of GILD at $82.08 for a total of $2052.04 for a realized gain of $50.55.

I originally purchased GILD last month when it tanked on Brexit. It since then appreciated about 8% before losing it all and then more after earnings were reported.

I believe GILD was a mistake as I am looking for long term sleep well at night stocks, and don’t feel that this is the case here, but bought it just based on the metrics looking so cheap. I sold towards the tail end of the after earnings report.

I continue to hold about $140,000 in cash, waiting for opportunities as they present themselves, although I am finding it difficult to find any values in today’s market, and cash is paying essentially next to nothing.

Forward income: 

  • GE: At a $0.23 quarterly payout, this will add $79.12 in annual passive income.
  • INTC: At a $0.26 quarterly payout, this will add $36.40 in annual passive income

Booya! Thanks for reading.

 

 

 

4 Comments

  1. German July 28, 2016
    • Greg Gee July 28, 2016
  2. Investment Hunting July 30, 2016
    • Greg Gee July 30, 2016

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