Saturday, January 2, 2016

Saturday: January 2nd 2016

Happy New Year!!

New year, new blog, and off we go...

I am starting off with a modest sum of money for this experiment. It's not in the hundreds of thousands, I wish it was, it's not, but it's not in the hundreds either. Somewhere in between should we say. :)

With the experiment just beginning, there are no stocks to report about.
So here are the stocks I am considering as the first few Potentials dips in the investing pool, I'll call them Potentials.

Name                               Cal-Maine Foods
Industry:                            Food Processing
Symbol:                              CALM
Timeliness:                        1
Safety:                               3
Technical:                          2
Approximate Price:            $50
Dividend Yield:                  7.9%
Industry Rank:                   32
Low Gain Estimate:           0%
High Gain Estimate:           30%

This one is a food company that deals mostly in eggs, good old eggs; boiled, fried, scrambled, over-easy, no matter how you like them, you are most probably buying them from this giant. The most attractive metric about this stock is the Timeliness ranking which in Valueline terms is a as good as it get rating. Another is the whopping 7.9% dividend yield, which means even if the stock declines 7-8% in the year you are still at a break even point. If the stock rises, then you have a bonus. The 3-5 year horizon has this stock rising between 0-30%. Even if the stock stays stable or increases slightly the over 7% annual rate of return is better than many other investment ideas.

Name:                                Kimberly Clark Corp
Industry:                            Household Products
Symbol:                              KMB
Timeliness:                        2
Safety:                               1
Technical:                          3
Approximate Price:            $128
Dividend Yield:                  2.8%
Industry Rank:                   8
Low Gain Estimate:            0%
High Gain Estimate:           10%

This is another giant, this one in stuff you use in the home all the time. It owns many known brands like Cottonelle, Kleenex, and Huggies. Although the Timeliness ranking is not top grade, it's still considered a "Timely" stock at a rating of 2. The 2.8% dividend yield and the small potential stock price gain over 3-5 years are also attractive. The most valuable asset for the company though is the many, many, many recognizable brands it owns and that the products it sells are mostly bad economy proof.

Name:                                Alphabet Inc.
Industry:                            Internet
Symbol:                              GOOG
Timeliness:                        1
Safety:                               2
Technical:                          2
Approximate Price:            $748
Dividend Yield:                  0%
Industry Rank:                   15
Low Gain Estimate:            15%
High Gain Estimate:           55%

OK, this is getting a bit repetitive, another GIANT!! Good ol' Google. What can I say, I won't be able to afford too many of these shares, but a tiny amount of them growing by 15-55% over the next few years will still accomplish a lot. The Timeliness of 1 is also reassuring. Google makes money by the truckload, and is constantly innovating, so I feel comfortable putting a chunk of my investment into a small fraction of this stock. I have done this once before and received handsome earnings for my bravery.

Name:                                Cedar Fair L.P.
Industry:                            Recreation
Symbol:                              FUN
Timeliness:                        2
Safety:                               3
Technical:                          2
Approximate Price:            $54

Dividend Yield:                  6.0%
Industry Rank:                   17
Low Gain Estimate:            25%
High Gain Estimate:           85%

Everyone loves to have FUN, and this company is fun itself. It operates 11 amusement parks mostly in the Midwest (OH, PA, MI, MN) and if that sounds vague, it also runs the Knott's Berry Farm in CA. Timely enough at 2 and with a solid dividend of about 6%, this company has been on a steady stock price rise for 5 solid years, it has also grown its dividend steadily over that time. Seems like a fun ride to me.

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