Wednesday, March 5, 2014

Recent Purchase (part 2): Nike

Nike (Ticker: NKE) is another stock that I have been watching for quite some time. As per my "watch list"; I have been observing Nike’s stock price since March 27, 2013 at which time it was trading at $58.66 per share. I watched the price consistently go up at a steady pace (with its occasional down days). However, I cant really recall any crazy fluctuations (as it was the case with DIS). Despite all that, I still remained a little hesitant with buying the stock mainly because of competition within the industry, controversies, and not having the time to do enough research.

The price passed the $60 mark and then went in to the $70s once again making me a little "upset" that I didn’t get in back in the 50s.

Well, I eventually got around to finishing my homework on NKE and on 01/14/2014 I pulled the trigger and bought myself some shares. Just as it happened with DIS, I purchased on a down day and during the weeks in which the market was quite bearish. The stock hesitated a bit post purchase going down for a bit until it began to stabilize itself once again and proceeded forward. I am up 3.10% (as I type this) since day of purchase. It is not nearly as high as DIS (just yet) but to be able to say that my investment has appreciated nearly over 3% in less than 2 months is something I am very happy about!!!

Who else would give me that rate of return?? Definitely not a savings account and much less putting my money under a mattress. This is the difference between being passive with your money (ie: stacking it all away in savings gaining 0.0001%) V. actually putting your money to work for you!

(REMEMBER: putting money away for an emergency and for your bills [including any kind of debt] should always come first. Any extra money, which you wont need any time soon, is what you should be putting to work in the stock market).

To all my investors out there just starting out—I just want to point out that everyone whom invests has their own "investing personality" meaning that they have their own strategy and their own approach towards stocks or any kind of investment instrument. Some go for the new and exciting IPOs, others love penny stocks, while others (as it is my personal case) concentrate mostly solid/established companies, preferably that pay dividends, and that still show potential for growth. I like to see that a company, regardless of how popular it may be, still works hard towards creating and maintaining sustainable competitive advantage, which I feel is the case with a company like Nike.

Here are some of the main reasons why I feel strongly about this stock:
  1. Leader in its industry- Nike is currently the largest sports/fitness apparel manufacturer in the world!
  2. Pays Dividends- Currently pays 0.96 per share (yield: 1.20%) and has been paying consistent dividends since 1984.
  3. Healthy 2013 returns (specially in Europe and China) and a positive outlook for 2014 (based on analyst reports from Credit Suisse & S&P which I examined)
  4. The company has an international presence ß gotta’ love international!
One of its most recent major competitors is UnderArmor (UA) which has become increasingly popular in fitness apparel and is working hard to establish a brand synonym with quality. That’s another great company which I am also keeping my eye on. However, at the end of the day, NKE is still king and I am proud to call myself a part owner of NIKE!

Tell me, what are you thoughts on Nike? (the company or the stock) How many Nike products do you own?

Saturday, March 1, 2014

Recent Purchases (Part 1): DISNEY

Hello my dear followers!

Finally got a break from my hectic semester to share a couple of my recent purchases which have turned out to be quite successful.

I may have mentioned on the blog previously that I've had an eye on Disney ($DIS) for quite some time. I actually placed the stock on my watch list around March of 2013 where it was around $54 a share and saw it shoot up in to the $70s range a few months later! I don't know why I kept hesitating on the purchase but it may have something to do with the fact that it was being a bit volatile-- Shooting up or down significant percentages from one month to the next. However, at the end of the day, when the stock would finally "stabilize" on a certain price it would move up a little more and then a little more until it would hit a new "record". Needless to say I would kick myself each time for "missing" the opportunity once again.

Some time ago during the end of January when the market was on some sort of downhill spiral; I spoke about the importance of taking advantage of downtimes within the market. In fact, as my virtual investing mentor, Warrant Buffet, explains; we shall be fearful when others are greedy and greedy when others are fearful. I love his methodologies and feel that they do work! There has to be research involved, of course, and we need to know what we are doing and what we are buying. But once we've passed the "homework" hurdle; next step is to catch a great deal when the opportunity presents itself.

So anyways, back to what I was saying; in mid January 2014 (less than 2 months ago) when the market was down; I decided to pull the trigger on DIS and purchased some shares at a price of $73.50. The stock is now at $80.81 (as I type this) and I am very excited at the fact that I "dove in" when I did, putting my fears aside, and my decision has paid off!! (literally). I am now at a near 10% profit in less than two months. All I can think is "why didn't I buy more shares?!" but, you never know with the market and I've had my share of experiences with over-buying so, I rather take it slow and steady for now.

I have to be honest with the fact that as soon as I bought my shares; the price went down slightly and continued to fluctuate a bit until it finally begun to accelerate forward. I don't know what the stock will do but DIS is an amazing company, crème of the crop, with very little competition (if any! is there any business identical to Disney out there? I don't think so). Plus, they have a diversified business owning ESPN and acquiring the Star Wars name, in addition to pursuing other strategic business deals. As the long term investor that I am, really looking forward to seeing what Disney has to offer in the coming years. Not to mention a current 1.10% dividend (.86 a share); and we all know how much I truly appreciate dividend stocks!!!

During my time at the Motley Fool I asked one of the experts (Hi! Jason Moser :) whether he could be the "devils advocate" and tell me if there is anything I should worry about with Disney since I couldn't find anything wrong with it based on my research. He admitted that he also loves the stock and the only "worry" is the fact that their major source of income is the ESPN enterprise (this is something I didn't know!) and considering the competition from companies like Netflix; offering certain services at cheaper prices and expanding on content; this could somehow hurt ESPN profits in the future. I loved the feedback as this is something that never occurred to me. So, I will continue watching any development on that arena. For now, I am a happy part-owner of Disney stock!!

Tell me, what are YOUR thoughts on Disney?