Monday, December 31, 2012
I also updated my portfolio page to Google spreadsheets instead of manually updated tables. This will help make that page run a little smoother and give more up to date information for everyone following along. Check out the new page here.
Sunday, December 30, 2012
Saturday, December 29, 2012
Friday, December 28, 2012
Tuesday, December 25, 2012
Lockheed Martin Corporation, a security and aerospace company, engages in the research, design, development, manufacture, integration, and sustainment of advanced technology systems and products in the areas of defense, space, intelligence, homeland security, information technology, and cyber security in the United States and internationally. It also provides management, engineering, technical, scientific, logistic, and information services. The company operates in four segments: Aeronautics, Electronic Systems, Information Systems & Global Solutions (IS&GS), and Space Systems. The Aeronautics segment offers military aircraft, including combat and air mobility aircraft, unmanned air vehicles, and related technologies. Its products and programs comprise F-35 Lightning II joint strike fighter; F-16 Fighting Falcon multi-role fighter; F-22 Raptor air dominance and multi-mission stealth fighter; C-130J Hercules tactical airlifter; and C-5M Super Galaxy strategic airlifter. The Electronic Systems segment provides surface ship and submarine combat systems; sea-based missile defense systems; ship systems integration; littoral combat ships; nuclear instrumentation and control systems for naval submarines, aircraft carriers, and surface warships; air and defense missile systems; air-to-ground precision strike weapons systems; tactical missiles; munitions; fire control and navigation systems for rotary and fixed-wing aircraft; manned and unmanned ground vehicles; mission operations support, readiness, engineering support, and integration services; simulation and training services; and energy programs. The IS&GS segment offers management services, information technology solutions, and advanced technology solutions. The Space Systems segment provides satellites, strategic and defensive missile systems, and space transportation systems; and space shuttle replacement services.
Analysts expect Lockheed Martin to grow earnings 4.94% per year for the next five years and I've assumed they can continue to grow at 3.50% per year thereafter, right around the long term inflation rate. Running these numbers through a two stage DCF analysis with a 10% discount rate yields a fair value price of $126.28. This means that at $92.77 the shares are undervalued by 26.5%.
The Clorox Company manufactures and markets consumer and professional products worldwide. The companys Cleaning segment offers laundry additives, including bleach products under the Clorox brand, and Clorox 2 stain fighter and color booster; home-care products primarily under the Clorox, Formula 409, Liquid-Plumr, Pine-Sol, S.O.S, and Tilex brands; naturally derived home care products under the Green Works brand; and cleaning and disinfecting products under the Clorox, Dispatch, Aplicare, HealthLink, and Clorox Healthcare brands. Its Household segment offers plastic bags, wraps, and containers under the Glad brand; cat litter products under the Fresh Step, Scoop Away, and Ever Clean brands; and charcoal products under the Kingsford and Match Light brands. The companys Lifestyle segment provides dressings and sauces primarily under the Hidden Valley, K C Masterpiece, and Soy Vay brands; water-filtration systems and filters under the Brita brand; and natural personal care products under the Burts Bees and güd brands. The Clorox Company also markets its products primarily under the Javex, Glad, PinoLuz, Ayudin, Limpido, Clorinda, Poett, Mistolin, Lestoil, Bon Bril, Nevex, Agua Jane, and Chux brands. The company sells its products primarily through mass merchandisers, warehouse clubs, grocery stores, other retail outlets, distributors, and medical supply providers, as well as a direct sales force, combination of direct sales teams, and network of brokers.
Analysts expect Clorox to grow earnings 8.04% per year for the next five years and I've assumed they can continue to grow at 3.50% per year thereafter, right around the long term inflation rate. Running these numbers through a two stage DCF analysis with a 10% discount rate yields a fair value price of $78.83. This means that at $73.63 the shares are undervalued by 6.6%.
Saturday, December 22, 2012
Thursday, December 20, 2012
Saturday, December 15, 2012
What I'll be Buying if the Fiscal Cliff Causes Recession - Dividend Growth Stock Investing posted his watchlist. That's something that I unfortunately don't keep track of as much as I should. He's got a great list of stocks should the market and economy take a nosedive.
If You Must Value the Market - Dividend Mantra posted about 2 metrics for valuing the market as a whole. While he doesn't use really use these, they can come in handy.
Time: It's Everything - Speaking of Dividend Mantra, he had another great post earlier this week. It's all about time and the freedom to do as he pleases. It's a great post and sums up most everyone that I know that's pursuing early FI.
Thursday, December 13, 2012
Wednesday, December 12, 2012
Medtronic, Inc. manufactures and sells device-based medical therapies worldwide. It provides products for the diagnosis, treatment, and management of heart rhythm disorders and heart failure, including implantable cardiac pacemakers, implantable cardioverter defibrillators, cardiac resynchronization therapy devices, arctic front cardiac cryoablation catheters, arctic front cardiac cryoablation catheters, and patient management tools. The company also offers cardio vascular products, such as percutaneous coronary intervention device, which is used for the treatment of patients with coronary artery disease; renal denervation for the treatment of chronic uncontrolled hypertension; endovascular stent grafts to treat abdomen and thoracic regions of the aorta; peripheral vascular intervention that encompasses various procedures to treat patients with peripheral vascular disease; surgical valve replacement and repair products for damaged or diseased heart valves; transcatheter heart valves; a line of blood-handling products used in arrested heart surgeries; positioning and stabilization technologies that assist physicians performing beating heart surgery; and surgical ablation system, which allows cardiac surgeons to create ablation lines during cardiac surgery. In addition, it provides medical devices and implants that are used in the treatment of the spine and musculoskeletal system comprising thoracolumbar, cervical, and biologics products; neurostimulators for chronic pain, implantable drug delivery systems, and deep brain stimulation systems, as well as urology, fecal, and gastroenterology devices; and integrated diabetes management solutions. Further, the company offers products and therapies to treat diseases and conditions of the ear, nose, and throat, as well as certain neurological disorders; and image-guided surgery and intra-operative imaging systems.
Analysts expect Medtronic to grow earnings 5.21% per year for the next five years and I've assumed they can continue to grow at 3.50% per year thereafter, right around the long term inflation rate. Running these numbers through a two stage DCF analysis with a 10% discount rate yields a fair value price of $59.83. This means that at $42.60 the shares are undervalued by 28.8%.
Tuesday, December 11, 2012
Sunday, December 9, 2012
Friday, December 7, 2012
Wednesday, December 5, 2012
Monday, December 3, 2012
Sunday, December 2, 2012
Saturday, December 1, 2012
Friday, November 30, 2012
Thursday, November 29, 2012
Wednesday, November 28, 2012
Target Corporation operates general merchandise stores in the United States. The company offers household essentials, including pharmacy, beauty, personal care, baby care, cleaning, and paper products; hardlines comprising music, movies, books, computer software, sporting goods, and toys, as well as electronics that comprise video game hardware and software; apparel and accessories consisting of apparel for women, men, boys, girls, toddlers, infants, and newborns; and intimate apparel, jewelry, accessories, and shoes. It also provides food and pet supplies, including dry grocery, dairy, frozen food, beverages, candy, snacks, deli, bakery, meat, produce, and pet supplies; and home furnishings and décor, such as furniture, lighting, kitchenware, small appliances, home décor, bed and bath, home improvement, and automotive products, as well as seasonal merchandise, which include patio furniture and holiday décor. The company sells its merchandise products under private-label and exclusive licensed brands. In addition, it provides in-store amenities. As of November 15, 2012, the company operated 1,782 stores in the United States. Further, it offers general merchandise through its Website, Target.com. The company distributes its merchandise through a network of distribution centers, as well as third parties and direct shipping from vendors. Additionally, it offers credit to guests through its branded proprietary credit cards, the Target Visa Credit Card and the Target Credit Card, as well as through its branded proprietary Target Debit Card.
Analysts expect Target to grow earnings 11.77% per year for the next five years and I've assumed they can continue to grow at 3.50% per year thereafter, slightly above the long term inflation rate. Running these numbers through a DCF analysis with a 10% discount rate yields a fair value price of $93.92. This means that at $67.95 the shares are undervalued by 33.0%.
Tuesday, November 27, 2012
Sunday, November 25, 2012
The Coca-Cola Company, a beverage company, engages in the manufacture, marketing, and sale of nonalcoholic beverages worldwide. The company primarily offers sparkling beverages and still beverages. Its sparkling beverages include nonalcoholic ready-to-drink beverages with carbonation, such as carbonated energy drinks, and carbonated waters and flavored waters. The companys still beverages comprise nonalcoholic beverages without carbonation, such as noncarbonated waters, flavored waters and enhanced waters, noncarbonated energy drinks, juices and juice drinks, ready-to-drink teas and coffees, and sports drinks. It also provides flavoring ingredients, sweeteners, powders for purified water products, beverage ingredients, and fountain syrups. The Coca-Cola Company sells its products primarily under the Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade, Minute Maid, Simply, Georgia, and Del Valle brand names. The company offers its beverage products through company-owned or controlled bottling and distribution operators, as well as through independently owned bottling partners, distributors, wholesalers, and retailers.
Analysts expect Coca-Cola to grow earnings 8.20% per year for the next five years and I've assumed they can continue to grow at 3.50% per year thereafter, slightly above the long term inflation rate. Running these numbers through a DCF analysis with a 10% discount rate yields a fair value price of $37.40. This means that at $37.93 the shares are overvalued by 1.4%.
Thursday, November 22, 2012
Wednesday, November 21, 2012
It's good for everyone to take a look at your bills, especially recurring ones to determine whether you're getting full use out of them. In this case it would be just as easy to just stockpile our trash since we don't have full pickups anyways and save by only getting one pickup per week.
Monday, November 19, 2012
Friday, November 16, 2012
Here's what's on my shopping list at current prices as of Thursday's close.
Friday, November 9, 2012
Thursday, November 8, 2012
Wednesday, November 7, 2012
Tuesday, November 6, 2012
Becton, Dickinson and Company, a medical technology company, develops, manufactures, and sells medical devices, instrument systems, and reagents worldwide. The companys BD Medical segment produces medical devices that are used in various healthcare settings. This segments products include needles, syringes, and intravenous catheters for medication delivery; prefilled IV flush syringes; syringes, pen needles, and other drugs to treat diabetes; prefillable drug delivery systems; anesthesia needles and trays; sharps disposal containers; and closed-system transfer devices. Its BD Diagnostics segment provides products for the safe collection and transport of diagnostics specimens, as well as instrument systems and reagents to detect various infectious diseases, healthcare-associated infections, and cancers. This segments products consist of integrated systems for specimen collection; safety-engineered blood collection products and systems; automated blood culturing systems; molecular testing systems; microorganism identification and drug susceptibility systems; liquid-based cytology systems for cervical cancer screening; rapid diagnostic assays; and plated media. The companys BD Biosciences segment produces research and clinical tools that facilitate the study of cells and their components. This segments products comprise fluorescence-activated cell sorters and analyzers; monoclonal antibodies and kits for performing cell analysis; reagent systems for life science research; cell imaging systems; laboratory products for tissue culture and fluid handling; diagnostic assays; and cell culture media supplements for biopharmaceutical manufacturing. It markets its products through independent distribution channels and independent sales representatives to healthcare institutions, life science researchers, clinical laboratories, the pharmaceutical industry, and the general public.
Analysts expect BDX to grow earnings 6.12% per year for the next five years and I've assumed they can continue to grow at 3.50% per year thereafter, slightly above the long term inflation rate. Running these numbers through a DCF analysis with a 10% discount rate yields a fair value price of $92.60. This means that at $76.59 the shares are undervalued by 17.3%.
Monday, November 5, 2012
Sunday, November 4, 2012
Saturday, November 3, 2012
Walgreen Co., together with its subsidiaries, operates a network of drugstores in the United States. It provides consumer goods and services, pharmacy, and health and wellness services through drugstores, as well as through mail, and by telephone and online. The company sells prescription and non-prescription drugs; and general merchandise, including household products, convenience and fresh foods, personal care, beauty care, photofinishing, and candy products, as well as home medical equipment, contact lenses, vitamins and supplements, and other health and wellness solutions. It also provides specialty pharmacy services for managing complex and chronic health conditions; customers infusion therapy services consisting of administration of intravenous medications for cancer treatments, chronic pain, heart failure, and other infections and disorders; and clinical services, such as laboratory monitoring, medication profile review, nutritional assessments, and patient and caregiver education. In addition, the company operates Take Care Clinics to treat patients, give prescriptions, and administer immunizations and other vaccines. As of October 30, 2012, it operated 7,944 drugstores in 50 states, the District of Columbia, and Puerto Rico, as well as approximately 700 worksite health and wellness centers, and in-store convenient care clinics in the United States.
Analysts expect WAG to grow earnings 12.47% per year for the next five years and I've assumed they can continue to grow at 3.50% per year thereafter, slightly above the long term inflation rate. Running these numbers through a DCF analysis with a 11% discount rate yields a fair value price of $64.03. This means that at $34.88 the shares are undervalued by 45.5%.
Friday, November 2, 2012
PepsiCo, Inc. engages in the manufacture and sale of snacks, carbonated and non-carbonated beverages, dairy products, and other foods worldwide. It operates in four divisions: PepsiCo Americas Foods (PAF); PepsiCo Americas Beverages (PAB); PepsiCo Europe; and PepsiCo Asia, Middle East, and Africa (AMEA). The PAF division offers Lays and Ruffles potato chips, Doritos and Tostitos tortilla chips, Cheetos cheese flavored snacks, branded dips, Fritos corn chips, SunChips multigrain snacks, and Santitas tortilla chips in North America; Quaker oatmeal, Aunt Jemima mixes and syrups, Quaker Chewy granola bars, and Quaker grits, Capn Crunch cereal, Life cereal, Rice-A-Roni side dishes, Quaker rice cakes, Pasta Roni, and Near East side dishes in North America; and snack foods under Marias Gamesa, Doritos, Cheetos, Ruffles, Saladitas, Emperador, Tostitos, and Sabritas, as well as Quaker-brand cereals and snacks in Latin America. The PAB division manufactures beverage concentrates, fountain syrups, and finished goods under Pepsi, Gatorade, Mountain Dew, Diet Pepsi, Aquafina, 7UP, Diet Mountain Dew, Tropicana Pure Premium, Sierra Mist, and Mirinda brands; ready-to-drink tea, coffee, and water products; and concentrate and finished goods, as well as brands licensed from Dr Pepper Snapple Group, Inc. The PepsiCo Europe division offers snacks under Lays, Walkers, Doritos, Chudo, Cheetos, and Ruffles brands, as well as Quaker-brand cereals and snacks; and beverage concentrates, fountain syrups, and finished goods under Pepsi, Pepsi Max, 7UP, Diet Pepsi, and Tropicana brands, as well as ready-to-drink tea products in Europe. The AMEA division provides snack food under the Lays, Kurkure, Chipsy, Doritos, Smiths, and Cheetos brands; Quaker-brand cereals and snacks; and beverage concentrates, fountain syrups, and finished goods under the Pepsi, Mirinda, 7UP, Mountain Dew, Aquafina, and Tropicana brands.
Analysts expect PEP to grow earnings 4.25% per year for the next five years and I've assumed they can continue to grow at 3.50% per year thereafter, slightly above the long term inflation rate. Running these numbers through a DCF analysis with a 10% discount rate yields a fair value price of $66.23. This means that at $69.44 the shares are overvalued by 4.8%.
Thursday, November 1, 2012
Wednesday, October 31, 2012
What do you think of the new layout?
Tuesday, October 30, 2012
Monday, October 29, 2012
*Update - US markets will be closed again on Tuesday. This storm isn't physically going to affect me but it's proving to be quite annoying. I hope that everyone that has been/will be affected will be safe.
Friday, October 26, 2012
Tuesday, October 23, 2012
Saturday, October 20, 2012
Blue-Chip Dividend Aristocrats - There is a Lot of Value in this Market: Part 4 - A great article on Seeking Alpha by Chuck Carnevale. This article should be standard reading for anyone interested in DGI. He focuses on valuing some well known dividend growth stocks and whether they are under, fairly or overvalued.
Savings Money is like Losing Weight - Dividend Mantra had a great post discussing how saving isn't a quick process and requires determination and focus to achieve your goals.
Friday, October 19, 2012
Wednesday, October 17, 2012
Monday, October 15, 2012
Saturday, October 13, 2012
How to Go from Middle-Class to Kickass - Mr. Money Mustache had a great post highlighting the budgeting aspect to reach early retirement. His blog is one of the best around.
Recent Sale - Dividend Mantra recently sold his position in Total (TOT). Total no longer fit in his portfolio, check out his post to see why.
Friday, October 12, 2012
Thursday, October 11, 2012
Wednesday, October 10, 2012
Sunday, October 7, 2012
|Goal||Actual through 3rd Quarter||Status|
|70% take-home pay savings rate||75.96% average savings (Jan 74.51%, Feb 73.09%, Mar 75.10%, Apr 71.42%, May 66.93%, Jun 87.23%, Jul 81.49%, Aug 74.05%, Sep 79.83%)||Exceeded Goal|
|Less than $1,600 required expenses||$1,528.77 average (Jan $1,694.02, Feb $1,682.70, Mar $1,590.72, Apr $1,541.32, May $1,549.48, Jun $1,252.68, Jul $1,608.65, Aug $1,417.13, Sep $1,422.25)||Exceeded Goal|
|Reduce Misc. Expenses by 20% (Exp. < $131.62 per mo)||$114.39||Exceeded Goal|
|Reduce Restaurant Expenses by 20% (Exp. < $128.12 per mo)||$148.35||Needs Improvement|
|Reduce Grocery Spending by 10% (Exp. < $214.07 per mo)||$209.52||Exceeded Goal|
Saturday, October 6, 2012
Covered Call Strategy in my Traditional IRA Update - My Journey to Millions highlighted how his covered calls have worked out for him. I know a lot of people aren't comfortable with options but I like them especially put options because it's another way to put in a limit order.
September 2012 Monthly Expenses - FI Fighter recapped the month of September. I really like the rental income and hope to be able to get a rental property myself within the next few years.
Friday, October 5, 2012
Wednesday, October 3, 2012
Monday, October 1, 2012
Saturday, September 29, 2012
The most challenging aspect of dividend investing - Dividend Growth Investor wrote a great article on the psychology of dividend growth investing.
Your Savings Rate Trumps Your Investment Returns - Dividend Mantra's piece on why focusing on what you can control, such as your savings rate, is so important. It is especially important for those that are set on retiring early.
Tuesday, September 25, 2012
This afternoon I purchased 20 shares of Norfolk Southern Corporation (NSC) for $65.14 per share for my Roth IRA. My total cost basis after commission is $1310.75 or $65.54 per share. NSC has increased their dividend twice this year which is a good sign for management's commitment to rewarding shareholders and belief in the underlying business. Railroads are local monopolies and I feel that NSC's business will pick back up. These shares have a 3.05% YOC and will provide an extra $40 per year in dividends before reinvestment or further increases.
Sunday, September 23, 2012
Saturday, September 22, 2012
YOLO - Dividend Mantra had a great post about why he's saving and investing to become financially independent at a young age. It was a great article and something I firmly believe in.
3 Easy Steps to Retire by 40 - Going with the early retirement/financial independence theme, here's a post from Retire by 40 outlining the 3 steps to reach FI. While the 1st step might not be completely realistic for everyone, it's still something to consider, especially when considering career options.
Thursday, September 20, 2012
I hope everyone else is having a great month of dividends!
Wednesday, September 19, 2012
Saturday, September 15, 2012
Trading Vs. Investing Dividend Mantra wrote about the difference between trading and investing and why he's first and foremost an investor.
Procter and Gamble: Still a Champion Blue-Chip? Dividend Monk analyzed the status of Procter & Gamble. He feels it's fairly valued where it's currently trading and wouldn't be buying without a 10% pullback.
Dividend Investors are Getting Paid for Holding Dividend Stocks Dividend Growth Investor had a great post that pretty much sums up the reasons to invest in dividend growth stocks.
Stop the Bleeding! - Internet Service All About Interest wrote about what he's done to lower his bills to find more investment capital.
Philip Morris Increases Dividend Compounding Income highlighted the recent dividend increase by Phillip Morris.(PM).
Dividend Growth Investing; Give Us Your Tired, Poor And Unguided Seeking Alpha is one of my favorite spots on the web to read articles on investing and DGI in particular.
Friday, September 14, 2012
If ADM is trading above $26 on expiration then I will pocket the full $81.01 premium. That would be a return of $81.01 / $2,600 = 3.09%. Even better is that I would have gotten that return in 99 days which is equivalent to a 11.39% annual return.
Thursday, September 13, 2012
The American people haven't been purchasing houses because they either don't have jobs, don't work enough hours or have no idea what the future of their job is. It's not because mortgage rates are too high, they're at all-time lows. What I see as the reason for doing this is to further clean up the banks' balance sheets by taking MBS off their books and hopefully spurring further lending by the banks with a pocket full of cash and low interest rates.
Wednesday, September 12, 2012
I was able to compile all the data and crunch the numbers to compare my total returns vs the SPY ETF that tracks the S&P 500. I gathered data from Yahoo! Finance's Historical Prices for the SPY. The historical prices gives the open, high, low, close & adj. close prices corresponding to each date. The adjusted close price is the price adjusted for all dividends and stock splits. It's an easier way to compare total returns without having to gather data for all dividends and closing prices. Yahoo! Help has a good explanation and example calculations of how they calculate the adjusted close price. Now I know that Yahoo! Finance doesn't always have the best information but it's the best that I can get to work with. All returns are calculated through close on September 9, 2012 to be consistent with my previous post.
Monday, September 10, 2012
To calculate your portfolio return you enter your cash flows like so.
Sunday, September 9, 2012
I reached a small investing milestone of a $40k FI portfolio value. Hoping that continues to increase every month.
Check out My Portfolio here.
Saturday, September 8, 2012
The Next Bubble is in Canada, and It Will Affect Everybody
The Dividend Guy had a great post about the potential debt bubble forming in Canada. It's eerily similar to how the US personal debt/income issues led us into the financial crisis and has only gotten worse there.
Appreciating The Small Steps Of Dividend Growth Investing
Dividend Growth Machine had another great article outlining dividend growth investing and compound income in general. His main point is to focus on the end result and to not get discouraged by the slow beginning.
How to retire with dividend stocks
Speaking of staying focused on the end result, Dividend Growth Investor posted about how to retire with dividend stocks. It's not a get rich quick scheme by any means, but it is one of the most stable ways to generate solid returns.
Money Down the Drain: Water Conservation and Your Wallet
The Simple Dollar wrote about conserving water in your house and how just a few little changes can save you money. And just think of what that money could turn into if you invest it.
Smuckers Looks Fairly Priced
Dividend Monk ran the J.M. Smucker Company through a stock analysis and determined it was fairly valued. Check out the post to see his reasonings.
Dividend Income Update - August 2012
We finally got a dividend income update from Dividend Mantra. I'm glad to see that he's back from his summer hiatus and posting again. His blog was a big inspiration for me to start mine.
Friday, September 7, 2012
Thursday, September 6, 2012
|Strike Price||Option Price||Cost Basis if Exercised||YOC if Exercised||Discount to Fair Value||Total Return if Expires||Annual Return if Expires|
I really like the $27 put option because you get a solid YOC entry point as well as a great option premium if ADM is trading above $27 come December 22. It wouldn't surprise me to see the option expire come December so that could be the best way to go, with it currently trading on par with the strike.
If I had the cash on hand I would sell at least one of these puts today, most likely the $26 put to help lower my cost basis on the shares. The $27 put doesn't give as much help since my cost basis on the 35 shares I bought last month is $25.96. The $26 put would lower my total basis to $25.28 and increase my YOC to 2.77%. Which is a good range to be in. This would also get my position to be in at a 19.27% discount to fair value.
Tuesday, September 4, 2012
Saturday, September 1, 2012
There were 2 new purchases this month with 35 shares each of Walgreens (WAG) and Archer-Daniels Midland (ADM). These will add an extra $38.50 and $24.50 to my annual dividends before dividend increases or reinvestment.
Friday, August 31, 2012
Sunday, August 26, 2012
Friday, August 24, 2012
Wednesday, August 22, 2012
(1) Option expires - I received $40.01 in option premium on $2,600 to cover the put, that's a return of 1.54% over 32 days which is an annual return of 17.55%.
Sunday, August 19, 2012
Archer-Daniels Midland Company procures, transports, stores, processes, and merchandises agricultural commodities and products in the United States and internationally. The companys Oilseeds Processing segment originates, merchandises, crushes, and processes oilseeds, such as soybeans and soft seeds, including cottonseed, sunflower seed, canola, rapeseed, and flaxseed into vegetable oils and protein meals. It offers crude vegetable oils, salad oils, partially refined oils, oilseed protein meals, natural health and nutrition products, specialty food and feed ingredients, cottonseed flour, and cotton cellulose pulp for the food, feed, energy, and other industrial products industries. This segment also operates fertilizer blending facilities. The companys Corn Processing segment converts corn into sweeteners, starches, and bio products. Its products include sweeteners, starch, syrup, glucose, and dextrose. This segment also produces alcohol, amino acids, and other specialty food and animal feed ingredients; corn gluten feed and meal, and distillers grains; vegetable oil and protein meal; and citric and lactic acids, lactates, sorbitol, xanthan gum, and glycols. The companys Agricultural Services segment buys, stores, cleans, transports, and resells agricultural commodities, such as oilseeds, corn, wheat, milo, oats, rice, and barley primarily as food and feed ingredients, and as raw materials for the agricultural processing industry. Its transportation network comprises truck, rail, barge, port, and ocean-going vessel handling and freight services. This segment also processes and distributes formula feeds, and animal health and nutrition products; and procures, processes, and distributes edible beans. In addition, the company offers commodity brokerage services; and cocoa liquor, cocoa butter, cocoa powder, chocolate, as well as writes crop insurance.
Analysts expect ADM to grow earnings 10.00% per year for the next five years and I've assumed they can continue to grow at 3.50% per year thereafter. Running these numbers through a DCF analysis with a 11% discount rate yields a fair value price of $45.16. This means that at $26.17 the shares are undervalued by 42%.
Saturday, August 18, 2012
Open Option Positions:
|Date Sold||Option Type||Underlying||Expiration Date||Price||Number of Contracts||Premium Received Less Comm.|
|2/2/2012||Put||BAC||Jan 17 2014||$1.73||1||$164.32|
|8/17/2012||Call||BAC||Oct 20 2012||$0.50||2||$98.43|
Friday, August 17, 2012
Thursday, August 16, 2012
Wednesday, August 15, 2012
|Put Option||Premium||Return (%)|
|$25 July 20 2012||$45.01||1.80%|
|$25 August 17 2012||$38.01||1.52%|