Sunday, March 31, 2013

Joined the Top PF Blog ranks

One of my goals for 2013 is to grow my blog.  I've already joined The DIV-Net and the Yakezie Challenge and recently just joined the Top PF Blogs list from Money Crashers.  The Top PF Blogs list is an aggregate ranking of several different metrics.  The Alexa rank is a factor, but so are Twitter, Facebook, Feedburner, Google PageRank and several others.  I'm excited to see how I stack up against some of the other great blogs and start making some moves up the ranks.  Passive Income Pursuit is starting off with a rank of 548.

Saturday, March 30, 2013

Weekly Roundup - March 30, 2013

Where has the first 3 months of this year gone?  Seems like just yesterday I was having to get used to writing 2013 instead of 2012 and now one quarter of the year is almost done.  This past week was pretty good.  Work went really smooth although I wouldn't have minded a shakeup in the markets.  My wife was off for Thursday and Friday and so she came down to visit me.  It was great getting to spend time with her and just reinforced my drive for reaching financial independence.

Thanks to everyone that mentioned Passive Income Pursuit this past week!

Aggressively Pursuing a Dream, the Roundup #6 by Write Your Own Reality

Wealth Building Bricks - Session #8 by Brick by Brick Investing

March Links: Where is Spring? by Dividend Growth Stock Investing

Thursday, March 28, 2013

Genuine Parts Company Dividend Stock Analysis

I got my second stock analysis report for March in with a few days to spare.  I'll have to get ahead of the game in April, because there's really no excuse for not getting these out to my readers.  I've been trying to find some undervalued companies that pay their dividends on a different schedule from the March, June, September, December schedule to try and get a little bit of monthly diversification on my payouts.  Today we'll look at Genuine Parts Company (GPC).  They are a dividend champion with 57 consecutive years of increasing dividends.  Genuine Parts closed trading on Wednesday, March 27th at $77.36.

Company Background (sourced from Yahoo! Finance):

Genuine Parts Company distributes automotive replacement parts, industrial replacement parts, office products, and electrical/electronic materials in the United States, Puerto Rico, the Dominican Republic, Mexico, and Canada. The company distributes automotive replacement parts for imported vehicles, trucks, SUVs, buses, motorcycles, recreational vehicles, farm vehicles, small engines, farm equipment, and heavy duty equipment; and accessory items used in the automotive aftermarket, such as repair shops, service stations, fleet operators, automobile and truck dealers, leasing companies, bus and truck lines, mass merchandisers, farms, industrial concerns, and individuals through 64 NAPA automotive parts distribution centers and 1,100 NAPA AUTO PARTS stores. It also distributes industrial replacement parts and related supplies, such as bearings, mechanical and electrical power transmission, industrial automation, hose, hydraulic and pneumatic components, industrial supplies, and material handling products primarily for food and beverage, forest products, primary metal, pulp and paper, mining, automotive, oil and gas, petrochemical, and pharmaceutical industries through 509 branches, 14 distribution centers, and 50 service centers. In addition, the company distributes computer supplies, imaging products, office furniture, office machines, general office products, school supplies, cleaning and break room supplies, and healthcare products to approximately 4,000 business product resellers through 41 distribution centers. Further, it distributes wire and cable, insulating and conductive materials, assembly tools, test equipment, and custom fabricated parts to original equipment manufacturers, motor repair shops, specialty wire and cable users, and various industrial assembly markets.

Tuesday, March 26, 2013

Recent Transactions

I have two more option trades to report from yesterday.  I recently bought to close the $39 call option that I had sold on HAL that was expiring in April for a nice little profit.  Since this freed up 100 more shares to sell a covered call on I did just that.  I had purchased 45 shares of AFL back in February and would like to increase my stake in AFL some more but at some better prices than are currently available in the market, so I sold a put option to effectively set a limit order and get paid while I wait.

Monday, March 25, 2013

Stock Valuation Method - Graham Number

This is the first of my series on different valuation methods for analyzing stocks.  If you have a commonly used metric named after yourself you must be doing something right.  And it doesn't hurt that you also taught Warren Buffet, who happens to be one of the greatest investors of all time.  Those two reasons alone should be enough to consider the Graham Number a useful tool, but what exactly is it.

Saturday, March 23, 2013

Weekly Roundup - March 23, 2013

It was a pretty busy week for me, although camping was great.  Got a little too sunburned but nothing I can't put up with.  Of course now I'm sloughing off dry skin like crazy so it's kind of gross.  Tuesday I had to head back to work which I wasn't ready for but knew it was coming.  On the plus side, I found out that we got 2 days of bonus for the well we finished last week and that will give me an extra $800 before taxes.  Nothing wrong with extra money.  Now on to the links.

Friday, March 22, 2013

Recent Buy and a Put Option

I've been busy with the portfolio this week so it's time to announce 2 new moves.  First I purchased 50 shares of Lorillard (LO) and then I also sold a put option on Intel (INTC).  I think both moves will help out the portfolio through added dividends and/or premium income.

Thursday, March 21, 2013

Recent Transaction

I'm reporting a trade from yesterday where I bought to close the $39 call option that I had open on HAL.  I'm way overweight HAL since they are my employer and I participate in the ESPP program and I need to start selling off some shares.  For now though, I figured it was pretty good to go on and close out the call option and I will sell another one shortly, most likely within the next week or so.

Wednesday, March 20, 2013

Recent Transaction

This morning I bought to close the put option I had sold on Coca-Cola (KO) back in late January.  Coca-Cola has had a pretty good run up along with the market since I originally sold the put option leading to the price of the put to decline.  I bought back the option for $0.25 on a per share basis which after commissions cost me a total of $32.98.  I decided to close out the put because there's still a little under 2 months left until expiration and this will free up the $3,750 that was securing the put.

Tuesday, March 19, 2013

A Long Term Plan to Continue Giving Back

Once I reach early financial independence, I have a plan to spend more time giving back, mostly in the form of time.  However, one idea that I have to give back will be through money with a scholarship.  A scholarship is a great way to help motivated students that wish to pursue college to avoid the pitfalls of student loans.  Plus it doesn't hurt that I get to name it whatever I want and you can rest assured it'll be named after me and my wife.  There's nothing wrong with a little self-promotion especially if it's while giving back.

Saturday, March 16, 2013

Weekly Roundup - March 16,2013

After several issues with the rig and parts breaking down, they finally got our tools out of the hole so I could finish up and get on the road.  I'll be gone camping with my wife and some friends this weekend and the weather is supposed to be perfect.  Hope everyone has a great weekend!

Thanks to everyone that mentioned Passive Income Pursuit this past week.

Financial Carnival for Young Adults hosted by Brick by Brick Inveseting

Aggressively Pursuing a Dream, the Roundup #4 by Write Your Own Reality

Weekend Reading Links - March 10, 2013 on DIV-Net

Yakezie Carnival hosted by My University Money

Carnival of Retirement hosted by Freeat33

Carnival of Money Pros hosted by The Happy Homeowner

Thursday, March 14, 2013

Illinois Tool Works Dividend Stock Analysis

I'm trying to get ahead of the game on my stock analyses, so here's the first one for March.  I'll be looking at the industrial giant Illinois Tool Works (ITW).   They are a dividend champion with 49 consecutive years of increasing dividends.  This is pretty rare territory.  Illinois Tool Works closed trading on Monday, March 11th at $61.26.

Company Background (sourced from Yahoo! Finance):

Illinois Tool Works Inc. manufactures and sells a range of industrial products and equipment worldwide. Its Transportation segment offers plastic and metal components, fasteners, and assemblies; fluids and polymers; fillers and putties; polyester coatings, and patch and repair products; and truck remanufacturing, and related parts and services. The company’s Power Systems & Electronics segment provides arc welding equipment; metal arc welding consumables and related accessories; metal solder materials; equipment and services for microelectronics assembly; electronic components and component packaging; static and contamination control equipment; airport ground support equipment; pressure sensitive adhesives and components; and metal jacketing and other insulation products. Its Industrial Packaging segment offers steel and plastic strapping and related tools and equipment; plastic stretch film and related equipment; and paper and plastic products that protect goods in transit. The company’s Food Equipment segment provides warewashing, cooking, refrigeration, and food processing equipment; and kitchen exhaust, ventilation, and pollution control systems; and food equipment maintenance and repair services. Its Construction Products segment offers anchors, fasteners, and related tools; metal plate truss components, and related equipment and software; and packaged hardware and other products for retail. The company’s Polymers & Fluids segment provides adhesives; chemical fluids; epoxy and resin-based coating products; and hand wipes and cleaners. The company also offers equipment and related software for testing and measuring materials, structures, gases, and fluids; plastic reclosable packaging and consumables; foil and film products; product coding and marking equipment; and conveyor systems.

Wednesday, March 13, 2013

Recent Transaction

I have another option trade to report from yesterday.  I've been wanting to pick up some more shares of Wells Fargo and was about to before it's recent climb up off from around the $35 level.  Wells Fargo, like the rest of the financial sector, had been under a lot of pressure from the financial crisis but has since returned to being a leader of the industry.  The are probably the most conservative of the too big to fail banks and if it's good enough for Warren Buffet who am I to go against him.

Tuesday, March 12, 2013

Recent Transaction

Yesterday I sold a put option on Lorillard (LO).  Lorrilard's share price has been under pressure recently due to the talks of a potential ban on menthol cigarettes.  I don't feel that the menthol ban will ever go past just talks and would like to own another cash cow cigarette company.  Lorillard would be a great addition as they are a dividend challenger with a 3 year dividend growth rate over 17%.

Monday, March 11, 2013

What is Margin?

Using margin is a topic that I understood the very basics of but not enough to be able to try and use.  I hope this primer will help you out because I know it aided in my understanding.  My main goal for using margin would be to sell more put options, i.e. naked puts, since I wouldn't have to only sell cash secured puts.  A naked put is simply a put option where the cash doesn't have to be in the account to ensure that you can pay for the shares should the option be exercised.  By using margin I wouldn't be required to hold the cash in the account and could sell more puts which I feel is a winning strategy since some 75% of options expire out of the money.  Although that's a very debatable topic for some other post.

Sunday, March 10, 2013

Colgate-Palmolive Dividend Stock Analysis

I still owe a stock analysis from February, so today we'll look at Colgate-Palmolive (CL).  They are a dividend champion announcing their 50th consecutive year of dividend increases last week.  Colgate-Palmolive closed trading on Friday, March 8th at $115.74.

Company Background:

Colgate-Palmolive Company, together with its subsidiaries, manufactures and markets consumer products worldwide. The company operates in two segments: Oral, Personal and Home Care; and Pet Nutrition. It offers oral care products, including toothpaste, toothbrushes, and mouth rinses, as well as dental floss and pharmaceutical products for dentists and other oral health professionals; personal care products comprising liquid hand soaps, shower gels, bar soaps, deodorants, antiperspirants, shampoos, and conditioners; and home care products, such as laundry and dishwashing detergents, dishwashing liquids, household cleaners, oil soaps, bleaches, and fabric conditioners. The company provides its oral, personal, and home care products primarily under the Colgate Total, Colgate Sensitive Pro-Relief, Colgate Max Fresh, Colgate Optic White, Colgate Luminous White, Colgate 360°, Colgate Plax, Palmolive, Protex, Softsoap, Sanex, Irish Spring, Speed Stick, Lady Speed Stick, Caprice, Ajax, Axion, Fabuloso, Murphy’s, Suavitel, Soupline, Sorriso, Kolynos, elmex, Tom’s of Maine, and Mennen brand names to wholesale and retail distributors. It also offers pet nutrition products for dogs and cats. The company markets its pet foods through pet supply retailers and veterinarians for everyday nutritional needs under the Hill’s Science Diet brand name; and a range of therapeutic products through veterinarians and pet supply retailers to manage disease conditions in dogs and cats under the Hill’s Prescription Diet brand name.

Saturday, March 9, 2013

Weekly Roundup - March 9, 2013

It's a quick update for the roundup this week.  Here's some posts that really made me think or inspired me from this past week.

Thanks to everyone that mentioned Passive Income Pursuit during the past week.

Yakezie Carnival hosted by Debt Black Hole

February Links: Snowed in Edition by Dividend Growth Stock Investing

Mid Week Money: PF Blog Round Up by Financially Integrated

Weekly Links March 3, 2013 by Dividend Growth Stocks

Carnival of Financial Planning by Brick by Brick Investing

Friday, March 8, 2013

Margin of Safety with Financial Independence

I know I'm a little early on this since I have a few more years until I reach financial independence; however, it doesn't hurt to at least have the ideas floating around beforehand.  There's a few school's of thought on early retirement.  Some people prefer to have all their expenses covered from investment or other passive income sources while others prefer to have a good chunk of their expenses covered and have the rest covered by part-time work whether at the same job but scaled back or a new one altogether.

Wednesday, March 6, 2013

Net Worth Update - February 2013

I knew February would end up being a pretty good month with high than normal income and the profit sharing from my employer hitting my 401k.  Considering the markets didn't have a repeat 5-6% gain, I got pretty close to topping January's personal record.  I had about $1,200 in combined 401k contributions and just under $900 in ESPP withholdings.  The biggest contributors for the monthly gain were the profit sharing of $4,500 and February net savings over $7,100.

Monday, March 4, 2013

Income Update - February 2013

February was a great month. I had a higher than normal income and put the difference to straight to savings. I did a pretty good job with controlling expenses for the month. Restaurants and groceries both overshot their budget, but by a combined $14 so it's nothing to worry too much about. My minimum and total expenses jumped this month thanks to my new cell phone from December waiting for a full billing cycle. I ended up getting charged for 1.5 months so it's much higher than normal. Instead of the $200+ from February it'll be closer to $90 which is still higher than I'd like but I can live with that. My minimum expenses for the month came in at $1,500.33 which is disappointing but would have been around $1,400 with a normal cell phone bill. TTM minimum expenses are averaging $1,453.94. My average for the year is $1,402.26 which is close to my goal of averaging less than $1,400 for the year. Total expenses for February ended at $1,603.48 and brought the TTM average down to $1,606.29. Dividend and interest income was decent for the month totaling $67.43, so my potential retirement income covered 4.49% of my minimum expenses. The 30 year treasury yield ended February at 3.10% which brings my FI number up to $307.71, over 2.5 times February 2012's number. This would cover 20.51% of my minimum February expenses.

Sunday, March 3, 2013

Mini-Options, a Game Changer?

I really like selling both puts as de facto limit orders and calls.  For some more information on my option strategy or general information check here and here.  Currently one call or put option covers 100 shares.  This means if I want to sell a $500 put option on a company like Apple (AAPL) I would need $500 * 100 shares = $50,000 to be able to sell a cash secured put.  Considering that's over half of my portfolio I don't think I'll be doing that anytime soon.  This has been the biggest burden with options trading, the cash outlay if you want to avoid potential margin costs is very high for some of the high priced (nominal not valuation) stocks.

Saturday, March 2, 2013

Weekly Roundup - March 2, 2013

Another week has flown by and now it's time for another roundup.  At least as of Friday's close the markets had shrugged off the sequester cuts.  For now all the worry was much ado about nothing,but we'll see if a patch is made over the weekend and how the markets react to the outcome next week.  I didn't think the sequester cuts would be that bad, although in the long run they're not going to make a dent in the massive amount of debt the federal government has.  Now how the markets would react there was no telling.      Here's some blog posts that caught my eye during the week.

Challenging Budget Exercise for a High School Class - iHeartBudgets had a guest post from Evolving Personal Finance and she had recently watched an episode of Dawson's Creek that inspired a great budgeting project for high school students.  I'm not sure if we should follow the choice of programming, but the budgeting exercise is top notch.  If only our education system would throw this into the curriculum to really prepare students for the real world.

Friday, March 1, 2013

Dividend Update - February 2013

March 1st has rolled around so it's time for another installment of my Dividend Update.  This is my favorite of my monthly updates since my ultimate goal is to reach early FI and live off my dividend income.  February wasn't the best of months, but it was still much better than February 2012 with a 71.5% increase.  It was still a light month since the majority of my holdings pay out on the March, June, September, December schedule, but any month with dividends is welcomed.  Four of my holdings in my FI portfolio rewarded my investment in them by sharing some profits one in my Roth IRA.  February was a quiet month for purchases with only a position in Aflac and Vodafone joining the portfolio.   The markets didn't see any major pullbacks and ended up essentially flat for the month.  Between the new purchases and several announced dividend increases, my forward 12-month dividends in my FI Portfolio now sit at $2,056.94 and in my Roth IRA they're at $208.91.  The FI portfolio forward dividends are 58.8% of the way towards my goal of $3,500 by the end of 2013.