Friday, April 15, 2016

TLH Market Review

It was a busy week here at TLH.  I have not done a lot of buying simply because stock prices had gone up and the good deals were hard to find. The jury is out whether I'm just suffering from an itchy trigger finger or if I made some good choices. Check back in 5 years and we shall have a better idea! I still have my eyes on a few other stocks, but that stingy market just won't give me another good shot. Maybe it's a sign?

However this week I did add to WWAV, RAI, and the all new Universal Corporation(UVV). Who? Yes that's their name alright. Universal Corporation is the top supplier of tobacco leaf and other value added services to the tobacco industry.  They've been around for over 100 years. You can see my write up here.  I was waiting for a pull back in some tobacco names and I felt adding to RAI was offering a nice price under $49.  With steady stocks I'm learning it's best to take the price when you can. I think if you are slightly more patient with a keener eye you can probably get better than my buy price, which as of writing is possible!! WWAV is one I'm torn over. The entire sector is unloved right now. However that's usually a good time to buy. The company is not cheap, but this will be my last add for quite awhile.  HAIN actually looks like a better value right now, and time will tell if I made the wrong choice.

The rest of the portfolio was quiet for the most part. Procter & Gamble announced a 1% dividend increase marking 60 years of increased dividend growth. While 60 years is very impressive, the 1% raise left a lot of investors wondering just how tough things are right now.  The company is under increasing competition from our fellow stock Church & Dwight, Colgate-Palmolive, and Unilever to name a few competitors.I noticed Colgate is actually breaking above a very long consolidation to new highs recently.  There is no doubt these stocks are steady and not very volatile.  I thought about adding to PG, but the lower than average dividend increase is making think twice for right now. However if the stock gets knocked back down to $70 I'd be a buyer.

Friday saw V, MA, PYPL, and GPN get a neutral call from Compass Point(huh?). Yeah I don't know who they are either. Their price targets were either all below, or right at current trading prices for each stock.  We know where I stand on this group.  The toll roads of electronic money will do fine, and one day we will look back at the price they were currently trading at saying "What a bargain that was!"

It was a busy weak for economic reports. Retail sales came in pretty weak declining 0.2% from the prior month. Excluding auto's the number is positive, but barely at 0.18%.  Judging by the chart we are dangerously close to hitting a downtrend into negative territory.

Industrial production also continued to come in weaker. Although some of that is attributed to a stronger dollar. The inverse correlation between the two isn't overly strong, but it's there.  Eventually the dollar hits levels that make it unprofitable for some manufacturers, and hence cut production.   

CPI also came in and the number was very modest.  That coincides with the Fed's reasoning that they want to see some strong inflation before doing anything.  I think the recent number will give them some leeway for not raising rates at the next meeting.  

Interesting enough initial claims for unemployment came in at a 40 year low.  A lot of people would tell you that doesn't mean anything. I'm undecided on it's real importance. There are certainly plenty of folks that never made it through the recession with a better job, or one at all. Yet it's hard to deny the numbers.  

That's all for now. Earnings will really pick up the following weeks.  I'll keep the blog updated with news as it comes in. Also for all the procrastinators out there make sure to get your taxes in by Monday.  The IRS is accepting returns until April 18 this year instead of today as the usual deadline. 

Have a good weekend!

The Long Haul Investor

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