Jared’s Investing Journal

The purpose of this journal is to document my investments. I do occasionally purchase ETFs in small quantities, which I will not include here.

This is NOT investment advice.

May 13, 2019: Buy – MSCI Inc.

  • MSCI is a leading provider of investment decision support tools worldwide. Our line of products and services includes indexes, analytical tools, data, real estate benchmarks and ESG research. (Investor Relations)
  • This is a starter position that I have taken as the market is currently 5% below it’s all time high. I plan to increase this position 1.5x in the near future. Fear has also returned, therefore I will be greedy.
  • Diluted average shares has gone down from 97 million in 2016 to 90 million in 2018.

  • EPS has gone from $2.70 in 2016 to $5.66 in 2018, below is a snapshot from their Q1 just recently announced.

  • And here is their 5-year chart, again similar to Visa below, bottom left to top right, consistent new highs. These are the businesses you want to own.

April 12, 2019: Sell – RioCan REIT

  • This position in my portfolio represented less than 2% and for little to no dividend growth, I have decided to move on.
  • Payout ratio is a little high around 80%.
  • Raising cash as there is now more greed than fear in the market.
  • From a total return perspective, I think there are better opportunities.
  • Continues my theme of selling out of Canada as I continue to counter my home country bias.
  • Chart Analysis: not stable enough, not constantly reaching new all time highs, positive trends but isn’t as “beautiful” as let’s say Visa below – that’s what I’m looking for (simply: bottom left to top right, uninterrupted)

January 31, 2019: Buy – Visa

NYSE: V

  • Visa reported after the close on January 30, the results are below
  • They also initiated a 8.5 billion dollar stock buyback
  • I do prefer to add to businesses when there is more Fear in the market, but this is a fantastic business which trades approximately 9% below it’s all time high. I often sway between being patient – waiting for fear -and knowing that I can’t time the market. What’s important is time IN the market.

January 15, 2019: Buy – Visa

NYSE: V

  • Visa is a global payments technology company that connects consumers, businesses, banks and governments in more than 200 countries and territories, enabling them to use digital currency instead of cash.
  • EPS Growth in %, 2009 to 2019 & 2020 estimates: 29, 33, 29, 24, 23, 19, 16, 8, 23, 33, 15, 14
  • Share count has been reduced from 3 billion to 2.3 billion over the past 10 years.
  • Current P/E: 31, 5-year average P/E: 32.6
  • From CNBC, “More Americans say they don’t carry cash”
  • 5 year stock chart:

December 31, 2018: Buy – Square

NYSE: SQ

-Square has sold off ~45% from it’s all time high earlier in the year

-The fundamentals of the business are accelerating

November 9, 2018: Buy – Kinaxis

TSE: KXS

Link: Investor Relations

Q3 2018

Why the stock fell?

  • Kinaxis lowered their current fiscal year’s guidance to be between $152 and $153 million from $156 million.
  • Margins also took a hit as they continue to invest in the business. Not only do I think investors should welcome these decisions, I think more businesses should do the same.

Conference Call Notes

  • Management stated that some contracts slipped into Q4, again nothing they said would make me nervous about the business or their sales ability. Sometimes things take longer than expected, it happens.
  • They constantly stressed that the investments they are currently making will result in accelerated revenue growth in FY2019, and as investors – I welcome these decision.

Kinaxis has no debt on their balance sheet and cash increased by $2 million this quarter. They have lots of sticky subscription revenue which provides visibility into the future. The stock is traditionally expensive, but that comes with stellar top and bottom line growth. Volatility should be expected into the future, and it will be very exciting to watch Kinaxis grow going forward.

October 29, 2018: Buy – Shopify

Most Recent Earnings Report: Q3 2018

Shopify Investor Relations – More Detail

-Revenue of $270.1 million, up 58%.

-$1.58 billion in cash.

-Gross Merchandise Volume for the third quarter was $10.0 billion.

-No debt.

-I like buying businesses after their stock prices rises from a good report (even though short term results shouldn’t impact an investing thesis). I view the current selloff as temporary and I will look to add in the future if possible.

September 24, 2018: Buy – Dollarama (Half)

Most Recent Earnings Report: Q2 2019

-Sales increased 6.9% to $868.5 million.

-Comparable store sales grew 2.6%, down from 6.1% the previous year.

-Diluted EPS increased 13.2%, from $0.38 to $0.43.

Why the stock sold off

-Same store sales missed estimates of 4.7%.

-Forecasted lower margins (Gross & EBITDA).

-Guidance of same store sales was reduced form 4.0%-5.0% to 2.5%-3.5%.

Dividend

-Dividend growth 5-year average: 16%

Future Events

-$1.71 EPS in 2019 (Analysts)

-$1.89 EPS in 2019 (Analysts)

-Buying back 5% of common shares between June 20, 2018 and June 19, 2019.

-Potential to increase store count 50% to 1800 and purchase a majority stake in Dollar City in February 2020 (FP).

Summary: I have waited on the sidelines of Dollarama as management continued to execute. They remain solid operators and this short-term issue represents an opportunity for long-term investors, knowing volatility will remain (the reason for starting with a half position). I will look to add in the near future.

July 4, 2018: Sell – Sun Life Financial

1. In my TFSA, over the past couple months I have been reducing my exposure to Canada, shifting the funds to the US markets. My strategy for my TFSA is to hold Canadian stocks directly and ETFs primarily for the US exposure. In my RRSP, I’m primarily holding the iShares ETF XAW.

2. Warren Buffett famously said, “Be fearful when others are greedy, and greedy when others are fearful”. From CNN, the index has been pushing to greed and now as an investor, it’s time to be fearful.

3. Sun Life does have a solid dividend and tailwinds of rising interest rates, but here I’m focusing on total return, where the US markets have outperformed by a wide margin since the crisis.

4. This trade does help raise the amount of cash in my portfolio, which I can use for opportunities in the future or when fear builds again.