April was calmer in terms of investment decisions compared to the past few months. With markets zigging and zagging at a much more frequent rate now, opportunities to buy some stocks and ETF’s have presented themselves. At the same time there have been some opportunities to bank some healthy profits. That’s the way markets go. Opportunities don’t set a time to arrive. They show up when they want to. That is why it is always it’s critical to have an investing playbook that reflects your investing ideology so when those moments arrive, you are not just staring at your toes wondering what to do. In April a couple of opportunities came up that I really didn’t have specifically on my Wish List, but they fit into some of my core investing ideology in terms of exposure to sectors I would like to be invested in.
Bought more shares in Nutrien (Ticker: NTR)
The stock went back down below $60 again after popping back to near $66, so I decided to buy more shares at $57 to lower my cost base which is now $65.6 and down from the $68 where the new shares started trading. Since the company officially merged, the stock has not been doing that great. Commodity prices, not including oil have been pretty flat of late, however, the future may be looking bright. In its most recent earnings report, the company signalled that potash demand is starting to pick up which could lead to higher prices. Sure enough the stock is back over $60. So I’m staying the course. I still think Nutrien, which is the product of two solid companies, Potash Corporation and Agrium, is a best of breed agriculture Company and I want my portfolio to have some exposure to the space especially as demand for healthier foods in many parts of the world rise, there will be a greater demand for agricultural products.
New Position: Added some ETF’s to the portfolios
This past month, I made a couple of decisions to add some ETF’s to my portfolio. For regular readers, you’ll know that I’m always looking out for out of favour companies and sectors as I think they serve as nice starting points for some further due diligence that could lead to interesting investment opportunities. Despite the markets roaring along, there have been a few sectors that have been underperforming. These are Pharmaceutical companies and Consumer Staples companies. Here’s a couple of charts.
I would normally do a deep dive in to some stocks, but these days I just don’t have that time to commit to the cause, so I decided that best way to get quick diversified exposure is through buying a basket of stocks through an Exchange Traded Fund (ETF). Analyzing ETF’s is a different process than evaluating individual stocks as you are looking at things from a higher level and not getting into the minutae of each business. In my How to Invest in ETF’s course that I teach, I walk through a framework of comparing ETF’s using some basic criteria. In the mind map videos below, I apply this framework in my evaluation of Pharmaceutical ETF’s and Consumer Staples ETF’s.
Bought shares in Spidr US Pharmaceutical ETF (Ticker: XPH)
One of my core investing themes involves health care. I’ve always wanted to get some exposure to health care stocks. The problem with health care stocks, especially pharmaceutical and drug companies is the regulatory burdens of getting drugs approved and the limited exclusivity of selling the drug once you get approval. Figuring out what drug stocks to buy is almost like buying a lottery ticket. I haven’t had a good go in the past, but I still want to have some exposure to the sector and I think the best way is through an ETF. The drug stocks have been lagging the market lately so I thought this may be a good opportunity to buy in at a lower price point.
Bought shares in Vanguard S&P Consumer Staples ETF (Ticker: VDC)
Despite companies generating strong profits and cash flows, the consumer staples sector has not been getting any love. Part of it is due to rising interest rates which historically have hurt stock prices. If that is the case then I would think this would be a good time to buy in as they are on sale. Here my evaluation that lead me to buy the Vanguard product.