UA-300188601-1 The Dividend Girl: Place a sell order for SPB

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Saturday, February 19, 2011

Place a sell order for SPB

This past Friday, I was so busy getting everything organize before leaving, that I did not follow the market. Everything look ok overall, at the exception of SPB. I prepared a sell order for this one. On Monday, the stock market is closed, so the sale order will go through the following say. I am writing this from inside the bus. There's wifi in here. In less than 2 hours, I will be home.

16 comments:

Arunan said...

Hi DG/Sunny, I hope you might have read many articles and book for investment. As a daily reader of you blog, I would like to give a small advise (if you don't mind). When you invest into a stock, shouldn't look for high yield only. Look for their businees, stability, competition, debt situation, risk level, etc,etc. If you look for only the high yield, it may vanish your capital investment. I'm telling you this because you shouldn't loose your hard earning money in one wrong pick. Have a wonderful week with your family.

The Dividend Ninja said...

Sunny, a wise decision to get out of SPB, high debt and lots of production and management issues.

I doubt this company can turn things around, lack of demand in propane, and lack of company direction i.e. drywall aquisition.
Anyway what company can afford a 13% dividend?

Anonymous said...

Take care Sunny. I'm so sorry about your uncle. Stay strong. You are going to make it!
Hope

Sunny said...

Hi Arunan,

I am just trying to do my best. Doing it without any mistakes would be a miracle. Yes, I wanted that huge dividend yield, ALL OF IT lol... I did some reading on SPB. I was aware of the danger of its high dividend. I spoke previously about SPB risk. I was aware, but as said I wanted the cash... but hey, I am going to sell SPB, reinvest the money in the Sprott Physical Silver (PHS.U) to help me to recover from a 200-300$ loss max... PHS.U is a very good investment for that. I am pretty sure that in a couple of weeks, nothing will appear from my loss. Once my SPB sell is completed, I will call TD Waterhouse to see how I can claim a money loss for tax purposes.

Thanks for the kind words!

Hi Dividend Ninja,

when reading about SPB, there was concerned about their high dividend. Some people say they won't invest in SPB because of the too high dividend. All smarter than I am. But... for a while, I made some interesting gain from SPB and I was like wow, I am going to get an increase in value and HUGE dividend... Ya.

Hi Anonymous,

It's all getting better. I am in New Brunswick right now. I arrived Saturday in the early morning. Its all ok. I had been able to get a 2 weeks vacation so I am going to get paid and I can take some time off. My mom want to come to Montreal so she's going to come back with me. I am looking forward to see if I can get a job here in New Brunswick. It keep my mind busy. I also have this Internet connection. So it's all right for now.

hope said...

Sunny,
Do you think Yellow Media is still a good investment? I was thinking about buying some next week, the unit price is pretty good.

Sunny said...

Hi Hope,

Myself, I had been holding Yellow Pages for a very long time. At the time, YLO was at a bargain price.

Right now, I wouldn't invest more in the company. If I wouldn't be holding any YLO stocks, its not a stock I would be interested in. The dividend could be cut, anything can happen. Why did YLO stocks lost in value recently? I don't know, but I won't recommend YLO. Why not investing in DGI.UN or RSI instead? About the same price, but better value.

Anyhow, if you really want to invest in YLO, why not, but don't invest too much in the company. Play safe. Remember my story with SPB: high dividend yield do not necessarily mean a good quality stock. That's something to keep in mind. Learn from my mistakes. Get something out of it for God love.

V said...

Sunny,

The divi with SPB despite the cut is 10% which is not too shabby.

hope said...

Thanks Sunny, I'll look into those stocks.

Sunny said...

Hi V,

You are right, the dividend cut is not that hard to take but what I am concern about is the value of the stock. Will SPB value is going to decrease really badly on the long run? I am a bit scare. Anyhow, I have tomorrow all day long to think of what I am going to do.

Hi Hope,

Nice to hear from you. You might like those stocks.

The Dividend Ninja said...

Hi Sunny,

You've certainly done very well with gains, much better than me :) I know it all sounds like proverbial verbage (from older people) - but really high yield = high risk. Companies don't pay high yield unless they have a problem, and can't raise capital otherwise. So when you invest in high yield you take on the associated risk.

SPB primarily delivers propane, that is related to NG prices. If Natural Gas stays low priced for a longer period of time, SPB cannot generate revenue. I would bail out now even if U take a loss.

Regarding Yellow Media, I feel exactly the same way about it as SPB, all the same fundamentals. Its high yield is unsustainable. While Yellow Media has lowe debt, it is another high risk investment. Their blackberry app is crap for example - they don't have a business model or business plan.

Perhaps you can move some of your assets into lower yielding and more stable companies, but high growth stocks. For example JNJ, MCD, Husky Energy etc. You like McDonalds don't you?

Sunny sorry to take up UR blog space, have a nice week! :)
Cheers and All my Best

V said...

Sunny,

Usually with these equities, there are many funds holding them who are in it for the return. I see SPB in many fund manager portfolios. The one year target at scotiabank is 11.25 and they are typically conservative. Dividend payout ration over the next two years is forecasted at under 100% which bodes well for not having another dividend cut. If your are keeping I would recommend you enroll into the DRIP.

Disclosure - I have SPB for over 2 years now.

Regards,

V

PS Sorry to hear about your uncle.

Sunny said...

Hi Dividend Ninja,

Thanks for the post, there's no too long comments, everything is welcome here! Every good finance tip is more than welcome.

YLO and SPB seem to share a lot of things in common.

I am scare to dead of SPB now. Remember when PGF.UN Pengrowth cut its dividend about 2 times? The event never make the stock decrease in value because its a quality stock.

Here, as soon as SPB has announced its dividend cut, SPB lost in stock price value... Why? Well probably because of factors you mention, debt, natural gas price issue etc etc etc.

Just see how hard it is for EnCana to gain in value right now! Imagine for a lower quality stock like SPB. Well, maybe SPB is not exactly a low quality stock, but SPB is very scary to hold at this time!

As for the money loss, well, I will reinvest the sum earn by the sell of SPB and I am going to reinvest the money in the Sprott Physical Silver (PHS.U). I should be able to gain enough from PHS.U in order to recover from a 200-300$ or 400$ loss.

It's seemed like I love to play with fire a bit too much. Once again, I GOT BURN... But things should go ok. PHS.U is strong enough to make me see some valuable gains.

Other than SPB, all the other companies been going well from what I had been able to monitor.

It's a good thing that I sell FTN. I cannot live with too much risk.

Hi V,

Thanks for the kind word. As for now, I plan to sell SPB. Maybe SPB is more for sophisticate investor. I will spend the night thinking of what I will do next.... To sell or not sell SPB that is the question and gees, right now, I don't have time to spend on such question.

I am trying to get find a job here in New Brunswick. I apply to a couple of things, but now, my mother want to come and spend some time in Montreal. This amuse me in a certain way because its mean I won't be able to spend a 2 weeks on a job search in NB... Life is like that, I guess.

The Dividend Ninja said...

Hi Sunny,
Or you can play the risky stocks, but always place a stop-loss :) That way you are always covered.

Look at me I got cocky and played WN for the special dividend - I lost, I only lost $70 or so but nonetheless I lost money. We all make mistakes LOL :)

You have lots of great stocks, but you can start shifting some of the higher yield and higher risk stocks into more conservative stocks with 3% to 7% yield. I think you are ready for that shift now :)

Sunny said...

Hi Dividend Ninja,

Setting out a stop-loss for all of the holding I have would be a great idea. It's stupid knowing I am not set for that in my account.

Before leaving from New Brunswick, I talked to TD Waterhouse about it, but that was on Friday, I did not have any time to set myself.

A mistake of mine was to get over-excited with super high dividend yield. I am a small investor, borrowing some big bucks to invest. I had been lucky so far, but I should know better. But I already knew about the danger of SPB but decide to invest anyway.. I just have to stick to the basic. It is sooo easy to loose the focus! But hey, money is tooo tempting. It's not really my fault :0)

I still hold YLO. I find it difficult to sell something that I had been involved in for so long!

The Dividend Ninja said...

Hi Sunny,

As you know investing is all one big learning expereince, and of course stock picking isn't easy - so don't be too hard on yourself. I think the whole problem started with income trusts, becuase investors got accustomed to high yield. But I think if you start to slowly shift your portfolio to more stable and safer stocks you will sleep better at night - even if you make a little less :)

I wrote a post on stop loss and limit orders on my blog (take a peek - it explains all of it with TD).

Some investors don't like stop-losses becuase it forces them to sell their winners, and take a small loss on a loser. As long as you keep the stop-price at least 10% away from the market price, then you won't end up selling on small market corrections. That is the one issue with a stop loss.

But remember, you don't have to sell what you like (ie YLO). A stop loss keeps the stock when it is going up, but sells it when it goes down :)

Ciao for now Sunny,drop me an email we can chat further on it..
Ninja

Sunny said...

Thanks Dividend Ninja, very kind of you.

 

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