Today, an unknown party purchased a call option that gives them the right to purchase 100 shares of TDS for $17.50 per share, on or before February 17, 2023. The call cost them $55 ($0.55 per share). Who sold them this contract and collected the $55?
I did.
…My market order to purchase 100 shares of TDS executed at market open today for the price of $14.54. Subsequent to that I placed a limit order to sell a 1 contract call @ $17.50 with an expiry of February 17, 2023, for a credit of no less than $0.55 per share. Unfortunately, because the stock market has been in freefall for over two weeks, TDS was already trading lower at market open, and my order did not process. The order is good until cancelled (GTC) and should trigger if TDS increases to perhaps $15. So, I am going to let it ride for at least a few days.
I updated the portfolio and summary by sector. Also, check out the portfolio’s performance to date. These exhibits are filling out nicely, particularly the summary by sector. The exhibits will be updated periodically and will have more meaning as the portfolio grows.
There are 45 Dividend Kings. Collectively, they provide exposure to ten of the eleven Global Industry Classification Standard (GICS) sectors. However, later this fall, Computer Services Inc [CSVI] is expected to complete its merger with the Centerbridge and Bridgeport partnerships and go private. With the loss of CSVI, the Kings lose exposure to the Information Technology sector. In anticipation of that change, we acquired Qualcomm Inc [QCOM], a company with a 20-year dividend increase streak with promising growth within the semiconductor industry. The Portfolio for the Ages now has exposure to all but one sector: Communication Services. The Dividend Kings can’t help us, and the Queen is dead.
The Communication Services sector has been destroyed so far this year with a return of -37.5%. However, there is one stock that has done slightly better (-28.75% YTD) with a 48-year dividend streak. This Monday is their lucky day.
That’s right, 17 months early and even before Charles III enjoys his coronation, Telephone and Data Systems Inc [TDS] becomes royalty.
…My market order to purchase 28 shares of LEG executed at market open today for the price of $36.04. I updated the portfolio and summary by sector. Also, check out the portfolio’s performance to date. These exhibits will be updated periodically and will have more meaning as the portfolio grows.
The Consumer Discretionary sector has returned -23.24% this year. That is the third worst behind Information Technology (-26.31%) and Communication Services (-34.18%). I’ve avoided selecting a King from this sector for weeks because discretionary businesses typically do not thrive in recessions. But it’s time to dip our toes in the water. And we want a company that is steady and resilient. I found one.
Come Monday morning, Leggett & Platt Inc [LEG] joins the Portfolio for the Ages.
…My market order to purchase 8 shares of MMM executed at market open today for the price of $124.75. I updated the portfolio and summary by sector. Also, check out the portfolio’s performance to date. These exhibits will be updated periodically and will have more meaning as the portfolio grows.
When I see a juggernaut of a company barely above their pre-pandemic lows, I take notice. When I see a 10% drop in a single day on news that is not timed with an earnings announcement, I take notice. The market loves to overreact – in both directions. Sometimes the overreaction is such that it makes sense to take action.
Formerly known as the Minnesota Mining and Manufacturing Company, 3M Company [MMM] joins the portfolio this Monday.
…My market order to purchase 8 shares of QCOM executed at market open today for the price of $128.84. I updated the portfolio and summary by sector. Also, check out the portfolio’s performance to date. These exhibits will be updated periodically and will have more meaning as the portfolio grows.
QCOM is not a Dividend King. However, it is a Royal Heir, and it has just been elected to the Portfolio for the Ages. This makes it an Elected Monarch. The 25 Royal Heirs were added to the Empire to ensure each of the eleven sectors have at least five stocks to invest in. The Royal Heirs have the longest dividend increase streaks (under 50 years) in their respective sectors.
Before market open on Monday, August 22, 2022, Computer Services Inc [CSVI] announced that it entered into a definitive agreement to be acquired by a couple of private investment firms, Centerbridge Partners, L.P. and Bridgeport Partners. The merger is expected to complete in the fourth quarter of this year and shareholders will receive $58.00 per share of CSVI. CSVI is the only Dividend King representing the Information Technology sector. I won’t lie, CSVI was a serious consideration as to why I thought building out this Portfolio for the Ages consisting of Dividend Kings was possible. In June, the market was significantly down for the year, and there were several Dividend Kings that were underpriced. CSVI was one of them, as evidenced by the acquisition price of $58.00 being 53% higher than the previous closing price of $37.88.
I chose not to launch the portfolio with an immediate acquisition of 10-12 stocks. Instead, I advocated a one stock per week approach because one never knows how the market will behave. Of course, the market reversed and for the first six weeks of the second half of the year, the portfolio snagged Kings as they were rising in price but not before they hit their estimated fair values. CSVI had actually drifted slightly lower. The rest is history. I missed the opportunity. And not just this time, but quite possibly forever. Not only are they priced just shy of their merger-defined fair value of $58.001, when the merger completes, CSVI will cease being publicly traded and a Dividend King will be lost forever.
I’ve spent the following days searching for a suitable replacement from the Information Technology sector.
That search is over. Tuesday morning, Qualcomm Inc [QCOM] joins the portfolio.
…My market order to purchase 22 shares of MO executed at market open today for the price of $45.81. I updated the portfolio and summary by sector. Also, check out the portfolio’s performance to date. These exhibits will be updated periodically and will have more meaning as the portfolio grows.
