Dumpster Diving/ Stocks

[HF63]

I been looking at the bottom of the barrel in individual stocks and here are some interesting ones. They are not at the lowest price but close enough.


1. WU/ Western Digital : I used this one to sent money to Mexico
2. WBA/ Walgreens: My prefer pharmacy
3. PFE/ Pfizer: My prefer vaccine maker
4.ABVE/ Ambev: Beer maker


They have an interesting dividend while one hope the price recovers. I am not looking to a lot of shares, probably couple of hundreds only.
I am crazy or!!!

 

[DrRoy]

I buy no individual stocks for any reason. A low price can still go lower including to zero.

 

[sengsational]

Given your couple hundred shares approach, I like what you're doing.

I think with "everybody" doing S&P 500 (the merits of which shall not be discussed in this, the active investing section of the forum), there are fewer people looking for solid companies that are undervalued.

 

[Dash man]

I invest in individual stocks and wouldn’t touch any of those. Dividends play a big part in the companies I choose, but not because of a high dividend. Do they grow their dividend each year? Does the stock price also grow? Are they able to pay dividends out of earnings? What is the payout ratio? What are the growth prospects for the company?
Buying stocks because they’re cheap with a high dividend can be a recipe for disaster.

 

[target2019]

WU Western Union. Revenues dropping, what could go wrong? Hint: DIV cut.

WBA Walgreen Boots Alliance. Look at the growth rates.

PFE Pfizer. I keep looking at that one. Shoulda bought CRSP.

ABEV Ambev S.A. Can buy a lot of shares for $2.55. DIV growth rates look nice. That's gambling money for me. Do I dare!

 

[HF63]

WU Western Union. Revenues dropping, what could go wrong? Hint: DIV cut.

WBA Walgreen Boots Alliance. Look at the growth rates.

PFE Pfizer. I keep looking at that one. Shoulda bought CRSP.

ABEV Ambev S.A. Can buy a lot of shares for $2.55. DIV growth rates look nice. That's gambling money for me. Do I dare!

Pfizer and Ambev seem to be the more interesting peaks.

 

[Dash man]

ABEV has a high payout ratio and likely can’t maintain its dividend growth. Seeking Alpha rates its Dividend Safety as a D-. The balance sheet isn’t real pretty either.
PFE is a profitable company, but the stock price isn’t likely to grow and the dividend has a very low growth rate.

 

[pb4uski]

... I think with "everybody" doing S&P 500 (the merits of which shall not be discussed in this, the active investing section of the forum), there are fewer people looking for solid companies that are undervalued.

I have a hypothesis that the markets rich valuation may be to incoming money from indexing just indiscriminately creating demand and raising prices indiscriminately. It might be that stock picking is a better path at this juncture unless one want to just ride the wave no matter what valuations are.

 

[target2019]

ABEV has a high payout ratio and likely can’t maintain its dividend growth. Seeking Alpha rates its Dividend Safety as a D-. The balance sheet isn’t real pretty either.
PFE is a profitable company, but the stock price isn’t likely to grow and the dividend has a very low growth rate.

Maybe their buyback program (ABEV) will be a big thing?

The number of beer brands they have really is impressive.

 

[Qs Laptop]

I invest in individual stocks and wouldn’t touch any of those. Dividends play a big part in the companies I choose, but not because of a high dividend. Do they grow their dividend each year? Does the stock price also grow? Are they able to pay dividends out of earnings? What is the payout ratio? What are the growth prospects for the company?
Buying stocks because they’re cheap with a high dividend can be a recipe for disaster.

^^ This ^^

A lot of established, old guard companies continue to pay a dividend even though their share price is flat or even declining. This is why you get "professional" financial advisers to tell you to put money in Johnson and Johnson or Cisco or AT&T. Sounds good, right? When you realize all you're getting is 3% to 4% return per year and the stock price is going nowhere, it's a real wake up call.

Look at some of those stocks listed:

WBA, Five years ago stock price was at $63; now it's at $22. It pays a 4.55% dividend.

PFE, Five years ago stock price was at $40; now it's at $28. Stock price got a shot in the arm with the Covid vaccine, but now it's going nowhere. But, hey, pays a 6% dividend.

ABEV, Five years ago price was $4.30, three years ago it was $2.78, now it is $2.60. 6% dividend payer.

WU (Western Union): 5 years ago price was $18.50, three years ago it was $24, now it is $12.70.

It's tempting to think that the stock price is so beaten down and such a value buy right now, it's bound to go up? But what exactly is Walgreen's, Ambev, and Western Union going to come up with for new products that is going to disrupt the industry and regain market share? Answer: Probably nothing.

Pfizer has a better shot but biotech and pharma stocks are usually hard to predict.

Instead of Ambev, consider Celsius Holdings CELH. Instead of Pfizer consider Eli Lilly LLY, or Novo Nordisk NVO. The total return on these alternatives I've listed is much, much, much better than the ones you've listed.

 

[target2019]

Dividend thread, I think. Maybe not?

CSCO is one of my favorite stocks. The positions have been held since 2010-2013. That marked the beginning of their transition to dividend payer. Yeah, timing matters.

I consider their products and services to be vital to internet security. Certainly they are growing slowly. But I'm in for the long haul. I've seen the company zig and zag through a lot. I hold this stock for a number of reasons. I always looked at Cisco internet/utility company. Like a utility it is limited in growth (won't beat the S&P500 for sure). But dividend investors hold it for specific reasons.

Cisco takes the necessary steps when growth takes a step down, or doesn't outrun expectations. Read current news.

If the dividend yield hits 4.00%, then it is worth a deeper dive, IMO. I'm not talking about betting the farm y'all.

 

[Montecfo]

I buy no individual stocks for any reason. A low price can still go lower including to zero.

They go down in an index too you know.

 

[Qs Laptop]

Dividend thread, I think. Maybe not?

CSCO is one of my favorite stocks. The positions have been held since 2010-2013. That marked the beginning of their transition to dividend payer. Yeah, timing matters.

I consider their products and services to be vital to internet security. Certainly they are growing slowly. But I'm in for the long haul. I've seen the company zig and zag through a lot. I hold this stock for a number of reasons. I always looked at Cisco internet/utility company. Like a utility it is limited in growth (won't beat the S&P500 for sure). But dividend investors hold it for specific reasons.

Cisco takes the necessary steps when growth takes a step down, or doesn't outrun expectations. Read current news.

If the dividend yield hits 4.00%, then it is worth a deeper dive, IMO. I'm not talking about betting the farm y'all.

You're looking for steady, reliable dividends. Cisco meets those needs.

I think the OP was looking for value stocks. Stocks whose price is down and may be able to bounce back. I don't think Cisco is one of those stocks that will see much price appreciation.

A growth alternative in the same sector as Cisco might be Palo Alto Networks PALO.

 

[Montecfo]

WU always looks cheap. But competition (think all the pay apps) has made it harder.

I do own PFE among my div oriented stocks. But I also own several I think better but they are growthier. ABBV Abbvie is a good one. LLY and MRK. AMGN in teresting maybe on a dip with a longterm play on weight loss drugs.

If you want to find some value look at Diageo (DEO) with 2.47% gowing yield, low payout ratio and out of favor. it is a better bet than AMBV I think and conservative.

Some of the defense stocks also look cheap on same basis. LMT for example.

Some ideas for further study.

 

[gromit]

WU - The Federal Reserve has two programs now that may undercut some of the need to wire money through a third party.
Fed Global allows banks to send ACH credits to Mexican banks and upon arrival the credit is converted from dollars to pesos. A Mexican worker in the US that wants to send money every payday to relatives in Mexico can have it set up as an automatic paycheck deduction.
Fed Now is just gearing up right now with test banks. It will allow participating US banks and other companies to send money to other participants that arrives instantly. I think the monthly fee to be a participant will initially limit it to large companies and banks.

 

[ownyourfuture]

^^ This ^^

A lot of established, old guard companies continue to pay a dividend even though their share price is flat or even declining. This is why you get "professional" financial advisers to tell you to put money in Johnson and Johnson or Cisco or AT&T. Sounds good, right? When you realize all you're getting is 3% to 4% return per year and the stock price is going nowhere, it's a real wake up call.

Look at some of those stocks listed:

WBA, Five years ago stock price was at $63; now it's at $22. It pays a 4.55% dividend.

PFE, Five years ago stock price was at $40; now it's at $28. Stock price got a shot in the arm with the Covid vaccine, but now it's going nowhere. But, hey, pays a 6% dividend.

ABEV, Five years ago price was $4.30, three years ago it was $2.78, now it is $2.60. 6% dividend payer.

WU (Western Union): 5 years ago price was $18.50, three years ago it was $24, now it is $12.70.

It's tempting to think that the stock price is so beaten down and such a value buy right now, it's bound to go up? But what exactly is Walgreen's, Ambev, and Western Union going to come up with for new products that is going to disrupt the industry and regain market share? Answer: Probably nothing.

Pfizer has a better shot but biotech and pharma stocks are usually hard to predict.

Instead of Ambev, consider Celsius Holdings CELH. Instead of Pfizer consider Eli Lilly LLY, or Novo Nordisk NVO. The total return on these alternatives I've listed is much, much, much better than the ones you've listed.

Agree with all. Sometimes value investing works, sometimes it can be a yield trap. AT&T could be an example. People love to look at the dividend yield, but a 24 year annualized return of 2.45% says after inflation, shareholders actually lost money by chasing yield. The only person to get rich was ex CEO Randall Stephenson who received a parachute of $64,000.00 per month for life after basically driving the company into the ground for 13 years.

I'm incredibly fortunate enough to have purchased a total of 350 shares of Eli Lilly in 2011-2012. Even though it's down close to $30 today, I'm not sure if I'd add at this point. Started a position in Celsius about a month ago.

 

[HF63]

WU - The Federal Reserve has two programs now that may undercut some of the need to wire money through a third party.
Fed Global allows banks to send ACH credits to Mexican banks and upon arrival the credit is converted from dollars to pesos. A Mexican worker in the US that wants to send money every payday to relatives in Mexico can have it set up as an automatic paycheck deduction.
Fed Now is just gearing up right now with test banks. It will allow participating US banks and other companies to send money to other participants that arrives instantly. I think the monthly fee to be a participant will initially limit it to large companies and banks.

I was not aware of this new program. TKS, I am going to look into it.

 

[Nash]

I bought $10,000 Pfizer a week or so ago. The dividend yield around 6.2%.

Seems like a solid, safe, conservative hold for the next 10-15 years.

 

[Al18]

I don’t dumpster dive for stocks or bonds - seems like gambling and I don’t gamble with my investments. If you want a good dividend payer, the Dividend Aristicrats NOBL and Schwab’s SCHD are a good choice.

PFE payout ratio is 61.58% according to https://www.dividend.com/stocks/health-care/biotech-pharma/large-pharma/pfe-pfizer/

I would not buy a dividend payer with greater than 50%, because it doesn’t seem sustainable.

 

[dunkelblau]

Agree with all. Sometimes value investing works, sometimes it can be a yield trap. AT&T could be an example. People love to look at the dividend yield, but a 24 year annualized return of 2.45% says after inflation, shareholders actually lost money by chasing yield. The only person to get rich was ex CEO Randall Stephenson who received a parachute of $64,000.00 per month for life after basically driving the company into the ground for 13 years.

I'm incredibly fortunate enough to have purchased a total of 350 shares of Eli Lilly in 2011-2012. Even though it's down close to $30 today, I'm not sure if I'd add at this point. Started a position in Celsius about a month ago.

Agreed, what you call "value investing" I call mean reversion bets, and in my experience the majority of these fare poorly, but the allure is that those that survive often have stellar returns. In this space with equal sized starting positions I care more about mean than median.

I've bought and sold LLY only once in my life, and my 16Mar2011 purchase was sort of a dumpster dive based on its preceding share price history. Unfortunately 13Jan2023 was a bad time to close out this position.

PFE's last decade of share price history kinda resembles LLY's back in 2011. And the LLY 2011 0.49/sh div/qtr on my 33.5/sh cost basis was ~6% which also rhymes with PFE's div today. Hmm ... thanks for the tip!

Just kidding, I took a 20% haircut on PFE between 27Jan2021 and 04Dec2023, but I am looking to try this bet again soon. I'm not expecting to own LLY again anytime soon.

 

[Dash man]

WBA is being replaced in the DJIA with Amazon.

 

[Qs Laptop]

WBA is being replaced in the DJIA with Amazon.

You beat me to this. I was just going to post this news.

 

[Qs Laptop]

Agreed, what you call "value investing" I call mean reversion bets, and in my experience the majority of these fare poorly, but the allure is that those that survive often have stellar returns. In this space with equal sized starting positions I care more about mean than median.

Goodness, you are investing on the basis that a beaten down stock will eventually achieve price appreciation because given enough time it will revert to it's mean?

I've bought and sold LLY only once in my life, and my 16Mar2011 purchase was sort of a dumpster dive based on its preceding share price history. Unfortunately 13Jan2023 was a bad time to close out this position.

PFE's last decade of share price history kinda resembles LLY's back in 2011. And the LLY 2011 0.49/sh div/qtr on my 33.5/sh cost basis was ~6% which also rhymes with PFE's div today. Hmm ... thanks for the tip!

So you are investing based solely on how a company's chart looks compared to another one, with no regard to the products it markets, the demand for such products, etc. Just, hey, they're in the same industry and eventually their charts are going to correspond?

Just kidding, I took a 20% haircut on PFE between 27Jan2021 and 04Dec2023, but I am looking to try this bet again soon. I'm not expecting to own LLY again anytime soon.

LLY happens to have the most disruptive drug in the world right now, Zepbound, which is the weight loss drug. They also have Mounjaro which treats diabetes. Based on demand, they are building a new $2.5 Billion facility in Germany to keep up with demand for these drugs. What does Pfizer have in their pharma pipeline that is going to remotely approach the demand and sales that Eli Lilly has with these drugs?

 

[Dash man]

My total appreciation not counting dividends for LLY is 1,136.52%. I don’t expect PFE to come close to that over the next 10-12 years.

 

[Qs Laptop]

A growth alternative in the same sector as Cisco might be Palo Alto Networks PALO.

Ooops. Their recent forward guidance was not good.



There is a lot of tech stock dumping ahead of Nvidia's earnings report after the market closes today.