Earning season is coming to an end and my stocks seem to be steady as rocks! Also, my evil master plan is slowly but surely taking place. I’ll take you through what I’m thinking exactly.
If you haven’t noticed, my portfolio is mostly dividend paying stocks. There is, however, a small part of my portfolio allocated specifically to wealth generation, strictly value plays. What I want to do with this is increase my portfolio value and then use this capital to maximize the bottom layer of my dividend pyramid. I still consider myself a young investor (I’m not even 30 after all) and the more I have in my portfolio now, the more it will amplify over time. My current portfolio’s value is nearing the $100k mark. Let’s pretend I manage to increase my portfolio by 30% to $130K over night, and that in 25-30 years, it’s worth 50x more. That small $30K difference now represents a $1.5M difference… Not too bad!
Current Penny Stocks
I’ve recently made a few trades and turned things slightly up side down. In the last post I talked about some penny stocks I have invested in. Here’s how they are doing:
- Imagin (IME): Pretty much trading sideways. Bought at $0.190 and now trading at $0.195. Some up days, some down days. I’ll be very patient with this one.
- Far Resources (FAT): Bought at $0.405 and progressively creeping up for about a month, now trading at $0.50. So up almost 25% in about 1 month.
Keep in my I had sold 239 shares (my entire position) in Boralex Inc (BLX) to cover the FAT purchase. A debt I will repay…
So here’s my plan for the money I will (just watch me!!) generate from FAT specifically.
- Repurchase 239 shares of BLX
- Take the leftovers and divide as such:
- Sienna Senior Living (SIA): 50%
- Dream Global REIT (DRG.UN): 30%
- Saputo (SAP): 20%
The goal here is to take advantage of this new capital to bring some balance to my portfolio and strengthen some of my weaker positions. The average yield (at current prices) of this distribution (excluding the BLX shares, which are constant throughout the scenarios) is 5.37%. So, let’s say FAT turns out to be a 2-bagger, it would give me an extra $294.04 in annual dividends. A 3-bagger and 4-bagger situation would give me $588.08 and $882.12 in extra annual dividends, respectively.
And here’s my plan for the money I will generate from IME (I make it sound like it’s a sure thing don’t I? Let me have my moment, please!):
- Metro Inc (MRU): 30%
- Alimentation Couche-Tard (ATD.B): 40%
- Rogers Sugar Corp (RSI): 30%
The average yield from this distribution (at current prices) is 2.597%. Here’s the extra annual dividend income provided by various scenarios:
- 2-bagger: $55.27
- 3-bagger: $110.53
- 4-bagger: $165.79
- 5-bagger: $221.06
As you can see here, scenarios vary from overly optimistic to ridiculously optimistic. But I have done my DD and I am confident that a 3-bagger situation from both of these stocks is very realistic, both within a 4-5 months timeframe.
The only other VALUE PLAY stock I was holding (up until very recently), was Canopy Growth Corp (WEED). I had bough it initially at $10.41 and decided to sell at $20.20 (making a 94% profit) based on the fact that valuation seemed to be slightly inflated. I don’t doubt for one second that this stock will continue to perform well but I would rather not be greedy and move on to other things for the time being. It’s not impossible that in the upcoming year I revisit this one, depending on price and overall sector health.
I’ve distributed the profits as such:
- Park Lawn Corp (PLC): 50%
- Saputo (SAP): 50%
This will bring me an extra $86.87 in annual dividends. After having sold WEED, the price dropped slightly, it currently trades in the mid $18’s, BOOYA!
There you have it. A quick tour of what’s going on inside my head at the moment. This is all part of a larger plan, to reduce the discrepancy between my FTN position and other stocks and will serve as a good way to create a thick cushion for purely dividend growth plays.
My only 2 current value plays are both penny stocks, IME and FAT.
Notice that I don’t plan on having any money leftover after allocating all of it. This is because of the new year approaching and the coming contribution room increases. New contributions will serve as fuel for more value plays, depending on opportunities at the time.
I’ll keep you guys posted on the progress of said plan!
Money Lover, Dividend Growth Investor, Youtuber, and Blogger!