Thursday, April 20

Today we researched and took a position in Seadrill Partners (SDLP). Closing price today was exactly $3.00, with 12 month projections ranging from $3.50 to $5.00. At the current price dividend yield (which we don’t love in this configuration) is a little over 13% annually. We’d much rather see that re-invested, or at least used in stock buybacks. As it stands this would be a perfect position to hold in a tax advantaged account, even if there was no capital appreciation. Our position is based on the expectation of a $4.00 value some time in the next 12 months for a 30% or better return.

The general market saw very strong gains today, all indices up slightly more than 1% in trading today. Earnings reports came in strong, with only Travelers and Verizon missing their projections. The dollar is down, promoting foreign investment. Treasury yields are continuing to rally, benefiting the financial sector.

Our portfolio saw strong gains today, though we somewhat lagged the market after a slight drop in crude (down to $51.72 from $52). This slowed PEGI and RDSA, though they still gained a small amount during today’s session.

Our decision to wait on Ford has proved somewhat misguided, they were up around 2.28% in trading today. It’s still possible that we might take a position in the near future, but with only 17% possible upside it doesn’t really seem as attractive.

 

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