5-Bullet Sunday

5-Bullet Sunday – #33

It was a busy week again, but with lot’s of good stuff. I very much enjoyed the Champion’s League matches is the quarter final, but unfortunately my favorite club Barcelona got beaten up by Bayer Munich with 2-8 (ouch!).

I also published a post about 5 Undervalued Dividend Stocks ideas. Check it out if you haven’t read it yet.

My weekly 5-Bullet Sunday post has been published quite a bit later than usual. This is due to the beautiful weather outside and the lot’s of opportunities to eat delicious ice creams 🍦

Actually, what’s your favorite taste this summer? Mine is (vegan) Pistachio 👌

Enjoy today’s 5-Bullet Sunday!

5-Bullet Sunday is a weekly blog post with 5 topics that were on my mind this week related to Financial Independence and Dividend Growth Investing or something that just fed my curiosity. An overview of earlier posts can be found here

🌟 How Engineer My Freedom and I do fundamental analysis

I actually ended the week by recording the latest podcast with my buddy Engineer My Freedom. We had a lot of fun recording it again and we actually continued talking for more than an hour afterwards. It got late and well past midnight, but it was totally worth it.

Our concept for the podcast is simple. We just want to talk about dividend investing as if we would be in a pub on a Friday night. We typically first address the news from the week, followed by our main topic, listener questions and we end with our dividend stock picks for the week.

Usually I don’t spend a bullet on the podcast, but in this case our main topic was about how we do fundamental analysis. We decided to pick up on this topic after we discussed dividend stock analysis in episode 5.

In that episode I mentioned that I’m typically using my gDoc template to analyze a company before I really pull the trigger to initiate a position. EMF liked that template a lot and he started to use it for his own stock analysis.

The gDoc Template actually allows you to do an unbiased analysis and it addresses the following topics:

  • Financial Strength
  • Management Quality
  • Dividend Quality
  • Valuation
  • The story of the stock
  • Momentum

It uses a scoring mechanism on individual checks within those categories so support my fundamental analysis. In the end it gives a total score and that gives me a good indication whether I find the company worth buying. At the same time it would have allowed me to get a pretty good understanding of the company, so it doesn’t happen too often to me that I get surprised afterwards.

Having said that, if you don’t have your own approach to fundamental analysis yet, then have a look at the gDoc template. It might just give you a nice jump-start as a foundation to design your own approach to analysis. I am always there to answer any question that you might have.

Also have a listen to the podcast if you want to hear a brief walk-through of the template 👇

🌟 [🍻 Join us 🍻] Dividend Quiz – Hosted by Dividend Talk

Join us on Saturday for a unique event 👌. Both EngineerMyFreedom and I thought that we should have some fun together as a community.

That’s why we decided to organize a Dividend Quiz in which we will prepare many Dividend related questions for you. It’ll be fun 👌 and with a European Flavor.

Are you interested and would you like to join?

Then just add the following calendar invite to your agenda (click google calendar icon) or reach out to me on Twitter or Instagram and I’ll share the invite with you:

When: Saturday 22 August, 21.00 CET (=20.00 GMT, 15.00 EST, 12.00 PST)

Further information will be shared via that Google Calendar Invite, Twitter and Instagram, so stay tuned!

🌟 Berkshire Hathaway – Q2 results and 13-F

Berkshire Hathaway from our uncles Warren and Charlie reported its Q2 results recently. I don’t own shares in the company, but I do look forward every year to watch their Annual Shareholder Meeting via a live stream on YouTube. It’s often called the Woodstock for investors.

Usually I wouldn’t really read their quarterly results, but this time was different. As we all know, Covid-19 had a severe impact to many economies in the world so I was very curious to how Berkshire Hathaway performed. In particular because they are a holding company with ownership of / investments in many traditional type of businesses compared to some of those hot tech-stocks.

So how did they perform then?

First of all it’s good to have some context when presenting some of the numbers, because Q1 was a very bad quarter for the company. Hence why some of the numbers might look suburb, but it has to bee seen in such context.

The company reported a year-over-year drop in total revenue from $64 Bln to $57 Bln. At the same time it earned (on paper) $40 Bln in investments compared to $10 Bln last year. This is a huge number, but it’s good to know that the company reported a $30 Bln loss on investments back in Q1.

All this and more equated to an earnings per share of 10.88$ compared to $5.74 last year around this time. Their not out of the woods yet, because the company is still in the red for 2020, because the EPS for the first 6 months is $-9.67 per share loss compared to $14.55 last year.

Not so good, right? But Q2 seems to be picking up again, so we might still see a positive number at the end of the year.

The surprising thing to me though was the fact that the company decided to repurchase their shares for a total of $5.1 Bln which equated to an average share price of approximately $176.

Last but not least, the company also just published its latest 13F form which gives you an overview of its latest investment trades. It’s interesting to see that the company sold quite a lot of Bank stocks. I always thought that uncle Warren has a preference for this sector, but something seems to have changed its mind.

Another interesting fact is that Apple currently makes out approximately 44% of its investment portfolio. Talk about single-stock risk!

Having said all of this: I believe that Berkshire had a very volatile quarter, but that it seems to be back on track compared to the very bad quarter back in Q1. Let’s see what the remainder or the year brings.

🌟 Recommended Read

In relation to first bullet, I can’t really recommend anything else now then to read 👇

It’s a comprehensive yet very simple written book. I would argue that most novice investors would be able to follow it and it lays the foundation for Dividend Growth Investing.

PS: it doesn’t contain an affiliate link

🌟 Recommend Video

“Wealth Inequality was made greater again”.

I mean, you wont find many people like Sven Henrich with such a straight-forward opinion. I enjoy following him a lot and I would recommend to watch this small interview with him.

That was it for 5-Bullet Sunday, edition #33

Have a lovely week ahead!

Yours Truly,

European Dividend Growth Investor

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