This is the editorial of our monthly Shareholder Yield Letter published on 10 September 2024.
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This month you can read how to know which of the recommended companies will perform best.
But first the portfolio changes.
Portfolio Changes
Buy Four – Hold Three – Sell Three
Four new recommendations this month as the MSCI World index is above its 200-day simple moving average.
The first is a £27.3 billion (USD 35.8 billion) large UK bank with a shareholder yield of 13.4%. It is made up with share buybacks of 7.0% and a dividend of 6.4%.
The second is a USD 70.4 billion US online payment services company with a shareholder yield of 6.2%, all from share buybacks.
The third is a £7.2 billion (USD 9.4 billion) UK learning company with a shareholder yield of 8.8%. Over the past 12-months, it has bought back 6.6% of its shares and paid a dividend of 2.2%.
The fourth and last recommendation is a €13.8 billion (USD 15.3 billion) Spanish energy company with a shareholder yield of 16.0%. This is made up with share buybacks of 8.3% and a dividend payment of 7.7%.
Hold Three
Continue to hold:
- Barclays PLC +51.9%,
- Serco Group PLC +17.1%
- Telenor ASA +26.6%
(all recommended in September 2023) as they still meet the newsletter’s selection criteria.
Sell Three
Sell Glencore plc at a loss of -13.5% as the company no longer meet the portfolio’s selection criteria, it has also breached the stop loss.
Stop Loss
- Sell Whitehaven Coal Limited at a loss of -9.8%
- Sell BP PLC at a loss of -4.1%
What Company Will Perform Best?
A subscriber recently asked me:
“What Company in the newsletter will perform best?”
The simple answer is I just do not know. I realized long ago that I am no good at forecasting and, as you know, neither is anyone else.
Numerous research studies have shown that humans can simply not forecast, even if their lives depended on it. And so-called experts also do not do any better; in fact, they do worse than amateurs.
So where does it leave us?
This means that not you or I, or ANYONE else can say which companies in the newsletter will perform best.
Let me give you a few examples from companies recommended in the newsletter.
Mitsui & Co., Ltd. +56.1 In one year (June 2023 to June 2024)
Would you have thought that this huge €50 billion Japanese general trading company would increase more than 50% in a year when its price was already at a five year high?
Imperial Oil Limited +44.4% in 14 months (Recommended in July 2023)
This €38 billion integrated Canadian oil company increased over 40% just as oil prices started falling from their multi year highs.
Barclays PLC +51.9% in 12 months (recommended September 2023)
Or that one of the largest banks in the UK, in a hated market sector on stock market left for dead, would increase over 50% in a year?
Fox Corporation +39.4% in 6 months (recommended March 2024)
A right leaning media company with a few scandals behind it would jump 40% in six months.
Altria Group, Inc. +41.5% in 11 months (recommended November 2023)
What about a “dying” old tobacco company increasing over 40% in just under a year.
Stellantis N.V. -30.7% in 3 months (recommended May 2024)
You cannot win them all and that is why we follow a strict stop loss system.
Stellantis, one of the largest auto companies in Europe fell suddenly after reporting a steep sales decline in its half year results. The fall was so big that it tore through the newsletter’s 20% trailing stop loss limit.
What’s the point?
What I want to show you is that all these companies went up a lot despite being in industries that were not exciting and that they all had problems when they were recommended.
The Best You Can Do
So, what can I do, you may be thinking?
The best is to simply follow the newsletter’s investment system.
This means:
- Invest in a diversified portfolio of high shareholder yield companies – the ones the newsletters finds for you
- Do not second guess the ideas – this is the hardest part
- Keep your investment in the individual companies small, 2% to 5%
- Limit your losses through the trailing stop loss system the newsletter follows
- After a year sell companies that are not in the newsletter’s investment model and invest the cash in currently undervalued quality companies
Your analyst wishing you profitable investing!
