Friday, January 20, 2017

Stock of the Month: Hanesbrands, Inc.

This is the first of hopefully many monthly posts about the stock I chose to buy that month.  I want to make it clear from the onset that I am not a professional investment advisor, that what is right for me may not be right for you and that this account, for me, is in between an investment and a toy.

I firmly believe that for most people the best long-term way to invest is in a diversified portfolio of low cost index mutual funds or ETFs.  That is where the majority of my investment money goes. 

However, being a bit of an investment nerd, I want to try to beat the system and pick my own stocks. This portfolio is a very small portion of my investable assets.  To put it another way, instead of buying shoes I don't need, I'm buying stocks I don't need; if they all tank tomorrow, life will go on as before.

What Stock Did  I Buy This Month?

This month I bought two shares of Hanesbrands, Inc.

What Does Hanesbrands, Inc. Do?

Haneswear, Inc. makes underwear and active wear. Their brands include Hanes, Bali, Playtex, Champion and L'Eggs.  

Why Did I Pick Hanesbrands, Inc.?

This month I decided to start my search for a stock at Morningstar.  My library subscribes to the full version of Morningstar and I can access it from my home computer.  I searched for five star stocks and then reviewed the list for companies with which I was familiar.  There were two:  Bed Bath and Beyond and Hanesbrands.  My Loyal3 portfolio already has Target and Kohls so I didn't want another retailer.  I decided to investigate Hanesbands further.

I then checked A Frugal Family's Journey's list of stock analysis post  in 2016 to see if anyone had written about Hanesbrands recently, and I found that Dividend Diatribes had and that JT was at least interested in the stock.  

I went back to Morningstar and read their analyst report written in October, 2016 which valued the stock at $39.00.  Since I bought at $21.93, Morningstar believes I got a bargain.  Gurufocus  has a calculator which only gave a value of $17.63 but I didn't find that until after I bought the stock. Zachary Sturdy wrote about Hanesbrands for Seeking Alpha and he valued it at $28.49 per share.

I decided that when I thought underwear, I thought Hanes and I'm sure a lot of other people do too.  At the price I paid, if dividends do not go up this year, I'll earn 2% .  The expectation is that Hanesbrands will raise the dividend.

Where Did I Get the Money?

The money I invested in the Hanesbrand, Inc. stock is money paid as dividends in my Motif portfolio.  

From Whom Did I Buy the Stock?

I purchased my Hanesbrand stock via Robinhood.  I paid no commission and will pay no commission when I sell.  

Did you buy any stock this month?
*Part of Financially Savvy Saturdays on brokeGIRLrich, and Racing Towards Retirement*

Tuesday, January 17, 2017

2016 Investing Results

One thing most of us like to do periodically is to take a look at our investments and see how they are doing.  This is my end-of-year check-up.

My 401(k)

My firm gives me 5% of my pay; I save 6%.  I have a diversified portfolio of mutual funds and this year I earned dividends equivalent to about 20% of my pay and, according to the fund company, my total return was 3.71%, which is dissapointing.  However, a lot of it is invested in bonds--we are getting older and aren't as comfortable with a total stock portfolio as what we once were.

My Husband's 401(k)

His company gives him 3%, he deposits 5%.  He invests in a small/mid-cap fund and a money market fund and this year he earned about a month pay in interest/dividends.  

Vanguard

This is where the bulk of our non-401(k) money is.  We both have Roth IRAs, regular IRAs and we have a joint non-IRA account.  While we have been moving money to Vanguard funds, we still have a substantial portion invested in a large number of mutual funds purchased for us by the finanical advisor we used a couple of years ago.  He and his company invested three different accounts in the same mutual funds and in order to get rid of them we have to pay $20 per account.  As long as they perform at or close to their benchmark we are going to leave them alone. There are a couple that we like and re-invest dividends received; most are simply ok. That financial advisor was not one of our better financial decisions. 

We have invested in the following Vanguard funds:
  • Vanguard Total International Bond Index Fund
  • Vanguard Total Stock Market Index Fund
  • Vanguard 500 Index Fund
  • Vanguard REIT Index Fund
  • Vanguard Total Bond Market Index Fund
During 2016 we collected dividends equal to 3.2% of the final value of the portfolio.  Vanguard says our annual return for the last year was 8.8%.  

Lending Club

At the beginning of the year, my account value was $19,278.08.  As of December 31, it was worth $20,529.82, a difference of $1250.74 which means a return of about 6.5% of the original balance.  However, if I use Lending Club's adjusted number, which takes into account notes that are currently late, and compare it to the adjusted number at the beginning of the year, the rate of return is only about 5%.  We have not added any money to this account this year.

Prosper

We added $850 to this account this year, with the last contribution being in July.  The account started at $16581.46 on January 1.  On December 31 it was valued at 18,561.40 .  If you take the difference in the balance at the end of July, compare it to the balance at the end of December, and annualize the difference you get a return of 4.45%, which is a far cry from the 12.76% shown on my dashboard.     

Motif

Motif allows investors to buy a basket of up to thirty stocks for one $9.95 fee.  Sometimes they run specials waiving or reducing that fee.  Most of my motifs were a "Motif of the Week" and purchased without paying a commission.  I will have to pay a commission when I sell.  Overall, I invested $7000.00.  I've been withdrawing my dividends and reinvesting them via Loyal3 and Robinhood. 

Here are my motifs:
  • Things I Like:  This was self-designed. On April 15, I invested $1000.00.  As of December 31, it is worth $1014.63, and, as of this moment, is trailing the S&P 500.
  • Buyback Leaders:  Stocks in companies that are buying back their stock.  Purchased $1000 worth $1410.46.   It is up 42.1% since I bought it, compared to 10.2% for the S&P.
  • Cyber Security:  Anti-hacking stocks.  I bought $1,000 worth and it is now worth $810.77.  Since the S&P is up 9.7% and this is down 16%, it hasn't been a good choice.
  • High Yield Dividends:  My $1,000 purchase is now worth $1137.94.  It is up 15% whereas the S&P is up 11.3%.
  • Online Gaming World:  Stocks of companies involved in Multi-Player On Line Role Playing Games.  I bought $500 worth and it is now worth $631.85.  Motif says it is up 40%, which doesn't match my math, and the S&P is up 9.7%.

  • Online Video:  Bought $250 worth, and it is now worth $179.06.  While the S&P has gained 6%, this has gained 10.2%.  I think some shares were liquidated and the cash sent to me.
  • Growing Dividends:  I invested $2,000 in this motif, and it is now worth $2287.19. It is just about equal to the S&P.  
During this year, I earned $170.76 in dividends.  

Loyal3

As noted below I've been reducing my exposure at Kickfurther and transferring that money to Loyal3 where my portfolio consists of the following stocks:
  • AMC:  3.2046 shares.  Invested $90; 12/31 value $109.05
  • Alibaba:  .5812 Shares.  Invested $50; 12/31 value $51.04
  • Apple:  1.0035 Shares.  Invested $115.  12/31 value:  $116.23
  • Disney:  1.6904 Shares.  Invested $165.  12/31 value:  $176.17
  • Hershey:  .8119 Shares.  Invested $75.00. 12/31 value: $83.97
  • Intel:  3.2986 Shares.  Invested $105.00.  12/31 value:  $119.64
  • Kohls:  3.3451 Shares.  Invested $145.00.  12/31 value $165.18
  • Target:  2.1570 Shares.  Invested $155.00.  12/31 value:  $155.80
  • Time-Warner: 1.1146 Shares.  Invested $90.  12/31 value:  $110.68
  • Unilever:  3.1645 Shares.  Invested $140.00.  12/31 Value:  $128.0
  • VF Corp. 3.2684 Shares.  Invested $190.00 12/31 Value:  $174.37
We started the year with this portfolio valued at $152.07.  It is now worth $1394. 39 which is $70.93 more than we invested.  During the year we collected $18.36 in dividends, which is 1.3% of the final portfolio value.  Since most of the purchases were toward the end of the year, I'm happy with the results. 

Robinhood

I own two shares of AT&T, one share of Lending Club and two shares of Visa.  This account is very new and my goal is to purchase at least one share of something every month. 

Kickfurther

This is still a toy, and I do not recommend anyone put serious money into it.  At this point, I'm ahead, but not by much.  I have earned $393.43 on offers that have finished.  I have lost $319.02 on offers that have been cancelled for non-payment.  I feel relatively confident that I will get some of that $319.02 back, I'm just not counting on it being a lot. 

I've cut my Kickfurther exposure quite a bit in the last few months, partly because of concerns about the viability of Kickfurther itself and partly because the returns were not what I had hoped.  I will probably keep some money on the platform, at least partly because it gives me something to write about.

*Part of Financially Savvy Saturdays on brokeGIRLrich, and Racing Towards Retirement*

Friday, January 13, 2017

2017 Financial Goals

The beginning of the year is a common time to set goals, so I thought I'd share mine.

Pay High School Tuition From Checkbook, Not Savings

My youngest will be in eighth grade in September and in this area, for Catholic school kids, that means high school (long story as to why, but yes, eighth grade is the first year of high school, not the last year of elementary/middle school).  It also means that her tuition will double.  On the positive side, this should be the last summer of paying for camp and I just made the last payment on her sister's college education, so the shock to the checkbook isn't quite as bad as it seems. Still, the tuition is due June 1, so we need to get saving.  This is the time of year when our checking account is at its lowest, however, we have no big bills due until April so this is time to save.

Continue 401(k) Contributions at Current Level

We thought about bumping this up a little, but our health insurance deductible increased and while we don't tend to be a sickly family, I'd like to have a little buffer there.  Also, I know I'm looking at more dental bills this year and since we didn't max out our IRAs last year, we have plenty of place to put retirement money outside the 401(k)s.  

Work On Monetizing This Blog

My blogging goals post last week talked about how I'm going to do that.  

Buy at Least One Share of Stock Per Month

Between the dividends earned on my current portfolios with Motif and Loyal3 and a few dollars we won't miss once it's gone, I'm sure we can invest in at least one share of stock in some company every month, and since we'll buy through Robin Hood or Loyal3, sales commissions aren't an issue.  I think I'll write a "Stock of the Month" post about what we chose and why, which will require me to think about it beyond "sounds good".  

Continue My Freelance Writing Jobs and Selectively Try to Find More

I have two regular freelance customers.  I found Classloom via Upwork and generally write three to four articles a month for them.  The Mulberry Silk Co. was a Kickfurther Merchant of the Week, and I write for them about once a month.  I spent a lot of time last summer doing a lot of jobs on Upwork that didn't pay well and were not very interesting.  I may go back there and look for more work but I'm going to be much more selective about the jobs I take.  

Add $4,000 To Our IRAs.

We managed that last year and hopefully can do so again.  One big difference will be that I'm not expecting any major overtime this year, whereas last year I earned over $2,000 in the course of a two week trial and preparing for it. 

Cut Spending On Food

When we've taken a close look at where our money is going, we see too much going to food of one sort or another. I'm going to focus on what is easiest to control, namely, me.  I'm going take my lunch at least three times a week.  I'm going work on meal-planning and see if that cuts our grocery bills.  My cook can follow a recipe but he doesn't juggle multiple dishes well and neither he nor my daughter like food that has too much "stuff" in it.  

Home Renovations

This is a carry-over from last year.  The IRS is not done with my father's final tax return.  Once they are, I'll get the final money from his estate and my plan is to spend it on my house.  I have carpet that is over twenty years old, and my den still has the original 1970's paneling.  It's time to renovate.