Portfolio Update: November 2017 ($14,000 gain!)

In the last update, I noted that I hit $10,000 mark in my profit and I was quite content. Well, I stand corrected. My portfolio somehow managed to hit $14,000 gain this month and I actually want more of it. 

Nov 2017.png
 My portfolio vs S&P 500

My portfolio vs S&P 500

Let me briefly introduce some of new additions to my portfolio. As this is not a valuation article, I'm writing this off the top of my head. Please bear with me if I get some of the facts wrong.

  • Royal Bank of Canada (RY: Toronto Stock Exchange)

RBC is the largest bank in Canada. The bank offers a wide range of services including retail banking, wealth management, insurance, etc. The bank has recently been added to a list of 30 of the world's most systemically important banks.

I added the RBC stock to my portfolio due to several factors:

  1. Cheap valuation & profitable operation [Example: P/E < 15 & ROE > 15] 
  2. The stock price was somewhat near its 52-week low at the time of the purchase
  3. Anticipated improvement on interest margin following the expected rate hikes
  4. The technologies the bank is investing in to cut the operation cost in the long-term [Example: block chain, robo-adviser, artificial intelligence]
  5. The expected growth in the fee business in the U.S. market [Example: the recent expansion of the wealth management team in the U.S.]
  6. It is the only bank I use personally in Canada. If the bank tries improving its profit margin by squeezing money from its customers, including myself (most importantly), I should be able to receive the benefit through increased dividends and price appreciation of the stock, in return
 Since the purchase, the stock price has been gradually increasing while I received my first dividend recently.

Since the purchase, the stock price has been gradually increasing while I received my first dividend recently.

  • CVS Health corporation (CVS: New York Stock Exchange)

I recently purchased 2 call options with 1.5 year expiry on CVS. Though I'm not going into details here, I will write articles on call option and valuation analysis of CVS later on in this blog.

CVS owns pharmacies in the U.S. and also runs a pharmaceutical benefit management (PBM). Simply put, PBM is a service that is offered for health insurance companies/government to reduce the price of medicine by negotiating with pharmaceutical companies. For my beloved Canadian friends, just think of the company as "Shoppers Drug Mart" with some extra perks.

 Stock price chart of CVS Health. You can see it's been quite a ride since the purchase...

Stock price chart of CVS Health. You can see it's been quite a ride since the purchase...

Let's see how these new investments will go.

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