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Post by sd51555 on Apr 19, 2017 8:16:05 GMT -6
It's earnings season again in stocks. Always a good time for some pin action to pick up shares of good companies treated poorly, or capture some gains. It's also a time when I look to slide some holdings out of my traditional IRA into my Roth. I like to call it sneaking under the fence. I'm on a plan to convert all of my traditional to Roth while my tax bracket is lower and I'm not paying the communist rates of MN tax by living in SD. What I look for is when one of my traditional holdings takes a real dump, but I still believe in the long term future of the company. Today, that's WW Grainger. It was recently as high as $255/share. As of earnings this week, they took a huge dump for missing earnings and fell below $200. Sitting on a near 20% collapse in price, I can convert them at a lower dollar value and lower tax cost. I'm sending off the paperwork today to get it moved. Timing it this way cheated uncle sam out of $300 vs doing it at the higher price, and all for just a little vigilance and paperwork.  |
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Post by kl9 on Apr 19, 2017 8:24:41 GMT -6
What if they continue to fall?  |
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Post by sd51555 on Apr 19, 2017 8:26:18 GMT -6
Been down that road many times.
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Post by kabic on Apr 19, 2017 10:39:26 GMT -6
What if they continue to fall? How can it conntinnue to fall , he believes in the long term future of the company. That will be enough. Similar to "build it and they will come", "believe in the long term future and it will rise"  |
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Post by kl9 on Apr 19, 2017 10:59:55 GMT -6
What if they continue to fall? How can it conntinnue to fall , he believes in the long term future of the company. That will be enough. Similar to "build it and they will come", "believe in the long term future and it will rise" If upper management of said company believes and practices that I think you're largely correct.
I have no idea about this company btw.
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Post by sd51555 on Apr 19, 2017 11:47:15 GMT -6
I'm not worried about them. They're a large old company doing things that need to be done. They will move and sway as construction and other things surge and retreat. They only missed expectations by a little bit. Their revenue is continuing to grow, they're stumbling a bit on margin, but there's no fire here. The market needs something to beat on right now, and Grainger came first. These guys are a dividend aristocrat, and I will always bet on a company like that if they're priced right.
One big thing I look at is the simple ability to increasingly generate free cash flow from normal operations. These guys can do it. I also took this opportunity to pick up more shares. Been down this road with ADM, UNP, TSCO, AAPL, DE, DOW, and others. They come back at some point, and it usually happens fast once it starts.
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Post by batman on Apr 19, 2017 12:13:58 GMT -6
Grainger was the first job I was ever fired from. I ran the Plymouth MN branch with 66 employees for 2 years. Things were going great until they let us write our own reviews. As luck would have it, I got to go first in the nation. I exceeded expectations, gave myself a 25% out of guidelines bump on top of a 9% raise. The raise went through, and my employment ended shortly thereafter.
That's how Double Bull came to be.
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Post by sd51555 on May 16, 2017 7:22:56 GMT -6
Its only right to own up to my blunders too.
Grainger has fallen another 10% since I made my "savvy" conversion. Can't claim the mantle of genius on this one just yet, but I am trying to pick up some more at this lower price. Any time a dividend aristocrat goes on sale like this, a guy can't hardly pass it up. 2.8% yield from here and a solid track record of providing an annual raise. Those annual raises have a tendency to drag up values over time.
This also marks the end of my effort to get my rollover cash re-invested since I left my old job two years ago. I wish I could report I just had a pile of cash laying around to buy buy buy, but such isn't the case. I was simply getting my old 401k money and HSA money put into stuff I wanted to own. Takes a long time to fish good buys out of a rising market.
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