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Kurtis Hemmerling

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  • Dividend Prince or Pauper? Valuation Tips to Help Separate the Good From the Mediocre [View article]
    I thought that I would report the long-term sustainable growth rates and let each investor decide if matched their individual style. Some prefer price stability over capital appreciation and others don't. I'll try to make more concise recommendations directed at certain groups in my future articles.

    For instance, "if you believe that stable price appreciation at a slower rate is more important than high annual growth at more volatile price fluctuations, then SO is a good pick with a sustainable growth rate of roughly 7%. Buffett may not agree since he prefers over 15%. Still, this stock could provide a measure of safety if you are ultra-conservative and want defensive picks with betas of 1/3rd the market."
    Mar 14, 2011. 12:31 PM | 2 Likes Like |Link to Comment
  • Dividend Prince or Pauper? Valuation Tips to Help Separate the Good From the Mediocre [View article]
    If you are happy with a compounded gain of roughly 7% as a sustainable dividend plus capital gain, keep it. Buffett recommends 15%. Other people are happy with far less if they feel the stock is a rock.

    While I haven't given future valuations for each stock on the final list, I tried to single out stocks with some good aspects such as long-term increase in dividends, decent yield, low payout ratio to allowing it to be raised if need be, with better liquidity and earnings growth than the average industry stock. The two stocks were given as examples on how to calculate probable future value for any dividend stock, and the bottom list was to give you more strong dividend stocks to pick from.

    I like KO and MCD, and they are both on the bottom list as having strength.
    Mar 13, 2011. 09:02 AM | 2 Likes Like |Link to Comment
  • Could These 7 Stocks Double on Triple-Digit EPS Growth? [View article]
    I forgot to add one sentence that some of the REIT payout ratios that are in excess of 200 or 300% may need to double their EPS just to avoid share prices tanking. You cannot pay out double or triple your earnings before you erode your value.
    Mar 8, 2011. 05:48 PM | 2 Likes Like |Link to Comment
  • 14 NYSE Dividend Kings: Mid and Small Caps With Low Payout Ratio [View article]
    I did my best to research these stocks. What I am trying to say is do your own due diligence. If I don't say that, someone always comes along and says that I'm not being thorough enough to highlight the risks. When I do pad my article with warnings, someone else comes along and says I'm not doing enough research.

    Just some disclaimers, that's all.
    Feb 8, 2011. 06:05 PM | 2 Likes Like |Link to Comment
  • Applying Covered Call Strategy to Blue Chip Stocks [View article]
    I'm not entirely sure what you mean. With this strategy EK can fall 23% and you earn 17.6%. Even the S&P 500 Dividend Aristocrats index has been outperforming the S&P 500, and their methods leave much to be desired. Covered call writing returns out-perform holding the underlying asset on average as borne by such covered call indexes and funds.
    Jan 21, 2011. 08:27 AM | 2 Likes Like |Link to Comment
  • Does Trend Following Work? [View article]
    I am not a strong supporter of trend following like Mebane Faber - but I do think this 'factor' does have its place in the investment toolkit.

    Any single factor has risk when taken in isolation. Look at a low PE value. It could be a value trap of falling earnings, a high yielding utility stock, or something else. PE seems to have a tradeoff between downward risk in bear markets to bull market alpha.

    Trend-followers also use tools such as the ADX to determine strength of trend and when the market appears trendless and full of whip-saws - they sit it out. This can be combined with the sma crossover. And if it keeps you out of down markets - you may be able invest in value stocks in bull markets for more return.

    But yes - when you take this one simple rule without tolerance bands to control for whipsaws and no other factors - it is difficult to see how this one rule can create a winning portfolio. I think the real lesson here is not to use a single rule for investing thinking that it will both boost returns and lower drawdown in all markets.
    Sep 1, 2014. 09:40 AM | 1 Like Like |Link to Comment
  • Gauging Negative Investor Sentiment [View article]
    I used and tested their data. It is really good stuff. Basically, the harder it is to locate shares, the higher the borrow cost, the fewer brokers who even carry shares, the more lent out the available shares are, and when lots of major holders start lending their shares out...all this points to severe future underperformance. But the high cost to borrow is against you...but still alpha present. Lots of it.
    Aug 29, 2014. 03:53 PM | 1 Like Like |Link to Comment
  • Are Large And Liquid Stocks Lower Risk? [View article]
    Good point. Please see my most recent article on dividend growth stocks (actually it would be a frozen angel where one year or more maintained but didn't rise) and the stats begin after the dot-com boom to bust. More history would be better but notice the massive gap between large and liquid dividend growth stocks and other sorting methods.
    Jan 16, 2014. 12:55 PM | 1 Like Like |Link to Comment
  • Finding Alpha In Discarded 'Dividend Growth' Stocks [View article]
    SA limited me to 10 charts so about 6 were put on the chopping block that were already embedded. Sorry
    Jan 15, 2014. 11:25 AM | 1 Like Like |Link to Comment
  • 'Discarded Gems' Of Dividend Growth Investors [View article]
    Thanks for the comment. I will definitely test out what you suggest and show the impact short- and long-term of a dividend cut in a div growth stock, but where some dividend does exist.
    Dec 23, 2013. 02:26 PM | 1 Like Like |Link to Comment
  • 'Discarded Gems' Of Dividend Growth Investors [View article]
    To answer a few questions...
    I use 2001 since, while there is history on stocks in general back to 1999, the rule I use requires dividend history 9 - 10 years before that point. I could start it at mid-point 2000 at the earliest - but I felt starting at the beginning of a year to be better.

    The 15 stock portfolio is not for sale and neither am I advocating it above any other ranking system you are comfortable with. It was merely to illustrate that with an extra hour of work you can create a more focused model suited to whatever your needs are. As you brought out, investors may want something totally different than my quick suggestion - I am just trying to generate addition dialog. I provided 2 other free ranking systems that have similar results if someone wants to use them.

    The ranking system is not the product of mindless data mining and does have logic. For instance, low PE speaks of dividend potential, I don't use div growth since the universe doesn't demand it, yield is important, I look to earnings quality for stability particularly in bad markets... the list goes on. Value is very important but you need to think of metrics that will keep you out of dying stocks and traps.

    If all you are looking for is validation of your ranking ideas, you can sign up for a free trial, make a list of the 5 or 6 factors that make sense and backtest well, and then cancel your sub and use it for the next 10 years. Or have the whole div growth community donate for one guy to have a sub and get him to run all their ideas. Or use other platforms that you can find. Or hire a very expensive financial planner who has his own software.

    I am not against buy/hold/re-invest but you still need to decide which stocks to buy. And once you define those reasons, what if a stock no longer meets them? Do you sell? What if your 30 stocks erode and rank lowly on those criteria you value over 10 years and there are 30 other stocks that exhibit those same characteristics in full measure? Do you pass them by or buy them with your dividend income or sell some of your other holdings to get into them or turn over your whole portfolio? Buy/Hold/Re-invest is great if you know you are holding a winning stock for the next 50 years - but if you can't see the future you do need to be flexible and open to selling and replacing at least once in a while.
    Dec 23, 2013. 01:58 PM | 1 Like Like |Link to Comment
  • Creating A Dividend Portfolio That Can Outperform The Market By A Big Margin [View article]
    Dividends are included in the screener for total return. I beg to differ that if dividends were not include the returns would be under-represented.
    Apr 30, 2013. 04:54 PM | 1 Like Like |Link to Comment
  • The Big 6 Dow Jones Stocks To Own Now [View article]
    Please see attached document for the closed trades (in order of highest closed % to the lowest)

    Please see this next document for the the daily portfolio performance that shows cash, amount invested and a day by day comparison with the actual benchmark. The last 2 columns show the comparitive returns of $100 invested in Dow Jones vs. the Big 6.
    Apr 12, 2013. 02:07 PM | 1 Like Like |Link to Comment
  • The Big 6 Dow Jones Stocks To Own Now [View article]
    I am not sure why you are ignoring dividends. This will give you only capital gains which is ignoring the full picutre.This system also uses cash management so what is listed is the portfolio return - not just simple stock pick return. Also, you are ignoring the closed trades and are just back-testing the current holdings. Let's look at the past few years of Dow Jones vs. these stocks.

    2007 - system underperformed by 4%
    2008 - system outperformed by 35%
    2009 - system outperformed by 5.3%
    2010 - system outperformed by 2.8%
    2011 - system outperformed by 5.1%
    2012 - system outperformed by 0.67%

    So far this year it is looking to underperform by 1.6%

    If you are asking for a list of the closed trades - then please do so. I am happy to provide more details but I don't appreciate someone simply trying to cast suspicion and doubt by matching open positions to an un-adjusted yahoo chart and claiming that I am making false claims.

    You'll note that I also have made this strategy available for free so there is little ulterior motive in trying to fool anyone.
    Apr 12, 2013. 01:30 PM | 1 Like Like |Link to Comment
  • 2 Stocks Making 52 Week Lows, Only 1 To Buy [View article]
    We will see. My point is more that big high volume drops on bad news usually don't pop right back up. Yesterday was that big drop so I would wait. I am not saying that is what it is worth, I am saying that when sentiment sours and frustrated longs walk away you might see a dip that low. But again, we will see and after a week or two if it is firming up I would buy. As a former prop trader, I'd never buy after it breaks down on heavy volume to a fresh low.
    Apr 11, 2013. 09:43 AM | 1 Like Like |Link to Comment