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IMF January And February Buys: The 17 Stocks Added To My Fund

Mar. 02, 2020 10:04 AM ETAKO.B, BCH, BP, CCU, DEO, ECH, MO, NYCB, SHEL, SU, TAP, WASH, WFC, XOM, SU:CA32 Comments


  • The next round of IMF buys are here.
  • Highlights include my case for the energy sector, and a defense of New York Community Bancorp.
  • I made these purchases two weeks ago, so significantly better prices are available on most of these names today.
  • This idea was discussed in more depth with members of my private investing community, Ian's Insider Corner. Get started today »

Ian's Million Fund, "IMF," is a real-money portfolio that I've written about monthly since January 2016 here at Seeking Alpha. The portfolio is a largely buy-and-hold group of ~130 stocks. Each month, I buy 10-30 of the most compelling stocks available at then-current prices, deploying $1,000 of my capital plus accumulated dividends. If things go according to plan, this portfolio, began when I was 27, will hit one million dollars in equity in 2041 at age 52. I intend it to serve as a model for other younger investors.

For various reasons, I didn't end up making any purchases for the portfolio in January of 2020. As a result, I rolled that money over and combined it with February's capital. I'm also recycling cash from a couple of recent portfolio sales - most notably my sale of former top five holding Bancolombia (CIB) - giving the portfolio almost $4,000 to spend across the following 16 stocks. I made the following purchases for the portfolio on February 18th:

In dividend reinvestment funds, this month, I channeled them into Altria (MO). Do remember that I keep all dividend-funded stocks separate from stocks I've paid for with my own capital. In this way, I can track how much of the portfolio has been purchased via dividends rather than my earned capital over the years (currently, dividends have paid for 8% of the portfolio's overall holdings). Hormel Foods (HRL) is the portfolio's primary dividend holding, given that it has been cheap for nearly the entirety of the past three years, making it an easy decision on my part to buy more every month with the dividends that roll into the IMF.

However, with Hormel hitting new all-time highs last month, I decided to move away from buying more of it for the time being. The portfolio's dividend-funded

This is an Ian's Insider Corner report published February 19th for our service's subscribers. If you enjoyed this, consider our service to enjoy access to similar initiation reports for all the new stocks that we buy. Membership also includes an active chat room, weekly updates, and my responses to your questions.

This article was written by

Ian Bezek profile picture

Ian Bezek is a former hedge fund analyst at Kerrisdale Capital. He has spent the decade living in Latin America, doing the boots-on-the ground research for investors interested in markets such as Mexico, Colombia, and Chile. He also specializes in high-quality compounders and growth stocks at reasonable prices in the US and other developed markets.

Ian leads the investing group Ian's Insider Corner. Features of the group include: the Weekend Digest which covers everything from new ideas to updates on current holdings and macro analysis, trade alerts, an active chat room, and direct access to Ian. Learn More.

Analyst’s Disclosure: I am/we are long ALL THE STOCKS IN THE TABLE. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Also long Brown-Forman, Bancolombia, and Berkshire shares.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (32)

Hi Ian. How come i never see BAM on your list? Seems like a good fit for your style.
Ian Bezek profile picture
I don't trust the accounting at all. Black box, intelligent analysts can't figure out how basic pieces of their "earnings" work. Plus the scandal in Brazil.

Fed has been the worst influence on the markets. Either it should stand down and get out of the business of trying to prop the market or it should put it in their manifesto that they will print like crazy to support the market.

The way they are doing it now only their friends in high places that can read between lines and idiots who don't care about valuation metrics ae making money.

What a shit show. It is too high to go long and not high enough to short. And now they will not even let us hide in money market funds.

Eff everyone of those Ph.D. idiots who couldn't get anything right for 10 years.
darnoc111 profile picture
Ian the market is irrational right now, and is the reason I am waiting before deploying any more of my capital. I just do not have the fire in my belly to trade like I use to, and I am tired. The coronavirus is a very bad flu that will cause havoc in economies around the world. That said it will be only temporary as it seems to be letting up in China if we can believe their statistics. I would guess that in a few months the virus should have run it's coarse and the market might be an opportunity to buy again. You are correct about energy as so many seem to be clueless about how much green energy would be needed to replace the current fossil fuels being used. I just read a report that stated that if we stopped just fracking that it would cost over 7 million jobs and $5,400 a year in less income per person. Green energy is not all that green when you look into the pollution from it. Yes costs are dropping but they are still, if the report I read is right, 50 to 100% higher than fossil fuels. It will take many years to bring solar and wind up to even 50% of energy use. And if we force the country to use only green energy it will cause economic damage especially to the poorest here, since they have the least ability to afford it. That said for now fossil fuel is in the dog house till the economies begin to recover from the flu. I enjoy your articles as they give me a new perspective on how to invest and evaluate stocks, thanks. Best of Luck, Darnoc.
darnoc111 profile picture
Talked to a young man from Wuhan China yesterday who told me that his family in China said that things are getting better. This is what I needed to start buying as hopefully the virus will not be too bad here. Best of luck to all.
ijeff profile picture
To Ian or any other astute investor who wishes to reply: Which is the better buy right now; WASH or NYCB? Here's my take after reading this article and taking a closer look at both. First of all, that NYCB yield is eye popping. The market seems to have a higher level of confidence in WASH and that 4.75% yield is nothing to sneeze at. But, NYCB might give you the best overall return over the next few years if or when the market recognizes its turnaround potential.
Ian Bezek profile picture
WASH should do better in a stronger economy - the overall bank is exceptionally safe but it has things such as wealth management that would work well in an economic pickup and see lower earnings in a recession.

NYCB held its value even in the financial crisis (stock UP between 2008-10) so the baseline is collect the dividend with minimal downside risk and maybe something great like a buyout happens that gives up an upside surprise as well.
Tiki Bar Capital profile picture
Ian -- Do you think NY's accelerating loss of population to more tax-friendly and business-friendly states has anything to do with NYCB's malaise?

My general sense is that NY is going the way of IL. Poor governance. Secular decline.
Ian Bezek profile picture
Given that NYCB primarily lends against multi-family apartments it shouldn't be a huge problem. The sort of people leaving NY for tax reasons by and large aren't the folks paying rent on the buildings NYCB has wrote mortgages on.
Tiki Bar Capital profile picture
With you all the way on your energy thesis, Ian.

It's astounding how badly the oil majors are trading. Sure, global growth concerns get people worried about demand. And there are too many marginal producers pumping too much oil at the moment. But growth will eventually revive and consolidation will lead to more production discipline.

I don't know where the bottom for energy is. These prices look really promising.
Ian Bezek profile picture
I've been early on Exxon in particular, but I'd be surprised if that 48 low from Friday goes down anytime soon.
Tiki Bar Capital profile picture
Sadly, I was earlier than you.
Ian Bezek profile picture
I know I sound crazy saying this, but I firmly believe XOM is a $100 stock in five years. Cash flow and EPS double from here thanks to their huge (if much-maligned) growth projects, and oil prices up a lot overall as well due to underinvestment in the sector since 2015.
Started a postion in WFC at about the same price as you. I've added to it multiple times since and am underwater a bit. Trimmed BF.B in the 71+ range and bought back Tap, while also adding BUD, ABEV, and CCU. Started a position in RDS.B as well, but early, and have added several times. Wild last week or so.
Ian Bezek profile picture
Nice timing on that BF trim, that was a top for now on that one. Let's see on the energy names - big recovery in Exxon but not so much in the others like Shell yet, probably because Exxon is big in the S&P 500 so all the index buying forces it up.
@Ian Bezek Well I should thank you for the timing on BF.B. I was leaning in the direction of trimming, but your article on the subject convinced me to move. Thanks for that.
The Millennial Investor profile picture
TAP seems crazy undervalued right now. How do you think it will perform during a recession @Ian Bezek (and others)
Panzerman profile picture
Hello Ian, good update and article. Just added WFC to the portfolio at 40. Just to good to pass up and a good dividend. This will be golden in five years.

At this point I am big into Oil and Tobacco as I love the yields and we live off the dividends of the portfolio. My question for you is what other sectors/countries have good potential after the selloff to pick up good dividends?
Ian Bezek profile picture
Those are two great ones for dividends. Banks as well but that requires more confidence in the health of the economy.
Agree with a lot of your picks, especially WFC and XOM. Added to these lately as well as DEO too.
Ian Bezek profile picture
Yeah, WFC is in a great place here with the gigantic share buyback. Lower it goes now, the more stock than it can retire. 10% of the float a year disappearing.

XOM will have a great reversal at some point as well - hard to guess the exact moment when this wave of green energy euphoria will end and things get back to normal but I'm guessing it's not too far away given what we just saw in TSLA stock.
hi Ian why today CCU do in Santiago a 5,5% of gain and CCU at Nyse only 1,5%? i don't think Is a anche Us dollar change matter a so large range of different result. Am I missing something about CCU in Chile and CCU in Nyse? i presume Is the same stock Company and have to follow quite the same results.
Ian Bezek profile picture
Yes same company and results. Looks like CCU went down more in Santiago on Friday than the U.S. and it "caught up" today. Based on the Chilean price, CCU should be at $15.98 and it closed at $16.15 so not much there to arbitrage, price looks fine.

Hard for most foreigners to trade the Santiago exchange so I'm not surprised the stock got slightly away from the correct value on a crazy day like last Friday.
Oh, Dude. Forget January. You need to update it for last week.

Watchu buying?
Ian Bezek profile picture
IMF March buys are in. Up on Ian's Insider Corner and I'll repost on the public site with the usual one or two week lag.
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