Wednesday, November 03, 2010

RSY XVI: Buy 200 PL @ $24.51, Update


Definitely a good day to be long in the market, and our portfolio gains of nearly a thousand dollars today reflect that above. That was over a 3% gain today and nearly a 9% overall gain on a cost basis of held positions. (Click on tables for clearer images.)

The above table is the realized gains for the RSY model portfolio. The table includes the partial harvest of profits from CODI and $152 of dividends from CODI and GAIN combined. The two tables above encourages me to look for other good dividend paying stocks to add to the portfolio.

Protective Life Corporation {PL} has an ex-dividend date quickly approaching on November 9th. There are plenty of things to like about PL and even our own "What the Market Wants" mentioned Protective Life a couple of times since we started the Sabrient blog. The financial accounting score is just average, but its value score is outstanding and the reason for Sabrient to rate PL as a strongbuy. Sabrient's SmartStock report states the following:
Value: Sabrient rates PL as one of the strongest value stocks in the market with a Sabrient Value Score of 91.4. At its current price, PL offers excellent value based on last year's results and projected earnings. This makes the stock a prime candidate for the value-minded investor.

In addition, Sabrient rates PL as very high for a balance sheet score of 90 and 81.6 for a fundamental score, which measures for liquidity and debt issues, and a company's financial health respectively. One reason for the hesitation in choosing this stock was that PL is in the Financial/Life Insurance sector of the economy and RSY portfolio already has MRH which is in the Financial/Prop. & Casualty Insurance sectors. {To its credit, MRH has given gains of nearly $1100 so far.} Even though earnings per share beat Thomson Reuters consensus estimates of 66 cents by 5 cents at $0.71, the market zigzagged since hearing the news yesterday.

Given that, RSY recommends a buy order of 200 shares of PL at a limit price of $24.51 at the opening on Friday {good for the day}. Considering the daily swings in both directions, a trader might in fact wait for opening and then consider the daily direction the price might trend before making a move. Since the 200 shares represents less than a 5% position (assuming $100,000 to start with), RSY might consider dollar cost averaging later on.


What Telecom Stocks Can Teach You About Dividends

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