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BookingAlpha Option Trading Advisory

Monday, August 18, 2014

Position initiated in Black Diamond Group Ltd.

Today I bought 108 shares of Black Diamond Group at $27.90 (Canadian Dollars). A total investment of $3013.20. The stock symbol is BDI.TO. That's for some sites. I assume the .TO at the end is because it is listed in the Toronto Stock Exchange. Now, on other sites, it may be BDI.CA. So, you type .TO, if that doesn't work go with the .CA version. Same thing happens with other Canadian companies.

This is a company from Calgary, Alberta dedicated to renting various types of oilfield equipment. I like everything here:

Sales - 5 Yr. Growth Rate: 36.35%  (Sales consistently growing in the last 5 years)
EPS - 5 Yr. Growth Rate: 6.37% (Earnings per hare consistently growing in the last 5 years)
Dividend 5 Year Growth Rate: 8.71% (Dividends growing more than 8% per year)
Long Term Debt to equity: 30.83% (pretty manageable debt)
Payout ratio: 69.95  (The dividend growth may start to get a little limited in the future if earnings don't keep going up)

For more information

I've been interested in this company for a while but hadn't seen the price action I wanted for my entry. Now it is attractive! I think there has been some unjustified panic here so instead of my usual $1500 investment expecting to enter a second leg later, I went all in with $3000 this time. I like it here. What am I saying? I love it here. This is still a young, small company with a market cap just a little above 1 billion. I expect it to be one of the main pieces of the growth portion of my long term investment portfolio.

Here's the chart. Current price well below the 200 Day Moving Average. Make your bet when everybody else is panicking!
(Click on image to enlarge)

This position adds $97.20 a year in expected dividends and the total for the portfolio goes up to $942.61 CAD plus $381.68 USD.

Finally, another chart showing how a $10,000 investment would have fared if invested in this company since it became public back in 2008.

That's a compounded 31% return per year. I'll be happy with just 15% per year going forward, and positively satisfied with 10% a year. 

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