Author Archives: NLO Team

NLO in Review: 2020-6

The following is the breakdown of the Dogs of the NLO based on our January 3, 2020 watch list, compared to other fundamental ratios.  The purpose of this work is to confirm or deny the claims proposed of the Dogs of the Dow theory as outlined by Michael O’Higgins in his book Beating the Dow. Continue reading

Income Bellwethers

In March 2019, Morningstar published their Income Bellwether Watchlist with data from February 11, 2019.  Below is the performance of the stocks based on the highest and lowest dividend yield from February 11, 2019 to February 7, 2020 (intraday).

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Based on the data, High Yield stocks severely underperformed the Dow Jones Industrial Average, even in the best case scenario.  Meanwhile, the Low Yield stocks trounced the Dow Jones Industrial Average.  This data confirms our work in the Dogs of the Dow.

Nifty Fifty: 1960

Below is the performance of the Nifty Fifty as published on June 6, 1960 by Barron’s covering data from  March 28, 1960 to March 20, 1961:

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In the period from March 28, 1960 to March 20, 1961, the Dow Jones Industrial Average increased +9.18% compared to the overall change of +9.53% in the Nifty Fifty.  The breakdown of the data based on dividend yield, price-to-earnings ratios, and dividend payout ratio.

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The best gain was achieved by the top three stocks in the High P/E category with an increase of +13.00%.

Note:

  • Rank is determined by 58 closed-end funds and over 100 open-end investment companies and their holdings.  Rank number 1 means the stock is held by the most investment companies on a dollar value basis.
  • “The Favorite Fifty: The First Quarter Saw a Good Many Changes in the Line-Up.” Barron's. June 6, 1960. page 9.
  • Aigeltinger & Co.
  • Vickers, Sydney. Guide to Investment Company Portfolios. Vickers & Associates. 1960.

See also:

Nifty Fifty: 1953

Below is the performance of the Nifty Fifty as published on September 28, 1953 by Barron’s covering data from June 29, 1953 to June 28, 1954:

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In the period from June 29, 1953 to June 28, 1954, the Dow Jones Industrial Average increased +25.32% compared to the overall change of +17.37% in the Nifty Fifty.  The breakdown of the data based on dividend yield, price-to-earnings ratios, and dividend payout ratio.

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The best gain was achieved by the top three stocks in the High Payout category with an increase of +22.99%.  On average, best performing group was the High P/E, however, no grouping managed to beat the performance of the Dow Jones Industrial Average.

Note:

  • Rank is determined by 58 closed-end funds and over 100 open-end investment companies and their holdings.  Rank number 1 means the stock is held by the most investment companies on a dollar value basis.
  • Johnston, Paul A. “With the Investor’s Investor: Tobacco Stocks Join List of ‘Favorite Fifty’ Group.” Barron's. September 28, 1953. page 31.
  • Aigeltinger & Co.
  • Sydney G. Vickers.

See also:

Nifty Fifty: 1951

Below is the performance of the Nifty Fifty as published on September 10, 1951 by Barron’s covering data from July 2, 1951 to July 9, 1952:

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In the period from July 2, 1951 to July 9, 1951, the Dow Jones Industrial Average increased +12.66% compared to the overall change of +11.15% in the Nifty Fifty.  The breakdown of the data based on dividend yield, price-to-earnings ratios, and dividend payout ratio.

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The best gain was achieved by the top three stocks in the High P/E category with an increase of +36.00%.  The best performing group was the High P/E stocks where all of categories generated gains that beat the Dow Jones Industrial Average.

Note:

  • Rank is determined by 58 closed-end funds and over 100 open-end investment companies and their holdings.  Rank number 1 means the stock is held by the most investment companies on a dollar value basis.
  • Johnston, Paul A. “With the Investor: Oil Holdings Maintain Lead in ‘Favorite Fifty’.” Barron's. September 10, 1951. page 35.
  • Aigeltinger & Co.
  • Sydney G. Vickers.

see also:

NLO in Review: 2020-5

The following is the breakdown of the Dogs of the NLO based on our January 3, 2020 watch list, compared to other fundamental ratios.  The purpose of this work is to confirm or deny the claims proposed of the Dogs of the Dow theory as outlined by Michael O’Higgins in his book Beating the Dow. Continue reading

TSX in Review: 2020-5

The following is the breakdown of the Dogs of the TSX (here) in week five, compared to other fundamental ratios. Continue reading

DJIA in Review: 2020-5

The following is the breakdown of the Dogs of the Dow (found here) in week five, compared to other fundamental ratios. Continue reading

Nifty Fifty: 1977

Below is the performance of the Nifty Fifty as published by Forbes from the December 15, 1977 publish date to December 15, 1978:

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In the period from December 15, 1977 to December 15, 1978, the Dow Jones Industrial Average decline –1.54% compared to the overall change of +2.46% in the Nifty Fifty.  The breakdown of the data based on dividend yield & price-to-earnings ratios.

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The best gain was achieved by the top three stocks in the High Yield category with an increase of +12.56%.  However, the best performing group was the Low Yield stocks where all of categories generated positive returns.

See also:

Nasdaq 100 Watch List: November 1, 2013

Below are the Nasdaq 100 companies that are within 10% of their respective 52-week lows. Stocks that appear on our watch lists are not recommendations to buy. Instead, they are the starting point for doing your research and determining the best company to buy. Ideally, a stock that is purchased from this list is done after a considerable decline in the price and rigorous due diligence.

Continue reading

Transaction Alert: Bought XEC at the Market

On July 17, 2012, we have bought Cimarex (XEC) at the market.

On June 8, 2012 (found here), we outlined our rational for buying XEC based on having good management and a consistent dividend policy.  Based on the Altimeter, XEC is considered worth purchasing at $72 and below.  At the current price of $56, XEC would have to increase +28% just to get back to the $72 level.

At the quarterly dividend rate of $0.12, we believe that XEC should be sold at a price of $123 or above. This will increase or decrease with the dividend policy.  Based on the previous Altimeter buy indications, investors should expect to hold XEC for 2 to 3 years before the next sell signal.

*NOTE: In our earlier transaction alert for UNM (found here), we indicated that we would allocate 10% of our portfolio to the stock.  Instead, we have reduced the allocation by half, to 5%, and bought XEC with the other 5%.  This allows us to take advantage of two opportunities which we fully expect to add to as the price declines.

Transaction Alert: Buying UNM at the market

On July 17, 2012, we will buy Unum Group (UNM) at the market.

On July 16, 2012, it was announced that Unum Group (UNM) is going to increase the quarterly dividend by +23.5%, from $0.10 to $0.13 (found here).  The increased dividend is payable to shareholders who hold the stock on or before July 26th. This increase of the quarterly dividend has brought UNM below the Altimeter level that would indicate that the stock should be bought.

On June 18, 2012, we pointed out the reasons why we like the dividend policy of UNM (found here).  Also, the Altimeter readings for UNM based on the new dividend indicates that, at the current price, the stock is relatively undervalued.

Those wishing to follow our strategy of buying UNM should understand that the stock is expected to decline from current levels.  This explains why we're only putting 10% of our portfolio into the stock at the present time.  Our goal is to accumulate more shares as the price declines.

At the quarterly dividend rate of $0.13, we believe that UNM should be sold at a price of $40.95 or above. This will increase or decrease with the dividend policy.  Based on the previous Altimeter buy indications, investors should expect to hold UNM for 3 to 6 years before the next sell signal.