Recent Stock Purchase II December 2016

Half way through December and my second tranche of buys have been made. It’s been a wild ride on the way up post election and the momentum doesn’t seem to have slowed down one bit. Sure, the ‘pause’ button may have been hit with the Fed raising interest rates but looking out longer term it seems that the ‘Trump Bump’ remains intact. We already have seen which sectors are benefiting from the recent run up in the market and which are being left behind. Clearly, any time the Fed hints at raising interest rates we already can expect a sell off in the REIT sector. In my December 2016 Stock Considerations post I had mentioned several consumer staples I was interested in picking up along with a couple health names including a couple in the health REIT space. With many consumer staples rising in recent weeks I was ‘steered’ towards the REITs. With that being said:

 

I have added to my IRA account 15.0 shares at $23.70 for a total investment of $355.50 in Care Capital Properties, Inc. (CCP). With this recent purchase my IRA account holdings in CCP now totals 36.4014 shares for a value of $861.99. This was a commission free trade.

 

I also added to my IRA account 15.0 shares at $29.16 for a total investment of $437.40 in HCP, Inc. (HCP). With this recent purchase my IRA account holdings in HCP now totals 107.3122 shares for a value of $3,113.13. This was a commission free trade.

 

I realize that these two purchases may not be the most popular names on the block as REITs, especially the health REITs, have really been crushed in the last month or so. Many stocks in the sector have come way down from their summertime highs as the whole health sector is seemingly under fire coupled with the fact that interest rates are finally moving higher in a meaningful manner. While it’s difficult to buy stocks that are under pressure for the foreseeable future that’s precisely the best time to initiate and/or nibble on positions as better prices, values and yields present themselves.

 

What do you think about my recent stock purchases in the health REIT sector? While the near and mid term outlook for this sector looks dicey, I still think that longer term (several years down the road) the sector as a whole will thrive. Please let me know below.

 

Disclosure: Long CCP, HCP

36 thoughts on “Recent Stock Purchase II December 2016

    • Hi JM,

      Believe it or not I’m also looking at other REITs to potentially add to my IRA. I’m also considering APLE, STAG and LTC to name a few. I think anyone investing in REITs needs to have a long term outlook and just sit tight during periods of turmoil as we are seeing nowadays. Happy to be a fellow shareholder with you. Thank you for commenting.

  1. Good purchase. I am down 20% on my CCP purchase but I am holding on as it is well diversified and large SNF operator (but trades at a steep discount to OHI’s P/FFO ratio), and will find ways to handle the interest rate rise by adding rent riders into the agreements in the future. You snagged CCP at s great price,
    Ten Factorial Rocks recently posted…What To Do With Gilead?My Profile

    • Hi TFR,

      I am taking a long term view with these recent nibbles as near term headwinds are really driving these stocks lower with rising interest rates scaring off many potential investors as well as a general assault on the health care sector as a whole. I agree that these REITs will be able to adapt to a rising interest rate environment by simply passing costs along to customers as they provide necessary services that are not easily terminated. Thank you for sharing your thoughts.

    • Hi IH,

      Anyone investing in the health REITs must have a long term outlook. The tailwinds are there for the next two or three decades but in the meantime one must contend with rising interest rates and an assault on the health care industry as a whole in the near to mid term. I always say that as long as those distributions keep rolling in I’ll be happy getting paid to wait till things improve in the space. As always, I appreciate your comment.

  2. Best time to buy when companies are falling as long as they are solid companies which they are. My theory is on solid companies what goes up must come down and vice versa. We don’t always know when it will happen. Good job keep it up
    Doug recently posted…November DividendsMy Profile

    • Hi Doug,

      Your comment highlights an important caveat of dividend investing… buying when others are selling to capitalize on better prices, values and yields. I’ll be the first to admit that putting any amount of fresh capital into a struggling business or sector does not give a feeling of comfort but can provide some of the best long term gains. I feel that the health REITs will have some issues in the near and mid term time frame but longer term I like the sector and will gladly get paid to wait until things improve in that specific sector. Thank you for commenting.

  3. DHut,
    I have to agree the market has been going crazy, not sure if its deserved, time will tell. I like your CCP buy, not as hot on HCP. In that field I have OHI and HCN, those along with DOC, CCP, and a few others would be my choices. I too have them in a tax advantaged account, let that money roll in!
    Have a good December!
    -Gremlin
    Dividend Gremlin recently posted…November Review / December Preview, 2016My Profile

    • Hi DG,

      The health REITs are really offering up some interesting buying opportunities in recent weeks, that’s for sure. You seem to have built up a nice portfolio in the sector judging by the names you have mentioned. I know HCP is not a popular stock these days for many reasons but I think that the ship can be righted in the years to come. Of course, my main concern is making sure I continue to get paid to wait while that happens. As always, I appreciate your comment.

  4. I have just purchased today some extra HCP to my portfolio as well. I really think that they are not stupid and after the QCP spin off they have set their dividend at a safe level so we won’t see a cut at any time soon. Now the yield is over 5% which is good enough for me. Furthermore the good assets have stayed in HCP so I’m hoping the best on a long term.
    Roadrunner recently posted…Building an Amazon Affiliate SiteMy Profile

    • Hi Roadrunner,

      Your comment reflects some of my reasoning for making this recent purchase. There’s little doubt that the health sector as a whole is hurting these days but there are still some solid names in the space going forward. I think investing in this sector just requires some patience and the enjoyment of getting paid to wait while things slowly improve in the space. Thank you for sharing your thoughts.

  5. Good purchases. I also bought HCP days ago, with a higher purchase price at $30.45. I’m okay with that, and will be very patient while collecting dividends. I also hold WPC in my ROTH IRA account for years. I didn’t hear much about CCP before, so thanks for the info sharing, and I’ll look into CCP.

    • Hi MU,

      I have the same attitude as you regarding HCP. Patience, collect those dividends and wait for a turnaround in the sector. I think HCP can become a stronger company going forward now that it shuttled QCP but there’s no question things are still shaky in the entire space looking near and mid term. CCP was a spin off of VTR a while back. That’s how those shares entered my account and they too have come down quite a bit in the last month and I figured a nibble on that name was OK at this time. Thank you for stopping by and commenting.

    • Hi DDU,

      It’s definitely a sector that’s under fire in recent months which is giving us some better buying opportunities when compared to their summertime highs. As long as those dividend continue to flow in I’ll be happy wait for a turnaround in the space. Thank you for sharing your thoughts.

    • Hi MD,

      Thanks for that vote of confidence. I still like the group going forward but there’s no denying the near term headwinds this sector is facing. Thank you for commenting.

  6. It definitely seems like a good time to at least be looking at the HC REITS. I honestly haven’t done my research on CCP since receiving shares from the spinoff so I can’t really justify adding more here until then. I need to look into HCP too now that we’re past the QCP spinoff because that was a mess. I keep hoping the markets will turn a bit to open up more value but every time they look like they might they turn right around.
    JC recently posted…It Never Hurts To Book A ProfitMy Profile

    • Hi JC,

      There’s no question the state of the health REITs are in flux these days. From new spin offs and old guard health REITs trying to figure things out in the changing health care landscape as well as adapting to a rising interest rate environment. It’s usually at times like these when things are uncertain that stock prices are reflected accordingly. For now, I feel comfortable nibbling on these health REITs and am hopeful that things will turn around in their favor in the years that follow. As always, I appreciate your comment.

  7. Good buys!! I’ve been looking to pick up some HCP for awhile but chose to go with OHI last month and recently scooped up some O. To be honest, I was hoping for a nice drop after the FED meeting but it didn’t move much and was up today.
    Special Agent Dividend recently posted…Recent BuyMy Profile

    • Hi SAD,

      Of all the REITs it looks like the health REITs are still looking the weakest. Nice pick up with OHI and O though. I’ll continue to nibble on the sector as it still looks weak for the foreseeable future. Thank you for commenting.

    • Hi DD,

      This recent nibble was purely about investing in the most beaten up names in my portfolio which are all the health REITs. Like you, I hope to read about a QCP dividend announcement sometime soon. I realize there is no guarantee of a dividend but I still suspect one to be declared eventually, even if it’s just a token distribution. Thank you for sharing your thoughts.

  8. The great part of being a dividend investor is that it takes some of the guesswork out of when to buy. You just grab shares at a valuation you like and collect the payments. No need to over analyze or try to time the market for every penny. It is a bit liberating and I have noticed how effective it has been for me over the last 10-15 years. Nice going and keep it up !

    -Brian
    Brian recently posted…Downsizing Complete – Was it Worth It?My Profile

    • Hi Brian,

      Well said. That’s pretty much how I invest. I just look for, what I perceive to be, good value and current yield first and, of course, dividend sustainability. The large health REITs all seem to fit those criteria these days which is why I nibbled a bit in the sector last week. I never time the market nor fret about every penny paid for a stock higher or lower. When taking a long term view it really, as you stated, takes ‘some of the guesswork out of when to buy,’ and what to buy. As always, I appreciate your comment.

    • Hi TCF,

      With these REITs a long term outlook is mandatory. Clearly the entire sector will be under pressure in the near term as rising interest rates and an all out assault by the government against the health sector in general is putting pricing pressure on these stocks. To me, it looks like a buying opportunity which is why I nibbled in the space. As always, I appreciate your comment.

    • Hi DC,

      The health REITs have gone on a big time sale over the last month which is why I decided to nibble on some stocks in the space recently. I still like these names long term but see continued uncertainty in the near and mid term which is giving us some better value and yields in some great REITs. Thank you for sharing your thoughts.

    • Hi DD,

      I can understanding your decision in wanting to wait to see how the health REITs will perform going forward. There’s no shortage of near and mid term questions that need to be answered before a definite direction for the space can be determined. Of course, I think long term the entire sector will do just fine and the current turmoil is presenting us with some better buying opportunities. As you noticed, my recent purchases were both on the small side as I too am continuing to invest, albeit cautiously in this sector. Thank you for commenting.

  9. I’ve been adding REITs lately(mainly index funds) to get them back to my target asset allocation and their drop recently has made for some more attractive price points. I wonder where yields will had in the next year and I could see that having a negative impact in the short term on REIT prices but at least our dividends will be reinvested at a lower price if that happens.

    • Hi timeinthemarketblog,

      The REITs have been looking a lot more attractive in recent weeks than in a long time. Of course, some REITs have performed better than others with the health REITs being negatively impacted the most it seems, which is why I decided to nibble a bit in the space. Are you adding to a REIT ETF like VNQ? I always say that as long as those dividends keep rolling in I’ll be happy and as you mentioned if they are reinvested at a lower price then that just means more shares for us. Thank you for stopping by and commenting.

    • Hi DD,

      Investing in health REITs requires a long term horizon. I still think they’ll have it tough in the near to mid term but further down the road there’s no denying the tailwind this sector will enjoy as our population ages. Thank you for commenting.

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