Sunday, 7 February 2016

Long Term Growth, Part 2: US Holdings

While I already spent some time with what defined 'Long Term Growth', there's a second side to it. Quite apart from wanting to hold on to quality companies for the long term, the simple fact is Canada is a small part of the global economy. Our currency (as many Canadians are now finding) is subject to the fluctuations of a global market that views ours as a petro dollar. Many of the worlds largest companies aren't on Canadian markets.

That's why I hold a significant chunk of my retirement holdings in US stocks, denominated in US currency. As the Canadian dollar declines, they become even more valuable in maintaining the value of my portfolio.

Alcoa (NYSE:AA) is one of the world's largest producers of aluminium and aluminium products, and it's a recent purchase on my part. With the global commodity route in full swing, Alcoa is at record low prices for what I believe is a solid company with good long term products. They are also planning to split into two different companies by the end of the year, one focusing on aluminium production, the other on their 'value add' business of products. This is something I personally believe will provide a lot of value to the company, as their value add business is (at current stock prices) something that seems to have been lost in the commodity prices crash.

Disney (NYSE:DIS) does not really require a ton of explanation. It's a global entertainment and media powerhouse. Most of the successful studio films of the last five years after been produced by the House of Mouse, and they are a theme park juggernaut. They show no signs of slowing down and continue to churn out hit movies, which provide a long term revenue stream once out of the theaters in merchandise and opportunities. Pixar, Marvel Studios, Star Wars...it all rolls up to Disney's bottom line.

Investors Bancorp (NASDAQ:ISBC) is my exposure to US financials. I wanted something small (but not too small), regional, with the opportunity for long term future growth. So far, looks like it's been a solid pick, with a recent dividend bump and good prospects with the recovering US economy.

Microsoft (NASDAQ:MSFT) is, as I already mentioned, a long term holding based on the growth of cloud computing. Sure, they have a solid entertainment devices division, with XBox and XBox Live providing solid returns, but with the world reliant on data for almost every aspect of our lives, control and access of data has moved increasingly towards cloud based systems, systems Microsoft is currently providing dominant services in.

Nordic American Offshore (NYSE:NAO) is a bit of an outlier. I only have a few shares in the company, they landed in my lap from a spinoff by an old holding of mine, Nordic American Tankers (NYSE:NAT) that I sold off last year for a solid gain. I haven't bothered to sell them off as they continue to pay a dividend, and were essentially 'free' as a result of the spinoff (I already booked a gain on my Nordic American shares).

Realty Income Corp (NYSE:O) is a REIT in the US that has solid real estate holdings in almost every single State. As the landlord for some of the biggest and most solid retail names in the US (Walgreens, FedEx, AMC Theaters), it allows me to collect rent without being a landlord myself.

Unilever (NYSE:UL) is a global consumer products powerhouse. Most people have Unilever products in their home without even realizing it. Dove, Axe, Hellman's, Lipton, Ben & Jerry's...all Unilever. A consumer products company is a critical part of any portfolio, in my mind, because these are products people use every day, buy every day, and even in an economic downturn, many of them are products people won't do without.

Verizon (NYSE:VZ) is one of the largest mobile telecommunications and online media companies in the US. In a world connected by the Internet, those who provide the connections and delivery systems, the phones that we use every day, is an integral part of any long term plan.




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