Wednesday, February 19, 2014

Portfolio Sale - ComDirect Bank

I had bought comdirect bank in September 2013.

The logic for that was a 5.84% yield, with a dividend of 0.44 Euro per Share at a purchase price of 7.54.

Yesterday, I sold out of the stake.

My purchase logic was to hold for a 29% appreciation i.e. collect 5 years of dividends.

However, there was a news announcement yesterday that

a) Profits were lower for 2013
b) Dividend has been cut to 0.36 Euro from 0.44 Euro
c) Profits for 2014 will  be lower than 2013.

Combining the three factors, essentially, I could bank the 3 years dividend due to the price appreciation or wait and watch to get my target 29% appreciation.

I chose the former.

The annualized appreciation is around 35%, actual appreciation is only 12.7% i.e. ROC of 12.7%.

Time will tell whether this was the right decision, but the logic for this was to divert the investment to Washtec AG.

Here is a look at Washtec AG.

I am looking for an entry below 10.5 say 10.41, so that my target 5.5% yield is met. Will update on this purchase once I buy it

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