My Black Friday Shopping List

by FI Fighter on November 19, 2012

in Stock Watchlist

Oh boy, my favorite time of year is coming! I can’t believe that it’s almost Thanksgiving already. This means that Black Friday will soon be upon us, which will bring forth so many good deals, as we kick off the holiday shopping season! I’ve been patiently saving up my paycheck in anticipation, so I’m really hoping to score some awesome deals this year.

My plan is to wake up early so that I can insure I make it to the front of the line by 6:30 AM sharp. I don’t want to miss out on those doorbuster deals!

Here’s what’s on my shopping list. I’m crossing my fingers, hoping these items will be on sale come Friday morning:

Vodafone (VOD)

VOD, based in the United Kingdom, is one of the largest telecommunications companies. It operates networks in over 30 countries, and owns a 45% stake in Verizon Wireless. VOD recently announced a dividend increase from $0.473573 (February 2012) to $0.509276 (due in February 2013). VOD pays out dividends twice a year. Usually, the smaller distribution gets paid in February, and the larger one gets delivered in August.

Further, Verizon Wireless recently announced that it would distribute an aggregate of $8.5 billion to its owners, Verizon Communications (VZ) and VOD.  In the recent earnings report, VOD announced that it would use the Verizon Wireless distribution for share buybacks.

At this time, VOD has not announced whether or not a special dividend will be paid in 2013. Last year, a special dividend of $0.62108 was confirmed in November 2011, with the payout reaching shareholders earlier this year, in February 2012. In the 2012 payout, the special dividend arrived at the same time as the regular dividend.

The dividend yield for VOD is spectacular, even without factoring in the special dividend. My cost basis for VOD is $26.81/share. I am a buyer at these levels, and hope VOD can remain below $26. I am crossing my fingers that it will hover below $25 by the time Black Friday arrives.

LinnCo (LNCO)

Recently, the IEA released a report stating that the US is aiming to achieve oil independence by 2035. The article states, the U.S. intends to “becomes all but self sufficient in net terms by 2035 thanks to rising production of oil, shale gas and bioenergy, and improved fuel efficiency in transport”.

The U.S. currently imports about 20% of its energy needs. To reach these lofty goals will require a lot of things to go right, namely a vast increase in production to meet the growing demand. The United States already consumes 6.87 billion barrels (18.83 million barrels per day) of refined petroleum/biofuel products.

My play on the potential future oil boom is to invest in a rising star in the upstream business. Linn Energy (LINE) is the oil and natural gas company I’m taking to the dance, and I will do so my investing in LNCO! I got in at over $39/share the first time around, so would love to add more shares at the current level. If it can stay below $36, I will back the truck up… as much as I can anyway 😉

Kinder Morgan Inc. (KMI)

KMI is a favorite amongst us dividend growth investors, and for good reason! Richard Kinder runs the ship, and his companies have a reputation for being shareholder friendly. KMI has made a promise to investors to increase dividends at 12.5% annually until 2015, and over 10% long-term.

Also, to continue on the previous point, if the U.S. is successful in its pursuit of achieving energy independence, it will definitely need a toll road to transport the goods. That’s where KMI comes in with its 75,000 miles of pipelines. With its recent acquisition of El Paso Corp, KMI should be up to challenge. I’m a buyer at the current share price.

McDonald’s (MCD)

McDonald’s needs no introduction. It’s stores are ubiquitous across the globe. The recent bad news regarding the first decline in same-store sales in over 9 years, is really no news at all. If reports like these are really enough to cause the shares to plummet, then I am all for it!

For long term investors, this “bad news” will simply represent a great opportunity that presented itself. Will anyone even remember this event by this time next year? How about in 10-20 years?

To get a clear picture, simply plot MCD’s stock performance over the past 15 years. You’ll see MCD survived two devastating macro-scale events – the dot-com bubble, and the financial debt crisis. MCD didn’t skip a beat. In fact, while other companies were going bankrupt, it’s shares continued to soar! I’m a buyer at the current share price, but will wait to see if the shares can test the sub $80 level. With so many other bargains out there at this time, I have the luxury of being patient with this one.

 

What’s on your shopping list this Black Friday?

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{ 14 comments… read them below or add one }

1 The StoicNo Gravatar November 19, 2012 at 5:43 am

Great shopping list FI! I’m with you on VOD. I’ve been watching it for over a year waiting for a good entry price. I think we are getting close.

Reply

2 FI FighterNo Gravatar November 20, 2012 at 7:53 am

Stoic,

Thanks. Yeah, I’ve been watching VOD for awhile now, waiting for a good entry point. When it dips below $26 is usually when I start to pay closer attention. Let’s hope for the best!

Cheers!

Reply

3 ChadNo Gravatar November 19, 2012 at 8:34 am

Like you I also have KMI and MCD on my Black Friday shopping list.

Reply

4 FI FighterNo Gravatar November 20, 2012 at 7:55 am

Chad,

Great stocks! I don’t think you can go wrong with either KMI or MCD long-term. It would be even sweeter to be able to add to these positions on a pullback.

Best wishes!

Reply

5 Dividend MantraNo Gravatar November 19, 2012 at 5:18 pm

Great list there. I’m with you on all of them. I still have to look at LNCO more before I feel comfortable.

I really like the idea of some defensive names in case we go over the cliff. KO, GIS, PEP and some others fit the bill here. Low beta consumer stuff. Not the cheapest, but fairly defensive.

Defense names are cheap, but I wonder how those will fair over the next few months.

GPC is another on my list. NSC is still extremely cheap. As is INTC.

Best wishes!

Reply

6 FI FighterNo Gravatar November 20, 2012 at 8:01 am

DM,

You definitely can’t go wrong with the defensives, and GIS is basically the epitome of that. GIS sells a “boring” product (cereal) that is always in demand, has minimal stock volatility (beta near zero), and has captured industry dominance for quite some time. Sign me up! I just wish the price would fall below $37 sometime.

KO, PEP, and GPC are all good ones. Like GIS, they just don’t move too much which makes it difficult to catch these on a pullback. When the market does correct, sometimes the other more volatile stocks look more appealing, at first glance. But it’s definitely a good idea to add these stocks, especially during periods of uncertainty.

I also like NSC and INTC, but I’m fully allocated in both these stocks. They would have to correct even further for me to consider adding more.

Happy hunting!

Reply

7 JW @ AllThingsFinanceNo Gravatar November 19, 2012 at 5:57 pm

Besides my AAPL pickup Friday, I’m actually holding off until congress comes to a compromise over this looming fiscal cliff. It brings too many uncertainties into this already fragile market. I may by a few options on DIA and SPY in expectation of a big market swing.

Reply

8 FI FighterNo Gravatar November 20, 2012 at 8:05 am

JW,

Great move on picking up AAPL. The discount didn’t last for long, and it’s probably only a matter of time before it surges over $600 again.

Good idea on waiting for the fiscal cliff uncertainty to clear up a bit. My strategy is to ration a bit -adding to some positions this month, but keeping the bulk available for next month, when things could get more interesting.

A fragile market can be an investor’s best friend. But it’s always important to exercise caution.

Take care!

Reply

9 The Keichi OneNo Gravatar November 19, 2012 at 6:13 pm

All great things to have on your shopping list! I initiated in KMI just a few short weeks ago and am already thinking of averaging down on it some more. VOD also looks good! Keep on living the good life!

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10 FI FighterNo Gravatar November 20, 2012 at 8:08 am

Keichi,

Great buy on KMI! I believe it’s a winner for the long term, and even though it already makes up a large percentage of my portfolio, I still have plans to add many more shares in the future.

VOD looks cheap as well. There are lots of questions/uncertainty regarding Europe, which is weighing it down a bit. The short-term outlook isn’t the brightest (there are even rumors that VOD wants to exit out of its Verizon Wireless stake), but it should be just fine in the long run. It has a huge customer base, and should be able to generate future growth in emerging markets.

Best wishes!

Reply

11 John S @ Frugal RulesNo Gravatar November 20, 2012 at 10:29 am

Looks like you’ve got some potential winners there. I had sold MCD near it’s high and have been waiting for it to come back down before I decide whether or not to get back in. I think I am going to be waiting til they decide (or not decide) what’s going on in D.C. before I make any major decisions though.

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12 FI FighterNo Gravatar November 20, 2012 at 9:45 pm

John,

Good job on being able to sell at the high. MCD is pretty cheap right now, and if it can dip to below $80, I will definitely add more shares.

It’s probably prudent to wait for the dust to settle a bit before going “all in”. I’m trying to do the same as well.

Best wishes!

Reply

13 Brick By Brick Investing | MarvinNo Gravatar November 28, 2012 at 11:01 am

HAHAHA LOVE IT!! This is the best Black Friday shopping list I have ever seen! Who knows you might actually get to go New Year’s shopping as well 😉

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14 FI FighterNo Gravatar December 1, 2012 at 5:22 pm

Marvin,

Thanks! Since I didn’t get to do any Black Friday shopping (most things were still overpriced), I’m going to save up some more for New Year’s shopping! Can’t wait!

Best wishes!

Reply

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