Hormel Foods Acquires Columbus Manufacturing for $850 million

Hormel announced today that it will be acquiring Columbus Manufacturing, an artisanal packaged meat company for $850 million dollars.

Last year, Columbus had an annual sales figure of around $300 million with an estimated 5% annual growth moving forward.

As you can see from the landing page for Columbuscraftmeats.com, it’s similar to those companies that also seem to be targeting the millennial generation. Buzz words like: Crafted, Anti-biotic free, & Authentic are all the craze with the under 35 crowd that is staying away from highly processed products.

“Most people in the food business regard Columbus as the Gucci of premium deli meat,” Gregory Purcell said, the CEO of the private equity group that originally purchased Columbus for $213 million in 2012. I really like this comment, it defines a company with a good reputation within its customer base, something paramount with any food company. Look at the struggles Chipotle is having right now after years of branding itself as a healthy, real ingredients with no antibiotics , fast-food chain.

I believe this acquisition was the right move for Hormel as it works to capture more and more market share within the pre-packaged meats industry.

Recent Buy: OHI (Omega Healthcare Investors) – Repurchase with 8% off

Recent Buy: 10/31/17

Today, I purchased an additional 21 shares of OHI (Omega Healthcare Investors) for $28.585/share or $605.24 in total capital. I had 37 shares of OHI prior to this purchase in my Traditional IRA, bringing my total shares to 58. This increases my forward dividends by $54.60/year.

For Q3 of 2017, OHI underperformed what was expected by Wall St. consensus. The company missed their expected revenue figure by $44.4 million, despite being up 4.4% since the same time last year. These troubles stem from tenant, Orianna Health Systems is essentially behind on their rent. Trouble is, with the types of properties that OHI operates, you can’t simply close down and kick out current tenants because a large majority of them are the elderly with longterm care needs.

The missed earnings caused a pretty big sell off after-hours on the 30th, and today it looks like it’s recovered some of it’s losses. It’s a great dividend player that just went on sale. Time to pick up some more with a little bit of capital.

It will be interesting to see what the next dividend increase looks like, although management did say on their earnings call that they don’t expect much change.

Invest on! It looks like another dividend growth investor, My Dividend Pipeline, also took advantage today, with a lot more capital, too! Way to go!

Total Forward Dividends: $822.45

How To Get To Machu Picchu, Peru

Back on Christmas of 2016, my partner, two friends and I traveled to Machu Picchu via a flight into Lima, Peru. It’s no easy task getting around and navigating Peru, so hopefully this can help smooth out some of those speed bumps.

If you’ve ever had the itch to visit this Wonder of the World, we’ve created a quick, fun and informational video on exactly how to get to Machu Picchu.

Have you ever gone on a vacation that could have used a guide to help you get there?

Enjoy the video!

Recent Buy: T (AT&T) – Repurchase

Recent Buy: 10/25/17

Today, I purchased an additional 21 shares of T (AT&T) for $33.49/share or $708.33 in total capital. I had 25 shares of T prior to this purchase bringing my total shares to 46. This increases my forward dividends by $41.46/year.

ATT suffered a big sell off back when I first posted that I was closely watching T.  Today, it dropped another ~4% after a not so investor friendly earnings report for Q3 ’17. It reported 74¢ earnings per share, but Wall St. was expecting it to be 1¢ higher. That might not sound that much, but when you take a penny of 6.4 billion shares currently in supply, its a bit of a shocker. The good thing though, AT&T managed to add more wireless subscribers than was expected. (1 million more, actually)

If I stick to my original thesis on buying for the long-term, this stock is only more of a sale. No reason to not buy more if the reason I first invested in T hasn’t changed. This is a long term investment, with a very nice dividend yield, to boot. There may be more short-term declines and possibly a bumpy ride, but it’s one I’m willing to take for the next 5-10 years.

I highly suggest other dividend investors follow suit. This stock hasn’t been this low since the beginning of 2016, and that was when the market was beaten down as a whole. When life gives you a %10 discount into your retirement, I take it.

Total Forward Dividends: $767.85

Recent Buy: GIS (General Mills)

Recent Buy: 10/23/17

On October 23rd, I purchased 27 shares of GIS (General Mills) for $51.91/share or $1401.66 in total capital. I had 0 shares of GIS prior to this purchase, so my total shares are 27. This increases my forward dividends by $52.92/year.

General Mills has been beat down in the last 52-weeks, dropping in value by about 14%. But, GIS is a dividend stalwart and has been paying a dividend for 119 years, consecutively. That’s serious commitment to shareholders, and I want in! They also pay out a very generous 3.77% yield at current price levels. I am happy to buy in at these discounted levels and ride out the temporary headwinds the’ve been facing as of late.

Forward yearly Dividends: $726.69 (almost to the $1k mark/year in dividends!)

Cryptocurrency Explained

You may or may not have heard about a new “trend” that is quickly starting to become a manic craze in the digital world. It’s called cryptocurrency and the most prominent version of cryptocurrency is called ‘Bitcoin’.

Before we dive into Bitcoin itself, let’s clear up what the heck a cryptocurrency even is.

Cryptocurrency

Cryptocurrency is a digital asset designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of additional units of the currency. Source

If that doesn’t make any sense don’t worry, it’s a little bit confusing at first, but I’ll see if I can simplify it a bit into something more bite-sized.

U.S. Dollars ($) are a paper-based currency that is given a certain value based on a finite amount of gold. The gold standard.  Bitcoin, the largest and most prominent crypto, isn’t based on a finite physical commodity, such as gold. Instead, its value is derived on a finite amount of Bitcoins. 21 million to be precise. So, there in lies the “value” of a single bitcoin coin. Anything with a finite supply eventually has a value that society puts on it. Gold, silver, titanium, etc are all examples of a physical good with a value that fluctuates depending on market demand and total amount that is in existence.

Imagine if I had only 1 nickel then gave you that 1 nickel. You now have 1 nickel and I have 0 nickels. You own that 1 nickel and can do anything you want with it, since it’s yours after all. I can’t tell you what to do with it and I can’t give you any more since I only had 1. You are free to give it to your mother as a horrible Mother’s Day gift, or you can give it to a kid on a playground and make their day, it’s all yours. It is pretty easy to understand this transaction because it happens every time we spend money, or give money in exchange for a service.

But, what if instead of giving you an actual, physical nickel, I gave you a digital nickel. The problem is you have no idea if that nickel is worth anything or if it even truly exists.

What if I don’t even have a nickel! This conundrum is called the double-spending problem and it exists with almost every digital currency in existence. Until, Cryptocurrencies. 

The Blockchain

We need some sort of ledger that allows me and you to see that the digital nickel I gave you was actually mine, and now is actually yours. So, we make a spreadsheet together and write down our transaction and the deal is done. The nickel is yours, right? Well, yes unless I am the one to keep that ledger and then alter it maliciously by adding more nickels to my account even if I don’t actually own them. The whole system gets screwed up and no one can be trusted anymore.

This problem was solved with the creation of Bitcoin and the blockchain. Blockchain = Ledger. Essentially, it’s just a endless transactional ledger comprised of ‘blocks’ that track all of the transactions that occur within it.

Bitcoin uses the same type of ledger system we used when we traded our nickels. The key difference though, is that instead of only me or only you having access to the ledger, everyone who participates in Bitcoin transactions gets a copy of it and can transparently see how many “nickels” are in supply at any given time. No more cheating and saying you have more “nickels” or Bitcoin than is actually there.

Things start to get even more interesting when you realize you can send more than just digital money with the blockchain ledger. You can attach little notes, contracts, etc and there is no way to modify or cheat the system because any participant can see the transaction and verify its existence.

Mining

Remember when I mentioned there is finite amount of bitcoin? 21 million. Well, currently there are 14 million in circulation, with about 1/3 left to be “mined.” Yes, mined like mining for gold. Are you seeing the similarities yet? New Bitcoins are created (or mined) by very techie people with very, very powerful computers that must solve complex equations, called Hashes. This part isn’t very important to understand the technicals of, but knowing where these digital coins come from can help with grasping the entire concept. So, when these miners and their computers spend enough time and power solving these complex equations, eventually they will have solved one and are reward with a certain number of bitcoins for all of there time and effort. The more and more equations that are solved, the less and less they are rewarded and the more complex the equations become. The assumption being, computers will become faster as the equations become harder. The very last of the 21 million bitcoins will be “mined” at approximately year 2140. Longer than anyone reading this will be alive, unfortunately. After the miners receive there reward, they are free to do what they want with it. Sell it, keep it or even lose it if they are careless. (Online “wallets” that store your coins all have passwords to keep them secure, lose the password, and you lost your coins.)

There are over 2100 different crypto currencies out there today, almost all of them will never gain traction, but a few have. Bitcoin, Ethereum, Litecoin & Ripple are all examples of the top 4 crypto currencies being used today. And they all have wildly different values at the moment. Bitcoin just today reached an all time high over over $6,000 per coin, while Ripple is worth only $0.20 per coin. Quite the spread. But each coin has something unique about them that differentiates them from the rest. I won’t go into the differences because it gets quite technical and I don’t really fully grasp it all either. So.. Yeah.

Hopefully this all helped to clear up some of the mystery behind Bitcoin and cryptocurrencies or oped your eyes to the possibilities of it and the blockchain technology itself.

I am invested in Bitcoin, Ethereum, Litecoin and Ripple. I strongly believe in the underlying technology and I am spreading out my eggs across the different coins to diversify as much as possible.

Want to get started and invest in cryptocurrencies today? Visit Coinbase.com

Want to read an article from a fellow finance blogger about Bitcoin? Check out Full Time Finance

Turn Impulse Spending into Impulse Buying

With companies like Amazon offering same-day shipping for a massive portion of their products, it’s pretty easy to take impulse shopping to the next level. In-fact, just today I ordered new disc brakes for my electric commuter bicycle on Amazon and it should arrive by tomorrow morning. Granted, this wasn’t an impulse buy, per se. It was a necessity because my front brakes barely stop me at all anymore due to the increased weight from the motor and massive battery. But, I digress.

I was an impulse shopper for years! Constantly ordering things I don’t need online only to barely ever use them or to sell just a few years later. Most of the gratification of making impulse purchases comes from the instant gratification of spending your hard earned money. It’s like a reward for working hard day in and day out.

I had to find a way to curb this bad habit.

Since I started investing almost 2 years ago, I found that I simply had less money to spend on impulse purchases. But more importantly, when I get that urge to spend money, guess what, I buy stocks! It’s the absolute best scenario I can think of to curtail those spending urges and I end up with boatloads of high-quality products that can be sold years later FOR PROFIT. I even get a very similar “high” as I did from making those stupid purchases on Amazon, all 28-pages of “past amazon orders” Ugh, what a waste of all those years of compounding returns.

Since selling my 4-wheeled-retirement-sucking metal cage, I have even more money available to spend that would have normally been spent on near-useless materialistic goods. I instead put 100% of that extra cash right into the stock market which is now increasing my yearly deposits by $6,000! That’s more than enough money to max out an IRA.

I know many, many people in my life that would benefit even more than me by turning their impulse spending into impulse buying.

Have you considered doing the same thing? I challenge you to 30 days of no impulse spending and switching to impulse buying of stocks (and more) and see what the effects are to your own finances.