How to Read Stock Charts

Although I aim to invest in fundamentally sound companies, I will use technical analysis techniques to help me determine when to buy or potentially sell a stock.

Today, I’ll go over some recent examples of technical charts of growth stocks: Tesla (NASDAQ: TSLA), Amazon (NASDAQ:AMZN), and JD.com (NASDAQ:JD). But these are techniques that you can apply to any stock chart, including dividend stocks

There’s a lot of information here. So, it’s probably better to watch the YouTube video instead and pause it whenever you need to. However, in case you prefer a blog version, here it is:

JD Stock Chart Reading

JD’s recent technical chart is beautiful and perfect learning material so I’ll start with this one.

JD stock chart showing stock bottoming, making higher lows, and breaking out
Figure 1. Source: Stockcharts with author annotation

Figure 1. It bottomed and then consolidated with higher lows before breaking out from the resistance that was marked by its 200-day simple moving average (or SMA) that’s in red.

JD stock chart showing potential bottom signal with relative strength index 30, moving average convergence divergence lines, and consolidation before breaking out above a long-term simple moving average.
Figure 2. Source: Stockcharts with author annotation

Figure 2. Notice that two indicators suggested a potential bottom. First, the Relative Strength Index (or RSI) hit below 30 (so the stock was oversold) and it eventually rose above the 30 mark.

Second, the Moving Average Convergence Divergence (or MACD) had the black line crossing above the red line, which indicated a change in direction of the stock.

The bottom was finally confirmed when JD stock climbed above the 50-day SMA, and it consolidated to eventually break above the long-term SMA.

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Brookfield Property Stock: Still Attractive with 7.3% Dividend Yield

Summary

  • Brookfield Property Partners LP’s (TSX:BPY.UN)(NASDAQ:BPY) / Brookfield Property REIT’s (NASDAQ:BPR) Core Retail business is resilient, and it’s going through a phase of redevelopment to be more relevant in today’s retail environment.
  • The REIT’s Core Office business is doing well.
  • Realized gains reduced 2019 payout ratio from 95% to 84%.
  • We’re comfortable with BPY’s token raise (+0.8%) of the Q1 2020 cash distribution, as the yield is high at 7.3%.

Financial Overview for Q4 and 2019

Funds from operations (FFO) per unit (excluding opportunistic portfolio investment gains) declined 6% for 2019 against 2018. However, BPY stock did increase its cash distribution by 4.8% year over year.

Based on FFO only, the payout ratio was 95%. Thanks to the investment gains from its opportunistic portfolio, the actual payout ratio (based on “total earnings”) is lowered to 84% for 2019. Although this is higher than the 60% range in the previous years, it’s still sustainable.

Capital Recycling Program

BPY has been consistently able to sell assets in the opportunistic portfolio or mature assets at higher than their accounting values and recycle that capital into properties with expected higher returns.

In 2019, BPY sold $3.3 billion of assets at 6% higher than their accounting values and generated net proceeds of $1.8 billion that were deployed at higher returns.

Management expects to continue this capital recycling program of stabilized or mature assets to achieve net proceeds of $1.5-$2.0 billion for redeployment.

Token Dividend Increase; Dividend Yields 7.3%

Admittedly, BPY’s 2019 payout ratio of 95%, based solely on FFO, was higher than normal. Its average payout ratio (based solely on FFO) from 2014 to 2018 was 85%.

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3 Top Dividend Stocks For February 2020

Summary

  • Restaurant Brands, Nutrien, and Simon Property are undervalued.
  • They offer decent yields of about 3-6% and long-term total returns potential that’d beat the market.
  • Returns will come from dividends, growing profitability, and valuation expansion over the long run.

Are you looking for dividend stocks to generate some nice passive income and market-beating long-term returns? Let’s get some insight from Peter Lynch. 

Are you looking for dividend stocks to generate some nice passive income and market-beating long-term returns? Let’s get some insight from Peter Lynch. 

He’s the incredible mutual fund manager who returned about 29% per year for his investors between 1977 and 1990 — essentially, transforming a $10,000 investment into about $280,000 over 13 years.

Source: Author

Lynch is also the author of The New York Times bestseller, One Up on Wall Street.

One of his famous quotes is

Invest in what you know.

So, what do we know? We come into contact with many companies every day. For example, in the past week, you might have gotten a quick bite at Burger King, Tim Hortons, or Popeyes Louisiana Kitchen and notice that the quick-service restaurant was buzzing with people.

This triggers you to do more research and realize that these franchises are actually all under the same company, Restaurant Brands (TSX:QSR)(NYSE:QSR).

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