July 08 updates to my DSP portfolio

With the market in correction, I couldn't help but consider opening new positions in some solid companies that offer inexpensive DSP plans. This market is going to turn around at some point. I am no economist nor am I an investment professional. I do not know what will shift the balance to the positive side. Whether it is oil price speculation correcting itself, the dollar appreciating, the housing market stabilizing, the credit crunch easing, I am not sure. What I do know is that this market will turn around. It did it 2000, following the dot-com burst and it will after the current crunch. I cannot predict a time line for a recovery, for that matter, I am not too worried about the time line itself. My investing horizon is long (10~15 years) and I have enough time for a recovery and forward growth. The current market condition brings to mind one of Warren Buffett's quotes, when he said "Be fearful when others are greedy and be greedy when others are fearful." I have had my share of lousy luck being greedy. I have never timed the market correctly, and I really should not have tried. I have fared much better when I have diligently and in a disciplined manner bought shares of an undervalued company at periodic intervals over a period of time. My motto right from childhood has been 'Slow and steady wins the race'. It is obviously taken from the story about the Hare and the Tortoise but it applies to the investing world as well. Dollar Cost Averaging helps to make investing affordable for those of us that do not have thousands of dollars in one shot to invest in multiple stocks. It also helps to keep the cost of investing low and is designed to even out the purchase price due to market inefficiencies. As long as the company fundamentals are good/strong, dollar cost averaging is the best way to reduce the risks of trying to time the market. By participating in multiple DSP plans I am also able to effectively diversify my portfolio.

Well, enough of my rant on dollar cost averaging and portfolio diversification, I am sure you all have heard that argument many times before.With that in mind I ventured out to the various DSP Plan websites. I came across one of my old favorites, Paychex (Amstock). Earlier this month I had noticed that Paychex was trading at it's year low. In fact, the current price for Paychex is close to the price I paid for it in early 2005. I participated in the Paychex DSP plan previously from 2004 through 2007. I started accumulating in 2004 and continued through 2007, selling some in 2006 (to finance the purchase of our house) and the rest in 2007 (to finance some urgent international trips). Except for the fees I paid when I sold the shares I did not pay a transaction fee for the monthly purchase. That’s a pretty good deal.

I re-initiated my monthly investment plan by signing up for an automatic debit of $150 from my checking account.

I also found a few other DSP plans that I believe would be good investments under the current market conditions:

(Click on the link to access specific plan information)

Oshkosh Inc. (Computershare)
Texas Instruments (Computershare)
Office Depot (Mellon Investor Services)

All of these are mature, well established companies.

Oshkosh makes commercial and fire trucks, and military vehicles. It has been around since 1917 and is currently struggling with lower-than-expected sales and a gloomy forecast for the 3rd quarter. I expect the stock to languish in the $17 to $20 range for the next 6 months or so until the end of the 4th quarter. That would give me some buying opportunity over the next 6 months and further.

Texas Instruments makes chips and calculators, to put it simply. It is almost 80 years old and the first chip design from TI came 50 years ago. Unlike some of the other technology giants like Intel, Cisco, IBM you won't hear much about TI but it is the market leader in what it does. It is priced quite attractively right now at ~ $24.

Office Depot is a supplier of office products and services to individuals and businesses. To my surprise Office Depot has been expanding internationally through investments in China, India, South Korea, Israel and others. I think these investments will pay off in the long run. Among the 3 companies I have mentioned here I am most concerned with Office Depot’s ability to turn around. There are some legitimate concerns about management quality at Office Depot, compared to Oshkosh and TI. However, the price is what attracted me. At around $7 it looks like a bargain.

That brings my DSP participation to 8

I am looking to invest into a couple more stocks offering DSP plans. Will need continue doing my research over the next 2-3 weeks to identify them. I have been thinking about diversifying into the financial sector. All of the major financial institutions such as BOA, Wachovia, WAMU, and Lehman Brothers offer DSP plans. Any suggestions?

Update to Computershare Customer Service Experience

For those that do frequent my blog for updates, I apologize for not adding any new posts since April. As in the past, family commitments and an overseas trip prevented me from adding new posts. When I returned from my overseas trip at the end of May I had a letter in the mail from Computershare apologizing for the mix-up. The ID issue was rectified and my Oneok Inc. (OKE) (Google Yahoo Earnings Chart) portfolio is now available online via account access. It did take quite some time (~ 2 months) to rectify the issue but now it's a thing of the past.

I have since added one more DSP to my Computershare portfolio and this time I did not experience any delay in being able to access my new portfolio online. More on new purchases in the next post.

Lousy customer service from Computershare. You be the judge!

In one of my earlier posts titled ‘It’s been a long time’ I mentioned that I had signed up for a new plan in February for Oneok Inc through Computershare. I highlighted Computershare in my very first post as one of few DSP administrators/transfer agents. I have had accounts with Computershare in the past, including Exxon Mobil, Aqua America, Pfizer, IStar Financial, and Equity Office Properties. My accounts with them go back to the year 2000 when I opened them with Equiserve. Equiserve was subsequently purchased by Computershare a few years back and all of my accounts were seamlessly transitioned to Computershare. I have had no complaints with Computershare since the transition until what has transpired the last few months. Let me highlight the key events that have occurred in the process of signing up for the Oneok Inc. DSP account.

Early February: Using existing online account, completed application for Oneok Inc. DSP plan. Initial Investment of $250 directly debited from checking account.

Mid February: Received W-9 form from Computershare to certify U.S. Tax Payer ID. Completed form and returned to Computershare

End of February: Monthly purchase cash debited from checking account directly to Computershare.

End of February: Completed W-9 form was returned to me, indicating that account could not be located. Mind you, this is a Computershare generated/initiated W-9 that was mailed to me.

Through out February I made several attempts to use Computershare’s online account access tool but to no avail.

Month of March: I have made 3 calls to customer service, once every week and during the first 2 calls I was told the same thing. My account ID has an invalid format and needs to be corrected. The customer service rep could not correct the ID format and needed to check with their supervisor. Each of the first 2 calls ended with a promise that a supervisor would call me back with a resolution. That did not happen after either of the first two calls.

End of March: Monthly purchase cash debited from checking account directly to Computershare.

End of March: When I called for the third time, the representative was about to get into the same routine of looking into the problem when I cut her off and asked to be connected to a supervisor.

I talked to her supervisor, who did remember reviewing my account from one of my previous calls. She promised to call me back with an update. She did call me back the same day to let me know that Help Desk is currently on the problem and is expected to fix the problem by the end of the day. She mentioned that several accounts have been affected by the problem.

April: It has been 3 weeks since that conversation with the supervisor. I have yet to receive an update on the status of my account. I called the supervisor on April 3 to find out the status my account but was only able to leave a voicemail. I have not heard back from the supervisor yet.

Out of curiosity I have been routinely accessing the online tool to update accounts and they still cannot locate my Oneok Inc. account.

I am to believe now that poor customer service is pervasive throughout the company. At least they are consistent in their methodology. Every customer service individual I have talked to has failed to communicate effectively to me. They have all failed to keep one of the most important tenets of customer service, fulfilling a promise to a customer. They all promised to call back with an update, but have never called back.

I am not expecting them to have perfect tools in managing their accounts. I work in IT and I know too well the occassionally glitches in account management tools. I do not doubt that Computershare is working towards a fix for the faulty account numbers so I am not questioning their attempts to fix the problem, just their ability to provide customer service.

Eyeing a few good DSP plans

I have been on the look out for a few good stocks with a DSP plan. The one stock that I have had in my tracking portfolio since last year is:

Omnova Solutions (OMN) (Google Yahoo Earnings Chart)

I began tracking Omnova, a small cap stock, starting April of last year when it was priced at $5.30. I had completed a New Account Application for Omnova under the then Bank of New Your Direct Stock Purchase Plan. I had signed up for monthly purchase of stock via direct debit from my checking account but had failed to enclose a check for the initial investment of $510.00. I assumed that the initial investment would also be directly debited from my checking account. However, the new account application came back with a letter stating that the check for the initial investment was not enclosed. I got sidetracked for a good part of 2007 from April through October due to family obligations so I never returned the application with the check. The company caught my eye again earlier this month when it released 1st Qtr 2008 results and the stock fell by almost 10%. It has since bottomed further to $2.98 (EOD April 11, 2008). That's a good 47% drop since I first looked at it last April.

After reviewing the 1st Qtr results here is my conclusion:


  1. Net sales rose 16% for the first quarter to $190.6 million from $164.8 million last year
  2. Net loss narrowed to $3 Million compared to a loss of $ 5.1 Million last year
  3. Operating profit of $2.5 million, down only $0.3 million despite $5.9 million higher raw material cost


  1. Raw material cost higher compared to last year
  2. As a consequence of increased raw materials cost the cost of goods sold increased 19%

All in all, it was not a bad quarter. There was not a lot of guidance provided for the remainder of the year but my guess is that costs will continue to be high, possibly increasing even more. I am keen on initiating a purchase in OMN using the DSP plan offered through BNY Mellon Shareowner Services. My timeframe for accumulating and holding the stock would be 2 years at the minimum. Here is the link to the InvestDirect Search page at BNY Mellon.


You can view the Omnova Solutions plan under the letter O. The plan highlights are:

Minimum Initial Investment: $500
Initial Check/Electronic Purchase Service Fee: $10
Initial Purchase Trading Fee: Company Paid

Minimum Periodic Electronic Purchase: $50
Periodic Check/Electronic Purchase Service Fee: Company Paid
Periodic Purchase Trading Fee: Company Paid
Dividend Reinvestment Service Fee: Company Paid
Dividend Reinvestment Trading Fee: Company Paid

Sales Transaction Service Fee: $10
Sales Transaction Trading Fee: $0.10/share:

It is a fairly inexpensive DSP plan. The only cost to participate in the plan is the initial purchase fee and the sales service/trading fee. There is no cost to periodic monthly purchase or reinvestment of dividends.

Cost Basis Calculator

When you invest in a DSP or DRIP plan one of the challenges is to calculate the Cost Basis of the purchased shares when it comes time to sell all or a fraction of the shares. I did some selling in 2006 and quite a bit of clean up towards the end of 2007. I just completed my 2007 taxes last week and used a Cost Basis Spreadsheet I had created a couple of years ago to calculate my cost basis and net gain/(loss) for the shares I sold in 2007.

Below is an image of the spreadsheet I had put together. Click on the image to view a full screen. It is a fairly simple spreadsheet that shows my purchases and sale of shares in Schnitzer Steel. I categorized the cost basis and gain/(loss) calculation into short term and long term.

If you would like a copy of the spreadsheet shoot me an email (there is a link in my complete profile) and I will send it to you.

It's been a long time

It has been a long time since my last post. Had a lot of family health & financial issues to deal with. Things have improved over the last few weeks and I am finally finding time to get back to updating my blog. Since last August I have pared back my holdings, both in Direct Stock Purchase (DSP) plans and Brokerage accounts. By the end of last year I had reduced my DSP holdings from:

  1. Aqua America (Google Yahoo Earnings Chart)

  2. Caterpillar (Google Yahoo Earnings Chart)

  3. Duke Energy (Google Yahoo Earnings Chart)

  4. Exxon Mobil (Google Yahoo Earnings Chart)

  5. Paychex (Google Yahoo Earnings Chart)

  6. Pfizer (Google Yahoo Earnings Chart)

  7. Limited Inc. (Google Yahoo Earnings Chart)


  1. Duke Energy (Google Yahoo Earnings Chart)

  2. Pfizer (Google Yahoo Earnings Chart)

Last month I signed up for two new DSP plans:

  1. Oneok Inc. (Google Yahoo Earnings Chart)

  2. PNM Resources Inc. (Google Yahoo Earnings Chart)

Among the above 4 DSP plans I currently participate in, on a monthly basis I contribute:

  • $75 to Duke Energy
  • $75 to Oneok Inc.
  • $100 to Pfizer
  • $100 to PNM Resources
On a related note, I opened custodial accounts for my children, one in Scottrade and one in Sharebuilder. I took advantage of the Costco special for new Sharebuilder accounts. Click here to read more about this special offer to Costco members. Costco members who open new individual, joint or custodial accounts with ShareBuilder will receive a $55 cash bonus deposited to their Sharebuilder account.

I bought shares for the following two companies in the custodial accounts:

  1. Manitowoc Company (Google Yahoo Earnings Chart)

  2. Perficient, Inc. (Google Yahoo Earnings Chart)