A new year has arrived, but having thoughts about how to improve the Portfolio still exist. The stock market continues its move higher, so good values are harder to find. However, it appears relative value may exist in the Utilities and REIT sectors. As for my portfolio, it’s done well, but as always it continues to evolve. Let’s find out what’s working, what’s not, and what stocks I might be looking to purchase.
For the first time in nearly 2 months I made a purchase, and it happened this past week. After months of pondering an addition to my tech holdings, I finally added to it with a small purchase of Texas Instruments (TXN). You can read my thoughts about this in my Recent Buy – TXN post. Other than this, it’s been quiet on the purchase front, although I do have 4 open put options which could result in more purchase activity – more on this below.
Portfolio stocks on the rise this past month have been financials T. Rowe Price (TROW) & Blackrock (BLK), biotechs Gilead Sciences (GILD) & Abbvie (ABBV), and healthcare companies CVS Healthcare (CVS) & Cardinal Health (CAH). TROW rose from about $105 to $120, becoming the 2nd largest portfolio position, passing QCOM. Wow! It’s been a nice run for TROW over the past month, and past year for that matter. Another investment related company, BLK, jumped from $515 to $586. BLK also offered up a nice 15.2% dividend raise in January, too. Meanwhile, biotechs GILD and ABBV have powered higher as well. GILD has risen from $72 to $85 in the past month, while ABBV has continued its run, rocketing from $97 to $123. Also, delivering healthy gains this past month were CVS and CAH, as perhaps there’s less of a perceived threat to their businesses from Amazon. CVS progressed from $72 to $82… just a nice steady move. CAH continued its ascent, too, moving from $62 to $75. It’s been a mighty price recovery for CAH over the past two months. There were outstanding gains from other stocks in my portfolio, too, but the group noted above really got my attention. Overall, the past month was outstanding – I won’t expect to see gains like that again anytime soon.
The laggards this past month were consumer staples Procter & Gamble (PG) & Hormel Foods (HRL), and REITs Realty Income (O) & W. P. Carey (WPC). None of these were big moves down, but compared to the gains from other portfolio stocks, these appeared to disappoint. PG dropped from $92 to $88 as they continue to work through a business turnaround. The recent earnings report suggests that more time is needed. My faith in PG is starting to waver though, as its seems they’ve had ample time to work through the issues. I may start evaluating possible alternatives for PG. This is sad to consider given that I’m a long-term shareholder, but performance is key. Maybe PG can still make it happen. HRL has drifted lower, too, from ~$36 to ~$34. I’m not concerned here. As for O and WPC, the rising interest rate environment seems to be weighing on them. O descended from $57 to $54, while WPC fell from $69 to $66.
As for adding to my existing positions, Skyworks Solutions (SWKS) is still on my radar from last month. SWKS moved higher over the past month, only to return to where it started. Just like last month, if it reached the low $90s I’d consider adding more. Although I’m happy with the size of my current REIT position, if O continued to move lower and dipped below $50, I’d most likely add some. I’m also looking to add to my HanesBrands (HBI) position if it drops below $21. I’ve got an open HBI put option (expires 2/16/18) to do just that.
The non-portfolio stock that I was watching last month was Comcast (CMCSA). It’s moved higher since last month. However, if it can pull back to the $37-$38 range then I’m quite interested in initiating a position. Another stock I’ve added to my watch list is Dominion Energy (D). This was motivated by Dominion’s offer to merge with SCANA (SCG) in a stock-for-stock deal. SCG is currently my only utility stock in the Portfolio. There’s a considerable amount of uncertainty regarding whether this deal closes, but if it does, my SCG shares will get exchanged for D (0.669 D shares for each share of SCG). I have 3 other stocks on my purchase radar all as a result of open put options I recently sold. The stocks in question are biotech Celgene (CELG), First Republic Bank (FRC), and utility Southern Co. (SO). You can read more about my thoughts on these stocks and options by checking my most recent Monthly Options Income (Jan. 2018) post.
What’s going on with your portfolio? Big price movements either way? What’s on your purchase radar? Any companies disappointing you with their performance? Please share your thoughts!