Time again for a monthly examination of my Portfolio via my monthly Portfolio Thoughts post.

I’ll go over my purchases & sales from this past month, see what price movement there’s been for my Portfolio holdings, and take a look at the stocks I’ve got on my watchlist.

Mixed in will be changes I’m contemplating to improve the Portfolio.  This might be thoughts about stocks I want to overweight or underweight, or stocks I wish to add or remove.

Let’s get to it!

 

Transactions

As has been the case in recent months, there are Portfolio transactions to report.  This past month, I had a partial sale, a small add-on purchase, and introduced a new stock to the Portfolio.

First, I had another stock swap if you will, paring back my position in Omega Healthcare Investors (OHI) and adding to my position in Pepsico (PEP).  You can read more about why I did this in my Recent Transactions (OHI & PEP) post.

Second, I initiated a position in Lowe’s (LOW).  Check my Recent Buy – LOW post for more information on this transaction.

 

Price Movement

Most of my stocks trended up this past month, along with the market.  Leading the charge upward with over 10% gains were a couple of tech names, a REIT, and a new addition to the Portfolio.

The tech names consisted of Qualcomm (QCOM) and Skyworks Solutions (SWKS).  Texas Instruments (TXN) was an honorable mention here with gains just shy of 10%.

QCOM has been up and down a few times over the past couple of years (trading in the range between $50 and $70) as the royalty dispute with Apple (AAPL) and QCOM’s purchase of NXP Semiconductors (NXPI) has dragged on, and the potential acquisition from Broadcom played out.  This month the stock price had a good climb from $51 to $60.

SWKS was a laggard from last month.  So this was essentially a bounce back, as the stock moved up from $87 to $100.  The earnings report from AAPL, which is a big customer for SWKS, helped ease some of the revenue shortfall fears that appeared to be baked into the SWKS stock price.

Many REITs have had an up and down month as they followed interest rate movements.  However, OHI had a fairly steady move up during the month, moving from $26 to $30.  My partial sale of OHI early in the month appears to have been about 3-4 weeks to early – Doh!  OHI has been mired in a slump for about the last 6 months as they addressed concerns about some of their larger tenants and the ability of those tenants to make future payments.

Contrary to my partial OHI sale, my LOW purchase seems to have been well-timed.  With the recent earnings report from LOW came some clarity about the company operations.  A new CEO was named, and along with it, hope for renewed growth.  LOW had a rather nice ascent from $82 to $97 during the month, with nearly all of the gains coming this past week.

As for Portfolio stocks on the decline, there always seem to be a few.  A few of the decliners are coming from the healthcare sector.  Luckily, only one stock fell more than 10%.

Cardinal Health (CAH) was my big loser this past month, plummeting from $64 to about $52.50 on the back of their earnings report.  CAH has been on the decline for 3 years now, and I’m not sure I see any good news to begin a turnaround.  I’m taking a wait-and-see approach for now.

Other Portfolio decliners in the healthcare sector for me are Gilead Sciences (GILD), CVS Health (CVS), and Johnson & Johnson (JNJ).  GILD dropped from $72 to $67, CVS fell from $70 to $66, and JNJ drifted down from $126.50 to $121.50.  Not a good month from my healthcare names.

Cognizant Technology Solutions (CTSH) pulled back from $82 to about $76 after their earnings report.  CTSH has had a really nice run since last October, so giving back some here is not surprising.  I still like the prospects for CTSH moving forward.

 

Watch List

The watchlist is always changing, but here are the stocks I’ve currently got my eyes on.

Let’s start with possible additions to, or deletions from, my existing Portfolio positions…

I’m looking to add to two of my smaller positions, Comcast (CMCSA) and Texas Instruments (TXN), in order to have them reach a more desirable Portfolio weighting.

I recently sold a put option on CMCSA, which would double my position should it be assigned for trading below the $31.50 strike price by mid-June.  I’m surprised CMCSA is trading in the low $30s, but it seems there is concern regarding their Sky bid (and having to possibly raise it), as well as for the debt that would come with the acquisition.

As for TXN, it’s had a run up in price this past month, so I’m not entertaining a new purchase at current levels.  I’d consider adding 25 shares should it trade below $100 again.

The drop in CTSH that I mentioned earlier has me watching that stock, too.  I could see adding ~20 shares should it drop to the low $70s.

Hershey (HSY) is another Portfolio holding that I’m watching now thanks to its price decline.  At its current level, HSY has only made minor price gains over the past 5 years.  The yield is decent at 2.84%, and I like the company in general, but the company has not been providing the kind of growth I’m looking for.  I need to decide if I want to continue to hold the stock, and add to my position down here (maybe at 3% yield, i.e. a price of ~$87).  One reason to sell is that I wouldn’t mind lightening up on my Consumer Discretionary holdings since they now sit at over 20% of my Portfolio with the fairly recent additions of CMCSA, Nexstar Media Group (NXST), and LOW.

With regard to non-portfolio stocks that I’m watching, these are holdovers from last month.

I continue to watch KAR Auction Services (KAR) – going on 3 months now.  I’m looking to add should it drop below $50, but it’s been trading in the $52-$56 range for the entire time I’ve been watching it.  If earnings continue to improve, initiating a position in the $52s could be a possibility.

3M (MMM) is still on my radar as well, but it will have to drop further before I purchase.  Something in the $185- $190 range might motivate me to initiate a position.

 

Follow Up

Following up on one my Portfolio stocks that I recently sold… Ensign Group (ENSG)

It appears I gauged incorrectly how high of a P/E level ENSG might trade at.  In mid-April I sold my entire position at $27.38/sh for a nice profit.  Unfortunately for me, it has continued to run up, and now trades at $36.16 only 6 weeks later.  Considering I held just over 200 shares, that’s about $1,800 I left behind.  ENSG may have reached overvalued territory at this point.

It’s never fun to report misses, but I want to ensure I highlight some of my poor investment decisions as well.  If only I had a crystal ball for stock price movement…

 

Thoughts?

What changes might you be looking to make in your portfolio?  What have you been watching recently for possible addition?  Please share your thoughts!