With August drawing to a close, it’s time for another Portfolio Thoughts post.

As usual, 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 can 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.

 

Transactions

I had a little more activity this month with regard to transactions.  I made two purchases, adding shares to existing Portfolio holdings in both cases.

One addition was to asset manager Blackrock (BLK).  A pull back in price since January got be tempted enough to make a purchase.  Check out my Recent Buy – BLK post for my purchase price and thoughts behind the addition.

The second addition was to diversified manufacturer Illinois Tool Works (ITW).  This stock has been a popular add for many bloggers recently, and I joined the crowd.  See my Recent Buy – ITW post for what I like about ITW, and all the purchase details.

Last month I said I didn’t foresee much purchase activity for me for the remainder of the year.  Apparently, I don’t listen very well.  Maybe I’ll slow down the purchases next month!  If I want to keep adding, perhaps I can do so in smaller $$$ amounts.

Since I only added to existing positions, the number of stocks in the Portfolio remains at 41.

I was thinking I might want to pare back on my Consumer Discretionary weighting, as it’s currently the largest in the Portfolio at north of 20%.  However, I believe a couple of my Consumer Discretionary names are going to move to the new S&P Communications Services sector when the transition happens in late September, early October.  I’m pretty certain Comcast (CMCSA) will be part of the new sector, and I suspect Nexstar Media Group (NXST) will transition as well.  Assuming that adjustment happens, my Consumer Discretionary weighting won’t look so heavy.

 

Price Movement

For the 3rd straight month, most of my stocks climbed higher, in conjunction with the market.  Yet, only a couple of stocks managed to move up by 10% or more.  This month that was CVS Health (CVS) and Target (TGT).

CVS has been up and down 10% or more multiple times over the past few months.  Last month CVS was my biggest laggard, this month it’s the top performer with a climb from $66 to $74.  You’d think with the looming Aetna merger that investors might be in wait-and-see mode, and the stock wouldn’t move much…. not the case.

As for TGT, they had a blowout earnings report this past week which helped out the stock.  However, most of the move up from $80 to $88 was prior to the earnings release.  TGT has shown a terrific turnaround from the lows of the summer of 2017.  Apparently, retail is not dead.

A few honorable mentions go to Comcast (CMCSA), Lowe’s Companies (LOW) and Abbvie (ABBV), all of which smartly moved up in price, but fell just short of my 10% threshold.

As for my Portfolio stocks on the decline, I had only one fall more than 10%.  That stock was Hanesbrands (HBI).

HBI made a nice recovery from the lows of this past May, climbing from less than $17 to nearly $23.  However, their earnings report at the beginning of August did not excite investors, and a swift decline from $22 to $18 ensued.  HBI looks like it might be range-bound for a while.  I should mention that HBI is one of three stocks in my Portfolio that currently has a dividend freeze.  For that reason, it will have a short leash with me.  HBI contributes to my large Consumer Discretionary weighting, so it could be a candidate for removal/replacement.

Despite HBI, in general, it was a good month as far as price movement for the Portfolio.

 

Watch List

My watchlist still seems quite long… at least I’ll have lots to choose from.  🙂

I’ll start with possible additions to my existing Portfolio positions…

The list from last month really hasn’t changed much.  I’m still looking to add to some of my smaller positions in order to bring them up to a more desirable Portfolio weighting.  The good news is that I was able to add to one recently in Illinois Tool Works (ITW), so I will pull them off the list this month.

That leaves Comcast (CMCSA), Texas Instruments (TXN), Starbucks (SBUX), Hershey (HSY), and Abbvie (ABBV) on the watchlist.

CMCSA had a nice move up Friday, and now sits at $36.50.  This still seems like a good purchase price, but the outcome of the Sky purchase remains to be seen.  I believe an event related to the purchase is upcoming (end of September).  I may wait to get some clarity on the deal before making any move with CMCSA.

Still no change with TXN for me.  I’d like it to trade below $100 before I add some shares.  I’ve been waiting for this opportunity for the past 3-4 months.  I still wish to raise my Portfolio weighting in the Information Technology sector and I like what TXN has to offer with regards to earnings growth, yield, and especially dividend growth.  I may need to increase the price I’m willing to pay.

SBUX has been creeping up in price the past few weeks, away from the $48 price where I’d look to add.  It’s wait-and-see for me with SBUX.

HSY has also moved up in price over the past month.  It’s in the high $90s now, well above the high $80s where I’d look to add.  If HSY can continue its move up to around $110 in the near term, I’d consider selling.  HSY contributes to my large Consumer Discretionary weighting.

Should ABBV drop about 10% into high $80s, I’ll be on purchase alert.  I could see adding about 20 shares at that price.  I continue to like the combination of growth and yield that ABBV provides.

Now onto the non-Portfolio stocks that I’m watching…

I still have my eyes on several big names including General Dynamics (GD), Cummins (CMI), 3M (MMM), FedEx (FDX) and Boeing (BA).

In mid-August BA dropped below $330 and I came close to an add.  However, that price didn’t last long, and up and away the stock went.  Perhaps I’ll get another opportunity down the road… patience!

 

Thoughts?

Have you pounced on any of the stocks from your watchlist?  What changes might you be looking to make to your portfolio?  Do you feel over/underweight in any particular sector?  Please share your thoughts!