Man oh man, October is almost over and I’m just now posting my Portfolio Thoughts. Perhaps that’s because there was lots to ponder this month thanks to all the market gyrations. This led to lots of price movement (plenty of stocks to the downside), more transactions than normal, and many stocks flooding my watchlist radar. In any case, let’s see what I’m thinking with regard to my Portfolio before there’s nothing left of October.
As usual, I’ll go over my purchases & sales from this past month, I’ll examine what price movement there’s been for my Portfolio holdings, and share a few of 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
After reporting no transactions last month, things got busy this month. So much for buys & sells slowing down for the remainder of 2018.
My first transaction was an addition to Texas Instruments (TXN). I’d been wanting to add to this position for months. The addition was quite small, but it helped TXN move out of the bottom spot with respect to my Portfolio weighting. You can read more about this purchase in my Recent Buy – TXN (#2) post from earlier this month.
A flurry of activity followed over the next week or two. I closed out my Hershey (HSY) position, and sold some more Omega Healthcare Investors (OHI) shares, I then used some of the proceeds to add to some of my existing positions: Abbvie (ABBV), Skyworks Solutions (SWKS) and Blackrock (BLK). Check out this Recent Transactions post for all the details.
I also had a put option assigned in October which resulted in the purchase of residential homebuilder D.R. Horton (DHI). DHI is a new position in my Portfolio. This assignment was covered in my most recent Monthly Options Income post.
Finally, I’ve had two more purchases in the past week that I did not write a separate post for. So, you are reading about these for the first time right here. These were additions to existing holdings. First was the addition of 14 shares of ABBV at a price of $84.85 on 10/22. Second was the addition of 15 shares of TXN at a price of $92.87 on 10/24.
After all that, the number of stocks in the Portfolio remains at 41, with HSY exiting the Portfolio, and DHI entering.
Price Movement
Note – my monthly price changes include closing prices from 9/26 to 10/30.
The 4-month streak of increasing Portfolio value came to a hard stop this month. Most of the Portfolio holdings were down significantly, too. Despite that, a handful of stocks held up relatively well, and managed to move up.
Let’s focus on the positive first. I had 11 of my 41 Portfolio holdings manage a gain over the past month, including all of my 4 REITs. However, the leader was Hormel (HRL), with a gain of 10.3%. Realty Income (O) was my other 10% gainer.
A few other stocks that recorded gains well above 5% for the month included: Altria (MO), Procter & Gamble (PG) and Comcast (CMCSA). It was nice to see the consumer staples and some of my other defensive names hold up in this market downtrend as one might expect.
Now for the negative… and there was lots of it. I had 16 of my 41 positions down over 10%. Ouch!
Most of the decliners were concentrated in the Information Technology, Industrial, Financial and Consumer Discretionary sectors. My biggest loser by far was Bank OZK (OZK), which declined leading into earnings, and declined after earnings as well (31.5% in total), thanks to some loan write-offs and concerns over their concentration of real estate loans.
A couple other standout decliners included Air Lease (AL) and Lowe’s (LOW), both dropping just over 17%.
It was certainly a disappointing month from a price movement perspective, but that’s to be expected after a healthy run-up in price for many of the names. At a minimum, it’s brought a few stocks back to a point where I’d consider adding to my position again.
Watch List
Last month I mentioned how it can pay to have a watchlist at the ready, as you never know when the opportunity to initiate a new position or add to an existing one will be too good to let pass by. Well, it didn’t take long before I got the chance to the execute trades involving some of my watchlist names.
Moving forward, I still have some of the proceeds from last month’s sales that I can invest. I suspect I’ll also get more investment capital as I continue to pare down my OHI position. I would have sold more OHI already, but I decided to wait for the ex-dividend date to arrive before selling (which was yesterday if I’m not mistaken).
Here are some of my Portfolio stocks that I’m watching for possible additions…
I boosted my ABBV and TXN positions nicely this past month, but I’m still open to further purchases. I would consider adding more ABBV below $80 and more TXN below $90.
CMCSA is still on my radar, as it’s still one of my smaller positions that I’d like to bring up to a more desirable Portfolio weighting. The company had a nice pop on its most recent earnings release this week, moving away from the $35 price where I’d like to add.
As for non-Portfolio stocks that I’m watching…
Many of the big names I’ve been watching over the past few months have entered into the price range were I’m interested in buying. However, the declines have been so swift that I’m inclined to wait and see if the fall continues. If I do initiate a position, it will be a starter position. I won’t be able to purchase them all, so I’ll have to decide which one might present the best investment opportunity. General Dynamics (GD), Cummins (CMI), 3M (MMM), FedEx (FDX) and Boeing (BA) are some of the names I’m watching. I’d lean towards FDX at today’s prices, but it never takes long for things to change.
Thoughts?
How has your portfolio held up with all the market turbulence? Are you making any portfolio adjustments? Please share your thoughts!
It has been a crazy month, but one that has been welcomed as it did provide quite a few nice buying opportunities for many in the DGI community. You’ve added to some nice positions, and I think your watch list has quite a few interesting names on it moving forward.
I haven’t reviewed the overall performance for October yet, but I know that there have been at least a few significant declines like you have mentioned. I knew OZK was getting hammered but I didn’t realize that they had dropped that significantly. I haven’t made any real adjustments other than adding a new position to my portfolio, BlackRock. Other than that I used the declining prices to add to a few positions, but otherwise holding steady.
Wild, indeed. It’s been a big decline for OZK. I suspect they made trade in a range down here for a while. At this point, I’m not inclined to add to my OZK position as it’s already a significant enough position for me.
I do like your BLK addition. I’ll keep looking to add where I see opportunities.
Hey ED – I liked your TXN purchase last month, made it on my shortlist of next purchases for the Global Fund so thanks for the idea! I’ll also check out a few of those others on your watchlist like FDX and GD.
I’ve been pretty lazy the past 6 months, but seems the timing is actually not too bad.
Look forward to seeing what you snap up in November!
Cheers, Gary
Hi Gary. I’ve been building up my TXN position after starting it in February. I’ve been waiting to add, but wanted to see the price drop. The time finally came, and I added twice in October, allowing me to double my position.
I wanted to initiate a position in FDX when it crossed under $210, but wasn’t in a financial position to do so. Perhaps an even better opportunity will present itself in the near future.
Being lazy with your portfolio isn’t so bad, as it allows you to stockpile some cash for new investment (even faster if dividends don’t get reinvested). With many markets in decline, more buying opportunities are presenting themselves, and having cash ready to invest leaves you in a good position. Let’s hope you find an investment that you can’t resist.
Hey ED,
Nice review of the month. I guess the correction was bound to happen at some point and you have been taking advantage of it nicely.
I saw some moves in my portfolio as well. T and CSCO probably were the biggest losers. But I had some positives as well – just like in your portfolio, there was a big increase for PG. I actually haven’t notice that O increased that much, I guess it happened more gradually. Also, SBUX increased by almost 10% yesterday after their latest earnings reports which is also great news. So the correction touched my portfolio only slightly, as I don’t own many tech stocks and don’t own any financials yet.
I am thinking about adding some company to my portfolio as well this month. So far, the candidates include Toronto Dominion, Blackrock, Fedex or some utility stock but I haven’t decided yet.
BI
Sounds like your portfolio held up quite well, BI. A nice feeling I’m sure. This correction seems to have been focused mostly on select sectors.
Your comment about not necessarily noticing the move up by O highlights why I like to keep an eye on price movement for stocks within my portfolio. In the case of stocks moving down in price, it can highlight a stock that may be suitable for an addition, or a sale, depending on an examination of why. It’s amazing how some of the stocks can move up or down, sometimes even without any company specific news.
You’ve lined up some nice stocks for your watchlist. I’ll be curious to see if you venture into a new sector. Happy stock hunting!
A wild ride indeed! I’ve added additional capital this month to take my extra shares home.
I initiated in TXN (and added bringing the total to 10 shares), in part because of your buys as well after my own research. I added to my Abbvie and IRM positions. I saw the drop in KHC and wanted to add but alas no more capital left. Unless I can convince the wife for some more but she was muttering something about Christmas presents… (joke ofcourse).
There seems to be lots of activities in the past month in the market as well as the community. You seem to have made some excellent choices ED!
Thanks, Mr. Robot. You’ve been busy as well.
Great to have you as a fellow TXN shareholder. TXN may tread water or drift lower in the near-term, but I like it for the long haul.
Running out of capital is no fun when you are looking to buy! Keep saving and you’ll be ready to go when the next buying opportunity presents itself.
I agree it’s important to have a watch list. That’s something I might try to implement in 2019, around the fall. I’m trying to save up for a house and so I really won’t have a lot of capital until after the purchase. But, if I had capital laying around, I would have done what you did, which was to buy more shares of ABBV, which is currently under $80 per share.
Hi DP. ABBV looks attractive under $80 to me as well. I’ve added ABBV twice already (at higher prices) in the last month to help build up my position. I was certainly happy to see yet another dividend increase for ABBV this past week.
There always seems to be competing priorities for our investment cash. Saving for a house sounds exciting though. Hopefully you’ll be able to save the amount you need over the next year. You can consider the house a nice piece of diversification for your investment portfolio. 🙂