Welcome to the first Portfolio Thoughts post of 2019! Once again I’m trying to deliver the post before the end of the month. Time seems difficult to come by these days.
I finished December with a small flurry of trading activity, so I’ll be summarizing that. I did a little tax loss harvesting, and used the proceeds to stock up on some names I’d been eyeing. On the flip side, January has been quiet thus far with regard to transactions.
I certainly welcomed the start of 2019 after a rough close to 2018 in the stock market. Thankfully, January brought some price recovery to my Portfolio. It’s a nice way to start the new year. Let’s hope it’s something to build on, as opposed to having us give up the ground we’ve gained.
My watchlist hasn’t changed too much, but the list is a bit smaller now, as a few stocks have run up and out of my target price range. I’ll cover a few of the stocks that have garnered my interest recently.
With the trading I’ve done the last couple of months, my Portfolio has been reshaped to a degree. I’ve lighted up a bit on the Consumer Discretionary sector, including eliminating Hanesbrands (HBI), I continued to pare down my REITs, and I initiated a position in a couple of big names that I’d been wanting in JPMorgan Chase & Co (JPM) and 3M (MMM). My Portfolio continues to be absent any Utilities after my sale of SCANA (SCG) last year, however, there’s the possibility of adding a name in 2019. I still feel there’s room to beef up my Technology holdings as well.
In any case, I’m sure 2019 will bring more change, it’s just a matter of how much.
Transactions
I made 6 transactions on the last day of 2018. A couple of those were sales that I made to harvest some losses for tax purposes and shuffle my holdings a bit. I sold all of HBI, and some of Cardinal Health (CAH) after a 2nd straight year of disappointing performance.
The remaining 4 transactions were thus purchases. Three were additions to existing positions – JPM, Altria (MO), and Comcast (CMCSA). The last one was a newly initiated position in MMM.
You can read about these transactions in my Recent Transactions (HBI, MMM, CAH, JPM, MO, CMCSA) post.
Since that burst of transactions to close out 2018, things have been quiet in 2019. I can’t say that’s all by design though, as I need to build a new pile of investment capital before any purchases can take place.
The result of all these late-December transactions was a net cash investment of $1,524.67.
The number of stocks in my Portfolio remained at 42.
Price Movement
Note – my monthly price changes include closing prices from 12/28 to 1/29.
As noted earlier, January provided some positive price movement for my Portfolio stocks… a nice change from December to say the least.
Not all of December’s paper losses have been recouped, but I’m well on my way.
In January, my Portfolio saw a 6-to-1 ratio of stocks with upward price movement compared to downward price movement. That means 36 of my 42 holdings posted a gain this month! I normally note the few stocks with 10%+ moves, but 6 of the 36 upward movers saw gains north of 15%. An additional 5 stocks bested the 10% mark.
The leaders were Bank OZK (OZK) with a 41.1% rise and Air Lease (AL) with a 25.4% climb. These were a couple of stocks that took it on the chin in Q4 of 2018, so it was nice to see the bounce back. Other leaders included VF Corp (VFC) with a gain of 19.1%, Union Pacific (UNP) jumping 17.1%, Gentex (GNTX) with a 16.1% bump, and Fastenal (FAST) moving up 15.2%.
Of the 6 price decliners the Portfolio had, 2 were down 10%+. Those stocks were Abbvie (ABBV) which was down 15.0%, and Qualcomm (QCOM) which dropped 13.0%. ABBV offered up a less-than-exciting growth forecast for 2019 which clipped its price, while QCOM continued to struggle with the growth slowdown in China, and the ongoing feud with Apple (AAPL) over royalties.
So, my Portfolio value is headed north to start 2019. Can it continue?
Watch List
This past month I was finally able to add one of the stocks I’d been watching for months – MMM. I don’t envision adding more at this time, so I’ll remove them from my list.
Boeing (BA) has had a nice run up this month, with a good chunk of that coming today after a blowout earnings report. Thus, BA will be removed from my watchlist as well.
With limited cash with which to invest, I’m not following as many stocks as I might otherwise. However, a few names are still on my radar.
Here are some of my Portfolio stocks that I’m watching for possible additions…
I did add 25 shares of Comcast (CMCSA) recently, but if it dips below the $35 level again, another small add could be in the cards.
I also added 10 shares of MO recently as it continued its recent dive, but its price is still below the level of all my prior purchases. I like the size of my current position, but MO crossing back below $44 might tempt me to consider another small addition.
REITs have been powering higher in January. Should that continue, I may consider continuing to trim the REITs from my taxable Portfolio and using the proceeds to enhance other positions.
As for non-Portfolio stocks that I’m watching…
The big names I’ve been watching over the past few months has been whittled down to two names for now, General Dynamics (GD) and FedEx (FDX). Both of these offered up some un-welcomed guidance in the last month, keeping their share prices depressed.
Thoughts?
Any big plans for your portfolio in 2019? Are you getting close to adding a stock that you’ve been watching for a long period of time? If so, please share your thoughts!
Nice update, ED! I like the reasonaning behind your portfolio adjustments.
I have reshaped my PF quite a bit during the last two month. Especially my exposure to the financial sector (I picked some BAC and JPM shares among others) increased decently.
The technology sector is still underrepresented however. I would love to change that and keep my eyes open for interesting companies. Wouldn’t mind to add to AVGO and TXN. But their prices have recovered during the past weeks, so I will wait for a better entry point here. AAPL and MSFT are good names, too.
Thanks, SF! I like what you are doing with your portfolio. Lots of great companies you’ve chosen. If I recall, you only didn’t have a stock representing the REIT sector. Any plans there?
I see you snatched up some GD right before Christmas… looks like you secured a nice price on that one. GD has been on my watch list a while. I’d like to round up some cash and initiate a position at the current level.
Yes, REITs are missing in my portfolio. To be honest, I struggle analyzing this kind of businesses. Simply because of lack of knowledge I guess. I bought OHI early in 2016 and it was a good investment for me. My reasoning was that the future might be bright for skilled nursing facilities. That’s it. But the decision to buy wasn’t based on any quality/valuation analysis. I mean, I’m not a professional stock analyst, but I like to check certain metrics and at least understand the business to a certain degree. I can’t say that about REITs yet. So as long this is the case, I will wait on the sideline and maybe educating myself a bit 🙂
Better to take your time dipping your toes in unknown waters, SF. I think that’s a prudent approach. Besides, your portfolio is looking great despite being absent REITs.
Awesome ED. I hope the changes you make for the coming year work out for your portfolio. I’m not invested in the utilities sector either and for some reason, I don’t have any banks, but if I did, I’m pretty sure JPM would be part of that list. As for me, the biggest decision I’ve made is to pay off my mortgage early starting next month, although there’s a decent chance I will start that in the next few days. Looking forward to keeping up with your progress for the rest of the year.
Hi DP. Sounds like it’s not all mortgage and nothing else, but rather some extra towards the mortgage, and some $$$ for other things. A nice balance.
There are always changes in the mix, as life changes and we adjust… portfolios included. I’ll be following your journey in 2019 as well. Here’s to good things coming our way.
As always, thanks for stopping by and commenting.
Solid number of stocks in the portfolio at 42 ED – do you have a number you’re most comfortable with, or just more focused on the Divs?
Hopefully there’s other fun things taking up your time which is making it hard to get these posts out 🙂
Cheers, Frankie
Hi Frankie. No set number for the number of stocks in my Portfolio. Right now my average position is about $7.8K, which I’m comfortable with. I’d imagine this amount, and the number of stocks will grow with my Portfolio. I could see the average position growing to about $10K over time, with the number of stocks in the 50-60 range.
Nice overview DivvyDad! I like how actively you manage your portfolio, it seems that the work you put in is paying off.
I added one position to my portfolio at the beginning of January – Target (TGT).
I don’t have much capital now but am thinking about adding something from the Utilities sector, as I haven’t got anything from them yet. Are you watching anything from this field? 🙂
BI
Hey BI. I’m guessing you were visiting DivvyDad’s site recently. 🙂 Always great content over there.
TGT should be a nice add. Hard to argue with their track record, being a Dividend King and all. Hopefully, any issues they have are short-term. I’ve done well with TGT in the 1-2 years I’ve owned it.
I’m right there with you on being short of capital. I’ll probably have to make some smaller purchases than I’m used to. I do have some free trades available, so I won’t have to worry about any commission being a fairly big percentage of my small investment amount.
Of the Utilities, I’m most familiar with D given their recent SCG acquisition. SO is another option. I’m intrigued by NEE, but would need to do more research on them.
Ooops, sorry for the mistake ED 😀 I am for some reasons imagining you as similar guys, not sure why 🙂
I am honored by that confusion and comparison, as ED is a great guy that is doing amazing things with his portfolio! 🙂
Thanks for sharing your thoughts. I just added you to my dividend blog feed, so now every time you post it should pop up on my page for my readers to view. Cheers
Awesome! Thanks, BHL.
I’ve looked for one of those blog feed plugins for my WordPress site, but it doesn’t seem there’s one that will update itself on a regular basis. Although it’s probably been close to a year since I looked.
The ones I saw were for blogspot sites if I recall.
I stopped by the other day and tried to comment on your post about the disappearing blog sites, but when I submitted my comment it wouldn’t take it (can’t remember the rejection reason). I was on my phone, so perhaps that was part of the issue. In any case, I’ll try again from my desktop computer.
Like the MO pick up. MO has been on my mind doe a few months and I have been adding to it as well. Still considering it in Feb. along with PM. Many high yielding solid dividend payers to choose from. T is also another consideration. We’ll see how Feb. plays out.
Hey DivHut! I think I started buying MO a bit too early, but it wouldn’t surprise me if it all turns out OK in the long run. I thought about averaging down some more, but I like the size of my MO position at this point.
There are definitely more stocks looking attractive these days compared to last year. I’m looking forward to seeing what you add in February.
It was nice to see the change from December, with so many more stocks in the green this past month! The MO pickup is very similar to where I am at, as I couldn’t resist adding some more at those prices despite it being one of my larger holdings. I’m content to sit tight now but should we see the price down there again I will likely add a little more.
Three that I continue to watch and hope that the price comes down to a level I am comfortable adding are KMB, PEP, and DIS. The chance was there in December but I didn’t have enough capital to go around. MMM was on that list too but I was able to add them in early January finally.
I see you had a great January, and cannot wait to see what more is to come!
I’m with you on MO… I’m not necessarily looking to grow the position, but if the price keeps getting better, and the situation hasn’t changed, adding more is a good possibility.
I was happy to add a few PEP shares last year during their dip. I’m always looking to add DIS at a good price, too, but it always seems there are competing priorities that win out. Happy you were able to scoop up MMM… I think you did better than me on the entry price if I recall. Nice work!
Here’s to a terrific 2019. I’ll be watching your progress as well.