Portfolio Thoughts (Oct. 2019)

Boo!

Hello to everyone on this Halloween.  October didn’t turn out to be too scary for my Portfolio, so that was a nice treat.

I’m scrambling to get this post out before month’s end, as my home was without power for several days as the primary electric utility turned off power in many areas of the state in the presence of high winds and conditions conducive to wildfires (dry vegetation, low humidity).  You don’t realize how much you depend on power until you go without it for a while.  Thankfully, we had hot water for showers (gas-powered water heater), and a BBQ to grill food, so that made things easier.  However, I found myself going to bed much earlier than normal thanks to the lack of decent light inside the house once the sun went down.

Due to the power outage, it was a bit difficult to write and post as usual.  I had a stock sale last week, but didn’t post about it for that reason (I’ll try to post about that soon!).

Anyway, this Portfolio Thoughts post will be short but sweet as I play catch-up.

Looking over my top holdings, the names stayed the same, but there was some shuffling within the group.  Qualcomm (QCOM) and Procter & Gamble (PG) swapped places at 2 & 3, Air Lease (AL) and Pepsico (PEP) traded spots at 5 & 6, while Union Pacific (UNP) and Aflac (AFL) flipped between 7 & 8.

As one can see, these top 10 holdings comprise over 1/3 of my Portfolio value.  Thus, I’m not looking to add to these names unless I find the stock to be undervalued.  These positions continue to grow regardless of any new capital investment anyway thanks to my reinvestment of their dividends.

 

Coming up… a look at my recent Portfolio transactions, price movement for my Portfolio stocks, and what might be on my watchlist.  Here we go…

 

Transactions

As noted earlier, I did have a sale a little over a week ago, but I haven’t shared it yet.  No big announcement here, just saving it for the next post.

I will say it was a complete sale, so my forward dividend income took a hit, and the number of stocks in my Portfolio dropped to 46.

I do still like the company, and can see purchasing it again, but I had another stock in the same sector & industry and thought the near-term prospects might not be the best for those stocks, and thus lightened up in that area for now.

Oh, the mystery!

 

Price Movement

Note – my price changes cover closing prices from 9/27 to 10/25.

Another month with Portfolio value inching higher.  It’s a slow, methodical climb right now.  My Portfolio saw nearly a 3-to-1 ratio of stocks with price gains compared to price declines.  For the 47 holdings, 35 moved higher, while 12 moved lower.

Of the 35 stocks that moved higher, 7 moved up over 10%, while another 5 stocks climbed better than 5%.  Gains were a little top heavy this month, as opposed to seeing even contributions from most of the gainers.

Leading the pack of gainers this month was Altria (MO) at 16.62% – a bounce back from being my biggest decliner last month.  MO has been trending downward for months.  The negative news around the stock seems to have abated a bit, so perhaps that helped.  Close behind MO in terms of gains was Kontoor Brands (KTB), rising 16.37%.  KTB is my smallest position, so this didn’t move my Portfolio value needle very much.  Still, I’ll take any gains I can get.  Semiconductor stock Skyworks Solutions (SWKS) [oooh.. alliteration] jumped 16.25% this month, while Fastenal (FAST) joined the high flyer group with an increase of 15.36%.  UnitedHealth Group (UNH) spiked on earnings news, climbing 13.77%.  Rounding out my 10%+ gainers were a couple of industrial names in Illinois Tool Works (ITW) and Caterpillar (CAT) with gains of 10.89% and 10.38%, respectively.

Of the 12 stocks that moved lower, none fell enough to cross the 10% threshold I’m usually paying attention to.  In fact, only 5 fell more than 5%, and all were less than 7%.

Leading my group of decliners this month was Hormel Foods (HRL) with a drop of 6.82%.  HRL has been range bound for a while, but that’s OK.  It could be time to add a bit to my HRL position if it dips under $40/share.  Next in line for declines is Starbucks (SBUX) which fell 5.65%.  This drop was prior to this week’s earnings, which seemed to deliver decent numbers.  Some investors have concerns about the debt SBUX is accumulating.  VF Corp (VFC) sank 5.23% this month.  VFC would garner add-on interest from me if it declined into the upper $70s.  Delivering an earnings report that signaled a slow down in sales triggered a sell off in Texas Instruments (TXN), leading to TXN showing up on this month’s decliners with a drop of 5.21%.  Last on my list is General Dynamics (GD) with a loss of 5.18%.  GD is looking tempting around the $170 mark… not too far away.

 

Watch List

I’m still looking primarily at my Portfolio stocks when it comes to new capital investment.  Building up some of the smaller positions is on my list of things to accomplish.  However, I still want to find value during those purchases, so I’m in no rush to buy.

Cash for any purchases still remains limited, but the cash pile is growing.  Last week’s stock sale added to the pot, too.

Within my Portfolio, here are some stocks that I’m watching for possible additions…

JNJ came close to hitting my $126 target price.  It has been trading in the $128-$142 range for most of the year.  Any JNJ purchase on my part would put it back into my top 10 holdings based on value.  The cost of settling the pending lawsuits, and certainly the time/cost spent on litigation has weighed on JNJ.

I’m still looking to average down on 3M Co. (MMM).  A price below $160 could get me to add some shares.

With recent gains, UNH and CAT don’t show as strongly on my radar, but they remain in the forefront of my mind as they are positions I want to build.

As noted earlier, HRL, VFC & GD could be candidates for adding shares if they continue to lead my monthly decliners again next month.

As for non-Portfolio stocks that I’m watching…

No new names here, but Boeing (BA) and FedEx (FDX) still have my attention.  BA declined again this month as questions returned about when their grounded planes can return to the air.  BA would need to get below $330 for me, but I’d prefer a price south of $300.  FDX has been drifting around the $150-$170 range for a while, usually closer to $150.  Nothing for me to get excited about at the moment with regard to FDX… just waiting for some positive news.

Disney (DIS) has some interest for me below $130, but if it managed to dip below $120 I think I’d return to being a shareholder again.  I used to own the stock many years ago, but the timing for me to get back in was never right.  One day I’ll see DIS in my Portfolio again…

 

Thoughts?

How’s your portfolio managing lately?  Any chance you are looking to reposition your portfolio prior to heading into 2020?  Please share your thoughts!

4 thoughts on “Portfolio Thoughts (Oct. 2019)

  1. ED- my cash pile is finally starting to get back up there, I’m having trouble honing in on stocks. The market keeps rallying. Thanks for sharing your watchlist thoughts.
    Look forward to reading your monthly report

    1. Yes, the bargains are getting harder to find, PC. However, it seems there’s always something on sale in the stock market. We just need to look carefully. Of course, time will reveal what was a buy. 🙂
      The monthly report is coming soon!

  2. It’s nice to see that your portfolio keeps climbing. There was some price movement in my portfolio as well during the earnings season. I saw more stocks climbing than falling which is nice to see.
    Looking forward to see which portfolio position you sold 🙂

    1. Always nice to see more moving up than down, for sure. It’s been a good year in terms of price appreciation, but less so in terms of dividend raises… seemingly the opposite of 2018.

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