I’m ready to kick off another year of Portfolio Thoughts! I hope you are, too. It’s a chance for me to reflect on what’s happening within my Portfolio and see if there are changes I need/want to make.
The new year is already off to an active start with respect to my Portfolio. I’ve already made two handfuls of transactions! The tsunami of transactions was essentially kicked off thanks to a call option assignment of one of my stocks, and me subsequently re-investing those sale proceeds.
Meanwhile, there’s been movement inside of my top 10 Portfolio positions, even though none of my recent transactions took place within my top 10. It always amazes me how much the stocks move around, even with no help from my buying/selling.
Then there’s always the question of what I might be looking to buy. Well, after all that Portfolio activity to start the year, priorities have changed, as I’ve knocked some pending to-dos off my list already. It should be interesting to see where I might steer this dividend ship.
In case you missed it, this past month I reviewed my performance in reaching last year’s goals (Review of 2019 Portfolio Goals), and also established some Portfolio goals for this year (2020 Portfolio Goals). Check out those posts if you haven’t had a chance.
Let’s take a quick check of my top 10 again this month. As mentioned above, there’s been some movement. The stocks within the top 10 have not changed, but there’s been some jockeying for positions.
Qualcomm (QCOM) has wrestled the #1 spot from RPM International (RPM). This is an ongoing battle, as these two have been switching places for months.
Visa (V) and Procter & Gamble (PG) have switched places, too. V continues its climb up the ranks and has reached the #3 spot. This stock has nearly tripled in value for me. Outstanding!
Moving up a spot and into the top 5 is Union Pacific (UNP). This stock keeps chugging along. 🙂
Also, moving up are Pepsico (PEP) and T. Rowe Price Group (TROW). PEP moved up one spot, while TROW moved up two.
With all this upward movement, which stocks are moving down? Well, its Air Lease (AL) and Skyworks Solutions (SWKS). Both of these stocks logged stellar performances for me in 2019, and I suspect some of the profits are being taken off the table. AL fell from #5 to the #8 spot, while SWKS dropped from #8 to the #9 spot.
Aflac (AFL) finished the month in my #10 spot. AFL was my only top 10 stock to remain in the same spot compared to last month.
As you can see in the table below, these top 10 holdings comprise ~36.7% of my Portfolio value, and ~28.2% of the dividend weighting. The value is up a bit compared to last month, while the dividend weighting is down a bit.
Let’s now transition to my customary Portfolio Thoughts items… my recent Portfolio transactions, price movement for my Portfolio stocks, and what’s on my watchlist.
Transactions
I had a call option that I’d written on my Target (TGT) shares a few months back that was more than likely going to get assigned on 1/17/20. So, I had started the preparations a couple weeks prior to address reinvesting the eventual sale proceeds. Since the Portfolio was going to get shaken up a bit with the TGT assignment, I figured I might as well make that Realty Income (O) trim that I was contemplating, too.
Before the dust could even settle on those two sales, I began some buying to recoup the dividend income that I lost with those sales. In a matter of a week, I’d reinvested most of the sale proceeds, as well as manage to recoup more dividend income than I’d lost.
All the details on those 10 total transactions can be found in these two posts from this past week…
With TGT exiting my Portfolio, and Cheesecake Factory (CAKE) and Wells Fargo & Co. (WFC) entering, the number of stocks in my Portfolio has settled at 47.
Price Movement
Note – my price changes cover closing prices from 12/27/19 to 1/24/20.
After 4 wonderful months of stock gainers noticeably outpacing losers, my Portfolio leveled off this past month. I can live with that. It’s much better than giving gains back in a sudden drop. A little consolidation sounds like a good thing after such a nice run.
This month my Portfolio saw slightly better than a 1:1 ratio of stocks with price gains compared to price declines. For the 46 holdings, 24 moved higher, 21 moved lower, and 1 finished the month at the same price it started. The 46 stocks accounts for TGT (which was recently sold), but doesn’t include new additions CAKE and WFC (which I’ll pick up next month).
Of the 24 stocks that rose, none were able to move up over 10% (the usual threshold I’m monitoring), while 8 stocks climbed better than 5%.
Leading the pack of gainers this month was V, advancing 8.24%. That was followed by a pair of Financials in TROW and BlackRock (BLK), gaining 6.81% and 6.73%, respectively. TROW has consistently powered higher over the past year, while BLK has done most of its annual climbing since its October low.
Also rising significantly compared to my other stocks were Gentex (GNTX), which gained 6.29%, and Crown Castle International (CCI), which climbed 6.25%. With my recent trim of O, CCI has become the top REIT in my Portfolio in terms of value.
Of the 21 stocks that fell in price, only one fell more than 10%. That stock was VF Corp. (VFC), which dropped 15.44%. VFC moved up nicely last month, but has given it back and then some this time around as this past week’s mixed revenues/earnings and reduced guidance did the stock in.
TGT was near the top of my decliner list before my option got called away. TGT retreated 9.81%, based on the sales price I received for my final shares.
Other significant decliners were Eastman Chemical (EMN), which pulled back 6.60%, Abbvie (ABBV), which dropped 6.35%, and Caterpillar (CAT), which fell 5.33%.
The one stock that ended the month right where it began in terms of price was Lowe’s Companies (LOW). This is quite the unusual occurrence!
All in all, not a bad month by any means. There are always winners and losers to be expected, especially over the short-term. If the long-term trend is up, then that’s what matters.
Watch List
This past month, some stocks I purchased were Comcast (CMCSA), Exxon Mobil (XOM) and CAKE. All were mentioned in last month’s watchlist, too. Sometimes a stock on my watchlist actually gets bought!
I still have some capital remaining from my TGT and O sales to re-deploy, so I remain on the lookout for opportunities.
Within my Portfolio, here are some stocks that I’m watching for possible additions…
At the top of my “build up this position” list are CAT and UnitedHealth Group (UNH). I’d prefer to add shares of CAT in the $130s, but I’m willing to purchase in the low $140s as I did the other day. As for UNH, I’d like to add below $265. UNH blew right past that level in mid-November and hasn’t looked back.
To a lesser degree, simply because I already own relatively larger positions in these stocks, I’m looking to add to my 3M Co. (MMM), General Dynamics (GD), CMCSA, and Texas Instruments (TXN) positions. Of this group, TXN would need to drop the most to garner additional investment.
With the drop experienced by VFC this week, the stock got my attention. I’d like to add 15 shares, which would essentially allow the position to grow to 100 shares. However, I think the stock would need to drop closer to $70 before that happened.
As for non-Portfolio stocks that I’m watching…
Boeing (BA) and FedEx (FDX) remain on my radar (still!), but I’ve been waiting for positive news from either before reassessing each stock.
BA came close to dipping below $300 last week, and that was an intriguing level to me last year. However, things have certainly changed. Maybe I purchase a few shares just to motivate me to follow the company more closely. Talk of a possible dividend cut for BA was tossed around this week while the company looked for financing, as the date for the MAX returning to service got pushed out once again.
I’d still love to get into Automatic Data Processing (ADP), but it’s pulling away from my preferred entry point of $165.
I’m trying to find an entry point for some shares of Broadcom (AVGO). Not only do I love the company’s growth (and dividend growth, too!), but it would add another Technology stock to my Portfolio, helping me in my quest to beef up my Technology holdings in 2020.
Other stocks I’ve got a long-term eye on are Microsoft (MSFT), Waste Management (WM) and NextEra Energy (NEE), but each seems well overvalued at this time. I’ll watch for any pullbacks.
There you have it… the first Portfolio Thoughts for 2020. Do you feel like you’ve gotten inside my head? 🙂
Thoughts?
Have you already made some moves within your portfolio to begin the new year? What’s your first priority? Add more stocks to your portfolio? Purge some laggards? Keep adding to existing positions when you can? Please share your thoughts!