Time to check out what I’m contemplating with regard to my Portfolio.  Here’s my latest monthly edition of Portfolio Thoughts.

This month, transactions within my Portfolio stayed active, there was all sorts of price movement (nearly all to the downside), and many stocks hit my watchlist due to lower prices.  I even had some stocks moving in and out of my top 10.  There’s always plenty to cover.

Before we start though… In case you missed it, this past month I posted my Portfolio’s performance for last year in my Annual Performance Review (2019).  Check out that post if you haven’t had a chance.  I show the 2019 performance of each individual stock in my Portfolio, as well as for the Portfolio as a whole.  I always find it revealing to see which stocks lifted up my Portfolio during the year, and which ones dragged it down.

 

Let’s take a quick check of my top 10 again this month.  Last month, the stocks in my top 10 did not change, they just shuffled positions.  This month, I had a couple of new entrants in the top 10.  Of course, this meant a couple of stocks correspondingly dropped out of the top 10.

The top 4 positions stayed the same compared to last month.  From #1 to #4 it’s Qualcomm (QCOM), RPM International (RPM), Visa (V) & Procter & Gamble (PG).

After that, Pepsico (PEP) and T. Rowe Price Group (TROW) moved up one position each, to #5 and #6, respectively, while Union Pacific (UNP) dropped two spots to #7.

Staying at #8 was Air Lease (AL).  The arriving/departing stocks were at positions #9 & #10.

Several months back Johnson & Johnson fell out of my top 10, but now they’ve made it back.  The stock was performing well recently, and then held up better than others during this past week’s declines.  This was enough to have it move up to #9.  Last month’s #9 was Skyworks Solutions (SWKS), which slid down to #11.

As for the #10 spot, moving in was Nexstar Media Group (NXST).  This is its first time in my top 10.  Moving out was Aflac (AFL) which slipped all the way to #13.

As you can see in the table below, these top 10 holdings comprise ~36.0% of my Portfolio value, and ~28.7% of the dividend weighting.  The value was down a bit compared to last month as my net Portfolio investment was outside the top 10.  Meanwhile the dividend weighting of the top 10 crept up a bit.  The nice dividend raise from TROW in February was a help here.

 

 

Transactions

For the 2nd consecutive month, I’ve made a healthy number of transactions, slightly re-shaping my Portfolio in the process.

This past month I trimmed my two biggest REIT holdings:  Realty Income (O) and Crown Castle International (CCI).  I’ve been reducing the dividend weight of the Real Estate sector within my Portfolio, which was nearly 10%, despite a value weighting of a bit over 6%.  With the trims, my REIT sector value weighting pulled back to ~5.4%, while the dividend weighting retreated to ~8.7%.  I expect that over time I’ll continue to trim my REITs,

I also trimmed Gilead Sciences (GILD) a bit after a recent run up in price.  GILD has been a noticeable under-performer for me over the past few years, so re-allocating a bit felt prudent.

All the sale proceeds and some cash then went into several purchases of just two stocks: Broadcom (AVGO) and Automatic Data Processing (ADP).  ADP was a new position.  The purchases of both of these stocks add to my weighting in the Information Technology sector.

All totaled, there were 9 transactions in February, and all the details on those can be found in these two posts…

• Recent Transactions – CCI & AVGO
• Recent Transactions – CCI, O, AVGO, GILD, ADP

 

With AVGO and ADP entering my Portfolio, the number of stocks in my Portfolio has reached 49.

 

Price Movement

Note – my price changes cover closing prices from 1/24/20 to 2/28/20.

Well, after this past week, I’m kind of afraid to see what transpired with regard to the prices of stocks in my Portfolio.  But, I’ll do it anyway.  🙂

One positive aspect… with falling prices come opportunities to add to key positions.  I’ve done some of that already, and still have some capital that will allow me to continue with that plan.

Let’s check out the damage…  The price gains I saw in 2019 leveled off in January, but they fell off the map in February.

This month my Portfolio saw an onslaught of red, with a 23:1 ratio of stocks with price declines compared to price gains.  For the 48 holdings, 2 moved higher and 46 moved lower.  The 48 stocks doesn’t account for new addition ADP (which I’ll pick up next month).

Of the 2 stocks that rose in price, neither was able to move up over 10% (the usual threshold I’m monitoring), and only 1 of the 2 climbed better than 5%.

Leading the lone pair of gainers this month was GILD, advancing 9.83%.  Not bad considering the trading environment!  That was followed by my only other gainer, Abbvie (ABBV), which managed to move up 2.60%.  Coincidence that both stocks are biotechs?  A short list of gainers this month, for sure.

The next best stocks in terms of performance were Quest Diagnostics (DGX) with a loss of 1.60%, Iron Mountain (IRM) which fell 3.61%, and Fastenal (FAST) which declined 3.66%.

Of the 46 stocks that fell in price, one fell more than 20%, and another 30 fell more than 10%.  Yet another 10 stocks dropped over 5%.  Stunning!

My biggest loser this month was Exxon Mobil (XOM) with a loss of 22.44%.  No real surprise there, as the price of oil has certainly been on the decline.  Not too far behind were plenty of other stocks.  I had Altria (MO) pull back 19.66%, while Kontoor Brands (KTB) followed suit with a drop of 19.49%.  Cisco Systems retreated 18.26%, and AFL declined 18.21%.

Other significant decliners were SWKS, dropping 18.09%, TCF Financial (TCF), which pulled back 17.63%, and CVS Health (CVS), which dropped 17.15%.  Lots of losses to go around.

While registering such declines is no fun, we are still well ahead of where we were just a year ago.  So not all is lost – literally.  Here’s to at least some price stabilization next month, assuming we can’t recoup at least a small portion of the losses.  It will be interesting to see what transpires.

 

Watch List

Once again this month, my purchases (AVGO & ADP) came from my watchlist.  I’m starting to get predictable.  🙂

With massive declines this past week, all sorts of stocks have hit my radar.  It will be too much to purchase everything, so I’ll have to be selective if I’m buying.

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

There are several stocks in the bottom half of my Portfolio ranks that I’d like to be larger.   These include a couple of choices noted last month in Caterpillar (CAT) and UnitedHealth Group (UNH).

CAT is already at a buy point for me, but below $120 would be especially nice.  As for UNH, I’d like to see it fall even more before I add shares.  Perhaps a price around $235 is enough, which is $30 less than I was thinking last month.  UNH appears to be affected by who the leading candidate for the Democratic party nomination might be.

Other stocks from the lower half that I’d like to add to are CSCO and possibly Eastman Chemical (EMN) or Wells Fargo (WFC).  In addition, I should try to add a few shares to my 3M Co. (MMM) position while it’s trading down here below $150, or to my General Dynamics (GD) position while it’s under $160.

Of course, I’m not done wanting to add to Portfolio newcomers AVGO and ADP, so I’ll look to add there as well.  Both are currently at levels where I could see adding more to my Portfolio.

Lastly, let me not forget VF Corp (VFC), which I mentioned last month.  I said then that despite a drop from near $100,  I’d want to see it closer to $70 before considering adding more.  Well, here it is at $72.  I wouldn’t have predicted such a swift drop over 2 months.

A couple of bigger positions that I still have more room for are Lowe’s Companies (LOW) and Starbucks (SBUX).  LOW below $100 or SBUX below $75 could result in some added shares.

I think I need more cash!

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

Boeing (BA) and FedEx (FDX) have now reached a point where I could see myself adding shares.  However, with safer alternatives available at decent prices thanks to the recent market drop, it’s probably best for me to stay away from these two until some signs of positive news arise.  BA sits just above $275 at this time, while FDX is at $141, after bouncing up from $134.

I liked the pullback I saw in Microsoft (MSFT) this past week, but I’m hoping for a price south of $150 before dipping my toes in those waters.

I was waiting for Sysco (SYY) to drop and it has.  Something in the low $60s would be enticing, and that’s not too far away at the current $66.65.

The Walt Disney Company (DIS), Waste Management (WM) and NextEra Energy (NEE) are on my radar, too, but I think a larger pullback is in order for each if I’m going to act on these.  I’d like to see DIS down around $105, WM closer to $90, and NEE well under $200.

 

Thoughts?

Have the declines this past week got you thinking about adding to your portfolio?  Might you be looking to strengthen positions in certain sectors?  Or perhaps add some stocks you’ve long had your eyes on?  Please share your thoughts!