Portfolio Thoughts (Nov. 2020)

Looking over my dividend Portfolio every month is something I look forward to.  It’s interesting to see which stocks have been on the move, how dividend raises and new purchases have impacted my dividend weighting, and scope out which new stocks can possibly make my Portfolio stronger.  This is a good portion of what I cover in Portfolio Thoughts every month.

This month, the stock market made a strong push higher thanks to some U.S. election clarity, and the hope that a COVID-19 vaccine was on the horizon.  My Portfolio was certainly better for it.  Plenty of my holdings made what could be considered a year’s worth of gains in one month.  I can’t wait to share some of the impressive moves up, so keep reading.

Something very interesting happened with my top 10 this month… and it didn’t have to do with a new stock making its way onto the list.  Instead it pertains to the movement within the top 10, and I’m not sure when I might see something like it again.  I’ll reveal this in a bit.

Portfolio transactions in November were limited, but at least they were buys – so the Portfolio keeps growing.  One of the purchases introduced a new stock into the Portfolio.  Stay tuned to find out which stock that was.

With the market moving strongly higher in November, fewer stocks remain on my watchlist.  However, I managed to find a few worthy candidates, and I’ll share those shortly.

Let’s not wait any longer.  It’s time to check out my Portfolio Thoughts for November…

 

Value Movement

What a month it was in the stock market.  The upward price movement was strong and fairly unrelenting.  My Portfolio stocks saw their fair share of advancement, too.

However, my top 10 didn’t reflect much position movement over the course of the month.  Not only did the top 10 stocks remain the same, but 8 of the 10 stocks remained in the same position as last month.  In fact, the only movement was a swap of the #4 and #9 positions… amazing.  I can’t imagine I’ll see another month with such little position movement for a long time.

Here’s how things settled out as the end of November drew closer…

 

 

For the 3rd month in a row, there was no change in my top 3 stocks.  My top stocks in terms of value continue to be Qualcomm (QCOM), RPM International (RPM) and Procter & Gamble (PG).  QCOM continued to strengthen its hold on my #1 spot, while RPM has firmly held down #2.  However, the relatively poor November performance by PG has allowed several other stocks to creep within striking distance of wrestling the #3 spot away from PG.

The big mover up in my top 10 was BlackRock (BLK), which launched itself from #9 to #4 on the back of a very strong November.  Financials had been lagging for most of the past few months, but rebounded nicely in November.

The #5 through #8 spots held steady this month.  Nike (NKE) retained the #5 spot, despite holding #4 for most of the month.  Visa (V) anchored the #6 position once again, with Union Pacific (UNP) and T. Rowe Price Group (TROW) maintaining #7 and #8, respectively.

Falling down sharply was Skyworks Solutions (SWKS).  It fell from #4 to #9, after notching the worst return of my Portfolio stocks during November.  Frankly, the percentage loss was not bad at all (which we’ll see later), but when everything else around is moving strongly higher, it was a relatively bad performance.

Lastly, I once again have Pepsico (PEP) claiming the #10 spot.  Fastenal (FAST) is a little outside the top 10, so PEP will have to perform to avoid falling out of the group.

From the table above, my top 10 holdings now comprise 38.34% of my Portfolio value.  This is a drop of 1.11% compared to last month.  This is mainly due to my purchases this month bolstering the bottom half of my Portfolio.

As for the dividend weighting of my top 10, this came in at 28.30%, a decline of 0.23% this month.  Again, my stock purchases outside my top 10, contributed to small declines in the dividend weighting of most of my top 10 stocks.  NKE and V bucked this trend as a result of their recent dividend raises.

 

Transactions

Not a bunch of activity in November with regard to Portfolio transactions.  I managed a pair of purchases on the same day, late in the month.

As it so happened, both stocks were biotech stocks, one new to the Portfolio, and the other an addition to an existing holding.

The new position consumed the majority of my investment capital and thus provided the biggest boost my forward dividend income.  Check out the details in the following post…

 

Recent Buy – AMGN & GILD

 

With the AMGN purchase delivering a new stock to my Portfolio, my number of Portfolio positions grew to 49.

 

Price Movement

Note – my price changes cover closing prices from 10/30/20 to 11/27/20.

After two months of small Portfolio declines in September and October, my Portfolio rebounded smartly in November and posted some magnificent gains.

I have to say I can’t recall if I’ve recorded such a positive month before.  Not only were the gains phenomenal, but the number of stocks participating was impressive, too.

This month I posted a 15:1 ratio of stocks with price gains compared to price declines.  Talk about outstanding!  Of the 48 holdings (not counting AMGN yet), 45 moved higher, while only 3 moved lower.

Of the 45 stocks that rose in price, two managed to move up over 30%, eleven surged over 20%, and another twenty jumped over 10% (the usual threshold I monitor).  That’s a total of 33 out of 45 Portfolio stocks moving up more than 10% this month.  Hello gains!

Leading the pack of gainers with their 30%+ moves up were Air Lease (AL) and Aflac (AFL), gaining 39.43% and 33.37%, respectively.

This was followed by a gain of 29.95% from TCF Financial (TCF), a 29.85% pop from Nexstar Media Group (NXST), and a 28.80% climb from Sysco (SYY).  These are some terrific returns from this month’s 2nd tier group, right?

My next best Portfolio gainers in November were:

  • VF Corp (VFC), rising 27.56%
  • Omega Healthcare Investors (OHI), advancing 24.44%
  • JPMorgan Chase & Co. (JPM), moving up 23.64%
  • Eastman Chemical, gaining 23.58%, and
  • AbbVie (ABBV), climbing 23.25%

Three Financial stocks showed up in my top 10 gainers… adding to pretty good performances from my Financials last month.

 

Not much to discuss with regard to stocks that fell in price, as only 3 Portfolio stocks managed to decline in November.  None of them fell by 10%.  In fact, none of them fell by 5% either.  My worst performers were as follows:

  • SWKS, retreating 3.63%
  • Hormel Foods (HRL), declining 3.06% on the heels of a quarterly revenue and earnings miss, and
  • Lowe’s Companies (LOW), falling 2.17%

Quite a short list… the shorter the better!

 

Watch List

My watchlist has thinned out after a strong run up in prices in November.  However, something always remains on my radar.

I was able to boost my Healthcare sector holdings this month with my two biotech adds.  Yet, I did nothing to increase my weighting in the Information Technology and Communication Services sectors, where I feel I’m underweight compared to target allocations I desire.

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

Even though I just purchased AMGN, it did start out as my smallest Portfolio position.  Thus, I’m looking to build the position, especially if the price drops.  A price below $210 would be good for me.

Last month, I noted GD trading around $131, while now its closer to $152.  Buying some at this point is not ideal, but I still believe it’s undervalued, and it would allow me to average down my position a bit.

CVS Health (CVS) is another stock that isn’t quite as attractive as last month, but it still shows undervaluation.  A small add at the current level of $67 is an option.

Adding a few shares to my UnitedHealth Group (UNH) position is still of interest to me.  However, I’m targeting a price at or below $300, so a drop of 10% would have to occur.

Realty Income (O) is another stock I could see adding to.  A dip below the $60 level would pique my interest, and allow me to purchase back shares I sold earlier in the year at or above $77.

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

Cogent Communications (CCOI) is still being watched.  A price below $55 is preferred.  Even if I do establish a position, it will be rather small.

Definitely on the more defensive side is Flowers Foods (FLO).  This stock is new to my radar, but sports a yield of 3.6% around the $22 price it currently trades at.

 

Thoughts?

What do you think about the current market environment?  Have prices run up too far, too fast?  Do you see any values in some of the currently unloved sectors?  Please share your thoughts!

6 thoughts on “Portfolio Thoughts (Nov. 2020)

  1. Hey EngineeringDividends, love your blog! Really agree with the AMGN & GILD buys – good timing too to catch them on sale. Market is close to an all-time high, so I would wait for a correction or downturn. But like you alluded to, you can always find an undervalued stock. As a fellow engineer, I’m just as analytical as you when it comes to optimizing the portfolio. I thoroughly enjoyed reading through your thoughts. Keep up the great work!

    1. Welcome FLA!
      Awesome to hear you enjoyed my Portfolio Thoughts. Yeah, it’s getting difficult to put money into the stock market with prices going ever higher. However, stockpiling a little cash is never a bad thing.
      Great to hear about your engineering background. I’m sure all that analytical thought and your problem-solving skills will come in handy in many aspects of life… including investing.
      Hope you’ll drop by again.

  2. We share a number of holdings ED… you have a good solid portfolio… as you stated …tough to find good deals in this high market… but there are some still out there … I’ve been purchasing insurers (afl, met, pru) over the past couple of months … but even they’ve run up 20-40% over the past month or so. I like your performance reviews of individual holdings – but I always think its just a snapshot of that moment. For example, a month or two back I had holdings down 50+% that are now up 20%-30% thanks to the wild swings in the market … if I looked at annual returns 2 months ago to today they’d be vastly different… regardless I still find the exercise an interesting one. Cheers!

    1. Welcome Divs4Jesus!
      Good to hear to like my Portfolio. I’ll have to check yours out considering we share a number of holdings.
      I bought some AFL a month or two ago, before the recent run up… so that’s worked out nicely. Insurers may still have some room to run up.
      On the Performance Checks, they are a snapshot of my performance for that stock up to that point in time, but it shows my annualized return since I’ve initiated a position, which is often at least 4-5 years.
      Granted, even with 4-5 years of time factored in, big price fluctuations (like we’ve seen this year) can move the annualized returns a noticeable amount. I do update all returns for stocks I’ve reviewed in a Performance Check each time I do a new one, so you can see how the annualized returns are changing over time.
      Thanks for stopping by and leaving a comment! Hope to hear from you again real soon.

  3. Certainly a lot tougher to find undervalued stocks after the huge rally, but blue-chip insurance companies still looking cheap imo.

    I’ve been researching PRU, UNM and AFL lately.

    1. Welcome, Dividend Athlete!
      I bought some AFL back in August… my first AFL purchase in years. It’s made a nice climb in price since then. Even at today’s prices there are still signs of undervaluation. I haven’t looked into PRU or UNM.
      There are still some sectors and industries that have been left behind by the recent market rally, but I suspect those stocks will require us to be on the other side of this pandemic before we see their recovery.
      Glad you dropped by and left a comment… hope to hear from you again soon.

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