Another month is in the books.  Despite all the weekly ups and downs, my Portfolio continued its climb higher in value.  That’s 4 months in a row for my Portfolio.

It’s hard not to like the progress, but the longer the upward trend continues, the more painful the inevitable correction will probably feel.

As for volatility, it seemed fairly contained when looking at the overall price movement for my Portfolio stocks this month.  I didn’t have a lot of big movers.  However, more often than not, there’s a handful of companies crossing my 10% threshold for the month, so I’ll cover those.

I also didn’t see a bunch of big moves within my top 10 holdings in May.  Half of the stocks maintained their positions in my top 10 relative to last month.  One stock though tumbled 5 positions.  Keep reading to find out which stock that was.

Transactions in May were contained as well.  If it wasn’t for some moves I made this past week, I would have experienced a shutout with regard to transaction activity.  I’ll update you on those two transactions… 1 sell and 1 buy.

As prices continue to head up, my watchlist continues to thin out.  I still see value in several Healthcare names, but I’d like to add in other sectors as well.  I’ll share with you any stocks that are on my radar these days.

Let’s get to it… here are my Portfolio Thoughts for May, 2021.

 

Top 10 Review

For the 3rd month in a row, my top 2 stocks remain unchanged in the rankings.  Despite a rough month from a performance perspective, Qualcomm (QCOM) easily retained my #1 position thanks to the large cushion it had over my #2 holding, RPM International (RPM).  RPM was negative for the month, but much less so compared to QCOM.

As I mentioned earlier, 5 of my top 10 stayed in the same position relative to last month.  We just covered 2 of them, so let’s find out about the others.

 

 

Moving up the rankings by a spot was T. Rowe Price Group (TROW).  TROW managed a good month with regard to price and was able secure the #3 spot – a position it occupied a couple of months ago.

Also climbing a spot this time around was BlackRock (BLK).  A strong month from BLK has allowed the stock to surge into my #4 spot, and with good margin.  Expect BLK to be a top 5 holding for me for a while as it has created a decent gap between itself and any stock trailing it in my rankings.

Rising a couple of positions to #5 was Union Pacific (UNP).  Just like in April, UNP was essentially flat for the month.  That flat performance in April resulted in the stock slipping one position in my rankings.  However, being flat in May was good enough to allow it to move up in my Portfolio… very interesting.

Staying put at #6 in my rankings was Visa (V).  The stock was in the red in May, yet managed to maintain its position.  V is still looking for its business to fully recover from the pandemic.  Having travel restrictions loosen up in Europe could go a long way to helping on that front.

Lowe’s Companies (LOW) was able to advance a spot to #7, despite a negative price performance in May.    LOW seems to have been consolidating in price over the past 3 months, hovering in the low $190s after a strong run-up prior to that.

This brings us to the big decliner in my Portfolio’s top 10 rankings.  As you will see shortly, Skyworks Solutions (SWKS) was my largest decliner in May, and this led the SWKS freefalling five positions, all the way down to my #8 spot.  SWKS is just barely behind several other stocks in the rankings, so a decent recovery over the next several weeks could see SWKS crack the top 5 again by this time next month.

Lastly, we arrive at the last two stocks that didn’t change position compared to last month.  Both stocks were slightly positive for May.  First, I have Nike (NKE) continuing to hold down the #9 spot.  Similar to LOW, NKE seems to be digesting previous gains.  Second, I have Procter & Gamble (PG) retaining the #10 position.  PG has been clinging to the last spot in my top 10 for a couple of months now.

Just outside my top 10 is Aflac (AFL).  AFL has come quite close to breaking into the top 10 again.  It’s been well over a year since AFL claimed a top 10 spot.  If AFL does regain one of those top spots, it may very well end up kicking out fellow legacy stock PG… we’ll see.

 

From the table above, my top 10 holdings now comprise 36.11% of my Portfolio value.  This is 0.80% lower compared to last month.  With a couple of my largest largest holdings from the Tech sector (QCOM & SWKS) not performing well in May, this could have been expected.

As for the dividend weighting of my top 10, this ended the month at 26.74%, which is 0.56% higher compared to last month.  A couple of strong double-digit dividend raises from UNP and LOW during the month of May led to this dividend weighting advance for my top 10.

 

Transactions

Portfolio transactions in May were almost non-existent for me.  However, I made a pair of moves late in the month to fend off any transaction shutout.

I trimmed my 3M Co. (MMM) position due to lackluster dividend growth over the past couple of years, as well as to lighten up on my Industrials weighting.  I then used the sale proceeds and some cash to keep building a fairly new Healthcare position in Merck & Co. (MRK).

I covered both transactions a single post.  You can check out all the details here…

 

Recent Transactions – MMM & MRK

 

There was no change to the number of stocks in my Portfolio, which remained at 52.

 

Price Movement

Note – my price changes cover closing prices from 4/29/21 to 5/28/21.

More price gains were notched in May… a 4th consecutive month of Portfolio gains.  How long can this continue?

In May, I realized just over a 2:1 ratio of stocks with price gains compared to price declines.  Of my 52 holdings, 35 moved higher, while 17 moved lower.

Such a positive ratio is good to see.  I didn’t have any standout stocks that carried the Portfolio this month.  Instead, it was just solid gains from the majority of stocks that led to the Portfolio green.

 

Of my 35 stocks that rose in price, only 1 offered up a gain over 10% (the usual threshold I monitor).  Still, I did have 7 additional stocks that posted gains of 5% or more.

The top gainers were:

• CVS Health (CVS), vaulting 13.19%
• Iron Mountain (IRM), advancing 8.07%
• Eastman Chemical (EMN), rising 7.55%
• BlackRock (BLK), gaining 6.01%
• Caterpillar (CAT), climbing 5.98%

The 5 best performers in May come from 5 different sectors.  It’s nice to see gains from such different stocks.

BLK made my list of my best performers for the 2nd month in a row!

 

Of my 17 stocks that dropped in price, two dropped more than 10%.  In addition, another 3 stocks dropped more than 5%.  Once again, I feel like losses were contained – less than 10% of the Portfolio stocks were down over 5%.  Here’s the worst of my decliners from May…

• Skyworks Solutions (SWKS), falling 14.08%
• VF Corp (VFC), dropping 10.22%
• Qualcomm (QCOM), retreating 5.71%
• Omega Healthcare Investors (OHI), declining 5.33%
• NextEra Energy (NEE), sagging 5.18%

Interestingly, both SWKS and VFC were a pair of my best gainers in April.  How quickly things can change.  It appears holding onto those gains proved a little difficult.

A pair of Information Technology names (QCOM & SWKS) stand out in the decliners list.  Both are semiconductor companies immersed in the 5G space.

 

Weightings

 

With my decision to trim my MMM position recently, I was able to reduce my weighting a bit in my most overweight sector – Industrials.  However, there’s more work to do there.

I’d have to reduce my Industrials weighting by 3% of my Portfolio’s value just for it not to be my most overweight sector.

Meanwhile, I’ve not been making any progress with boosting my weighting in my two most underweight sectors: Information Technology and Communication Services.

I have identified a pair of possible candidates in the Communication Services sector to keep any eye on – more on that shortly.

My recent MRK addition, has made my Healthcare holdings nicely weighted, but with some good values still being present in that sector, I may expand to overweight.

As always, I’ll keep all these weightings in mind as I adjust my Portfolio, and my watchlist.

 

Watch List

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

Healthcare stocks MRK and AMGN remain near the top of my list for additions.  After adding to MRK recently, I’d prefer to add to AMGN to increase the size of that position.  I almost added last week when AMGN touched $235, but I’d like it more below $230.

I’d consider adding some shares of NEE should it dip below $70.  However, I’d still consider the shares overvalued at that point and would really like to see much lower prices.  However, it’s possible that never happens.  I keep wanting to add to Microsoft (MSFT) at lower prices that never seem to arrive.  Patience!

 

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

Once again, Bristol Myers Squibb (BMY) is on my radar, but the signal is weaker after the stock has drifted higher over the last several weeks.  Should it fall to $60/share I’d be tempted to find room for yet another Healthcare stock in my Portfolio.

I mentioned that a pair of Communication Services stocks have hit my radar.  I haven’t given either a thorough examination, but I hope to do that soon.

One of the stocks is Omnicom Group (OMC).  The company offers marketing and corporate communications services.  It looks like I may have missed a good chance to initiate a position in this company, as it’s had a nice price run-up since the beginning of February, and now appears fairly valued.  Fairly valued may still be a bargain in today’s market, so I’ll keep my eye on the stock and its 3.4% yield.

Looking like less of a bargain is the other Communication Services stock, Interpublic Group (IPG).  According to their website… they are a “global provider of marketing solutions, specializing in advertising, digital marketing, communications planning, media, public relations and specialty marketing.”  This stock currently yields 3.21%, and also has had a significant advance in price in recent months – doubling since the start of last October.

Over the last decade, both have offered dividend growth with a CAGR a little over 10%.  However, the capital appreciation with OMC has been much better.

 

Thoughts?

How has your portfolio fared to start 2021?  In which stocks have you been finding value?  Has your buying slowed down with the elevated stock prices?  Please share your thoughts!