After 4 months of higher highs for my Portfolio, gains finally took a breather.  Portfolio value wasn’t looking too good a week or so ago after the Fed spoke of tapering its quantitative easing purchases earlier than planned, and of interest rate hikes arriving earlier, too.  However, bounce back trading this past week made the monthly losses in my Portfolio hardly noticeable.  Still, the price action over the course of the month is a reminder of how fast the markets can turn to the downside.

My Portfolio has been getting slightly more defensive over the past 4 months.  All my purchases have been in either Utilities or Healthcare, two of the three defensive sectors.  I suspect it will be more of the same over the near-term if the market doesn’t pull back.

Dividend progress within my Portfolio seems to be going well in 2021.  Thus, I’m looking forward to my mid-year review of my annual goals in July in the hopes of getting confirmation of that progress.  I’ve been especially happy with how dividend raises have been coming along thus far.  A few of my companies have resumed dividend raises after a freeze in 2020.  In addition, the raises are coming in better than I’d hoped.  Given that dividend raises make up the majority of my forward dividend income growth during the year, I’m thrilled to see this.

Despite my Top 10 containing the same stocks compared to last month, I had some decent movement in my Top 10 in June, with 6 of the 10 stocks changing ranks.  One stock climbed 4 spots and another fell 3 spots – I’ll be sure to highlight those coming up.

Transactions were limited in June, with only a single buy to speak of.  The exciting part of that lone purchase was that it introduced a new stock to my Portfolio.  Stay tuned for that.

Price movement for my Portfolio stocks was fairly muted this month.  I did have a rather negative ratio of losers to winners, but the overall losses were well contained.  As usual, I’ll discuss the biggest movers in either direction.

Last month I created a Weightings section to show my Portfolio value weightings and dividend weightings by sector and supersector.  I’ve got an updated table for you.

Finally, I’ll take a quick look at the stocks I’m watching both inside and outside of my Portfolio.  My lone purchase this month happened to be a stock from my watchlist.

Oh well, enough of the preview… let’s get to my Portfolio Thoughts for June, 2021.

 

Top 10 Review

Qualcomm (QCOM) handily retained the #1 position for another month… a spot it looks to be holding on to for a while given the greater than 1% weighting difference between itself and the #2 spot.

The big news is that after 3 months of RPM International (RPM) locking down the #2 spot, we have a bit of a shake up.  T. Rowe Price Group (TROW) continued its strong performance in 2021 and managed to bump RPM out of the #2 spot, declaring it its own.

Bonus news from TROW came in the form of a special dividend announcement.  TROW will be paying out $3/share next month.  Woohoo!

 

 

In a month in which Materials stocks didn’t perform well, RPM faded and ended up at #3 this month.  In fact, it almost fell an additional spot thanks to it being my 6th worst performer in June.

Hard-charging BlackRock (BLK) was the stock that almost rose to #3, but instead it had to settle for the #4 ranking this month.  That’s the same rank that BLK had last month, but it’s now much closer to cracking the top 3.  BLK is up well over 20% on the year.

Claiming the #5 spot this month was Nike (NKE).  NKE rose 4 spots during the month (actually all in one day) as the result of a monster earnings report.  This past Friday, the rocketed higher by over 15% on the heels of those earnings and the company’s outlook.  A price jump of that magnitude is not common for a stock of its size.

Retaining the #6 spot was Visa (V).  Despite a very good performance in June (4th best performance), V could not overcome the even better performance of NKE.

Moving up one spot to #7 was Skyworks Solutions (SWKS).  SWKS was also a top performer for me in June (3rd best performance).  The stock has had trouble finding a footing after a significant run-up in price from mid-December to mid-February.

Falling 3 spots, all the way to #8, was Union Pacific (UNP).  It wasn’t a horrible performance from UNP in June, but it was negative, allowing a few top 10 stocks to shoot past it in the rankings.

Another stock with a slightly negative June was Lowe’s Companies (LOW).  This led to LOW sinking a couple of spots in the rankings to #9.  LOW is still in my good graces, however, thanks to the tremendous 33.33% dividend raise they announced in late May.  It will take a while before that fades from my memory. 🙂

Lastly, I have Procter & Gamble (PG) holding down the #10 spot for a 3rd consecutive month.  PG has slipped out of the top 10 during the course of the month, but finds a way to remain in the top 10 by the end.  I’m not optimistic that will continue if the market continues to power higher.

Lurking outside the top 10 and trying to find a way in are a handful of stocks I like.  These include Aflac (AFL), Nexstar Media Group (NXST) and Fastenal (FAST).  Legacy stocks Pepsico (PEP) and Johnson & Johnson (JNJ) are right behind that group.

 

From the table above, my top 10 holdings now comprise 36.87% of my Portfolio value.  This is 0.76% higher compared to last month.  The gain was powered by NKE, SWKS and V… top 10 stocks that all finished June as some of my top performers.

As for the dividend weighting of my top 10, this ended the month at 26.61%, which is a 0.13% decline compared to last month.  Each stock drifted slightly lower in its dividend weighting in June since I didn’t add to any of these positions, and due to no dividend raises being announced within the group.

 

Transactions

Portfolio transactions were limited in June… just a single move for me.

It was a purchase that I made late in the month, and it introduced a new stock to my Portfolio.

I scrounged up about $1,100 in cash and added to my Healthcare names, buying 17 shares of Bristol-Myers Squibb (BMY).

I went over all the details in the following post…

 

Recent Buy – BMY

 

By adding a new stock to my Portfolio, the number of stocks in my Portfolio rose to 53.

 

One other item of note… Merck & Co. (MRK) spun off part of its business (women’s health portfolio) early in June.  I received 1 share of Organon & Co. (OGN) for each share of MRK that I owned.  This resulted in the addition of 10 shares of OGN, and some cash in lieu of a fractional share.

I still own the same number of MRK shares, but their cost basis was adjusted lower as a result of the spinoff.

Since OGN doesn’t currently pay a dividend, I’m undecided on whether I’ll keep the OGN shares or sell them for the cash.  It will probably be the latter, as I don’t foresee any clarity regarding a possible dividend payout coming any time soon.

 

Price Movement

Note – my price changes cover closing prices from 5/28/21 to 6/25/21.

Overall, prices took a minor turn to the negative side during June.  It was much worse about mid-month, but during this past week the market recovered a good chunk of the losses.

In June, I realized nearly a 2:1 ratio of stocks with price declines compared to price gains.  This is a notable departure from the past few months where stocks in the green seemed abundant.  Of my 52 holdings (not counting new addition BMY just yet), 34 holdings moved lower in price, while 18 moved higher.

While the ratio was solidly negative, my overall Portfolio performance wasn’t too bad, as many of the stocks that did manage a positive month, happened to be some of my larger positions.

Volatility was fairly contained, as well.  I only had a couple of stocks move more than the +/-10% I monitor for.

 

Of my 18 stocks that rose in price, only 1 offered up a gain over 10% (the usual threshold I monitor).  In addition, only 2 others posted gains of 5% or more.

The top gainers this month were:

• Nike (NKE), surging 13.11%
• Microsoft (MSFT), rising 6.14%
• Skyworks Solutions (SWKS), climbing 5.12%
• Visa (V), advancing 4.41%
• V.F. Corp (VFC), moving up 3.96%

The 5 best performers in June came from only 2 different sectors – Information Technology and Consumer Discretionary.

NKE topped the best performers list strictly based on gains this past Friday.  Prior to Friday, NKE was negative for the month.  Now that’s an impressive turn of fortune.

SWKS and VFC were part of my worst performers list in May, and part of my best performers list in April.  Good luck trying to figure out where these two stocks are headed in the short-term.

 

Of my 34 stocks that dropped in price, only 1 dropped more than 10%.  In addition, 5 other stocks dropped more than 5%.

My worst decliners in June were…

• Caterpillar (CAT), sinking 10.27%
• Eastman Chemical (EMN), declining 6.87%
• JPMorgan Chase & Co. (JPM) pulling back 6.20%
• Gentex (GNTX), retreating 5.92%
• Air Lease (AL), falling 5.50%

This list is a bit more diversified compared to my list of gainers.  Here we see a couple of Industrial stocks on the decliners list, followed by one each from the Materials, Financials, and Consumer Discretionary sectors.

All 3 of my Materials stocks were negative in June, led of course by EMN from the list.  In addition, all 8 of my Industrials stocks were negative, too, led by CAT.  Wow… I was completely shutout from gains in two different sectors.

 

Weightings

 

Thanks to my BMY addition, my Healthcare weighting advanced a bit, yet it’s still only my 4th largest sector weighting in my Portfolio.  However, Healthcare strengthened its hold as my sector with the largest dividend weighting.

I’m still most overweight in the Industrials and Materials sectors (by at least 4% and 1%, respectively) but I like each of my holdings in those sectors, so I’ll probably stand pat and see if I can reduce their weightings by adding to the other sectors over time.

I’m still doing a poor job with boosting my weighting in my two most underweight sectors: Information Technology and Communication Services.  I’d like to see their weighting percentages grow by 4% and 3%, respectively.

In general, I’m targeting being within +/-3% of the sector weightings of the S&P 500.

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… driven mainly by my desire to increase the size of these positions to something closer to my Portfolio average.

Healthcare stocks BMY and Amgen (AMGN) sit atop my list of possible additions.  I’d like to add AMGN below $230, and BMY below $65.

NextEra Energy (NEE) below $70 could elicit an additional purchase, too.

I’ll try to pick up another share or two of Lockheed Martin (LMT) should it retreat below the $370 level.  While this would be well above my cost basis, it still seems reasonably valued there.

Another pair of stocks I’d like to add to are Pinnacle West Capital (PNW) and Microsoft (MSFT), but I’d like to see much lower prices before doing that.

 

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

I’ll remove BMY from this list after initiating a position in the stock in June.  I paid more than I wanted to for the stock, but I am happy to see the stock in my Portfolio.

As noted last month, I’m watching Omnicom Group (OMC) from the Communication Services sector – one of the sectors I want to see with a larger weighting in my Portfolio.  This isn’t the highest quality stock, so if I do take the plunge it will probably start as a rather small position.  I’m hoping I might be able to buy in at $75 or lower.

Lastly, I have a new stock that I’m watching in toy/gamemaker Hasbro (HAS).  I’d want to see the stock under $90 (3% yield at this level) before initiating any position, but I’d prefer to be under $85 for a larger margin of safety.  Unfortunately, HAS has not announced a dividend raise since February of 2019, so I’d like to see dividend growth resume as well.

 

Thoughts?

As we reach the half way point in 2021, is your portfolio shaping up as you’d planned?  What remains to be done to get your portfolio where you want it?  Please share your thoughts!