Welcome, everyone!  I’m glad you could stop by as we get close to putting on bow on 2021.  It’s time for another Portfolio Thoughts post.

My Portfolio has reached a couple of exciting levels this November…

First, my Portfolio value crossed the $600K level with the market surge earlier this month.  Currently, my Portfolio is still holding that level, but market concerns about a new Covid-19 variant could easily knock my Portfolio back down in no time flat.

Second, the forward dividend income for my Portfolio, recently crossed the $14K level.  As you will see in my upcoming Monthly Dividend Income post for November, a monster dividend raise from one of my holdings, and several smaller raises from more than a handful of other companies helped me to reach $14K.  It’s on to $15K now…

Anyway, I wanted to share those events before we got into my normal Portfolio Thoughts content.

My Top 10 Portfolio stocks had some decent movement this month.  Two stocks dropped out of my Top 10, which of course means that two new ones moved in.  I can’t recall the last time that might have happened, but it’s been a long while.  Stick around to hear about all four of the stocks involved.

Portfolio transactions were about average for a month.  I made 5 total trades, in 2 different sets of transactions.  I twice purchased a stock that I hadn’t bought in nearly 6 years.  In addition, I trimmed my largest holding after an insane gain in stock price.  Lastly, I added a new stock to my Portfolio… a stock that has been on my watchlist for a few months.

November saw my Portfolio with more stocks losing ground than gaining.  However, with my largest holding performing so well this month I believe my Portfolio came out ahead overall.

I made progress in moving some of my Portfolio sector weightings in the direction I’d like.  We’ll examine which ones I was able to nudge in the proper direction, and which ones still need more help.

As for my watchlist, I actually executed some trades in November involving watchlist stocks.  It’s important for me to have a shopping list ready to go so that I can possibly act quickly should the opportunity present itself.  I’ll let you know which stocks are garnering the most attention from me right now.

Here are my Portfolio Thoughts for November 2021…

 

Top 10 Review

There were 6 changes within the Top 10 in November, including two stocks that fell out of the Top 10 altogether.

The early part of the month saw many earnings reports get released, and this always adds to the volatility and movement.

Starting at the top, there was no movement within my top 2.  Qualcomm (QCOM) only solidified its hold on the #1 spot after its stock price rocketed higher following its earnings and forecast release.  Maintaining its grip on the #2 spot, despite posting a negative month from a price perspective, was T. Rowe Price Group (TROW).

 

 

Moving up a spot to #3 was Lowe’s Companies (LOW).  LOW continued to power higher, just as it’s done for most of the past year.  The earnings from LOW were fabulous again this past quarter and this led to another leg up in price… and my rankings.

Also climbing a spot, to #4 in this case, was RPM International (RPM).  RPM managed to rise in price in November, adding to a healthy gain from last month.

Falling a couple of spots to #5 was BlackRock (BLK).  BLK has been up and down significantly each of the past 4 months.  Let’s hope BLK can change direction again next month as that will mean a positive result in December.

Holding steady at #6 and #7 were Nike (NKE) and Union Pacific (UNP), respectively.  NKE was up a bit this month, while UNP was slightly down.  UNP cooled off a bit after a scorching month in October.  Given their current weightings, NKE has a decent chance to move up the rankings, while UNP is more likely to move down.

Procter & Gamble (PG) had a good November and moved up one spot in my rankings to #8.  PG ended the month in the upper $140s (even reaching a 52-week high this past week) after finishing the previous 4 months in the lower $140s.

After posting the worst price performance in my Portfolio in November, Visa (V) fell several spots from #8 to noticeably outside my Top 10.  As you’ll see later, I tried to take advantage of this recent dip in price.

Also falling outside my Top 10, after a short 1-month appearance at #10, was Aflac (AFL).  AFL didn’t have a horrible month, it was just leapfrogged by a couple of stocks that notched some good performances in November.

So, which stocks managed to muscle their way into my Top 10 this past month?  As my 2nd best performer in November, Fastenal (FAST) rose up my rankings and settled in the #9 spot.  FAST has been a part of my Top 10 before.  Claiming the #10 spot in my rankings is first-time entrant Broadcom (AVGO).  This is the 5th consecutive month that AVGO has finished higher in price.

Just lurking outside my Top 10 is Pepsico (PEP).  I wouldn’t be surprised to see it back in my Top 10 next month.  Farther behind, but still in striking distance are AFL and V.

 

From the table above, my Top 10 holdings now comprise 37.88% of my Portfolio value.  This is 0.92% higher compared to last month.  QCOM accounts for all of that gain and more.  If QCOM was flat in November then this percentage would have decreased compared to last month.

As for the dividend weighting of my Top 10, it ended the month at 28.91%, which is an increase of 1.58% compared to last month.  That’s back-to-back 1%+ gains in the last two months.  In November, this was primarily due to new Top 10 holdings FAST and AVGO having larger dividend weightings than departing members V and AFL.  The recent dividend boost from NKE contributed to the weighting gain as well.

 

Transactions

My Portfolio moves this month were a little different than normal.  I added shares of a stock for the first time in nearly 6 years, I trimmed one of my Top 10 holdings, and I added a new stock to my Portfolio.

It was a total of 5 transactions – 4 buys and 1 sale.

You can find the details for all these transactions in the following two posts:

 

Recent Buys – V & AMGN

Recent Transactions – V, QCOM, DOX

 

Accounting for all the trades, I invested $2,464.21 and increased my forward dividend income by $57.52.

As a result of initiating a position in DOX, the total number of stocks in my Portfolio rose to 55.

 

Price Movement

Note – my price changes cover closing prices from 10/26/21 to 11/26/21.

The markets started November on a rather positive note, and I thought my Portfolio might finish the month that way.  However, after my Portfolio drifted lower for the majority of the month, things really dropped off the day after Thanksgiving, and my Portfolio ended up with a upside/downside ratio less than 1.

My ratio of stocks with price gains compared to price declines came in at 4:5.  Of my 54 holdings (not counting DOX yet), 24 holdings moved higher in price, while 30 moved lower.

Still, I had one stock standout to the upside so much that I believe my Portfolio ended up in the green for the month despite the unfavorable upside/downside ratio.

Here were the top movers in each direction…

 

Of my 24 stocks that rose in price, only 1 of them gained over 10% (the usual threshold I monitor for) – it blew by that mark actually.  In addition, I had another 5 stocks post gains of at least 5%.

The top gainers in November were:

• Qualcomm (QCOM), rocketing up 33.20%
• Fastenal (FAST), gaining 7.28%
• Lowe’s Companies (LOW), rising 7.19%
• Quest Diagnostics (DGX), popping 6.49%
• AbbVie (ABBV), climbing 6.41%

Wow, that gain from QCOM in just one month could be considered a whole year’s worth of upward movement… very impressive.

LOW continued its strong performance from the last quarter.  Meanwhile FAST broke out a bit after hovering in the mid-$50s for a few months.

I had a pair of Healthcare stocks make the list this month in DGX and ABBV, however many of my other Healthcare stocks didn’t fare as well during the month.

Those first 3 stocks are members of my Top 10.  Big gains from top holdings is a wonderful development.

 

Of my 30 stocks that dropped in price, 2 pulled back more than 10%.  Additionally, 6 more stocks declined more than 5%.  This is never great to see, but it could easily be worse.

My worst decliners this month were…

• Visa (V), plummeting 14.74%
• The Walt Disney Co. (DIS), retreating 13.91%
• Altria Group (MO), dropping 9.08%
• Skyworks Solutions (SWKS), slipping 7.21%
• Realty Income (O), fading 6.25%

The drop from V resulted in the stock falling out of my Top 10, but also to me adding shares of that stock for the first time since I established my position.

The decline from DIS was significant.  Slowing subscriber growth for Disney+ has apparently become a concern.

 

Weightings

 

In general, I target being within +/-3 percentage points of the sector weightings of the S&P 500.

The “Weight Diff.” column shows which sectors sit outside my preferred weighting ranges.  If I’m overweight a sector, it’s shaded green.  If I’m underweight a sector, it’s shaded red.  If I’m within my target weighting range, then no shading exists.

I actually made zero headway in decreasing my most overweight sectors.  The percentages in Consumer Staples, Industrials and Materials all rose.  This all happened naturally, as I didn’t make any transactions involving stocks in these sectors.

As for my two underweight sectors, there was some slight natural progress in adding to the weight of my Communication Services sector.  However, not my big QCOM gains this month, nor reinvesting all the proceeds from my QCOM trim (and some cash) into another Technology name (DOX) allowed me to put a dent in the weighting difference in the sector.  In fact, the change was 0.15% in the wrong direction.

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

 

Watch List

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

Despite adding some shares of V recently, I’m inclined to add more, especially if the price continues to drop.

I like Skyworks Solutions (SWKS) in the mid-$150s.  I sold 10 shares of SWKS back in February at $190, so I can see buying back some or all of those shares.

Healthcare stocks Merck & Co. (MRK), Amgen (AMGN) and Bristol-Myers Squibb (BMY) continue to drop.  In the case of AMGN and BMY, I’d be averaging down.  Plus, those are two of my smaller positions so I’d lean towards adding to those first.

I’m still building out my Omnicom Group (OMC) position.  With the price sitting in the upper $60s I’d be able to lower my cost basis there, too.

Lockheed Martin below $340 is intriguing to me, as is my newest holding, Amdocs Ltd. (DOX), below $72.

I’m still looking to trim some additional Omega Healthcare Investor (OHI) shares.  I have 10 shares in mind for the trim, but recouping the lost income is challenging given the stock’s high yield.

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

While I don’t necessarily need to add another Healthcare stock to my Portfolio, I’m watching Medtronic (MDT) rather closely.  I’m attracted to the quality of MDT and its current $110 price is already below the $115 target I had.  The cheaper it gets, the more likely I’ll initiate a position.

Insurer Allstate (ALL) is also on my watchlist.  A price below $110 would raise my interest level.

I’m still watching Activision Blizzard (ATVI), but given its recent issues, I’ve held off on investing despite it falling well below the $75 target I had.

 

Thoughts?

What are you hoping to accomplish in your portfolio during the final weeks of 2021?  Do you have any concerns investing with the markets close to all-time highs?  Please share your thoughts!