My Portfolio Thoughts are coming to you a few days earlier than normal this month.  However, that won’t change any of the content.  I’m just looking to free up some time late in the month for additional pursuits.

Oh boy… after a one month respite in March, it was back to more losses in April.  There appears to be a flight to safety taking place in the stock market.  Defensive sectors such as Consumer Staples, Healthcare, and Utilities are holding their own while some carnage takes place in higher growth sectors.  My Portfolio is not nearly defensive enough to overcome the overall market negativity, and thus my Portfolio value took a hit in April.

Significant price movement has returned with the increased market volatility this month.  Unfortunately for me, the biggest movers within my Portfolio were all to the downside.  As usual, I’ll provide a list of my 5 best and worst percentage movers from my Portfolio.

I’ve got two stocks that worked their way into my Portfolio value Top 10 in April.  Of course, that means a couple dropped out as well.  You’ll know the stocks that were involved shortly.  Also, there was plenty of shuffling among the stocks within the Top 10, too, thanks to their nearly equal weightings when the month began.

When it comes to the sector weightings within my Portfolio, I had another sector become ‘overweight’ during April.  I’ll let you know which sector that is, and if I’ve got any concerns about the fact that I now have 4 overweight sectors in total.

As for my watchlist… I’m still primarily focused on adding to my existing Portfolio holdings.  In fact, my most recent internal purchase (JPM) was of a stock that was on my watchlist from last month.  In addition, I also brought two new stocks into my Portfolio [Verizon (VZ) and Cummins (CMI)], both of which I highlighted for myself in last month’s Portfolio Thoughts.  So, one could say my watchlist has been bearing fruit over the past month.

Let’s check out my Portfolio Thoughts for April 2022…

 

Price Movement

Note – my price changes cover closing prices from 3/25/22 to 4/22/22.

My ratio of stocks with price declines compared to price gains finished at exactly 5:3.  Of my 56 holdings (not counting newest addition CMI yet), 35 moved lower in price, while 21 moved higher.

Here were the top movers, up and down, in April…

 

Of my 21 stocks that rose in price, none of them managed a gain over 10% (the usual threshold I monitor for), and only 7 posted gains of at least 5%.

The top gainers in April were:

• VICI Properties (VICI), popping 8.64%
• Realty Income (O), jumping 8.23%
• National Retail Properties (NNN), climbing 6.06%
• RPM International (RPM), advancing 6.00%
• Hormel Foods (HRL), rising 5.68%

While last month I had a bunch of Industrials listed in my top performers, in April you can see that REITs headlined my gainers.  VICI, O & NNN led the way, with STORE Capital (STOR) also performing well in April.  Only Medical Properties Trust (MPW) bucked this trend for me.

I was happy to see RPM bounce back in April after declines in each of the previous months to start 2022, and also being on last month’s worst performers list.

HRL rounded out my top performers, with several other defensive stocks from the Consumer Staples and Utilities sectors holding up well, too.

 

Of my 35 stocks that dropped in price, 9 of them declined more than 10%, which was a tad disturbing.  In addition, another 9 stocks retreated more than 5%.  Thus, there were plenty of significant red numbers weighing down April performance in my Portfolio.

My worst decliners this month were…

• Skyworks Solutions (SWKS), plunging 16.57%
• Qualcomm (QCOM), plummeting 15.93%
• The Walt Disney Co. (DIS), sinking 15.00%
• Union Pacific (UNP), tanking 14.30%
• NextEra Energy (NEE), dropping 11.90%

A pair of semiconductor stocks top my decliners list in SWKS and QCOM.  My other two semiconductor stocks, Broadcom (AVGO) and Texas Instruments (TXN) sagged over 6%, too.

Sadly, QCOM and DIS were my 2nd and 3rd worst performers in April, just like they were in March.  Returns in April were even worse than the month prior.  That’s not a good trend.

 

Top 10 Review

There was plenty of movement this month in my Top 10.  One stock moved over 6 spots in the rankings.  Any ideas on which stock that was?

About the only constant in my Top 10 is that Qualcomm (QCOM) holds the #1 spot.  However, the margin QCOM has over the rest of the pack is getting narrower.

None of the other 9 stocks in my Top 10 managed to stay put, so prepare to hear about the shuffle.  In addition, two stocks dropped out of my Top 10, making room for two new ones.

 

 

After QCOM, it was Procter & Gamble (PG) jumping up four spots to #2.  PG had a solid month posting a positive return.  Couple that with the stocks ahead of PG falling on temporarily hard times and it was a recipe for PG to ‘move it on up’.

Showcasing an even bigger move up my rankings was RPM International (RPM).  This stock popped six spots to claim the #3 ranking.  RPM finally had a good month in 2022 and the benefits to its ranking were immense.

Falling one spot each, into my #4 and #5 rankings, were AbbVie (ABBV) and Aflac (AFL), respectively.  Both stocks lost at least 3% in price during the month, but less than 4%.

After an ugly month, Union Pacific (UNP) posted the most dramatic fall in my rankings.  The stock dropped four spots to #6 after more than a 14% haircut in price.

Another stock that lost ground in my rankings was Broadcom (AVGO).  After close to a 7% loss this month, the stock gave up two spots in my rankings and settled in at #7.

In the #8 spot I have one of the two stocks that managed to crack my Top 10 this month.  Pepsico (PEP) is no stranger to my Top 10.  This defensive name has excelled recently while higher growth names have been taken down a notch by the markets.

Slipping a couple of spots to #9 was Lowe’s Companies (LOW).  After an outstanding 2021, LOW has moved lower each month in 2022, including a 7%+ decline over this past month.  I expect this trend to end soon enough.  However, will LOW fall out of my Top 10 before this happens?

Laying claim to my final spot at #10 was Fastenal (FAST).  FAST is another stock that has graced my Top 10 before, but exited upon challenging times.  However, FAST seized the day (or month in this case) and joined my Top 10 once again.  FAST actually lost over 1% this month, but this was good enough to allow it to move up the rankings.

After more than a 10% decline this month, Nexstar Media Group (NXST) couldn’t stay in the Top 10.  While a 4% decline wasn’t nearly as bad, Visa (V) fell from the Top 10 ranks as well.  Both of these stocks now sit just outside the Top 10, with Johnson & Johnson (JNJ) not too far behind them.

 

From the table above, my Top 10 holdings now comprise 35.53% of my Portfolio value.  This is 0.73% lower compared to last month.  Big losses from QCOM and UNP during the month contributed significantly to the overall decline.

As for the dividend weighting of my Top 10, this ended the month at 33.28%, which is an hefty increase of 2.44% compared to last month.  Most of this increase was due to the higher yields of new Top 10 stocks PEP and FAST, which replaced NXST and V.  The dividend raise from PG during the month helped some, too.

 

Weightings

 

In general, for the Sector Diversification, I target being within +/-3 percentage points of the sector weightings of the S&P 500.  For the SuperSector Diversification, I target being within +/-5 percentage points.

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.

As the Energy sector remains on a roll, my underweight difference in the Energy sector continued to get worse since I don’t have any holdings to keep up.  The weighting difference has now topped -4%.  Of course, Information Technology remains my most underweight sector by a large amount.  I’m eyeballing some of my current holdings in this sector for a potential addition, which could help address this situation.

After just coming into my weighting range in March (at -2.91%), my Communication Services sector is now looking even better one month later (at -2.27%).  That’s some nice progress in just one month.  Apparently, my holdings in this sector held up much better this month than the average stock in the sector.

With regard to my overweight sectors, you can add Healthcare to the list, joining Industrials, Consumer Staples and Materials.  My Healthcare stocks have performed well recently, and that led to my weighting falling out of my target range… just barely.  Three of my four overweight sectors are within 1% of coming back into range, so I’m not really concerned that the overweight sector count bumped up to four.

Industrials easily remain my most overweight sector, but if I continue to trim my 3M Co. (MMM) position I’ll make some headway here.

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

 

Watch List

With the market decline this month, there are quite a few attractive values to be had.  Prices could be headed even lower, but I suspect I’ll be buying on the way down.

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

I really like T. Rowe Price Group (TROW) here in the low $130s.  The stock has dropped over 10% since this time last month… and I liked its value back then.

Skyworks Solutions (SWKS) has come way down over the past month, as most Technology stocks have.  I’m looking to add 5 shares here in the low-to-mid $110s.

I added some JPMorgan Chase & Co. (JPM) recently at $126, but that doesn’t stop me from adding more, especially if the price continues to drop.  I’m on the lookout.

Starbucks (SBUX) has fallen well below the lower end of the $85-$92 target range I had last month.  It’s yield is now north of 2.5%.  I need to find a way to add some shares here.

I’m still looking at Comcast (CMCSA) as it drifts around in the mid $40s.  This stock has held up comparatively well the past month.

Although I initiated a position in Cummins (CMI) this past month, the stock price has declined a further 5%.  So, I’ll look to bolster my position by averaging down.

NextEra Energy (NEE) has been hit hard in the past month.  This is my smallest position.  Should it drop below $70 I’d probably prioritize scooping up some shares.

One stock that’s moved an uncharacteristic amount in the past couple of weeks is Medical Propertied Trust (MPW).  I could lower my cost basis pretty easily by adding here around $18.

While I have some cash on hand, I might look to trim my 3M Co. (MMM), Gentex (GNTX) positions to fund some of these potential purchases.  Both of these stocks have little to no dividend growth at this time, so putting my capital to work in other stocks with better dividend growth appeals to me.

 

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

Last month I had Verizon (VZ) and CMI on this list.  I purchased both in the past month.  So, I guess I need to find other candidates.

I’ve been watching FedEx (FDX) in recent weeks, waiting for a drop below $200.  It’s almost there.  I’m not sure I have a strong conviction on this stock, but I’m watching it nonetheless.

For a low-yield, high-growth option, NVIDIA (NVDA) in the mid $180s is intriguing.  The fact that it’s a tech stock is a bonus for me since I’m looking to add in that sector.  However, I’ll have to buckle up if I choose to add NVDA to my Portfolio, as it’s been volatile.

 

Thoughts?

What stocks on your watchlist are finally coming into play after months of never looking attractively valued?  Are you ready to buy if it reaches your price target?  Please share your thoughts!