Sheesh!  My Portfolio was punished in June.  It seems there was no place to hide.

All market sectors were down 4% or more this past month.  Heck, even the Energy sector, which has been riding high all year, was beaten down in June… to the tune of nearly 14%.

It could have been even worse if not for the gains the market managed in the week ending 6/24.

In any case, these things happen from time to time.  We’ve just got to maintain our investing discipline, and take advantage of the down times by adding more shares at the lower prices.

After wading through all the rubble in my Portfolio, I noticed quite a bit of red.  In fact, only a few of my Portfolio stocks managed to gain in price over the past month.  Regardless, as is the norm, I’ll be covering both my best and worst percentage movers for the month… you’ll notice all the big moves are to the downside.

With regard to my Top 10 Portfolio stocks, you’ll find 2 stocks worked their way back into the group, which of course means two fell out.  I’ll be letting you know about all 4 of these stocks as I detail the movement within my Top 10.

As for my Portfolio sector weightings, I now have another sector becoming overweight due to two factors: 1) it being my best-performing sector of the month, and 2) a stock within the sector being my latest addition to my Portfolio.  These two factors also led to one of my supersectors going overweight.  I’ll cover other sector-related news within my Portfolio as well, in just a bit.

My watchlist was put to good use in June.  I acquired shares from a pair of stocks on my watchlist.  In addition, I trimmed a position that was put on alert in last month’s post.  With all the negative price movement this past month, you can bet more stocks have hit my purchase radar, so stick around for a watchlist update, too.

Let’s get to it… here are my Portfolio Thoughts for June 2022.

 

Price Movement

Note – my price changes cover closing prices from 5/27/22 to 6/24/22.

Oh boy, it was an ugly month and my list of decliners relative to gainers shows it.

My ratio of stocks with price declines compared to price gains finished at over 7:1.  Of my 58 holdings, 50 moved lower in price, while 7 moved higher, and 1 was flat.  Ouch.

Here were the top movers, in both directions, in June.

 

Of my whopping 7 stocks that rose in price, 0 posted a gain over 10% (the usual threshold I monitor for), and another 0 notched a gain of at least 5%.  There was some green… it just wasn’t much to get excited about.

The top gainers in June were:

• Bristol-Myers Squibb (BMY), rising 3.70%
• Starbucks (SBUX), advancing by 1.83%
• AbbVie (ABBV), moving up 1.56%
• NextEra Energy (NEE), creeping up 0.76%
• Johnson & Johnson (JNJ), inching up 0.66%

My Healthcare holdings were the bright spot in my Portfolio in June.  In addition to the 3 Healthcare names on the list above, Merck & Co. (MRK) also eked out a small gain, and the others held up reasonably well.

While the SBUX gain was nothing much to write home about, it did snap a 5-month streak of lower lows for the stock.

 

Of my 50 stocks that dropped in price, 1 of them declined more than 20%.  That’s no good.  However, it gets worse, not from a percentage decline perspective, but from the number of stocks falling.  Another 2 stocks tanked more than 15%.  Another 10 stocks sank more than 10%.  Finally, I had another 12 stocks fall more than 5%.  It was a sea of red.  Let’s hope this is a one-month phenomenon.

My worst decliners this month were…

• Altria Group (MO), plummeting 20.26%
• Medical Properties Trust (MPW), tanking 16.68%
• Eastman Chemical (EMN), dropping 15.67%
• Caterpillar (CAT), falling 14.58%
• Omnicom Group (OMC), backpedaling 13.87%

That’s stocks from 5 different sectors topping my decliners list.  So, you can see that the Portfolio carnage was widespread.

MO became my worst decliner for the month after the Food and Drug Administration (FDA) banned Juul from selling its popular vaping device (and flavored cartridges) due to insufficient data on its health and safety.  The headwinds persist for MO.

MPW extended it’s streak of monthly declines to six.  Not a single up month yet in 2022!

I could go on and on about all my losers this month, but that would just make me tired.  Suffice it to say that it was a bad month, and we can only go up from here (wishful thinking on my part).

 

Top 10 Review

In June, I concluded that movement within my Top 10 was elevated.  While my top two spots held steady, shuffling was present everywhere else in the rankings.

One stock fell 7 spots, falling out of my Top 10 as a result.  Any ideas on which stock that was?  You’ll know soon.

The biggest climbers were a pair of stocks that each rose 4 spots in the rankings, including one that entered the Top 10 thanks to that rise.

Here are the details…

 

 

Qualcomm (QCOM) remains in the #1 spot.  Move along… nothing to see here.

Clinging to the #2 spot in the rankings was RPM International (RPM).  It’s a paper thin lead it holds over my #3 stock, AbbVie (ABBV).  ABBV moved up one spot compared to last month.  RPM sank more than 10% this month, while ABBV posted a slight gain, thus you can understand how ABBV closed the gap in June.

Despite a decent month (slightly negative in a sea of red), Procter & Gamble (PG) slipped one spot to #4 in the rankings.

Pepsico (PEP) was able to rise one spot to #5.  Like its fellow Consumer Staples stock, PG, a decent month resulted in a rise up the ranks.  It’s no surprise that these defensive stocks held up well in a negative market environment.

My biggest mover to the upside was Union Pacific (UNP).  The stock rose four positions to settle at #6 in my rankings.  UNP actually had a negative month, but it was noticeably better than other stocks ahead of it in the rankings.

Next is the first of my two stocks that worked its way back into the Top 10.  Visa (V) rose four spots to reach #7.  Just like UNP, V had a down month, but it wasn’t horrible and it managed to rise in the rankings due to poor performance from other Top 10 stocks.

Slipping one spot to #8 was Aflac (AFL).  AFL is on a 3-month slide after peaking at $65 in March.  Its price accelerated to the downside in June.

At #9 is my other stock reclaiming a spot in my Top 10… Johnson & Johnson (JNJ).  JNJ moved up 3 spots to reach #9.  It seems like it’s been a while since JNJ has been a part of my Top 10.  I may have to go find out how long it’s actually been.  In any case, the price for JNJ has been pretty much holding steady the last couple of months, which has effectively allowed the stock to move up the rankings while other stocks fall down.

Lastly, I’ve got Nexstar Media Group (NXST) falling one spot to #10.

Broadcom (AVGO) and Lowe’s Companies (LOW) were the stocks that fell out of the Top 10 this month.  AVGO was in freefall, dropping seven spots all the way to #12 due to more than a 12% loss in June.  Comparatively, LOW performed a little better in June, but still dropped 3 spots to #11.

 

From the table above, my Top 10 holdings now comprise 35.39% of my Portfolio value.  This is only 0.24% lower compared to last month.  This was a bit of a surprise given that my largest two holdings (QCOM & RPM) didn’t perform too well in June.

As for the dividend weighting of my Top 10, this ended the month at 30.89%, which is an decrease of 2.75% compared to last month.  Most of this decline is attributable to AVGO being replaced by V in my Top 10.

 

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.

After initiating a position in Medtronic (MDT) in June, as well as having my Healthcare holdings performing well in June, my Healthcare sector is now overweight.  That said, I don’t plan to address this in the short term, as this may very well correct itself over the coming months.

The good Healthcare sector performance in June, along with relatively good performance from Consumer Staples and Utilities, too, resulted in my Defensive supersector now becoming overweight.  Given the uncertain times in the market right now, and with additional downside certainly a possibility, having my Portfolio become a little more defensive is fine by me.

My most underweight sector, Information Technology, only became more underweight in June.  Many of my technology names, most notably the semiconductor holdings, fared poorly in June… and I have four semiconductor stocks that help comprise my nine technology holdings.

With the poor performance of the Energy sector in June, and my Portfolio not having any Energy holdings, I did manage to put a dent in the degree to which I’m underweight in Energy.  So, at least I made some headway in addressing one of my two underweight sectors.

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

 

Watch List

Plenty of stocks have made their way onto my radar in June as a result of falling prices.

I’ll probably continue to add in small allotments over the near term, but if something truly get me excited, I’m happy to purchase in larger dollar amounts.

 

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

High on my list are T. Rowe Price Group (TROW) and JPMorgan Chase & Co. (JPM).  My last purchase of TROW was at $128.50, and the stock trades at a 10% discount to that right now.  I added some JPM just under $113 last week, and would be happy to add some more shares should JPM drift even lower.

I’m still watching Skyworks Solutions (SWKS), especially with its price in the low $90s.  However, I’d prefer to add Texas Instruments (TXN) if I’m going to put money more money into semiconductors.  I’d want a better price on TXN though… perhaps something lower than $145.

Should the market tank, I’ll be looking to add shares of Microsoft (MSFT), as I still want to bolster my Tech holdings.  Buying below my last purchase price of $213.50 would be awesome, but we’re still a ways off from that.

Comcast (CMCSA) below $40 is enticing.  I don’t know why I haven’t pulled the trigger on adding a few shares yet.  I guess I’ve just found more desirable stocks for my recent investments.  Still, I need to find a way to purchase something while the price is down here.

Adding to my fairly new MDT and Cummins (CMI) positions would be nice, too, as I want to make each a bigger part of my Portfolio.  I’d be looking for MDT below $88 and CMI below $185.

I like The Walt Disney Co. (DIS) below $100, but would prefer something below $90 since DIS has a suspended dividend right now.

Should I need immediate cash for a large purchase of one of the stocks above, I’d look to trim/sell my 3M Co. (MMM) and Gentex (GNTX) positions to raise cash.  Both stocks are currently in my penalty box for little to no dividend growth over the past 2 years.

 

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

My FedEx (FDX) target of $200 still holds, but the stock price has moved up and away from that level over the past month.

A Tech name I might consider adding to boost my Portfolio weighting in that sector is Corning (GLW).  A price below $30 would be preferred before I jump in.

With a yield now over 5%, and low double-digit earnings expectations over the next couple of years, shares of Huntington Bancshares (HBAN) look interesting, especially if it dips below $12.

 

Thoughts?

How’s your portfolio holding up this year?  Are you comfortable with how your portfolio is invested and the performance you’ve had in 2022?  Please share your thoughts!