Just a quick update here.  I made a pair of transactions over a week ago and have been slow to post about them.

I made a small Portfolio tweak involving a couple of stocks in the Industrials sector.

Basically, I re-allocated some capital, trimming one stock and investing the proceeds into the other.

In the process, I changed the weightings of these two Industrials within my Portfolio, something I had been looking to do with this pair of stocks.

The switch also increased my forward dividend income some, too.  I’ll always take that.

Let’s check out the details…

 

General Dynamics (GD)

I don’t have any issues with GD.  This was just me wanting to reduce the position and bring it a little closer in weighting to my Lockheed Martin (LMT) position.

My GD share count swelled a bit back in mid-2020 when I scooped up what appeared to be undervalued shares below $150 (in a couple cases below $130).

Now that GD is trading well above those levels, and well above the price of my most expensive shares, I took the opportunity to trim the priciest lot.

I haven’t made a buy or sell of GD in over two years, so this sell put GD back on the activity map.

On 10/7/22, I sold 10 shares at $223.6821/share.  The sale proceeds were $2,236.77, after the $0.05 SEC fee.

This sale was about an 18.6% reduction in the size of my position.

At my sale price, shares of GD yielded 2.25%.  This yield is 0.81% below my current Portfolio yield of 3.06%.

I realized a long-term capital gain of $457.27 after selling the share lot that I bought for $177.75/share back on 12/26/2019.

The trim resulted in a loss of $50.40 in annual forward dividend income.

My remaining GD position (a tad under $10K) is still larger than my LMT position, but it’s not nearly the 2:1 ratio that existed prior to my GD sale.  My GD share count stands at 43.823 shares after the trim.

GD slid down down my Portfolio rankings and is now the 24th largest holding in my Portfolio of 59 stocks, resting just behind Skyworks Solutions (SWKS) and ahead of JPMorgan Chase & Co. (JPM).

 

Caterpillar (CAT)

My GD sales proceeds stayed in the Industrials sector when I subsequently bolstered my CAT position.  It was my first addition of CAT shares in about 2 1/2 years.

I last bought some CAT at the start of the stock market decline in March, 2020.  Shares were just $93.50 then.

For this current purchase, shares are more expensive for sure, but I find the stock to be reasonably valued at this time.

I’ve been wanting to grow my CAT position for a while, but the shares looked really expensive.  With their 2022 price decline of roughly 15%, the share cost was easier to digest.

On 10/7/22, I bought 13 shares of CAT at $177.50/share, for a total of $2,307.50.  This was a little more than a 40% increase in the size of my position.

The stock yielded 2.70% at my purchase price.  This yield was still below my current Portfolio average, but higher than the yield of the GD shares I just sold.

I now own 45.127 CAT shares.  The purchase raised my cost basis over $16/share to $136.20/share.

My annual forward dividend income rose by $62.40 as a result of adding the CAT shares.  This covered all the dividend income I lost in the GD sale, and even provided a little extra.

CAT now ranks as my 27th largest Portfolio stock… just 3 behind GD now.  As for its adjacent neighbors in the rankings, CAT trails Texas Instruments (TXN), but ranks ahead Air Products & Chemicals (APD).

 

Summary

I wanted to get my readers caught up with regard to my Portfolio transactions.

Over a week ago, I moved some investment dollars around in my Industrials sector.  I trimmed one of my Aerospace and Defense stocks (GD) and rolled the cash into a Heavy Machinery name (CAT).

The weightings of the two stocks are much closer to equal as a result of the transactions.  In addition, GD is no longer more than twice the size of my LMT position.

With the two transactions, I made a net investment of $70.73 into my Portfolio.  My annual forward dividend income also rose by $12.

Also, I realized a long-term capital gain of $457.27 with the GD trim.

Since GD remained a part of my Portfolio, and CAT was already a Portfolio holding, the number of stocks in my Portfolio held steady at 59.

 

Have you found yourself adjusting your portfolio construction during this market malaise?  Perhaps acquiring shares that haven’t looked so inexpensive in quite a while?  Bring on those comments!