Time for my Portfolio Thoughts! Sorry for the reduced post count recently as I’ve been extra busy, especially with the holiday season having begun.
Still, it’s good to talk about my Portfolio for the first time in a while. Even better, I’m glad that I’m able to post about such a positive month of November.
After 3 dismal months in a row, it was a nice rebound this month. That’s a great way to head into the holidays. While Thanksgiving is now in the rear-view mirror, Christmas and New Year’s Day are on the horizon.
Plus, let’s not forget there’s only 1 month left to strive for those currently unattained annual goals. Suffice it to say that I expect to remain busy.
Once again, I’ll be covering my usual topics for this month’s Portfolio Thoughts post…
- Price Movement – I’ll look at my top advancers and decliners in my Portfolio during the past month.
- Top 10 Review – I’ll update my Top 10 Portfolios stocks and how they changed rank this past month.
- Weightings – I’ll examine the sector weightings within my Portfolio and let you know where I’ve made progress with regard to getting into my preferred weighting ranges.
- Watch List – I’ll share which stocks I’m looking at as I prepare to invest my capital in the coming months.
Here are my Portfolio Thoughts for November 2023…
Price Movement
Note – my price changes cover closing prices from 10/27/23 to 11/27/23.
Well, I mentioned it being a good month. That should translate to a good ratio of stocks in my Portfolio with price gains relative to price declines, right? Let’s see…
My ratio of stocks with price gains compared to price declines was 9 to 1! This meant that for my 60 holdings, 54 moved higher in price, while only 6 moved lower. That’s impressive! It gets even better when you see the percentage gains versus the percentage losses.
Here were the stocks with the biggest moves to the upside and downside…
Of my 54 stocks that rose in price, two of them exceeded a 20% gain, while another 16 topped a 10% gain (the usual threshold I monitor for). To top that off, add in another 22 stocks that posted better than a 5% gain. All totaled, that’s 40 of 54 stocks gaining more than 5%. I don’t see astounding returns like that very often!
My top gainers in November were:
- BlackRock (BLK), rocketing 22.17%
- Qualcomm (QCOM), surging 20.42%
- The Walt Disney Co. (DIS), exploding 19.97%
- American Tower (AMT), popping 16.99%
- RPM International (RPM), advancing 15.20%
The top gainers came from five different sectors. The gains were widespread, no doubt.
Three of my top gainers are some of my largest holdings (BLK, QCOM & RPM). This, made for a nice recovery in my Portfolio’s value this month.
AMT made its 2nd consecutive monthly appearance in my top gainers list.
Note – 5 sectors in my Portfolio had all their holdings in the green: Industrials (9), Financials (6), Consumer Staples (5), Communication Services (5) and Real Estate (4). Technically, my Energy holdings were all in the green, too, but I don’t count that since I only hold one energy stock. The number in parenthesis is the number of stocks I own in that sector.
Of my 6 stocks that fell in price, none sank more than 20% and none tumbled more than 10%. In fact, there was only a single stock that managed to decline at least 5%. If only my losses could be contained like this on a regular basis!
My worst decliners in November were…
- Cisco Systems (CSCO), dropping 7.04%
- Bristol-Myers Squibb (BMY), sliding 3.92%
- V.F. Corp (VFC), falling 1.89%
- Air Products & Chemicals (APD), slipping 1.62%
- Merck & Co. (MRK), retreating 1.35%
The decline from CSCO was primarily thanks to the company sharing a weak outlook mid-month.
A pair of Healthcare stocks showed up in the top decliners list in BMY and MRK. AbbVie (ABBV) nearly joined these two as well.
VFC continued its poor showing this year, too. When will its rebound begin? Ever?
Top 10 Review
There were no new entrants to the Top 10 this month. Typically I get one, sometimes two, but occasionally there’s none at all, and that was the case for November.
Once again, many of my Top 10 holdings held their positions relative to the prior month. In November, five of my Top 10 stocks didn’t change ranking. This included my top 2 stocks AVGO & AFL, a couple from the middle of the pack in V & PG, and lastly PEP.
My biggest mover to the upside moved higher by only two spots, and that was LOW, which finished in the #8 spot. LOW had a decent month as it gained 8.82% and this was enough to help it climb in my rankings.
Nearly falling out of my Top 10 after tumbling three spots this month was ABBV. ABBV only had a slightly positive gain of 0.12% for the month when most other stocks were excelling. So, relative to the pack, ABBV couldn’t keep up and slipped down the Top 10.
AVGO has now exceeded a 5% weighting threshold in my Portfolio thanks to its strong performance this year. I’m not ready to trim the holding just yet, but I’ll keep a watchful eye on the percentage to see if it climbs further in the months ahead.
Just outside my Top 10 and eager to join the list once again are Union Pacific (UNP) and BlackRock (BLK). As noted earlier, BLK had an outstanding month of November (rising more than 22%), which nearly catapulted the stock into my Top 10.
From the table above, my Top 10 holdings now comprise 37.66% of my Portfolio value. This is an increase of 0.54 percentage points compared to last month. Impressive double-digit November gains from AVGO (13.35%), QCOM (20.42%), RPM (15.20%) & V (10.85%) accounted for a good chunk of this larger Top 10 weighting.
As for the dividend weighting of my Top 10, this finished the month at 30.30%. This was an increase of 0.30 percentage points compared to last month. The big 19%+ dividend raise from AFL early in the month was the primary driver here.
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.
I still have 3 overweight sectors and 2 underweight sectors. The sectors closest to getting into my preferred weighting range are Energy and Financials. Adding a second Energy stock to my Portfolio would probably go a long way in helping me with its sector weighting. I’ve got a stock in mind to add, which I’ll share in the watchlist section.
Two sectors that aren’t close to getting into my preferred weighting range are Industrials (most overweight) and Information Technology (most underweight). I could probably sell one of my Industrial holdings and invest it all in one of my Tech holdings and that still wouldn’t move the needle for either sector. It’s going to take a good deal of time to see these two sectors come into their preferred weighting ranges.
I’m still a bit overweight in the Materials sector, too. I’ve been pondering selling some/all of my Eastman Chemical (EMN) position to bring the sector weighting down, but it’s not something I’m eager to do. So, I’ll continue to think about it. Maybe if the stock was overvalued I’d make the trade, but the stock is not really close to being in that state.
Industrials are currently my largest sector by weighting (16.48%), but just narrowly over both Financials (16.34%) and Information Technology (16.27%). My Healthcare weighting (15.20%) was right with those other three sectors a month ago, but recent performance had that sector weighting fade relative to the other three.
As always, I’ll keep all these weightings in mind as I continue to adjust my Portfolio, and my watchlist.
Watch List
While the market was on the way up in November, I didn’t find myself making any Portfolio buys. Being short on cash was the primary reason.
Despite the lack of cash, I continued to watch plenty of stocks for buying opportunities. Even though stock prices in general were on an upward trajectory this month, many of them still sport decent prices. Thus, lots of purchase options still exist as we head into the last month of 2023.
Within my Portfolio, here are a few stocks that I’m watching for possible additions… starting with some of my smaller holdings.
I’m interested in adding to my McCormick & Co. (MKC) position. This stock has traded at a premium for 5+ years, but would be reasonably priced to me under $60.
Adding a few shares to my Walt Disney Co. (DIS) position would be nice. Now that DIS is back to paying a dividend, that makes it more appealing. I last bought DIS back in May at $88.38, but I’d consider them at the current level around $93 given EPS growth in the next 2-3 years looking to be in the 15% to 20% range according to analysts.
Cummins (CMI) is another position I’d like to see grow. I added a few shares a little over a month ago at just under $220, so I’d be looking for a price below that. This stock looks like a better value than either of the previous two stocks I mentioned.
My last purchase of NextEra Energy (NEE) was in September at $65.35. The stock dipped under $50 in the weeks after that, but has since recovered to be north of $58. Scooping up some additional shares at a better price than my last buy sounds good to me. The current price seems to be at the upper end of reasonable for this stock that always seems overvalued.
For tech stocks, Skyworks Solutions (SWKS) still has my interest. SWKS has rallied over the past month, from around $87 to almost $97. However, it might have another year of poor performance before growth picks up again. Still I’d consider bolstering my position below $100. I’d like to add to Amdocs Ltd. (DOX) below $80 as well. I had an opportunity last month but didn’t have the cash to invest. Texas Instruments (TXN) trading south of $148 might get me to buy a few additional shares of that stock, too.
As for non-Portfolio stocks that I’m watching…
Another tech name… Corning (GLW) still trades below my price target of $30. It’s just above $28 currently. An entry of $28 would be a starting yield of 4% – sounds good to me.
I mentioned adding a 2nd Energy stock to my Portfolio earlier in this post. The stock I’ve got my eyes on is Cactus Inc. (WHD). I mentioned this stock back in May, I believe, when it was trading in the low $30s. It surged above $50 in August. Since then, half of those gains have been returned. I’d like to see the stock below $40 before I make a purchase. This stock only yields a little over 1%, but it would add a smaller, mid-cap element to my Portfolio that’s dominated by larger companies.
Thoughts?
What did you make of November’s stock market rally? Is this the start of a long-term upward trend, or just another head fake?
What should investors be doing with their portfolios in the final month of 2023? What are you thinking you might do with your portfolio? Please share your thoughts!