Starting in the middle of June, I made some Portfolio transactions and have neglected to report on them.  Needless to say, I haven’t been very timely with this update.  So, let’s see what transpired as I attempt to get you caught up on my Portfolio moves.

The moves started with a trim of my largest holding, a high-flying stock in the Information Technology sector.  I can’t say the trim was very large, as it did little to impact the stock’s position in my Portfolio.  But, it did make me believe I was being proactive about not letting the stock runaway too much.

I wanted to keep my investment cash in the Information Technology sector (since I’m so underweight there), so I identified an undervalued Tech holding in my Portfolio and re-deployed a bit over 86% of my sale proceeds the very same day.

Just days after my trim, the same stock continued to rise swiftly, so I trimmed the position again.  I didn’t have a plan for this sale, but the intent was to determine how I’d re-deploy the remaining funds over the coming days.  Unfortunately, I never got to that stage.

That’s because the stock I trimmed twice began to retreat in price as quickly as it rose over the previous days.  So, just 4 days after the 2nd trim, I decided to buy back all the shares I trimmed, looking for a short-term rebound.  In addition, I re-purchased the shares the day before the stock went ex-dividend, allowing me to collect the June dividend.

When all the moves were complete, the transactions resulted in me realizing a fairly hefty long-term capital gain.  In addition, I was able to boost my forward dividend income.

Confused yet?  Let’s see if I can clear things up by going over more specifics for my transactions…

 

Broadcom (AVGO)

AVGO has been rocketing higher in price ever since Q4’22.  It’s risen over 50% year-to-date and more than doubled over the past year.  At one point this month, the stock had become more than 9% of my Portfolio value.

As you may know, I try to keep my individual positions to no more than a 5% Portfolio weighting.  With AVGO climbing well past that, I thought a trim would be in order.

On 6/14/24, I sold 1 share of AVGO at $1,740/share.  The sale proceeds totaled $1,739.95 after the $0.05 SEC fee.

At my sale price, AVGO yielded 1.21%.  This yield is well below the stock’s 5-year average of 3.06%, which gives you an idea of how far the stock price has climbed over those years (and this is despite a dividend that’s growing at a double-digit annual clip).  The 1.21% yield is also less than half my current Portfolio yield of 2.72%.

The size of my AVGO position was reduced by 2.86% with the single-share sale.  A trim, indeed.

With this sale, I realized a long-term capital gain of $1,431.05.  The share I sold was one I bought back on 1/27/2020 at $308.90/share.  This was one of the most expensive AVGO shares I purchased.  My cost basis for my remaining shares dropped a mere $0.60 to $287.89/share.

The sale also resulted in a $21 reduction in annual forward dividend income.  As you’ll soon find out, I quickly recouped this lost income.

Despite the trim, AVGO easily remained my top Portfolio holding, easily staying ahead of fellow semiconductor stock, Qualcomm (QCOM).

 

Amdocs Ltd. (DOX)

Shortly after the AVGO trim, I re-deployed most of the sale proceeds into DOX.  The stock was on my mind, as I’d purchased a handful of shares about 2 weeks prior.

However, DOX dropped about 5% in price compared to that previous purchase, so I thought DOX had become an even better value.

Thus, it was an easy transition to go from AVGO to DOX… overvalued to undervalued, lower yield to higher yield, all while staying in the Tech sector.

On 6/14/24, I bought 20 shares of DOX at $75/share, for a total of $1,500.  The stock yielded 2.55% at my purchase price, not too far behind my overall Portfolio yield.

The purchase increased my DOX share total by 36.4%.  So, it was a fairly significant position addition.  I now own a total of 75 DOX shares.

The purchase added $38.32 to my annual forward dividend income.  I recouped almost 2x the dividend income I lost from the AVGO sale without reinvesting all the AVGO sale proceeds.

As a result of the addition, my DOX cost basis decreased $0.27/share to $75.73/share.

DOX was my 8th smallest holding prior to the purchase, but after my buy it popped 7 spots in my value rankings, becoming my 15th smallest holding (out of 57 stocks).  The stock now closely trails Realty Income (O), but is ahead of Medtronic (MDT).

DOX is no longer my smallest Tech holding.  That spot now belongs to Accenture (ACN).

 

Broadcom (AVGO)

With the dust still settling on my two moves on 6/14, I pondered how I’d reinvest the remaining $240 or so of the AVGO sale proceeds.

However, 3 days later, AVGO had climbed further in price, so I decided to trim another share, trying to keep its Portfolio weighting in check.

On 6/17/24, I sold another 1 share of AVGO, this time at $1,830/share.  The sale proceeds totaled $1,829.95 after the $0.05 SEC fee.

At this sale price, AVGO yielded 1.15%.  In addition, the size of my AVGO position was reduced by another 2.95%.

For this share, I realized a long-term capital gain of $1,521.05, after the share I sold came from the same lot as the previous one.

My cost basis for my remaining shares once again dropped by a small $0.63 amount, to $287.26/share.

The single-share sale resulted in another $21 reduction in annual forward dividend income.

AVGO still remained atop my Portfolio rankings, with plenty of distance between it and QCOM.

 

Broadcom (AVGO)

Just 4 days after my 2nd AVGO trim, the stock tumbled down in price.  It was a bit over an 8% drop in less than a week.

The decline was so swift and so large that I decided to buy the two shares back that I sold during the previous week, as it allowed me to secure the June dividend, and I thought I might be able turn a quick profit if the shares rebounded at all.

On 6/21/24, I re-acquired the 2 AVGO shares for $1,680 share, for a total of $3,360.  The stock yielded 1.25% at my purchase price.

I was back to owning a total of 34.951 shares of AVGO.  The purchase returned $42 to my annual forward dividend income.

For the time being, this significantly raised my AVGO cost basis by nearly $80/share, to $366.95/share.  However, I plan to unload the same two shares if I can sneak out a profit.

 

Summary

As you can see, there was lots of activity surrounding my AVGO holding in mid to late June.

I initially sold a single share of AVGO before reinvesting most of the sale proceeds into DOX.

I followed those moves up with another single-share sale of AVGO after its price climbed even higher than the level at which I previously sold.

Finally, after a swift decline in the price of AVGO just days later, I decided to re-acquire my two AVGO shares, ensuring I secured the quarterly dividend, and hoping for a near-term rebound that allowed me to claim a small profit.

All the transactions resulted in a net Portfolio investment of $1,290.10 into my Portfolio.  Also, my annual forward dividend income increased by $38.32 (basically from the DOX buy).  The effective yield on this investment was 2.97%.  This ended up being greater than the DOX yield (2.55%) given that I sold my AVGO shares for more than I paid to buy them back.

I recorded a long-term capital gain of $2,952.10 after selling the two AVGO shares.  Also, my AVGO cost basis rose quite strongly (nearly $80/share to $366.95/share) due to buying back the two AVGO shares at today’s higher prices.

The number of stocks in my Portfolio held steady at 57.

 

If you are an AVGO owner, did you take any action recently with your shares?  What percentage of your portfolio is comprised of Information Technology stocks?  I look forward to your comments!