Hi everyone.  I’ve been under the weather for an extended period of time this month, so posting has been put on the back burner while I rest and recover.

Given those circumstances, this post will most likely be shorter than normal.  However, I’ll do my best to get the content in… perhaps there won’t be as much commentary.

The slow grind upwards continued this month.  The stock market powered higher and my dividend Portfolio went along for the ride.  The S&P 500 has notched a gain north of 21% (including dividends) so far in 2024.  Can the index hold those gains in Q4?… or better yet, add to them?  We shall see.

All S&P 500 sectors have participated in moving the index higher.  In fact, all sectors but one have posted double-digit gains in 2024.  The one sector bringing up the rear is Energy, but even that sector has managed a gain of nearly 5% this year.

Information Technology, Utilities and Communication Services has been the top-performing sectors thus far.  Each has notched gains of at least 26.8%.

As usual, in my Portfolio Thoughts post I’ll be discussing the following items…

• 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.

Let’s check out my Portfolio Thoughts for September 2024…

 

Price Movement

Note – my price changes cover closing prices from 8/27/24 to 9/27/24.

My Portfolio gains continued in September with most of my stocks being in the green for the month.  My Portfolio finished with a ratio of stock gains to stock declines of slightly better than 2.4 to 1.  This was a shade better than last month, too.

Of my 58 holdings, 41 gained in price while 17 declined.  About 40% of my gainers managed gains of better than 5%, which helped push up my Portfolio value.

Here were the stocks with the biggest moves to the upside and downside…

 

Of my 41 stocks that rose in price, I didn’t have any monster movers… in other words, no stocks that topped a 20% gain.  I did have 2 stocks post at least a 10% gain (the usual threshold I monitor for).  In addition, a solid 14 additional stocks exceeded a 5% gain.

My top gainers in September were:

• Eastman Chemical (EMN), surging 11.69%
• Caterpillar (CAT), popping 11.38%
• RPM International (RPM), rising 8.56%
• Verizon Communications (VZ), climbing 8.30%
• Air Products & Chemicals (APD), advancing 8.08%

 

What stands out to me is that all three of my Materials stocks landed a place in my top gainers list.  EMN, RPM and APD all gained better than 8%.  This was close to double what the S&P 500 Materials sector returned.

Another good month from CAT adds to what was already a good year for that stock.  CAT rose for the 3rd straight month and has moved higher by more than 30% this year.

Rounding out the top gainers list is VZ.  This slow-mover usually doesn’t make an appearance here, but it did so this September by climbing 8.3%.  VZ finished the month at a 52-week high.

Note – three sectors in my Portfolio had all of their holdings in the green this month: Utilities (4), Materials (3) and Energy (2).  Four other sectors were one stock shy of having all their holdings in the green, too.

 

Of my 17 stocks that fell in price, none hit the 10% loss mark.  Even better, only 2 stocks dropped more than 5%.  Losses were contained for yet another month, allowing the gainers to shine.

My worst decliners in September were…

• FedEx (FDX) , sinking 9.27%
• Skyworks Solutions (SWKS), sliding 8.22%
• JPMorgan Chase & Co. (JPM), slipping 4.40%
• Altria Group (MO), declining 3.70%
• Pepsico (PEP), falling 3.02%

 

FDX missed its Q1’25 revenue and profit estimates and compounded things by issuing soft guidance for FY25 overall.  That’s what led to FDX topping my worst decliners list in September.

Making an appearance on the list for a 2nd straight month is SWKS.  This month’s decline was slightly worse than last month’s.  Sadly, SWKS is currently in the red for 2024.

After four consecutive months of gains, JPM pulled back a bit in September.  It was a modest loss of 4.4%, and it was my only Financials stock to be in the red this month.

Finishing off the top decliners list are a couple of my Consumer Staples stocks: MO and PEP.  MO has had a pretty good year and this was a minor retreat after posting some solid gains over the summer.  As for PEP, it’s basically traded sideways in 2024, in a fairly tight range, call it $162-$182.  The stock ended September roughly in the middle of that range.

Note – no sector in my Portfolio had all its holdings in the red this month.  That’s now three months in a row that I can say that!

 

Top 10 Review

September brought more movement to my Top 10 than I’ve seen in recent months.  Half of my Top 10 stocks changed spots.  There was also one stock that fell out of my Top 10, which means another moved in.

Broadcom (AVGO) solidified its hold on my #1 spot after a strong month (+7.0%).  The entire Top 10 performed well this month, as 8 of the Top 10 were in the green.

However, there was a swap of the #2 and #3 spots, with Aflac (AFL) moving up and Qualcomm (QCOM) slipping a bit.  QCOM was the Top 10 laggard this month (-2.18%), and it resulted in the stock giving up its #2 position.

RPM International (RPM) and AbbVie (ABBV) held steady in the #4 and #5 spots, respectively.

Climbing one spot each in the rankings were Lowe’s Companies (LOW) and BlackRock (BLK), which finished at #6 and #7.  Each moved past Visa (V), despite that stock posting a small gain (+1.64%) in September.  It was V with the biggest tumble in the rankings this month, sliding two spots to land at #8.

Procter & Gamble (PG) retained its position at #9, but the #10 spot saw Fastenal (FAST) replace Union Pacific (UNP) in the Top 10.  FAST and UNP have taken turns knocking each other out of the Top 10 for three straight months now.

 

 

Now hovering just outside the Top 10 is UNP, with Pepsico (PEP) and Nexstar Media Group (NXST) much further behind.

 

From the table above, my Top 10 holdings now comprise 40.12% of my Portfolio value.  This is an increase of 0.30 percentage points compared to last month.  This is no surprise given that the majority of my Top 10 had good performances for the month, including my top holding.

As for the dividend weighting of my Top 10, it finished the month at 28.86%.  This is a decrease of 0.26 percentage points compared to last month.  The decrease was primarily due to most of my dividend reinvestment and new capital investment occurring outside the 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.

No real change with regard to the overweight sectors in my Portfolio.  There are still 3 of them: Industrials, Financials and Materials.  The weighting difference in Industrials and Financials got a tad better.  However, my weighting difference got noticeably worse in Materials with the strong gains posted by my three holdings in that sector.

As for my underweight sectors, I have two again.  Of course, there’s Information Technology, where I’m woefully underweight.  But, after getting into my acceptable range in Consumer Discretionary last month, I’m back to being underweight in that sector again.  The weak performance from my three Consumer Discretionary holdings [Lowe’s Companies (LOW), Nike (NKE) and Starbucks (SBUX)] relative to the overall S&P 500 sector (which was the best performing S&P 500 sector in September) did me in.

Despite being my largest sector, Information Technology is slowly becoming a smaller part of my Portfolio.  It slipped to being 18.67% of my Portfolio, giving up another 0.2 percentage points in September.  Financials, Industrials and Healthcare are my other large sectors, each holding down double-digit weightings between 14.5% and 16.8%.  However, all other sectors have less than an 8% Portfolio weighting.

Healthcare is my leading sector with regard to Dividend Weighting, at 16.62%.  Financials isn’t far behind at 15.55%.  Information Technology, Industrials, and Consumer Staples also have double-digit dividend weightings.

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

 

Watch List

I made only one purchase in September, but I’ve yet to post about it.  Therefore, I’ll hold off on commenting about it (but a post about it is coming soon!).  It was a stock I’ve been watching in recent months, but I didn’t talk about it as part of last month’s watchlist.  It was an addition from outside my Portfolio.

I did use up a good chunk of capital to initiate the new position, but there’s still some cash in reserve to add Portfolio shares here and there.  So, even though plenty of stock prices are looking overvalued after additional run-up in September, should I come across something at a decent value, don’t be surprised if you see me make further Portfolio additions.

 

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

Hershey Co. (HSY) is still hovering around $193, but I’m holding out for a dip below $187.  There are concerns in the investment community about the rising cost of cocoa, but this isn’t the first time HSY will have had to manage that cost for its business.

After performing poorly the past couple of months, Skyworks Solutions (SWKS) has hit my radar again.  I last purchased shares back in February just below $100.  With the stock now trading around $99, I could be open to another buy.  Perhaps I’ll target something around $95 should the stock dip to that level.

Selling my Bristol-Myers Squibb (BMY) position is still an option, as I outlined last month.  Also, the price of Altria Group (MO) slipped this past month, falling farther away from the $58 level where I’d like to trim my position.

 

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

Concentrix (CNXC) is a stock I’ve watched before.  It’s a small-cap Industrials stock.  I’ve noticed that it has performed horribly in 2024, down nearly 50%.  I’ll need to take a closer look to try and understand the details surrounding its decline, but perhaps there’s an opportunity there.

 

Thoughts?

Are you worried about the outcome of the upcoming U.S. elections impacting your portfolio?  Given the election and the stock market’s recent climb, are you inclined to wait on the sidelines for about 6 weeks to let the election conclude, and to then see the market reaction?  Please share your thoughts!