Saturday, June 25, 2016

July Watchlist with Price Targets

Did some research this evening after the drop in the market on what my desirable price targets are for specific stocks in different sectors.

The names in Bold are higher priority companies I want to get first.

Friday, June 24, 2016

My post-Brexit watchlist

The UK has done it. They voted to leave the EU. This creates uncertainty in the market and the market hates uncertainty.

S&P futures are looking bleak at -5%
The pound has crashed by 10% relative to the dollar.

Pound to USD:

Tuesday, June 21, 2016

Recent buy: NKE, ABT, HRL ...

I added several companies this week. Below is a summary of my buys.

Your Plan Investments
TAT&T INC$800.00

Today I also swapped AbbVie (ABBV) in exchange for its parent company Abbott Labs (ABT). Note that Abbott in the past spun off AbbVie so shareholders in Abbott got both shares in AbbVie and Abbott. I prefer Abbott's stable medical device business, nutritional food items, and diagnostics products instead of the more uncertain AbbVie pharma products and AbbVie's high reliance on their one hit wonder drug Humira (and the expiring patent rights). AbbVie has the potential for more capital appreciation but comes with more risk. I don't feel that I need to take such risks to achieve my goals so I am performing this swap. I am not very fond of hoping that AbbVie management is capable of continuously pumping out one hit wonder drugs from their pipelines and prefer straight forward simple boring companies. AbbVie occupied less than 2% of my portfolio and my net return including dividends was around -$3.00 which includes trade commissions, so it was basically flat.

The above chunk of buys averages around 2.54% yield so that is about $312 more per year in dividends.

Saturday, June 18, 2016

What to buy list : My fair value targets

I did some homework today on stocks that I can look to purchase in the coming week. Some of the fair values in my head are now perhaps out dated since earnings have gone up or guidance has changed due to macro factors such as the weakening dollar and lower oil prices.

I have done some research on Morningstar and S&P to get some fair value estimates. I also use the Jefferson Research to analyze the quality of the companies. On top of that I have the Valueline and S&P credit ratings and safety ratings on my Portfolio page. Some of the companies listed here may not have the VL/S&P Financial score or Safety rating since I don't have them in my portfolio, but you can be guaranteed this list will only contain very high quality companies. In today's market with high valuations and uncertainty (Brexit anyone?) I will only purchase the most financially secure blue chips. Speculation is not for me right now.

I like to categorize my picks into dividend paying dates (when I receive the check).
1/4/7/10 months
2/5/8/11 months
3/6/9/12 months

Note that Pepsi (PEP) and Coca Cola (KO) have some strange month paying schedule.

The analysis is quite simple. They will all follow the format.
Jefferson Research: Earnings / Cash flow / Operating eff / Balance sheet / Valuation
S&P:  12month Target,   Fair Value
Morningstar: Fair Value

I highlight companies I think that are good deals in Green Bold. Those in just regular Green are so-so buys I might consider. Note that I want to balance high yield buys with low yield buys since I want to average around 3% yield. So I may add high  yield picks into my Green buy list even if they are a bit overvalued.

Tuesday, June 14, 2016

May 2016 Portfolio Summary

I am a bit late to summarize my May portfolio performance. So I will take this post to summarize how my portfolio stands 15 days after the end of May.

May was a rather positive month. The general index has went up a little, however it has been creeping back down. Overall, the market remains expensive and is near its all time highs. In the long term view, the market has been trading sideways for more than a year. Of extreme strength recently are consumer staples and utility stocks. Those are my favorite companies and it's unfortunate they are very high since I can no longer really add to them without overpaying greatly. I have however benefited from the rise in share prices since I am heavily favored in consumer staples.

Recent buy: PEP

Purchased $1000 in PEP today.
PEP yields 2.92% as of today.

Tuesday, June 7, 2016

Recent buy: NKE, ADP, ABT ...

Today I added several purchases from my cash positions. I want to deploy capital gradually even though the market is quite expensive in high quality companies since I am not confident in predicting market tops or bottoms. These purchases will help improve my income in the 1/4/7/10 and 2/5/8/11 months.

PG, T, KO are the heavy dividend payers here.
ADP and ABT have moderate yields
NKE is a very low yield stock but it has strong growth and I am liking the price of this high quality company as it continues to fall.

I consider Nike the highest quality consumer discretionary company. They have a credit rating of AA- from S&P, a very low 14% debt/cap, consistent earnings and dividend growth, Value Line financial strength of A++ (highest) and a Value Line safety of 1 (highest). I consider NKE to be fair value at $50-52 but want to build the position slowly as it falls further.

As of now I have around $25,900 USD in cash positions waiting to be deployed, so roughly 12% of my portfolio. This is higher than I would like but it's hard finding value nowadays.

Wednesday, June 1, 2016

May 2016 Dividends Received

Another month has passed. More dividends received! These dividend payments are getting quite useful. Check out what I cashed in this month:

Ticker      Total    Taxable    Roth IRA         401k
T $59.48 $59.48
GIS $53.58 $41.25 $12.33
HCP $37.94 $37.94
VZ $37.56 $37.56
NSRGY $34.83 $34.83
PG $31.50 $31.50
O $31.01 $31.01
ABBV $18.33 $18.33
CL $13.60 $13.60
ABT $13.11 $13.11
AAPL $12.82 $12.82
BUD $11.67 $11.67
MA $8.96 $8.96
SBUX $7.72 $7.72
APD $7.66 $7.66
CVS $5.81 $5.81
$385.58 $295.34 $68.95 $21.29

The big payers this month were AT&T, General Mills, HCP (which I no longer own), and Verizon.

In terms of dividends and my goals, I would say my growth has slowed down recently due to my increasing cash position. I have not been putting my money to work as often as I used to. Hopefully I can accelerate the growth as I try to deploy more cash (good value is hard to find nowadays). May of last year I received $238. This year I received $385 which is a near 62% growth. This growth was mainly from my continued contributions.

Recent buy and sells

I have bought $1000 in ADP this week.

I have removed BUD, NSRGY, and NVO from my portfolio because of tax complexity. My net gain is around 4 to 5% capital appreciation and I have received all year dividends from NSRGY and NVO and half a year of BUD dividend. Don't get me wrong these three are great companies but I sold them for practical reasons. NSRGY and NVO only pay once a year while BUD pays twice a year. I prefer my dividends to be quarterly. The other main issue I had is that the dividends are taxed heavily when they pay to your account, but I can reclaim some of these withheld dividends back when I file my tax return. I want all my dividends reinvested back into the same company immediately with no withholding. Since I hate taxes I decided the fuss was not worth the effort. Also the dividends are also influenced by the foreign exchange rate and since the US dollar is stronger, the US dividend amount is reduced.

Next week I plan to execute a larg purchase with my surplus cash at hand. I'm currently sitting on $32k in US dollars.