My November Stock Buys

I've been busy shopping in November, the only kind of shopping I like is when I get to buy high quality stocks at fair or near fair value. In this post, I will be sharing my November buy transactions along with reasons for buying these stocks.

My November Stock Buys

My portfolio consists of two types of positions: 1) Core 2) Non-Core.
Core positions are the stocks that I feel most comfortable owning and they make the largest positions in my portfolio, both from Market Value and Income generation standpoint.

Non-core positions is everything else I own. These are stocks that I consider good enough to own, but not good enough to be a core position yet. If they show potential, they will eventually move up into the core category and will be built up to a full size position. If they continue to lag or show deteriorating fundamentals, then they will be trimmed or sold off completely.

You can read more about how I pick core positions here.

In total, I made 10 buy transactions in the month of November. 

All added shares to my existing core positions with the exception of only two non-core positions. No new positions were started.

ABBV 

Abbvie has been a core position in my portfolio, but relative to other core positions, it was a smaller position. So, I added more to it on a recent dip and got its MV (market value) above 3%. Overall, it contributes about 2.44% of my total dividend income per year. I would continue to add to it on any short-term weakness.

WPC

It is the only REIT I added in November. It is a blue chip diversified REIT. I have held WPC for several years and it has proven to be a great income provider, all these years. With the new share addition, it is contributing 5.78% of total income at a MV of 4% and YOC (yield-on-cost) at 6.22%.

KMB

Kimberly Clark is the only core position I own under the Consumer Staples sector. The stock was taking a break and was experiencing some downward pressure when I decided to add to it as it has been my smaller positions. It normally yields around 3%, so I had to wait for a slightly higher yield before pushing the buy button. My YOC on KMB is 3.49% and a MV of 1.82%.

I will continue to add more shares to my KMB position to bring it up to at least a 3% MV.

CMI

Cummins is a highly cyclical industrial company. I started a position in it during 2015 industry down cycle and build it up to be a core position. My CMI position is up over 50%. A recent dip in the stock due to the Tesla announcement of electric semi-trucks, gave me an opportunity to grab more shares at a few percent discount. Even after adding the new shares, my YOC remains close to 4%.

KSS and TGT

These are the only non-core positions I added in November.

I consider both KSS and TGT as non-core positions mainly because they are going through a turnaround in a very challenging retail industry. I added more shares mainly because both companies were trading at historically low valuations and paying generous and growing yields despite the rot in the retail industry.

TGT is a dividend aristocrat and has raised its dividend for more than 25 years.

KSS is not a dividend aristocrat, but it has grown its dividend by double digits in the past three years.

Both of them have a potential to become core positions if they continue to improve fundamentals and dividend growth.

VZ

Verizon is one of the only two telecom stocks I own, the other one is T. VZ is a core position and I saw an opportunity to add to it when the stock was trading at a lower valuation (mid 40s) and a ~5% yield. I also own a big position in T. At this point, I consider both VZ and T to be a full position. Therefore, I won't be adding any more to it anytime soon.

PPL

PPL is a regulated utility company that also gets a large portion of its income from the UK. It has been under pressure for the past year due to British Pound weakness as a result of BREXIT. The management has taken necessary hedging measures to counter pound weakness and have committed to increasing dividend by 4% for the next several years.

I've been building up this 4+% yielder and finally with the new addition of shares it is now the third biggest utility position in my portfolio followed by D and SO.

I will add more to it as I get more capital to invest. The stock seems to be holding its 4+% yield for now.

SO

Southern is a my largest utility holding with a total MV of 3.58% and income contribution of 4.2%. My YOC on SO is slightly over 5%. I added more shares on recent weakness which also provided a nice boost to my income.

PFE

Pfizer is one of the three pharma/biotech stocks I own and was the one lagging in terms of market value and income contribution. Therefore, I bought some share before the stock started to move upward movement.

PFE is also expected to gain big from the new tax bill, which will allow one-time tax repatriation for big corporations that have been hoarding large amounts of cash overseas. I expect bigger dividend increases when PFE brings its overseas cash back to the US.

Conclusion

That's pretty much all the shopping I did in November. The new shares are doing well so far, and I expect them to continue to drive upward momentum for my portfolio, at least till we hit a big correction.

Always a pleasure reading thoughtful comments from my readers. Let me know how you like or even dislike my recent buys.



Disclaimer: Author of this article is not a licensed/registered financial or investment adviser and does not provide investment advice. Any mention of stock names/tickers in this article or website is not a recommendation to buy or sell. Please do your own due diligence before buying any stocks. This article is for informational and entertainment purposes only. Full disclaimer can be read here: Full Disclaimer

Comments

  1. Lots of activity in November. Nice buys. Most of those are on my watch list right now for adding a new position. ABBV, SO, PFE, etc. Just waiting for a dip or some free capial. Kind of suprised to see the TGT buy. The price is still pretty good, but has rebounded a lot from the last huge dip. I expect another dip to come in December/ January if it missed on earnings. And it is too big of a position for me now so I'll need to wait a little until I add more. Also, I am liking the new theme on the site!

    ReplyDelete
    Replies
    1. Hi Daze,

      Regarding TGT, I bought these shares on a third rebound since it bottomed in Nov. Even though TGT is not yet my core position, it is the biggest non-core position at 2.91% MV and I hope to make it a core some day, it's getting close.

      Also, since the bulk of my TGT buys have been at a lower cost basis, I now have more flexibility to add shares at a higher price point without much disturbing my total cost basis or yield. This allows me to keep adding more shares into the strength while still earning a 4+% yield on a dividend aristocrat.

      This is why I like to start a new position at the cheapest valuation possible because that acts as an anchor to a great yield and margin of safety and then I start building up that position as the company and its stock starts to improve.

      Target has been by no means out of the woods yet, but they are making progress and it's starting to show in the stock. The share price is still slightly under value per next year's eps estimates. So, I think I got a pretty good deal at $57/share.

      As you said, there may be another buying opportunity after the holidays, if so, I would likely buy more and make it a core position. If not, that would be okay too as I already have a decent position in the stock which earns a nice and growing income (my primary objective of owning dividend stocks).

      Thanks for liking the new theme on my blog, I was just getting tired of looking at the old blog and needed a change :)

      Delete
  2. Good Morning Mr. ATM, Of course I like all of your recent buys. It probably won't surprise you that I'm long all of the stocks you purchased except KSS. I haven't followed KSS. Years back during the growth of B&M specialty and big box retailers, I remember them as a growth darling. Then I think they hit some hard times. Sounds like they must be back. If you are looking for a future post idea, reviewing your KSS rationale may be a good one as you probably know they are not covered much in the DGI community.

    TGT and WMT are my two primary B&M retail holdings. I have held WMT for a several years accumulating as growth slowed, investment to compete online increased and the stock sputtered. I always thought with the resources WMT has they would get online figured out. I think they are starting to do that. I hold TGT for the same reasons you state.

    Nice purchases, nice post. Tom

    ReplyDelete
    Replies
    1. Good Morning Tom,

      Oh I envy you. I missed out on WMT stock. It has done great since recovery in late 2015 and has become the strongest B&M around. You saw past their troubles and now you are being rewarded, while I was a bit pessimist at the time on WMT. Also, since I don't shop there, I didn't quite make the connection that I have with TGT.

      I'm hoping TGT can be the next WMT, though they have long ways to go. They are doing better and making changes that are starting to show. I also shop there and always see the store filled with customers. They recently added Starbucks within the store, so it gives me another reason to go there, while Mrs. ATM shops.

      I bought KSS stock dirt cheap last May in the midst of the retail slump. I wrote about it here: https://www.mrallthingsmoney.com/2017/05/which-department-store-stocks-should-i.html

      I was looking for good deals in the battered retail sector and was contemplating buying between Macy's, Kohl, and Nordstrom. I decided to go with Kohl, it had a double digit dividend growth, a better FCF/Sales, and a turnaround plan which involved partnerships with brands like UA and Amazon.

      KSS has done quite well and appreciated by almost 22% since I bought it. With a YOC of 5.53% and most recent div increase of 11%, I'm quite happy with my pick.

      There have also been rumors and speculations on Amazon buying them, don't know how true they are, but not completely out of question since they have a partnership already. Will see what happens.

      Thanks for commenting and take care :)

      Delete
    2. Thanks for the link to Kohls. Always one step ahead of me. Tom

      Delete
  3. So this is how you Christmas shop? I approve!!! I don't currently own any of these stocks directly but VZ, KMB, and PFE are on my watch list. Cramer said this morning that people are selling out of the big tech names and going into $T and $VZ driving their prices up a bit. We'll see how long that continues. Thanks for sharing your shopping list with us!

    ReplyDelete
    Replies
    1. Hi DS,

      Well, not quite a Christmas shopping, but it is still something. I had some cash sitting around and thought I better buy some stocks and work on strengthening existing positions while increasing dividend cash flow.

      Yes, it does seem like a sector rotation out of Tech and into staples and telecom. I normally don't pay much attention to sector rotation and just look for where I can find value without compromising risk profile of my portfolio.

      I'm ending the year pretty strong both from dividend cash flow and total return standpoint. Hope the same goes for you and other fellow DGI'ers.

      Thanks for the comment and stopping by.

      Delete
  4. That's a strong list of companies Mr. ATM. I also like how you separate things between core and non-core holdings. It provides flexibility to your portfolio. I only invest in core holdings at the moment, but who knows, maybe one day that might change.

    ReplyDelete
    Replies
    1. Thanks DP.

      For me, a new position always starts as a non-core and can later be promoted to a core position. This strategy allows me to pick multiple small positions to start with and then wait to see which ones are doing well. I only promote the ones (one at a time) that have done the best among the non-core positions, while waiting for the others to become promotion worthy.

      I call it a 'Next Man Up' strategy. The winners take turns to get promoted, while the losers will eventually get sold off at some point or remain a very small position in the portfolio.

      Delete
  5. I'm bad at stock picking so I just buy an index ETF. I've seen a lot of people buyTarget and CVS recently

    ReplyDelete
    Replies
    1. Index ETFs are great for someone who doesn't like to pick stocks or is a passive investor. Also, since most retirement accounts don't let you pick stocks, indexing is the way to go in such accounts.

      Thanks for stopping by.

      Delete
  6. Hi buddy,

    I´ve read this post 4 times now, but always on the phone, and I hate commenting on the phone, so sorry for taking so long.

    First, your site is amazing. Even the comment section seems super smooth and it just looks really really good.

    Second, let´s talk about your buys: I Like All Of Them! Very Stockles approved! PPL is the only company I don´t know from before, but when looking at Simplysavedividends, I see that they have a dividend safety of 91, growth of 3 and yield at 82 (score based). Seems like a nice dividend income player.

    Btw, I´ll be more active soon when christmas arrives and one can finally relax and enjoy life again. Talk to you soon!

    ReplyDelete
    Replies
    1. Hi Stockles,

      No problem and thanks for sharing your thoughts and SSD numbers for PPL.

      Now l know who to contact if l need SSD rating on a stock :)

      I’m glad all of my buys are Stockles approved.

      Look forward to chatting with you.

      Take care.


      Delete
  7. Hello ATM,

    I like the list of stocks. I currently own 6 of them, including TGT. I expect TGT to remain a going concern for some time to come, however, like you, it is a non-core holding for me and I would look to sell if it returns to the prior valuations in the short term (i.e. >$75). I was fortunate to pick some up earlier this year when it was trading in the low $50s where I believe the value was too compelling to pass up (I would add more if it drops again to those levels with all else remaining constant).

    On different note, thanks for sharing the link to the bond rating site that you shared elsewhere on this blog. The discovery was very timely for me as I had been looking for an easier means to lookup company credit ratings and by happenstance, found a great source on your blog.

    Regards,

    PIV

    ReplyDelete
    Replies
    1. Hi PIV,

      Yeah, I'm holding my target position but not adding any more. It is up almost 10% for me and dividend seems safe and growing. I think in the long run they will do fine, they have been trying best to compete with Amazon and Wal-Mart by making changes to their stores and upgrading online shopping.

      Glad you found my link to bond rating.

      Thanks for your comment and stopping by.

      Delete
  8. Some excellent purchases. Some of your recent purchases aligned well with mine such as Target, Verizon and PPL and KMB are on my radar as well. Keep those dividend coming :). Good Luck.

    Happy Investing.
    TheDividendKarma -TDK

    ReplyDelete
  9. Talk about a shopping spree! That is some serious buying power your are demonstrating Mr. ATM. I like the fact that you put your money where your mouth is. Good work!

    I think I can't really say anything negative on your buys. You seem to have thought them all out. I really like the fact that you keep analysing your entire portfolio with each an every buy. Very methodical and something I need to start doing as well. I had KMB in my sight as well but choose a different route with ADM and DIS. Curious to find out your comments on those buys.

    Keep up the great buys Mr. ATM, you are smashing it!

    ReplyDelete
    Replies
    1. Hi Mr. Robot,

      What a coincidence, I just left you a comment at your blog as well :)

      I love your ADM and DIS buys. Awesome companies. ADM is trading and lower valuation with a juicy 3.2% yield and a great dividend history and growth. Not to mention a S&P credit rating of A. Can't go wrong with that. It is a commodity company so the stock price will swing with the price of the underlying commodity, but ADM knows how to deal with the pricing pressure.

      DIS is another great buy. But I can't seem to get it to generate higher yield, for me to buy it. Income generation is my prime focus.

      As for my Nov. purchases, yes I pretty much used up most of my investable cash to build up existing positions. It was part of my year end portfolio buildup/maintenance operation.

      Now, working on next year's plan.

      Thanks for stopping by and commenting Mr. Robot.

      Delete

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