Micro Blog #28: My April Stock Buys

Despite being cautious due to lingering risks to the stock market and overall economy, I've been selectively adding shares to my existing companies. My strategy is to keep adding shares to the companies I already own when they beat earnings or raise guidance/dividends.

Nice thing about adding to an existing company is that I don't have to research the company, as I've already done that before owning it the first time. So when an existing company beats its earnings and/or raises guidance and dividend, it's almost a no-brainer for me to add to it. Easy peasy!

The other reasons why I keep adding to existing positions (despite macro risks) is that I want to own sizable positions in top high quality companies, rather than too spread-out in low quality companies. I want less trading and more asset ownership. With about 37 positions in my portfolio, I have plenty of diversification across all 10 sectors of S&P 500 and therefore, I need to continue to focus on building-up my existing positions.

My April Buys

I added to four of my existing positions mainly based on either their earnings report or historically high yields. Since I'm only buying selectively, I focus on existing companies that are either beating earnings estimates & raising guidance or offering yields that are at least within 10% of their historical 5-yr high yields.


All four stocks fall into a defensive category with yields 4% or above. This year, I've been focusing on building up my defensive sectors such as utilities and consumer staples. Utilities and consumer staples have been beaten down mainly due to rising interest rates and there are some really great buying opportunities.

Given the interest rates on a 10-yr Treasury bond is at or near 3%, I look for at least a 3% yield when buying shares of any stock new/existing. The 10-yr acts as a competing income investment to dividend stocks and therefore, it's important to ensure that I'm getting compensated well for investing in stocks with much higher yield than a no-risk T-bill.

So that was it for my April buys. How about you? Did you buy anything or doing nothing? 

Disclaimer: The quarterly highlights are based on each company's latest earnings report transcripts or press releases. I do not take responsibility for the accuracy of the information presented in this article, please do your own due diligence before investing in any of the stocks mentioned here. 

Comments

  1. This month I added to $T, and $JNJ. I also initiated a position in $BA. Some good opportunities for yield plays right now, IMO.

    Thanks for the report good sir!

    ReplyDelete
    Replies
    1. Those are some great buys too DS. I also just added to my T position today, I think it's a good time to buy given the historically high yield and the anticipated closure of DOJ/ATT TWX merger case.

      Regarding BA, I think based on FCF it still looks fairly valued or maybe even slightly cheap. IMO, the US-China trade-war risk is the only thing keeping this stock from flying even higher. So fingers crossed, the trade-war risk would subside and BA could go flying even higher. Though, I'm not adding any more shares to BA as I already own a ton and current yield is also way below my target yield of at least a 3%, but nevertheless, I think it is still a great LT buy.

      All the best!

      Delete
  2. Nice buys. Telecommunications are getting hit pretty hard. Utilities are still down as well. As you know, I picked up T. But plenty of great value right now. Want to initiate a new position soon, but don't think I'll have the cash flow. KMB is on that watch list for a potential new position.

    ReplyDelete
  3. Mr. ATM, KMB was my only buy in April. I've been pretty conservative with my purchases over the past 18 months. I will continue to add over time. Many attractive yields have surfaced over the past 2-3 months. Tom

    ReplyDelete
    Replies
    1. Hi Tom,

      KMB is starting to recover a bit, so maybe we saw the bottom already? Glad I also picked some when the yield was at or slightly over 4%.

      Yeah, I'm trying to be conservative as well by only buying very selectively and in small amounts. Not sure where this market is going in the short-term, still waiting on the China story to fully pan-out.

      Delete
  4. I added PG to my portfolio.

    Unfortunately it dropped 6$ a share a week later. Oh well story of my investing life :)

    ReplyDelete
    Replies
    1. On a positive note, you increased your dividend cash flow. Which is more important? The stock price or dividend cash flow?

      Delete
    2. Your absolutely right Mr. ATM. It's just sometimes frustrating to see things like this happen again (and again). But in the long run it probably won't matter at all :)

      Delete
  5. I recently added KMB to my portfolio and was so very close to adding VZ as well. I see your point about wanting to build up existing positions. There are currently 18 stocks in my portfolio, and I don't think I'm going to go much beyond 25. In fact, I might get to about 20 to 22 individual stocks and round out the portfolio with 3 or so funds. Then, I'll be focusing on building up existing positions which will hopefully represent a substantial amount in each company. Interesting insight Mr. ATM.

    ReplyDelete
    Replies
    1. I think 20 to 22 individual stocks is a pretty good number for diversification. Though, I currently have 36 stocks in my portfolio and don't mind increasing the number to 40. It all depends on your comfort level and the size of the portfolio.

      Delete
  6. Playing it defensive seems like a smart move right now. I love this quote, "I want less trading and more asset ownership"!

    I am also growing existing positions by auto dividend reinvestment.

    ReplyDelete
    Replies
    1. Auto-dividend reinvesting is a good plan. Thanks for stopping-by.

      Delete

Post a Comment

Popular posts from this blog

Building A City Of Dividend Stocks

My Dividend Radar

My Magic Heat Map Says: IBM Shares Ripe For Buying

My Dividend Paradise

How To Speed Read An Earnings Report In 60 Seconds Or Less

Micro Blog #26: My Dividend Glide Slope

Micro Blog #21 My Tactics For Investing In Dividend Stocks