Friday, November 16, 2012

What are you buying?

Since the election finally finished the stock market has rarely seen a positive day or even flat day.  The DJIA has shed 700 points, 5.31%, since the Wednesday after the election.

Here's what's on my shopping list at current prices as of Thursday's close.

Phillip Morris (PM)
Vodafone (VOD)
Caterpillar (CAT)
McDonald's (MCD)
Kinder Morgan Inc. (KMI)
Harris Corporation (HRS)
Walgreen's (WAG)
Intel (INTC)

Phillip Morris and Vodafone are great global plays in their respective markets and that's why they are the highest on my list.  I've been waiting for about 7 months for Vodafone to drop back down to the current levels, and of course now that it does I have no free capital.  I would be willing to add to my MCD and KMI positions at the current levels, but I think MCD would be on hold for the time being due to it's current size in my portfolio.  Caterpillar is high on my shopping list because I feel that long term it's a steal at these prices, although a dip into the upper-$70's wouldn't surprise me at all.  Harris Corporation's drop is one of the most confusing to me.  It seems like every other day there's another article about a new contract they just signed yet the share price has been following the market along.  Intel has been on a very noted decline over the last few months and if I didn't already own 146 shares I would be picking some up, although it might move up on the list since it'll give me a good chance to average down in my position.  I expect the markets to continue to show weakness, giving long-term investors plenty of opportunities to pick up more shares of quality companies.

In general that's about how my shopping list currently looks and I can't wait to get some money transferred over to pick up some shares.  Unfortunately there won't be enough capital to pounce on the current opportunities as I would like.  I think Phillip Morris and Vodafone will be where I look first before adding to the positions that I currently have in the other stocks.

What are you buying?

13 comments:

  1. Nice list! I also like VOD, MCD, and KMI.

    I would also add in NSC, but I'm sufficiently allocated there, and it seems like waiting is the best play for this falling knife.

    Some other ones I want to add are: LNCO, SO.

    In all honestly, AAPL looks to be the cheapest, but I doubt I will add more.

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    1. FI,

      VOD, PM and CAT are probably the top 3 for me once I get can some capital. The challenge is going to be deciding which one because I won't be having a large amount of capital free until December. It's at the point now where I think the markets going to continue lower, but the prices are starting to represent really good value.

      I saw your purchase of LNCO and need to look more into it. At some point I'm going to add some utilities in but right now I don't want to pick up any. Of course I haven't really looked into them that much. I love that they're monopolies in their service area so I know at some point I'll pick some up.

      Thanks for stopping by!

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  2. If I had extra cash today I'd probably start a position with KMI.

    I do like your list and have all of those on my short list as well besides HRS which I don't know much about.

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    1. I like HRS but currently have 80 shares so they're about the size I'm comfortable with right now, but if the price takes a tumble from here then I might have to scoop some more up.

      I think KMI is great and I currently have 126 shares. It's still tempting to be able to pick up some more shares but I think PM and VOD will be the first since I've been waiting for quite a while to invest in them. At the current prices then CAT would be next although I've been wanting to add some more Intel but they make up a good chunk of my portfolio right now so we'll see what happens.

      Thanks for stopping by!

      Delete
    2. I meant to also add that I've got some small positions in WM and PFE that I need to get rid of back from when I first started investing they'll add up to about an extra $1,000. They might be getting the boot soon. I originally invested in PFE as more of a capital gains plus DG stock and I'm sitting on 27% gains with them, I'm worried about their pipeline but I had them on DRIP on the last ex-div date so I'm waiting until the payment early next month then their gone if the price is the same as it is now or higher.

      I'm still not sure about WM yet. It's a good yield with a YOC of 4.60% but the DG has been lower than I wanted. I really like the business model though and that's what's kept me in so far.

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    3. I've built a decent size position in WM. I think you have to treat it more like a utility. You can't really choose who hauls away your trash. It's usually either WM or RSG which own most of the market.

      I've sold another put on WM and I would still consider picking more up around my cost basis which is close to $29/share.

      I couldn't justify selling a DG stock with 9 straight years of increases and a 5-year CAGR of 9.1%. At that rate your yield would double every 8 years (rule of 72). That's not bad for a stock that currently yields 4.5%.

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    4. I'm leaning more towards keeping WM for now. It's the small position size that irks me and the 4.4% increase for the last dividend raise. It's one of the positions I'm kind of on the fence about, there's times where I'd like to add more and other times where I'd like to get out, but you're right about thinking of them more as a utility. Which is why I keep holding on to them. Once the economy picks up and more people are buying stuff and having to throw trash away that could lead to better results for them. I really like that they've swapped to nat. gas trucks where possible and the energy generation. Those could both show big savings and potential new profit streams.

      In the current market I don't think I'd add because I think there's better values presently, but if their share price stays depressed while the market rebounds I would probably add more to the position.

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    5. PIP,

      Nice list there. I think I'd say that my list pretty much looks the same right now. I'd say I'd add GD, KO, MO, GIS to that list..and that's only because I want a larger allocation to the former three and I'd like to initiate a position with the latter choice at some point sooner rather than later.

      Great list there. INTC is ESPECIALLY cheap right now, but I just don't know if I want to take on a larger position right now. I'm "tech-shy" and I'm already more exposed to that sector than I'd really like to be.

      PM has taken quite a hit lately, along with MO. PM is a solid company, and I'd be open to adding another 20 shares here and bringing my position up to a full 100 shares.

      KMI has fallen sharply since I initiated a position. I think that the shares are undervalued by at least 20% here based on expected growth. Plus, that yield is very nice.

      Best wishes!

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    6. DM,

      I need to look more into the defense contractors such as GD. KO was one omission from the list mainly due to valuation. It still has a ways to drop before I'd be buying more shares, but it's one of the few companies that always holds a spot on the shopping list but rarely goes on sale. TGT is another company that I'd like to get a position in but it's above my price target so it didn't officially make the list.

      After the sale yesterday and transferring about $550 I've got enough cash to make one small purchase for the time being. Later this month I'll have a lot more at my disposal.

      Thanks for stopping by!

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  3. A bunch of utilities, TD, O, INTC, and perhaps NSC. CVX, KMI, and MCD also look good.

    On WM, it seems to me that a yield greater than 4% that grows faster than inflation is quite attractive! I think once you get a 4% yield, it's normally not realistic to expect high dividend growth any longer. That's why I find tobacco stocks and things like KMI to be especially interesting!

    Right now I like RSG a little bit more than WM despite the lower yield. Still thinking about it though.

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    1. CI,

      I'd be picking up more NSC but it's a pretty big position for me, plus I want to keep all the shares of it in my Roth IRA which is already fully funded and invested for the year.

      I need to check on RSG again today since I last checked it out at the first of the year. WM will be a hold, but it was something I was considering but the fact that there's really 2 companies that service the whole country for trash disposal makes it hard to sell. And so I haven't. Plus the current yield and my YOC are very enticing.

      Thanks for stopping by!

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  4. Nice shopping list -- several names (VOD, MCD, KMI, INTC) overlap with my own list. The main issues for me are (a) not having enough cash; and (b) deciding what to buy with my limited cash. The second issue is more of a high-quality problem -- so many good opportunities from which to choose! :)

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    1. DGM,

      I'm struggling with the same issues as you. A lack of cash is really frustrating right now, but it comes with the territory of investing.

      Thanks for stopping by!

      Delete