On April 8, I suggested it was Time to Build a Shopping List. I had run out of things to buy during the prolonged, uninterrupted bull market run. I believed it was time to raise some cash and prepare for a buying opportunity. On June 10, I revisited the shopping list.
American States Water Company
Since then, some names were added to the list. At various times in recent years I looked at American States Water Company (NYSE:AWR). They have increased their dividend annually since 1954. In my 2007 issue of Mergents Handbook of Dividend Achievers, I wrote one word on the AWR page: "flat." They seemed stalled in no-growth mode. AWR reappeared on my radar when it was mentioned in a May 24 Dividends4Life article. I then visited AWR's website and was stunned. The sleepy little water utility has found new life so I added it to the shopping list. In light of its price history, I decided a 3% yield ($54) would be a good place to initiate a position. (FYI--They have announced an upcoming 2-for-1 split.) I bought shares of AWR on June 19 and 20.
Kinder Morgan Energy Partners
Recently, I asked Seeking Alpha friend Bob Wells for an MLP recommendation. He suggested Kinder Morgan Energy Partners (NYSE:KMP), so read the earnings call transcripts, looked over the recent quarterly reports, etc. I owned KMP years ago, and I've kept up with it from a distance, so it was a quick study. I added KMP to the shopping list. It was yielding slightly over 6%, so I felt like it was in a good place for an initial purchase. I bought shares of KMP on June 18 and 20.
Orchids Paper Products and B&G Foods
Chuck Carnevale's FAST Graphs provide a one-click sector identification for a stock. Chuck is working on a series of articles highlighting each of the ten S&P sectors. In 2010-12, I had numerous consumer staples stocks, but as they appreciated, I rotated out. I added Orchids Paper Products Company (NYSEMKT:TIS) to the shopping list after reading Dividend Strategist's June 10 admonition "Don't Forget The Little Guys." This was a totally new company for me and it was a fun study. I also added a company I owned during much of 2012, B&G Foods Inc (NYSE:BGS). I haven't opened a position in either of these as of this writing (the evening of June 20). If June 21 is like June 19-20, I may own them before this is published!
It's hard for me to find stocks in the consumer discretionary sector, except for my old friend Genuine Parts (NYSE:GPC). Entertainment is one of the sub-sectors, so I did some fresh study. In the past I owned Cedar Fair (NYSE:FUN), so I looked at it again and I studied Six Flags (NYSE:SIX) and Disney (NYSE:DIS). They are all companies with momentum, but I was drawn to EPR Properties (NYSE:EPR), another stock I owned years ago. Their recent numbers look good to me, and even though it is a REIT, it is a landlord for movie theaters, ski resorts, and (not exactly entertainment) charter schools. I put EPR on the shopping list after it re-entered my consciousness via an April 29 Brad Thomas article about EPR. I bought some shares on June 19 and 20.
Merck, Chambers Street and Monmouth
I added Merck (NYSE:MRK) to the shopping list. I have no position yet. I've already written about two other REITs mentioned by Brad Thomas: Chambers Street Properties (NYSE:CSG) and Monmouth Real Estate Investment Corp. (NYSE:MNR). I consider these both special situations. Monmouth hasn't grown as much as I would like, and their dividend has been flat, but I believe there is both safety and potential in these two REITs. I can't afford to put Brad on retainer, so I subscribed to his newsletter. I added some additional shares of MNR on June 19.
Technology is a tough sector for me. I almost bought Intel (NASDAQ:INTC) when it was below $20 a couple of years back. Apple (NASDAQ:AAPL) is on the shopping list, and after their dividend raise, the 3% threshold was lifted to $406.67. After the June 19-20 selloff, it is within a whisker of this level. (If it was a $41.64 stock rather than a $416.41 stock, it would be within $1 of this level--$40.67.) As of this writing, I own neither AAPL nor INTC (nor any other tech stock).
Digital Realty Trust
In lieu of a tech stock, I reached back in to the REIT bag and put Digital Realty (NYSE:DLR) on the shopping list. For me, it is a surrogate for a tech stock. DLR owns the buildings (which require a special infrastructure with things like lots of wall plugs (or sub-stations), movable floors, ceilings, heavy duty HVAC, and emergency power generation. The "cloud" is really down-to-earth. Recent noise from hedge fund shorts brought this stock to my consciousness. It has had quite a selloff. Once again, I trust Brad Thomas' judgment on this one. The numbers look good, the business model makes sense, so I put it on the shopping list. When the downturn occurred, I bought shares of DLR on June 19 and 20.
I previously held AT&T (NYSE:T), but for the last year or two I have not had a telecom stock in the portfolio. I decided to add Vodafone (NASDAQ:VOD) because of their international growth and their 45% stake in Verizon Wireless. I made an initial purchase of VOD on June 20.
I'm heavier in REITs than my target allocation, and I'll look for opportunities to pare these stocks back, but for now I've retreated into a space that I have come to appreciate over the last 30 years.
The steep selloff of June 19-20 provided an opportunity to put the shopping list to work. After the close of trading on June 21, I will update my retirement income portfolio in another article.
Everyone's portfolio is a reflection of his or her interests and risk tolerance. Like a garden, it's always a work in progress. The above paragraphs make it very obvious that the Seeking Alpha community has been a great help to me in shaping my portfolio.
A Shopping List Helps During a Market Frenzy
The big sale this week on Wall Street has given me an opportunity to get into some stocks that have been on my shopping list.
For months we've been hearing money pros talk about how Quantitative Easing -- QE has been a big mistake. But, when we get a hint that the unwinding of QE may be in sight because the economy is improving, many money pros seem to be in panic mode. However, I heard Mr. Bernanke's words yesterday as good news.
My hunch is that the Bernanke statement was an excuse for some people to do some end-of-the-quarter rebalancing and profit-taking. It was quite a two-day ride and it may not be over. Get your shopping list ready. Here's mine. The target prices/target yields have been adjusted in light of several factors, including the recent sell-off.
Ranked by number of consecutive years of dividend increases. June 20 closing price and yield are given, along with the target price and the dividend yield at the target price. This is what works for me. Your situation may be different. This is not a recommendation to buy any particular stock, but rather is presented for educational purposes to give you some ideas for stocks to study. Do your own due diligence.
* = recent addition
|*Amer States Wtr||54||53.05||1.62||3.1%||54.00||3.0%|
|3M Co (NYSE:MMM)||59||108.78||2.54||2.3%||72.57||3.5%|
|Ill Tool (NYSE:ITW)||63||69.06||1.52||2.2%||50.67||3.0%|
|RPM Int (NYSE:RPM)||74||31.51||.90||2.9%||25.71||3.5%|
|Pdmnt NG (NYSE:PNY)||80||32.85||1.24||3.8%||27.56||4.5%|
|Nat'l Ret (NYSE:NNN)||90||33.16||1.58||4.8%||31.60||5.0%|
|Realty In (NYSE:O)||95||41.02||2.18||5.3%||43.60||5.0%|
|Ent Prd Prt (NYSE:EPD)||97||58.53||2.68||4.6%||53.60||5.0%|
|WP Carey (NYSE:WPC)||99||64.35||3.36||5.2%||67.20||5.0%|
|Plains All-A (NYSE:PAA)||01||54.66||2.30||4.2%||46.00||5.0%|
|Norfolk So (NYSE:NSC)||01||73.48||2.00||2.7%||57.14||3.5%|
|Southern Co (NYSE:SO)||02||42.48||2.03||4.8%||45.11||4.5%|
|NuSTAR Enrg (NYSE:NS)||02||43.50||4.38||10.1%||43.80||10.0%|
|AGL Resour (NYSE:GAS)||03||41.86||1.88||4.5%||41.78||4.5%|
|Naturl Rs P (NYSE:NRP)||04||22.53||2.20||9.8%||22.00||10.0%|
|Generl Mills (NYSE:GIS)||04||48.21||1.52||3.2%||43.43||3.5%|
|Westar Enrg (NYSE:WR)||04||30.44||1.36||4.5%||27.20||5.0%|
|Prospct Cap (NASDAQ:PSEC)||10||10.45||1.32||12.6%||10.56||12.5%|
|General Elec (NYSE:GE)||11||23.25||.76||3.3%||19.00||4.0%|
|LTC Prop (NYSE:LTC)||12||37.04||1.86||5.0%||37.20||5.0%|
|PPL Corp (NYSE:PPL)||12||28.52||1.47||5.2%||29.40||5.0%|
Disclosure: I am long AWR, GPC, JNJ, VOD, NNN, O, KMP, WPC, PNNT, SO, NS, NRP, DLR, STWD, ETN, LNCO, EPR, PSEC, LTC, PPL, MNR, NLY, CSG. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.