2 Team Alpha Portfolio Updates: Selling Several Losing Positions And Performance Reviews

by: Regarded Solutions

Hence forth I will be doing both the Team Alpha Retirement Portfolio, and the Team Alpha Dividends And Income Portfolio in one update article. In this way my readers, and those who follow these portfolios, will be able to compare much more easily, without having to read more than necessary.

Both portfolios are directed towards the dividend income investor for a more secure financial future or retirement. Thus far we have had very solid success.

Before getting into the results of these portfolios, I would like to remind everyone that our Young And Restless Retirement Portfolio has already been updated in 2 parts.

Part one can be reviewed here, and part two can be reviewed here.

That particular portfolio has shown very strong gains and some changes have been made within the updates for you to consider.

Team Alpha Retirement Portfolio Continues To Outperform

In 2 years and 2 months, this portfolio has performed better than I anticipated as far as capital growth is concerned, but right where I believed it would perform as far as a reliable stream of income from dividends.

The Team Alpha Retirement Portfolio currently consists of Apple (NASDAQ:AAPL), AT&T (NYSE:T), BlackRock Kelso Capital (BKCC), Cisco (NASDAQ:CSCO), CSX Corp. (NYSE:CSX), Chevron (NYSE:CVX), Exxon Mobil (NYSE:XOM), Ford (NYSE:F), General Electric (NYSE:GE), Johnson & Johnson (NYSE:JNJ), Coca-Cola (NYSE:KO), McDonald's (NYSE:MCD), Newmont Mining (NEM), Procter & Gamble (NYSE:PG), Realty Income (NYSE:O), Wells Fargo (NYSE:WFC), Franklin Street Properties (NYSEMKT:FSP) , and Omega Healthcare Investments, Inc. (NYSE:OHI)

Stock #Shares 11/30/2013 TotValue Orig. Price div rcvd
XOM 125 94/shr 11750 75 81
JNJ 105 95/shr 9975 63 70
T 400 35/shr 14000 28
GE 500 27/shr 13500 15
BKCC 300 10/shr 3000 10
AAPL 20 556/shr 11120 436 61
PG 100 84/shr 8400 61
KO 100 40shr 4000 34 28
NEM 100 25/shr 2500 33
WFC 200 44/shr 8600 40 60
O 300 38/shr 11400 34 54
CSCO 400 21/shr 8400 18
CVX 65 122/shr 7930 116 65
MCD 110 97shr 10670 86 90
CSX 200 27/shr 5400 19 30
F 300 17/shr 5100 13
FSP 200 13/shr 2600 13
OHI 100 33/shr 3300 31
Cash Rsvs x x 5471  
Tot Value x x 147116
Click to enlarge

As you can see I have added the stocks that went ex dividend in November, and have added the cash received for the month ($569) to our cash reserves. This portfolio now has a current yield on cost of 5.04% which will pay us roughly $7,100 annually based on the invested dollars.

While the portfolio itself has increased in value by 47.1% (including dividends) over 26 months, the income being produced has risen over 75% from where we began, and that is our main objective here. I am hopeful that 2014 will bring us even more income as our core holdings continue to increase dividends, and as we seek out solid opportunities for our cash reserves.

The weakest stocks in the portfolio have been BKCC and NEM. I will be selling our entire position in each, on the next trading day (Monday 12/2/2013), and temporarily putting the cash into our reserves. We will be taking a loss in each of these stocks, and will use the loss to offset some gains we have taken throughout the last year.

BKCC has been a disappointment in that the anticipated capital appreciation has underperformed other stocks in the business development company sector, and I do not feel that the company can maintain a high enough dividend to make it worth holding.

NEM is a gold mining stock that has cut its dividend from over 5% down to around 3%, and as the price of gold drops, the share price of NEM has suffered. I see no catalyst for gold prices to surge and that means we will have less dividend income from this investment while waiting for the share price to rebound. That is never a good strategy. It is time to sell and move on.

AAPL on the other hand has given us a really nice shot in the arm from the price we paid, and I strongly believe that this is a dividend champion of the future. If the stock falls back, I want to be a buyer to add shares to our position.

CSCO is on my watch list. The stock has retreated and the company itself appears to be stuck. If there are no dividend increases soon, I will be taking whatever gains we have made and redeploying the funds. This will not happen until AFTER the 1st of the year, not now.

GE has nearly doubled, and I firmly believe that 2014 could be a breakout year for the stock. I will look to add shares on pullbacks of more than 10%, if that occurs.

Team Alpha Growth And Income Portfolio Is Off To A Quick Start

This portfolio blends both dividends and growth stocks to produce income and strong capital gains. I believe that as we move ahead in this bull market that investors who have a slightly longer time horizon will benefit from capital appreciation to be used later, during retirement, to fund the purchase of more dividend champion stocks and shares.

The brand new Team Alpha Growth And Income Portfolio consists of Apple (AAPL), Ambarella (AMBA), Cisco (CSCO), CSX Corp. (CSX), Chevron (CVX), Ford (F), Facebook (FB), Galena (GALE), General Electric (GE), Altria (MO), Johnson & Johnson (JNJ), Coca-Cola (KO), McDonald's (MCD), Realty Income (O), Procter & Gamble (PG), AT&T (T), Wells Fargo (WFC), Exxon Mobil (XOM), Yahoo (YHOO), Mid-America Apartments (MAA) Franklin Street Properties , and Omega Healthcare Investments, Inc.

Stock Shares Price Now Total Value Cost Basis Div. Rcvd.
AAPL 10 556 5560 $475 30
AMBA 350 25 8750 $19
CSCO 125 21 2625 $23
CSX 125 27 3375 $26 20
CVX 30 122 3660 $120 30
F 200 17 3400 $17
FB 100 47 4700 $50
GALE 3500 4 14000 $2
GE 175 27 4725 $24
MO 175 37 6475 $34
JNJ 40 95 3800 $86
KO 75 40 3000 $38 21
MCD 40 97 3880 $97 32
O 150 38 5700 $40 27
PG 50 84 4200 $76
T 175 35 6125 $34
WFC 100 44 4400 $41 30
XOM 50 94 4700 $86
YHOO 175 37 6475 $33
MAA 100 60 6000 $62
FSP 200 13 2600 $13
OHI 100 33 3300 $31
Cash Rsvs x x 1,520
Tot.Value x x 112,970
Click to enlarge

I added the dividends earned in this update as well. The $190 was added to our cash reserves. Our yield on cost sits at 3.93% since we added FSP and OHI to our mix. While our goal is to increase our income stream in this portfolio, the real drivers going into 2014 will hopefully be our growth stocks; AMBA, FB, GALE, and YHOO.

Those 4 stocks have accounted for the 12.97% increase in the value of the portfolio in just a few months, and I believe these for stocks will be important players next year.

I will be looking at adding shares to GALE, and AMBA after the 1st of the year on any pullback. These two stocks could be stellar performers next year and I believe we need to commit more dollars to each.

I will also look to finally add Twitter (NYSE:TWTR) at some point, when the share price falls back to $35-$38. If it goes straight up then I will be sitting on the sidelines even though the stock is my pick of the year for 2014. I wanted to get in on the $26/share IPO price but that did not happen and the share price has been bid up to lofty valuations right now. I believe the stock will pullback from these high valuations.

The Bottom Line

With disciplined portfolio management and a clear focus on our goals, these portfolios should continue to perform well. While there is always the inevitable correction, or even a bear market, I am not of the opinion that we will see that in the near term (3-9 months), especially if the Federal Reserve continues to manipulate interest rates.

I am convinced, however, that at some point inflation will increase and interest rates will rise quickly no matter what the Fed does. We need to be aware of these issues so that we could be ready to take action to preserve capital.

Disclosure: I am long AAPL, AMBA, CSCO, CSX, CVX, F, GE, GALE, JNJ, KO, MCD, NEM, O, T, WFC, XOM, YHOO. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.