Skyworks Is A Name I Continue To Add To My Portfolio

| About: Skyworks Solutions, (SWKS)

Summary

Skyworks highlights the list of names that I have purchased this week along with Allergan and Gilead.

I decided to reinvest my dividend in Eaton Vance despite the though of closing my position in the name.

My portfolio is up 7.4% since inception versus the 1.5% drop in the S&P 500.

During 2015 I decided that I wanted a portfolio which mimicked the S&P 500 without owning an index fund to do it. From the inception of the portfolio I have always at most maintained twelve stocks and the portfolio is up 7.4% so far compared to the 1.5% drop in the S&P 500. The portfolio is up right now because of the significant outperformance of S&P Global Inc (NYSE:SPGI), Eaton Vance (NYSE:EV), and Priceline (NASDAQ:PCLN). The intention of this portfolio is for long-term investments (minimum of three months), not trades. For short-term volatility however I do buy calls and puts as hedges for my names.

I evaluate the portfolio quarterly after earnings season and I only make changeouts if the fundamentals have changed in a company. I try to hold two stocks in each of the following categories: value, dividend growth, growth, and growth & income; and four speculative names. I also try to have at least one stock in each sector.

Just recently I bought additional shares in Allergan (NYSE:AGN), Skyworks (NASDAQ:SWKS), and Gilead (NASDAQ:GILD) while reinvesting my dividend in Eaton Vance . I'd like to give a quick synopsis of each of these stocks right now and provide an update for the entire portfolio. Please keep in mind that I do individual homework on these stocks through articles here on SA and you can look up the tickers with their corresponding articles, but you should always do your own homework too.

Skyworks

Skyworks engages in the design, development, and manufacture of proprietary semiconductor products. The stock appears to be inexpensively valued on next year's earnings estimates and inexpensive on earnings growth potential while having great near- and long-term earnings growth expectations. The company pays a small dividend with great returns on assets and equity. From a chartist perspective the stock appears to be in oversold territory on the RSI chart and it is trying to break out from negative sentiment as seen from the MACD chart below. I believe the stock offers great value as long as it remains below the $83 level. I'm long on the common stock for the dividend growth & income portion of the portfolio and believe that if it can break out from the negative sentiment in few days it may be off to the races. With that I think the best way to get into the name is either through buying a call option or buying the stock outright. Another way to make income on the name is to write a put but caution must be exercised if the price drops lower.

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Allergan

Allergan engages in the research, development, and manufacture of pharmaceutical products. The stock appears to be inexpensively valued on next year's earnings estimates while having great near-term earnings growth expectations. The company pays no dividend. From a chartist perspective the stock appears to be in middle ground territory on the RSI chart and there is increasing its positive sentiment as seen from the MACD chart below. I believe the stock offers great value as long as it remains below the $267 level. I'm long on the common stock for the speculation portion of the portfolio and believe that the stock has already broken out. I am only buying a small lot of shares here and just riding the wave higher for now until I see the technicals begin to break down. The stock has received quite a bit of positive news lately with a great earnings announcement and an upgrade from Goldman Sachs.

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Gilead

Gilead is a research-based biopharmaceutical company that discovers, develops and commercializes innovative medicines in areas of unmet medical need. The stock appears to be inexpensively valued on next year's earnings estimates and expensive on earnings growth expectations. The company pays a decent dividend. From a chartist perspective the stock appears to be in oversold territory on the RSI chart and there is decreasing negative sentiment as seen from the MACD chart below. I believe the stock offers great value as long as it remains below the $102 level. I'm long on the common stock for the value portion of the portfolio have been looking to buy a call for quite some time in the name now. Fortunately I have not bought a call yet because it would have decayed tremendously by now. I will continue to wait until I see the sentiment turn positive before I buy my call and lever upwards in the name.

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Eaton Vance

Eaton Vance manages investment funds and provides investment management and counseling services to high-net-worth individuals and institutions. The stock appears to be inexpensively valued on next year's earnings estimates and expensive on earnings growth potential while having great near-term earnings growth expectations. The company pays a good dividend. From a chartist perspective the stock appears to be in middle ground territory on the RSI chart and there is flattening sentiment building as seen from the MACD chart below. I believe the stock offers great value as long as it remains below the $34 level. I'm long on the common stock for the dividend growth portion of the portfolio and most recently reinvested my dividend in the name. With the reinvestment I'm up about 18% in the name in roughly five months. The company reports earnings on the morning of the 25 th and it may be high time to exit the position because of the great gain I have.

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Now it's time for an update on the entire portfolio from inception.

Company

Ticker

incl. DIV

Portfolio

S&P Global Inc

20.64%

5.51%

Eaton Vance Corp

17.98%

9.20%

The Priceline Group Inc.

11.84%

7.56%

O'Reilly Automotive, Inc.

(NASDAQ:ORLY)

-1.33%

2.90%

Alphabet Inc.

(NASDAQ:GOOG)

-4.78%

2.06%

Allergan plc

-10.24%

18.60%

Gilead Sciences Inc.

-10.39%

10.19%

Skyworks Solutions Inc.

-12.39%

11.67%

Cash

$

32.32%

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My portfolio is moderately risky. Financial planners typically recommend this type of portfolio for investors who have three- to 10-year investment horizons and who are concerned by volatility but not preoccupied by it. Such portfolios often generate a healthy stream of current income. So far this portfolio is beating the overall market but the key is to keep tabs on all your stocks regularly as well.

I have a growth portfolio. I have a lot of exposure to the healthcare sector. Healthcare issues generally offer good growth potential but come with a lot of risk. Keep in mind that many companies in this area face long, expensive product-development cycles and significant regulatory challenges. Also, the prices of these stocks tend to move together. Also note that I do not have exposure to the consumer defensive sector and I will be looking to add some names to it in the future.

My portfolio's stock exposure is biased toward aggressively priced growth stocks. Among these, it is worth noting that compared to the broader stock market, I have a good mix of small, medium, and large companies. I intend to further diversify your portfolio by increasing my exposure to value stocks. I also have very little exposure to hard assets, slow growth, and speculative growth names.

Disclaimer: This article is in no way a recommendation to buy or sell any stock mentioned. This article is meant to serve as a journal for myself as to the rationale of why I bought/sold this stock when I look back on it in the future. These are only my personal opinions and you should do your own homework. Only you are responsible for what you trade and happy investing!

Disclosure: I am/we are long SWKS, AGN, EV, GILD, GOOG, ORLY, PCLN, SPGI.

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.