My 87 Stock Portfolio Q3 Report By Sectors And Income With New Stocks And 6 Trading Options

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Includes: ABBV, ADP, AMGN, APLE, ARCC, ARI, BA, BDX, BXMT, CAH, CCP, CL, CLDT, CMI, CNP, CSCO, CTO, CVS, CVX, D, DEO, DLR, DNP, EXC, FE, GAIN, GILD, GIS, GPC, GWW, HAS, HCN, HD, HTGC, JNJ, KHC, KMB, KO, LADR, LMT, LNT, LXP, MA, MAIN, MAT, MCD, MDLZ, MET, MGEE, MMM, MO, NEWT, NHI, NKE, NRZ, O, OHI, OXY, PEP, PFE, PG, PM, PNNT, PSEC, RAI, SBUX, SNR, SO, SPG, STAG, STWD, T, TGT, TROW, UBA, UL, UNP, V, VFC, VLO, VTR, VZ, WEC, WFC, WPC, XEL, XOM
by: RoseNose

Summary

3Q shows mixed results with portfolio value decrease, yield increase with steady dividend income. I am on target for projected dividends for the year.

I chart the portfolio by sectors and income and emphasize the stronger to weaker holdings.

New additions are (PFE) Pfizer and (BXMT) Blackstone Mortage and (PSEC) Prospect Capital.

I also wrote 6 Options: 4 Calls on (DEO) Diageo, (PG) Procter & Gamble, (JNJ) Johnson & Johnson, and (UL) Unilever and 2 puts on (NKE) Nike and (VFC) Corp.

I would like to show the portfolio by sectors and income and then discuss my newer additions. They are (NASDAQ:PSEC) Prospect Capital, which I forgot to include in my last article, (NYSE:PFE) Pfizer and Blackstone Mortgage (NYSE:BXMT) are the newest.

I will discuss later the calls and the puts. Gosh, what the heck was I thinking. I hope to explain it all.

First the 87 Stock Portfolio News for Q3.

The market is down and so is my portfolio value for Q3, but it is still totally up for Q1-3. I was expecting a down turn, but gosh it sure is disheartening when it finally happens. I had seen it go up dramatically for the first 2 quarters of 2016 and I did know it wouldn't last. I did do some trimming to capture some gains, but pretty much let the rest ride the roller coaster knowing I would still be collecting the dividends which are the rewards.

Quarter 3 Report = Q3 (July, August & September)

Please keep in mind I am not an accountant and this is my record keeping. I offer here a quick synopsis in percents only as I want to keep it confidential. I feel the actual numbers are relatively meaningless, but the portfolio is not a small one in value.

First Q1 and Q2 were good, where Q3 was not, but over all Portfolio Value is up 15.7% including dividends and cash. Dividends were up Q1 to Q2 by 6.3%, but not much happened for raises in Q3, just up 0.14% for Q2 to Q3. Kind of sideways dividends but constant.

Removing dividends from portfolio value or PV-D I show real portfolio value changes.

Now there is some cash running around in there too, which changes from time to time, but, I am fully invested most of the time. As I am the accountant, I can safely say I have no real idea how that would change the results, but it might.

Port Value Dividend PV -D
Q1 8.10% 7.08%
Q2 8.80% 7.16%
Q1+Q2 16.90% 6.30% 14.74%
Q3 -1.00% 0.14% -1.99%
Q1-3 15.70% 12.46%
Click to enlarge

Without the dividends the portfolio is still up 12.46% from January.

I do admit to some trimming and investing those dividends, while I churn some of the shares. I am a manager extraordinaire, for good or bad. I keep most all the stocks and do trim/sell some when they get overpriced or I become unhappy with them which is mostly rare, thank goodness.

There have been some take overs and spin-offs, so they can skew results too. I will not offer specifics here as I have done so, in older articles. Just be aware it is not a static portfolio just sitting accumulating dividends. It could be, but then I would not be having this joy of investing. The dividend yield projected on the current portfolio value, ending Q3 is 4%. That yield is up a bit from Q3.

Portfolio by Sectors and Income

Company Name curr $pr % Value Sector Inc% >1.5% <1.5-1% <1-0.5% <0.5%
CONS-Staples (15) 21.53% 16.1
The Coca-Cola Co (NYSE:KO) 41.73 2.44% 2.44%
Procter & Gamble (NYSE:PG) 90 1.43% 1.43%
General Mills, Inc. (NYSE:GIS) 62.13 2.33% 2.33%
Target (NYSE:TGT) 69.04 1.86% 1.86%
Kimberly Clark (NYSE:KMB) 123.01 1.58% 1.58%
Mondelez (NASDAQ:MDLZ) 42.69 0.76% 0.76%
CVS Health Corp (NYSE:CVS) 86.4 1.62% 1.62%
PepsiCo, Inc. (NYSE:PEP) 105.99 0.61% 0.61%
Diageo plc (ADR) (NYSE:DEO) 112.66 1.32% 1.32%
Colgate-Palmolive (NYSE:CL) 73.05 0.51% 0.51%
Unilever (NYSE:UL) 46.4 0.65% 0.65%
Philip Morris Int (NYSE:PM) 96.02 2.81% 2.81%
Altria (NYSE:MO) 61.92 2.26% 2.26%
Kraft Heinz Co (NASDAQ:KHC) 87.4 0.48% 0.48%
Reynolds Am (NYSE:RAI) 46.64 0.87% 0.87%
CONS-D (8) 6.27% 3.75
Genuine Parts (NYSE:GPC) 98.27 0.69% 0.69%
Mattel (NASDAQ:MAT) 30.06 0.42% 0.42%
McDonald's (NYSE:MCD) 113.45 1.06% 1.06%
Hasbro (NASDAQ:HAS) 79.3 0.65% 0.65%
Home Depot (NYSE:HD) 128.31 0.60% 0.60%
Nike (NYSE:NKE) 51.79 1.09% 1.09%
VF Corp (NYSE:VFC) 54.56 0.51% 0.51%
Starbucks (NASDAQ:SBUX) 53.46 1.25% 1.25%
ENERGY (4) 6.47% 7.42
Exxon Mobil (NYSE:XOM) 86.74 2.03% 2.03%
Chevron (NYSE:CVX) 102.27 1.44% 1.44%
Occidental Petr (NYSE:OXY) 73.54 2.24% 2.24%
Valero Energy (NYSE:VLO) 54.27 0.76% 0.76%
FINANCIAL (10) 5.89% 3.64
Apollo Com R E finance (NYSE:ARI) 15.58 0.36% 0.36%
Blackstone Mortgage 27.97 0.13% 0.13%
New Residentail (NYSE:NRZ) 13.65 0.77% 0.77%
Ladder Capital (NYSE:LADR) 12.4 0.35% 0.35%
Consolidated-Tomoka Land Co. (NYSEMKT:CTO) 50.2 0.12% 0.12%
Mastercard (NYSE:MA) 102.25 1.44% 1.44%
T. Rowe Price (NASDAQ:TROW) 66.58 0.94% 0.94%
Visa (NYSE:V) 82.88 0.97% 0.97%
Wells Fargo (NYSE:WFC) 45.33 0.64% 0.64%
Metlife (NYSE:MET) 47.22 0.17% 0.17%
BDC (7) 5.32% 11.65
Main Street Capital (NYSE:MAIN) 34.47 0.97% 0.97%
PennantPark (NASDAQ:PNNT) 7.63 0.89% 0.89%
Prospect Capital 7.98 0.28% 0.28%
Gladstone Inv (NASDAQ:GAIN) 8.95 0.25% 0.25%
Hercules (NASDAQ:HTGC) 13.4 0.63% 0.63%
Ares Capital (NASDAQ:ARCC) 15.5 1.74% 1.74%
NEWTEK Busines (NASDAQ:NEWT) 14.12 0.56% 0.56%
HEALTHCARE (7) 8.08% 4.96
Johnson & J (NYSE:JNJ) 119.24 3.63% 3.63%
AbbVie (NYSE:ABBV) 62.93 1.18% 1.18%
Amgen (NASDAQ:AMGN) 167.5 1.18% 1.18%
Becton Dickinson (NYSE:BDX) 177.4 0.42% 0.42%
Pfizer 33.56 0.16% 0.16%
Gilead Sciences (NASDAQ:GILD) 75.24 0.35% 0.35%
Cardinal Health (NYSE:CAH) 76.4 1.16% 1.16%
INDUSTRIAL (6)-MATERIAL (0) 4.96% 4.17
Boeing (NYSE:BA) 133.85 1.72% 1.72%
Union Pacific (NYSE:UNP) 98.07 0.46% 0.46%
3M Co (NYSE:MMM) 171.33 0.80% 0.80%
Cummins (NYSE:CMI) 128.44 0.90% 0.90%
W W Grainger (NYSE:GWW) 224.41 0.53% 0.53%
Lockheed Martin (NYSE:LMT) 233.53 0.55% 0.55%
TECHNOLOGY (2) 1.76% 2.08
Automatic Data (NASDAQ:ADP) 87.37 1.02% 1.02%
Cisco Systems (NASDAQ:CSCO) 31.47 0.74% 0.74%
TELECOMM (2) 7.50% 8.75
AT&T (NYSE:T) 38.87 3.64% 3.64%
Verizon Comm (NYSE:VZ) 49.92 3.86% 3.86%
UTILITIES (10) 14.93% 15.02
Southern Co (NYSE:SO) 49.16 3.34% 3.34%
MGE Energy (NASDAQ:MGEE) 54.01 2.04% 2.04%
Xcel Energy (NYSE:XEL) 39.61 2.16% 2.16%
WEC Energy (NYSE:WEC) 57.09 1.34% 1.34%
Dominion (NYSE:D) 71.5 3.01% 3.01%
DNP Fund Inc. (NYSE:DNP) 10.03 1.08% 1.08%
CenterPoint (NYSE:CNP) 21.9 0.51% 0.51%
Exelon (NYSE:EXC) 32.18 0.60% 0.60%
Alliant Energy (NYSE:LNT) 36.54 0.68% 0.68%
FirstEnergy Corp. (NYSE:FE) 31.32 0.17% 0.17%
REAL Estate
Healthcare (5) 7.01% 9.7
Nat Health Inv (NYSE:NHI) 75 0.88% 0.88%
Care Capital Prop (NYSE:CCP) 26.49 0.62% 0.62%
Welltower (NYSE:HCN) 69.54 1.14% 1.14%
Ventas (NYSE:VTR) 66.95 1.57% 1.57%
Omega Health (NYSE:OHI) 33.18 2.80% 2.80%
Misc (11) 10.29% 12.76
Apple Hospitality (NYSE:APLE) 18.22 0.15% 0.15%
Digital Realty (NYSE:DLR) 91.62 1.50% 1.50%
W.P. Carey (NYSE:WPC) 61.51 3.17% 3.17%
Realty Income (NYSE:O) 61.46 1.44% 1.44%
Lexington Realty (NYSE:LXP) 9.66 0.63% 0.63%
Chatham Lodging (NYSE:CLDT) 18.63 1.13% 1.13%
New Senior Inv (NYSE:SNR) 10.19 0.19% 0.19%
Urstadt Biddle (NYSE:UBA) 21.49 0.20% 0.20%
Simon Property (NYSE:SPG) 196.81 0.09% 0.09%
Stag Industrial (NYSE:STAG) 22.21 0.78% 0.78%
Starwood Trust (NYSE:STWD) 21.57 1.01% 1.01%
Total (87) 100.01% 100% 100% 53.35% 22.65% 20.20% 3.81%
22 19 30 16
Click to enlarge

Note this chart also shows how each stock compares to the entire portfolio. A summation of it is shown below.

I have 22 stocks that are 53.35% of portfolio value and each is > than 1.5% in portfolio value.

Stock % PV # Stocks Total %
>1.5% 22 53.35
<1.5-1% 19 22.65
<1-0.5% 30 20.2
<0.5% 16 3.81
Total 87 100.01
Click to enlarge

This also shows I have 16 stocks that are tiny holdings, some are new, such as the Pfizer holding.

I found this enlightening and helpful for me to know where I am putting my money and where I should put more. Some of my bigger positions are 3-4%. Sometimes over pricing can take a holding up in value and it can fall easily, so much should be considered when doing such a study. It can work both ways- as a lower valued holding might just be under priced, I have learned to keep it in mind when I look at these charts.

I do like seeing some of the BDC and REIT holdings in the small % sizes. They are indeed more speculative, but at the same time productive for earnings. It is a bit of a conundrum, but I am pleased with this portrayal.

Some of these holdings will be displaced if my newly placed options are exercised. So lets take a look at what I did with options, my puts and calls.

OPTIONS

CALLS

On September 20 th, when my brother in law was here to guide me,

I wrote 4 Sell to Open Calls: They are all 1 option each for 100 shares. They are covered calls, as I own the shares. The date is when the option ends. The price is the amount x 100 shares or for 1 option.

UL OCT 21 2016 $47.50 @ 0.56. I was paid $56.00 less commission of $6.70 = $49.30

DEO NOV 18 2016 $120 @1.19. I was paid $119 less commission of $6.70 = $112.30

PG DEC 16 2016 $90 @1.61. I was paid $161 less commission of $6.70 = $154.30

JNJ DEC 16 2016 $120 @2.12. I was paid $ 212 less commission of $6.70 = 205.30

Total = $521.20, this is added in the portfolio value for all calculations.

Unilever

Now the beauty here is I wanted to sell some UL @ $48, so I will accomplish that with this call if it exercises. If it doesn't I still own the shares and pocket $49.30. The dividend is due the end of October. This option was written to avoid any dividend involvement. As UL is over priced in my estimation and only has hit $48 thus far once, I think the shares are still mine and I can play options with them again, maybe. It is a rather meager options payment for this company and I might just trim it out right if it hits that high again.

Diageo

This stock is another foreign holding in the UK. It is suffering Brexit issues and has been running in a channel near to $110- $118, and not really near $120. When it was creeping up again in price I took out this option. There should be no dividend involvement as they only pay twice a year. I don't have a huge commitment for all the shares and trimming was an easy decision, so I saw Play Time with it. If I get $120 for it, Yippee, Win-Win, at least in my mind.

Procter & Gamble

This one involves a 66c dividend in the time frame I chose into December. If the option does not exercise before the ex-date in October, the dividend is mine as I will still own the shares. I was thinking of trimming some shares near or above the $90 mark. The option will give me an extra $1.00 if I don't get the dividend. This is a bit more shares than I really wanted to trim, but I am learning and this one could prove to be interesting. The share price has been a teeter-totter around $90, so anything can happen.

Johnson & Johnson

I almost don't feel like mentioning this one, but I did do it. The share price has been $125 earlier this year, so this $120 price can happen. I see it needing to hit $122 or more for me to have the shares be taken away. I thought it was over priced then and still do. My thoughts and the market sometimes just don't match up in the same manner. I have a nice hefty holding in JNJ, so I can risk some. This has a dividend payable in December, and an ex-date in November for 80c. You can watch this one with me. So, do you think I will own these shares in December. Again, I am willing to wait for a better re purchase price if they get called away. A good lesson will be learned on this one for the dividend and lost shares.

Apple- I should have written options on my Apple shares. I just sold them out right. I had no idea how to do it. I am displeased that I didn't even try. I just wanted to share that with you, another lesson learned.

OPTIONS

PUTS

NKE NOV 18 2016 $52.50 @1.13. I was paid $113 less a commission of $6.70 = $106.30

VFC JAN 20 2017 $ 55 @2.87. I was paid $287 less commission of $6.70 = $280.30

$386.60 was paid to me when I wrote these and they are included in the portfolio value for the article.

The only obstacle I dislike here is I must place the cash amount of these puts to be held in the account.

If someone knows how better to do it, I would enjoy learning it. I don't want to do margin. It does give me patience and a commitment to a purchase I have never felt before. I can't decide if I like it or not.

Nike

My goodness Nike- what can I say, it is under performing. It was over priced. I thought I was putting this price down low enough, but looks like I might get these shares. That's okay, as I don't mind, I was going to buy some anyway. The dividend is so minuscule I didn't worry about it. If I don't get the shares, no worry either. I get my $ back in November.

VFC Corp

This one is also experiencing retail consumer woes. I hope it picks up for winter. I don't mind getting the shares and it is getting close for it to exercise. I thought I would be buying them @ around 52.20 with the put. Now even that could happen by itself. One never knows. I do not like having the account money tied up this long. Another lesson to be learned.

Now you know what I have been up to with the portfolio and you can follow along. I hope you offer your experiences and let me know how I did or didn't do. I just wanted to learn and for me experience is the best teacher.

New Purchases

PFIZER

M* fair value is $38. It is a Value Line #1 with a $40-50 outlook for 3-5 years. Yahoo analysts says $39.40 for their 1 year outlook. AA S&P credit rating.

I wanted more healthcare holdings and Pfizer has finally started to make some good moves with a nice 5 year DGR 9.2%.

I like the yield of ~ 3.5% @ 33.90. I started a position and will add more as money permits. If my put options don't get exercised I will have some money for more shares.

PSEC= Prospect Capital

It pays monthly, $1 yearly. 12.1% yield @ $8 price. It is a BDC or Business Development Co, which is required to pay out 90-95% of it's profits to share holders. Now this one is a real struggle for me. I owned it once and have very hard bad feelings for the management, which is external. There are many arguments for not buying this one, but many more for it being a buy, and at the very least a hold. S&P Capital IQ has a BUY on it, so does The Fortune Teller. I respect them both. Scott Kennedy has a hold on it and some other writers are in that ball park too. Nasdaq says $9 price and Yahoo is $8.18. I am taking a flier small position in it. If the dividend gets frozen or cut, I will not be too disappointed. I actually like to speculate now and then and this one will be just that. I do not recommend anyone else following me into PSEC unless you want an interesting challenging investment. It currently trades @ $7.98. If it continues to fall, I am adding to my position.

BXMT= Blackstone Mortgage Trust

Morningstar does not cover it. Nasdaq analyst consensus says $31 for 1 year out. S&P Capital IQ has a Buy on it and positive outlook. Brad Thomas covers this mortgage REIT and has a buy on it, even with fair value of $26. He seems to think it is less complex than STWD, which I already own. I got some, a very small holding, a foot in the door @ 28.71 and 8.8% yield. Another speculation. If the price continues to fall, I will adding to my position.

So that's my 87 stocks. I think I counted them all and have them all in the charts.

Thank you and Happy Investing.

Disclosure: I am/we are long IN THE LISTS.

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.