Seeking Alpha
Research analyst, portfolio strategy, portfolio management
Profile| Send Message|
( followers)  

This past week we have seen a bit of the pullback we have been waiting for. Moving ahead into this week, we face a weaker jobs number than expected and some headwinds from our favorite soap opera, the eurozone.

We could see some more of our anticipated pullback if earnings begin to slow as well, but now is the time to figure out what we want to buy as we continue our strategy of buying on the dips.

Our current portfolio consists of ExxonMobil (XOM), Johnson and Johnson (JNJ), AT&T (T), General Electric (GE), Annaly Capital (NLY), Southern Company (SO), Procter & Gamble (PG), Philip Morris (PM), Intel (INTC), Realty Income (O), Chevron (CVX), E.I. du Pont (DD), Duke Energy (DUK), Coca-Cola (KO), and Bank of America (BAC).

Stocks To Add Now To Our "Buy" List

Annaly Capital: Price: $15.58/share; Dividend Yield: 14.15%; ESS Rating: Neutral

Click to enlarge all images.

Annaly Capital Management, Inc. (NYSE:<a href='http://seekingalpha.com/symbol/nly' title='Annaly Capital Management, Inc.'>NLY</a>)

On Feb. 3, Annaly's share price was $17.14. With the price now at $15.58 per share, we have seen an approximate 9%-10% pullback and a cut in dividends as the company continued its conservative approach by staying within the short range of the yield curve, going out no further than the 10-year Treasury rate. As this spread has widened, we can take advantage of the pullback as well as the better interest rate "spread" for what I see as a better-performing second half of 2012.

Adding to our core now could be a well-timed purchase in my opinion, and secure some additional dividends for our portfolio.

Bank Of America: Price $9.23/share; Dividend Yield: .50%; ESS Rating: Neutral

Bank of America Corporation (NYSE:<a href='http://seekingalpha.com/symbol/bac' title='Bank of America Corporation'>BAC</a>)

Obviously we would not be adding more shares of Bank of America for its dividend. We recently moved the shares from our risk basket to our core because the company has been cleaning up its balance sheet, has passed the Fed's "stress test," and has implemented some very positive steps to enhance and grow its bottom line.

We have also seen a pullback in the share price by approximately 8%-9% recently, and we can take advantage of the positive news, as well as the pullback, to add some additional capital appreciation to our core portfolio.

I believe adding Bank of America to our shopping list could prove to be quite profitable. I might even want to add shares this coming week.

AT&T: Price: $30.94/share; Dividend Yield: 5.75%; ESS Rating: Very Bullish

AT&T, Inc. (NYSE:<a href='http://seekingalpha.com/symbol/t' title='AT&T Inc.'>T</a>)

This stock has not pulled back by any significant amount. However, we have been seeing very positive growth steps in its overall strategy (as noted here) and it has been positioning itself for future revenue growth as well as earnings.

I believe the current headwind of labor negotiations is being dealt with in a prudent manner, and the workers have agreed to stay on the job as negotiations continue, which is a positive sign that there will be little or no service interruptions. I believe AT&T will handle the issue sooner rather than later, and this too will be behind us.

With the new iPhone 5 rumors abounding, Apple (AAPL) has "leaked" some of its applications and the sleek new look, as it usually does to build further momentum. A release date of June or July of this year has been noted in various sources.

Whether it is June or July is not the issue for AT&T. The main positive issue are those lines at the AT&T stores filled with Apple fans seeking the latest and greatest! What this has always meant for AT&T is a definite pop in revenue and earnings, and we should position ourselves to take advantage of what has become a "regular happening."

The current yield is a fabulous 5.75%, and we could not ask for a better stock in the sector right now to add more shares to our portfolio. We should be adding AT&T right now, in my opinion.

My Opinion

Buying the dips and adding to the core has been Team Alpha's mantra from day one of this series. The recent dip, although not quite the correction or pullback we expected, has offered several opportunities as I have noted above.

I believe it is time to take advantage of those opportunities.

Disclaimer: Please remember to do your own research prior to making any investment decisions. This article is not a recommendation to buy or sell any securities or stocks, and is the opinion of the author.

Source: Retirement Strategy: It's Time To Make A Shopping List (Part 18)