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Current Market And Portfolio Analysis

|Includes:AAPL, AFL, AVGO, BDX, ETP, HYG, INTC, K, MSFT, NLY, OHI, PPL, QCOM, RGP, SPDR S&P 500 Trust ETF (SPY), T

Much has happened in the markets since my last post: we have seen a new multi-year high in the (NYSEARCA:SPY) and (NYSEARCA:DIA), European uncertainty has again dominated the markets and Facebook announced its IPO. A recent 6.4% decline in the (SPY) has left the benchmark index up just 4.37% on the year. My flagship fund at Cofran Capital remains up 9.0% year to date.

While my top holding have not changed much, I have adjusted several sector allocations in recent days and weeks. Recent additions include (NYSE:PPL), (NASDAQ:WIN), (NYSE:ETP), (NYSE:RGP) and (NYSE:CTL). In addition, I doubled my position in (NASDAQ:CSCO), closed my position in (NYSE:FE) and halved my position in (NYSE:T).

I have taken hedges off several positions in which price declines in the underlying stock have led to significant profits in the options sold against them. These include (NYSE:CMI), (CSCO) and (NYSE:TIF). In addition, hedges on (NYSE:K), (NYSE:AFL) and (NYSE:CSX) are set to expire this week. At present, the portfolio is hedged against a 4.5% market decline. I will continue to employ hedging strategies to minimize risk of further pullbacks in stocks who have experienced near-term strength.

For now, the market appears to be perched between 1,320 and 1,360. A significant catalyst in either direction could push us out of this range in the short-term. I see downside potential to 1,280 and upside to 1,440 over the next 3 - 4 months. Longer-term, I am growing slightly more cautious than I have been in the last 18 months.

Overall Sentiment: Near-term range bound.
Portfolio Yield: 5.75%
Projection: Consolidation (+/- 5%) around 1,365.

Top 5 Positions:

  1. iShares High Yield Corporate Bond (NYSEARCA:HYG)- 15.4%
  2. Apple (NASDAQ:AAPL)- 5.8%
  3. Microsoft (NASDAQ:MSFT)- 4.7%
  4. Omega Healthcare Investors (NYSE:OHI)- 3.3%
  5. SPDR Barclays High Yield Bond (NYSEARCA:JNK)- 3.0%

Disclosure: I am long HYG, AAPL, MSFT, T, OHI, PPL, WIN, ETP, RGP, CTL, CSCO, CMI, TIF, K, AFL, CSX

Stocks: SPY, HYG, AAPL, MSFT, OHI, T, BDX, K, PPL, RGP, ETP, QCOM, AVGO, INTC, AFL, NLY