November 2018 Stock Considerations

As the calendar shows November, it is time, once again, to highlight some of my potential stock buys for the upcoming month.

 

Are we having fun yet? Are any of you making sense of the market these days? I can honestly tell you that I have zero idea about what’s going on and where we’ll be in the near term. Seeing the DOW move triple digits almost daily in both directions while seeing the tech heavy NASDAQ swoon only to recover only to fall can make anyone’s head spin. To say October was a volatile month is a severe understatement and looks like November is starting out the same way. Perhaps I should invest in something a lot more stable with minimal volatility like Bitcoin. It’s always an option… In any case, looking forward to my potential November buys I am presented with a lot of choices as many high quality names have been trading at historically high yields because of lower pricing. While not practical to list twenty stocks I have whittled my choices down to about five. Of course, there is always the caveat that Mr. Market may give me a new opportunity not considered in this post. With that being said let’s take a look at my potential stock buys for November.

 

First up is a name that I know is very much unloved, and for good reason, as growth concerns and debt plague this once staple food company found in many low volatility portfolios, The Kraft Heinz Company (KHC). This stock, along with many others in the sector continue to look “ugly” which is why I am taking a peek under the hood and might want to nibble a bit at these levels.

 

Next are a couple of health sector names that have also been beaten up as of late but seem to offer good potential long term gains and yields, Gilead Sciences, Inc. (GILD) and AbbVie Inc. (ABBV). While I am really loving ABBV at these levels it is already a sizable portion of my portfolio and I may defer to GILD instead.

 

Finally, I am looking at two other long time income favorites among many in the DGI community, AT&T Inc. (T) and Illinois Tool Works Inc. (ITW). While T seems to really polarize opinions on the stock as most either love it or hate it, ITW, on the other hand, seems like a much loved stock that is currently suffering a near term swoon (though has bounced nicely from its recent lows).

 

Bottom line, all the stocks mentioned are trading at much higher yields because of recent price swoons. To me it signals a potential buying opportunity as many of the concerns regarding these companies in the near term might be overblown (perhaps KHC has deeper issues). What do you think about my November considerations? Are you looking at any of these stocks too? Please let me know below.

 

Disclosure: Long KHC, GILD, ABBV, T, ITW

25 thoughts on “November 2018 Stock Considerations

    • Hi P2035,

      October has been brutal for many traditional high quality stocks. Today we are seeing yields not offered in a long, long time which should make any dividend growth investor salivate. Thank you for commenting.

    • Hi DD,

      It looks like the entire DGI community is looking at the same names for November. So many quality names have been beaten down so hard it’s tough not to look at some of the new high yields we are being offered. Still not sure where I’ll deploy but rest assured, I will be making a buy 🙂

    • Hi DD,

      ABBV is a machine. There is a lot of fear in the news about their current drugs and pipelines but I think it’s all overblown. To me ABBV looks like a solid play for the long haul especially at these levels.

    • Hi DI,

      Looks like ABBV and T are the popular names for November. IBM might be an interesting play too now that they own Red Hat. I think it was a good move on their part. Thank you for commenting.

  1. Keith,

    Liking the list, liking it a lot. Own KHC and T. You’re right, KHC is not getting a lot of love at the moment and the market definitely punished them this week because of their lack of growth. I’m still figuring out if I want to add slightly or let it ride and focus elsewhere. I feel much better about AT&T despite the large debt. Their cash flow and growth and payout ratio seem better to me, at least when I’ve looked at it recently. ABBV is one of those stocks I know people like a lot, but I haven’t put the time and research to form my own conclusion. Regardless, it is a great listing and you can’t go wrong selecting one of these stocks.

    Bert

    • Hi DD,

      KHC is a tough one. I can see it making a nice rebound over the long haul but it does face some serious issues. That being said, I can’t imagine 3G and Berkshire sitting on their butts watching the carnage from the sidelines and not do anything. There is a risk with KHC no doubt but that yield still looks tempting. T is the stock everyone loves to hate. Great cash flows, insane debt, crazy high yield… what’s one to do??? I agree, given the KHC/T choice I’d go with T.

    • Hi Passivecanadianincome,

      I understand currency issues when it come to deploying fresh capital in USD denominated stocks. It can suck at times. I guess it’s not the worst thing to build up a nice cash pile for when things ultimately turn around. As always, I appreciate your comment.

    • Hi MR,

      I know many don’t like KHC because of its high debt load and low to no growth in many segments it operates. However, buying an unloved stock is usually the best time to lock in large potential gains before a turnaround is realized. It comes with risks but that juicy yield might be enough to mitigate some of that risk.

  2. Morning DH,

    We share ITW on our watch lists and while I already have full positions for ABBV & T, I agree they are attractive at these prices and tough to pass over. Some other stocks that have come down in price that have caught my eye include; Air Products (APD), Fastenal (FAST), and Ryder System (R).

    • Hi KK,

      Seems like everyone is looking at the same few names for November. To tell you the truth I haven’t even looked at my APD in a looooooong time. I can’t even remember the last time I added to that name. It is trading at a historically higher yield these days. Thanks for the mention.

  3. I own both ABBV and T. I haven’t bought any stocks recently Div Hut, but either seems like a good pickup, although I can understand against ABBV since it is a larger holding in your portfolio. FWIT, I’m a fan of dollar cost averaging so I contribute monthly to either stock regardless of what Mr. Market does.

    As for the huge swings in the market as of late, I could care less. That’s one of the benefit of having a long-term horizon.

    Could luck with whatever you decide to buy.
    Dividend Portfolio recently posted…Get Out Of Debt PlanMy Profile

    • Hi DP,

      Like you, I’m also a fan of DCA. It’s really the only way I invest as I buy every month and reinvest dividends no matter what mood Mr. Market is feeling. Long term horizon and no panicking is the way to go.

  4. Hey Keith,

    I love it; Bitcoin gets the chance to be called the stable investment in today’s environment.

    In the meantime, ABBV has hit my radar as well after a big down day in the market. Still a great company with plenty of room to run in the future.

    Thanks for sharing.

    Take care,
    Ryan
    Get Rich Brothers recently posted…October 2018 Portfolio UpdateMy Profile

    • Hi GRB,

      It’s true about Bitcoin as crazy as it sounds. Wanted a stable October… sit in Bitcoin. How times have changed 🙂 Still liking ABBV a lot too myself though it is a large portion of my portfolio. We’ll see how November unfolds.

  5. Hi Divhut,

    KHC is also on my watchlist. If i’m not mistaken they are at a 5 year low. I think 3G and Berkshire will do probably help finance a big take-over. They can’t cut costs indefinitely, so I suspect something is brewing.

    Cheers,
    TLTI

    • Hi Tlti,

      You are probably right that something is brewing in the back room regarding KHC. Can’t imagine 3G and Berkshire just sit back and watch the carnage. Thanks for commenting.

  6. Keith,

    I like those positions, though not as big on ABBV or GILD as I am on AMGN. Of those I want to add ITW a lot. Hopefully you can crush all of those. You were at Capital One right? What brokerage have you switched to now?

    – Gremlin

    • Hi DG,

      ITW has been a very popular name the last few weeks. It’s not often a high quality name like that goes on sale. Still early in the month and if last month was any indication of volatility it seems like we’ll get many other opportunities to invest. I was with Capital One and today is the first day I’m with ETrade. I’ll stick with them for now. There is a Schwab across the street from me and I might just walk in and ask if they can offer me something better. For now, I’m with ETrade.

  7. Share your views, long in KHC, GILD and ABBV myself. Choosen other telecom companies than AT&T since I`m not happy with their latest aquisition and strategy shift. Will take a look at ITW, sounds interesting. Regards, T. Htttp://toscananext.blogspot.com in case yo want o take a look at my portfolio.
    Toscananext recently posted…Buffetts återköp och top 12 innehavMy Profile

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