Recent Stock Purchase II October 2016

I always end my ‘Recent Buys’ posts with the caveat that Mr. Market can always spring up some new opportunities not outlined in my monthly considerations posts. Generally speaking my ‘considerations’ posts offer a pretty solid road map for potential purchases I’d like to make in the upcoming month, and since I have started blogging I have stuck to my own recommendations almost all the time. Of course, in recent weeks and days for that matter, some solid, otherwise less compelling buys have become a lot more attractive. I think you all know the names.

 

For a few weeks we have seen the likes of Wells Fargo & Company (WFC) take a beating for obvious reasons as well as other financial names such as T. Rowe Price Group, Inc. (TROW) near its 52 week lows. Consumer staples dividend stalwart V.F. Corporation (VFC) has not been spared either closing just a few points above its 52 week low as did Unilever PLC (UL) as well. Then we had the most recent bombshells occur in the health sector with AbbVie Inc. (ABBV), Cardinal Health, Inc. (CAH), McKesson Corporation (MCK) and AmerisourceBergen Corporation (ABC) all nosediving over drug pricing. It’s at times like these that one must pause, take a breath and simply ride out the storm. Sure, in the near term it can be scary to see some of your holdings gyrate wildly but one must differentiate the noise from the reality. Personally, I do not see any of these businesses changing fundamentally long term. The financial sector was vilified after 2009 and has bounced back quite handsomely since, even in the face of increased regulation and interest rates that headed to near zero. Long term I see the entire health sector with a pervasive tailwind. Will there be some turbulence along the way? Of course, but the course remains unchanged. My question to you, as you read the dozens of articles written after this bloodbath telling you to steer clear of the sector, is where was all this insight beforehand? The talking heads love to write articles and produce videos after the fact. The reality is that no one saw this coming. All you can do as an individual dividend investor is tune out the noise, stay diversified among your holdings and make sure the dividend remains covered. OK. On to the reason you clicked on this post:

 

I have added to my taxable account 19.0000 shares at $57.53 for a total investment of $1,093.07 in AbbVie Inc. (ABBV). With this recent purchase my taxable account holdings in ABBV now totals 125.2220 shares for a market value of $7,212.79.

 

I have added to my taxable account 16.0000 shares at $66.17 for a total investment of $1,058.72 in Cardinal Health, Inc. (CAH). With this recent purchase my taxable account holdings in CAH now totals 21.0298 shares for a value of $1,419.51.

 

I have added to my ROTH account 9.0000 shares at $53.96 for a total investment of $485.64 in V.F. Corporation (VFC). This is a new position in my ROTH account. I also hold 40.0084 shares in my taxable account with a market value of $2,173.26.

 

What do you think about my recent buys? Have you been buying up some solid dividend payers at much better prices, values and yields recently? Please let me know below.

 

Disclosure: Long WFC, TROW, UL, VFC, CAH, ABBV

44 thoughts on “Recent Stock Purchase II October 2016

  1. Thanks for sharing your recent purchases!
    I am hoping to get back to adding to my portfolio again in the next few months, maybe early 2017. The good news is that even though I haven’t been adding to my portfolio, dividend income is still up over last year thanks to raises.

    I totally agree on your thoughts of being an investor too. “All you can do as an individual dividend investor is tune out the noise, stay diversified among your holdings and make sure the dividend remains covered.”

    As far as the buys, these are definitely names I’ve heard of, but I’ve never done a ton of research on any of them. Always great to take advantage of a dip though.
    Graham @ Reverse The Crush recently posted…YTD Dividend Income UpdateMy Profile

    • Hi RTC,

      That’s the beauty of being a dividend investor. You continue to get paid even without adding any fresh capital. Between dividend raises and reinvestment, if you choose to do so, you can still enjoy an ever increasing passive income stream.

      I think staying calm is an overused expression to describe what to do during market corrections but the reality is that it’s probably the best advice. As you mentioned my quote, there really is nothing anyone can do when it comes to stock picking other than be diversified and stay the course. Think about it… WFC, one of the most solid banks for over one hundred years with a great dividend track record got whacked by news that no one, I repeat, no one saw coming. GE a few years back, the bluest of blue chips that exists got hammered during the financial crisis. The point is that any stock in our portfolio, from the conservative 1% yielding names to the crazy high 10% payers out there can get whacked, for lack of a better term. Hold several dozen names in your portfolio and you’ll mitigate any disasters as we witnessed in the health space last week with MCK, ABC and CAH that no one saw coming either. Thank you for commenting.

  2. Nice buys. Thanks for posting. I have been watching the pharmaceutical and banking sectors as well lately and almost added to my stake in Wells Fargo this week. In terms of pharmaceuticals I have been thinking more on the retail end at CVS. Seems like there is a lot of room for long term growth. Hadn’t really been paying attention to ABBV, but after seeing your post and taking at the yield, history, and valuation, I’m definitely going to take a closer look.

    • Hi DS,

      The financial sector in general has been hurting for some time. Looks like WFC and TROW are two names that appear to be offering better values and yields these days. Of course, last week we saw many health names get hammered with the likes of ABC, MCK, CAH and ABBV all falling dramatically. Just stay diversified during these rocky times and continue to nibble on positions and average down if possible and if you still believe in the long term prospects of the company. Thank you for stopping by and commenting.

  3. Once again your consistent purchases keep showing that there’s always a value somewhere. VFC is looking good here and I’d love to add some at these levels. I’m about to rollover my 401k so VFC might find it’s way into that portfolio. I’ve seen CAH mentioned a lot recently so it’s probably time I take a deeper look at them. Have a great weekend.
    JC recently posted…Weekly Roundup – October 29, 2016My Profile

    • Hi JC,

      Sometimes intra-day dips are too large to ignore and you become compelled to pull the trigger even though it wasn’t in your original plan. That’s why Mr. Market always has the last say when it comes to helping us pull the trigger on a stock or not. You already know my mantra of consistently investing, large or small but nevertheless, investing. VFC over 3% is still looking very attractive to me going into November and the CAH sell off last week just made that name more compelling as well. As always, I appreciate your comment.

    • Hi Jack,

      I feel your conundrum regarding WFC. It’s a similar sentiment many feel with investing in cigarette or alcohol related stocks. Sometimes, as humans, we have to deal with ethics even though it may ‘hamstring your returns.’ For me, I’ll be sticking with my WFC for now. While I don’t plan to add to my current holdings in the near term I will be keeping an eye on that stock going forward. Overall, it doesn’t represent a major portion of my portfolio. Thank you for sharing your thoughts.

  4. I took the opportunity to add some CEFs with attractive dividends recently. I’ve no idea how the market is going to react over the next couple of months but like you, I’m just going to keep accumulating at reasonable prices for the long term.

    Its always hard to look through the near term noise but a lot of the challenges some of these businesses are facing are challenges they’ve faced before. I guess the question is: do you think management is capable of dealing with the challenges? In most cases, they have before, so why not now?
    AustralianDividendInvestor recently posted…The Hardest Thing About Dividend InvestingMy Profile

    • Hi ADI,

      I used to own a few CEFs a while back. This was before I became a dividend growth investor. If you buy a CEF at a discount and make sure it isn’t too leveraged they can be fairly safe options to add diversity and great current yield to your portfolio.

      Most of the companies we are collectively invested in have been around for decades if not a century or longer. In other words, as you stated, these businesses have seen these challenges before. Think about it. Many of these companies have survived the Great Depression, two World Wars, fear of a nuclear Armageddon, sky high as well as rock bottom interest rates/inflation and have managed to pull through. It’s all about tuning out the noise as an individual investor and not panicking during shaky times. As always, I appreciate your comment.

    • Hi MD,

      CAH has been making the rounds among our dividend blogging peers in recent weeks and for good reason. It has a stellar dividend track record and after its recent drop is trading at a much better price, value and yield. Looks like October has given us quite a few stocks to choose from compared to prior months. There’s no shortage of value in the energy, financial and even health sectors these days. Some staples like UL and VFC are looking more attractive too. Thank you for stopping by and commenting.

    • Hi DFG,

      As long as VFC stays above the 3% yield mark I think it will garner a lot of attention among our dividend investing peers. It’s really a long term solid play and what I would consider a ‘fashion staple’ type of company rather than a trendy fashion company like ANF, AROPQ and URBN to name a few. Thank you for commenting.

    • Hi DD,

      All these buys have been made on their recent dips in price which should be some of the best times to buy into a stock, when others are selling. ABBV entered my portfolio as a spin off of ABT a while back and I will continue to hold and add shares as prices become attractive. UL is another great name to hold in a long term dividend portfolio. I think if that price goes below $40 we’ll be reading a lot more ‘buy’ posts online. Thank you for stopping by and commenting.

    • Hi MSM,

      I wrote about CALM a while back and it does look like an interesting dividend stock, though not a traditional dividend growth stock. The company has a policy of paying out dividends based on quarterly performance which means payouts can vary widely from quarter to quarter. Just something to keep in mind. I do like any consumer staple and eggs are about as staple as they come which is why I did look at them at one time. Still, CALM could perform quite nicely over the long haul. I don’t see eggs being replaced any time soon. As always, I appreciate your comment.

  5. Very interesting buys! I also think now is the time to buy healthcare related stocks. ABBV and CAH are good picks. I’m waiting for ABBV to come down a bit more. The high long term debt and high leverage in combination with the fear of loosing market share by expiring patents makes me a little more patient with this stock. But it’s definitely a long term winner.
    DivRider recently posted…Time to say hello againMy Profile

    • Hi DR,

      Many solid health names are getting hammered these days. For such a “solid” sector it sure turned soft quickly. Looking at drug pipelines is always important when considering a health stock. Of course, ABBV has a pretty diverse set of current drugs on the market and as a stock looks attractive based on its current yield, moderate payout ratio and reasonable PE. As you stated, long term it is a winner. I happen to agree. Thank you for sharing your thoughts.

  6. Nice buys! From the ones you mentioned, I also added Unilever this month. When it comes to solid companies, sudden big sells can mean a good buying opportunity. Guess that was a big factor with your ABBV purchase. I’ll most likely buy Ameriprise (AMP) for the same reason. I think the company is punished too much after the Q3 results. What do you think about it?

    • Hi Roadrunner,

      When I see stock prices start to drift or drop lower I take notice. UL has been drifting lower as was VFC. CAH and ABBV just dropped. I always say that as long as I stay diversified, yields look attractive and the dividend remains covered I’ll be a long term buyer. Could these names drop further? Sure. Which means I’ll most likely consider averaging down as long as I believe in the long term prospects of the company. Regarding AMP, I wish I had more insight to give you. Honestly, I have never even looked at that company once. With just a quick look at AMP, the numbers seem to make sense. It has an attractive current yield with a moderately low payout ratio so the dividend does appears to be safe, an excellent dividend growth rate too and it’s trading at a low PE relative to its five year average. On the surface it appears to be a good candidate. I think I need to look at this name a bit more closely. Thanks for bringing it up. I appreciate your comment.

  7. DH, great buys specially in the health sector with ABBV. It certainly has the possibility to go lower as investors fear that their number one source of revenue Humira might be soon losing its patent exclusivity. I would agree that now its the time to average in to the position.Thanks for sharing
    Dividendforce recently posted…March 2016 Dividend IncomeMy Profile

    • Hi Dividendforce,

      I currently hold a few health sector names and am not too worried about the Humira patent expiration as ABBV has many other drugs in their pipeline as well as a fairly large stable of current drug offerings. This is part of investing in the sector. It comes with the territory and while near term pressure might continue to drive the stock lower I still believe that ABBV can make a great long term holding for a dividend growth portfolio. After all, that recent dividend raise from ABBV was pretty nice. Thank you for stopping by and commenting.

    • Hi DD,

      Sometimes my buys are small and sometimes they are large. You have to admit, after seeing some of that carnage last week it was too difficult for me to ignore. Let’s see what happens in the new month. If November will be anything like October we’ll get plenty of great buying opportunities. As always, I appreciate your comment.

    • Hi IH,

      Volatility has definitely picked up in recent weeks for many individual stocks and even whole sectors. Of course, we already know that volatility usually translates into buying opportunities. CAH has been making the rounds a lot in recent days and I think VFC is worth a closer look. It’s a dividend stalwart and now that it’s yielding over 3% I have a feeling we’ll be reading more ‘buy’ posts from our dividend peers. Thank you for sharing your thoughts.

    • Hi Brian,

      It looks like the health space will continue to see some volatility going forward. ABBV, CAH, ABC and others still look like they are on shaky ground. Even medical device companies like BDX, BCR and dividend superstar JNJ are down form their summer highs. I think November will continue to offer us some good buying opportunities. Check out VFC. It’s looking like a great buy at a yield of over 3%. Thank you for stopping by and commenting.

  8. both CAH and MCK have a great run today, bouncing off from the lows. Congrats on catching CAH at the bottom.

    AMGN and ABBV has continued to fall. I don’t recall at what point you’d add more to average down the cost. Mind sharing your strategy again?
    vivianne recently posted…Recent buy – McKesson (MCK)My Profile

    • Hi vivianne,

      It looks like volatility is here to stay in the health sector. I was happy with my purchase price but somehow, in the near term, I’m not sure if I bought “at the bottom.” However, I feel I’ll be happy in five or ten years down the road with this buy 🙂 I have AMGN and GILD on my watch list still and will watch ABBV and decide when to add more. For now I’m up 52% on ABBV so any buy I make would be averaging up. As long as that yield looks juicy and the dividend remains safe I’ll feel comfortable adding to my holding. As always, I appreciate your comment.

    • Hi DI,

      Looks like CAH and ABBV are making the rounds among our fellow dividend investors. It’s all for good reason. Normally these companies produce great returns and solid dividend growth over the years. It just so happens that the sector is hitting a rough spot these days which is only giving us better buying opportunities. Nice pick up with ORI. That’s on my watch list but I have yet to pull the trigger. Thank you for commenting.

  9. Great buys, catching them at some lower prices is always nice. We checked out ABC and wanted to buy after the recent commotion. But turns out our brokerage doesn’t offer them.
    So for now were thinking of averaging down on some current holdings or pick up some SBUX or maybe Unilever. We are not in a hurry though.

    • Hi Divnomics,

      Whenever volatility picks up in the market or specific sectors it usually translates into buying opportunities. Myself along with quite a few of our fellow dividend investors have been buying up the same names, MCK, ABBV, CAH, ABC even WFC and TROW among others. I like your potential buys. I’m a UL holder for a while now and SBUX is on my watch list. I think SBUX will continue its amazing dividend growth rate for many years to come. Thank you for sharing your thoughts.

    • Hi FS,

      I fully agree with you that the long term outlook for the health sector looks quite promising as we all live longer and need the products and services of pharma, medical device and health real estate companies. The plan is to make CAH a long term holding in my portfolio though I will see how big I’d like that position to get going forward. IHI is a great way to buy instant diversification into the health space. As always, I appreciate your comment.

    • Hi desidividend,

      October and November, so far, have been presenting us with some better buying opportunities in some solid dividend paying stocks. Quite a few of our fellow dividend bloggers have been buying WFC after news of their scandal broke. Keep hunting for those good values and yields. Thank you for commenting.

  10. Looks like some more high quality purchases here! VFC has been on my list as of late along with CAH. I really want to break into some more consumer products players but most everything is still a bit overvalued for me. I really like using a comparison of current P/E vs historical P/E to tell me if what I am looking at is over or undervalued. Keep up the great work!

    • Hi DK,

      You, I and many others would love to break into the consumer staples in earnest. I will say that KMB and UL are starting to look a lot more attractive in recent weeks so you may want to consider those names in the consumer staples space. The reality these days is that we do have a lot more investing options than in recent months. Thank you for sharing your thoughts.

    • Hi DDU,

      For the most part I like to buy solid companies that are beaten down. Each of those stocks mentioned above have seen significant declines over the last month or so. Of course, these days the market has been riding extremely high especially after a nine day losing streak in the S&P. Still looking for future good buys. Thank you for stopping by and commenting.

Leave a Comment

CommentLuv badge