It’s been almost a full month since my last recent stock purchase was made which just highlights my frustration in June for finding places to deploy my fresh capital. While the stock market continues to melt up seemingly every week taking many of my holdings up with it, finding good to decent value is becoming increasingly difficult.
The last several months have seen me add to my existing positions in companies that have been faltering as of late, you all know the names, General Mills, Inc. (GIS), Hormel Foods Corporation (HRL), W.W. Grainger, Inc. (GWW), Bemis Company, Inc. (BMS), even health REITs Care Capital Properties, Inc. (CCP) and LTC Properties, Inc. (LTC) among others. This month, instead of adding to my existing positions I decided to initiate new positions, all in the health sector, to a) boost my overall exposure to the sector and b) further diversify my overall portfolio. With that being said:
I have added to my taxable account 16.0 shares at $32.58 for a total investment of $521.28 in Teva Pharmaceutical Industries Limited (TEVA). This stock has really been under the gun as of late as a recent buying spree for the company has greatly increased its debt load. That being said, its recent acquisition of generic drug maker Actavis now makes TEVA the largest generic pharma company in the world which should play out well in the coming years. Even with an Israeli withholding tax that can be as high as 25% (there are varying withholding rates), TEVA still offers a pretty juicy and safe current yield. This is a new position and was a commission free trade.
I have added to my taxable account 2.0 shares at $171.61 for a total investment of $343.22 in Amgen Inc. (AMGN). This is a new position and was a commission free trade.
I have added to my taxable account 5.0 shares at $69.98 for a total investment of $349.90 in Gilead Sciences, Inc. (GILD). This is a new position and was a commission free trade.
I have added to my taxable account 11.0 shares at $34.10 for a total investment of $375.10 in Pfizer Inc. (PFE). This is a new position and was a commission free trade.
In all, I have added $1,589.50 in fresh capital this month. These four new positions will slowly afford me further diversification among my health sector holdings. Of course, it doesn’t hurt that Morningstar rates each of these stocks four stars. On the whole, I don’t expect any of these four positions to ever become “overweight” in my portfolio as I plan to keep Johnson & Johnson (JNJ), Abbott Laboratories (ABT), AbbVie Inc. (ABBV), Cardinal Health, Inc. (CAH) and Becton, Dickinson and Company (BDX) doing most of the “heavy dividend lifting.” As my portfolio and dividend income continues to grow I begin to think about my overall “dividend reliability” where I want to adequately protect my passive income stream from potential dividend cuts or eliminations. The only way I can see that to fruition is to further diversify my holdings away from my larger positions. Don’t get me wrong, if I see a day when JNJ, ABBV, MCD, CL, UL, KMB, PEP or any other high flying name falter I’ll gladly add to those holdings but in the meantime I’ll initiate several new small positions in my portfolio.
So far, June has been a total departure from my monthly stock considerations watch list. As many of you know, I have a long term horizon and continue to make purchases every month no matter where we are in a market or economic cycle. I don’t pretend to know where the market or any stock will be in the short term so all I can do in the meantime is remain consistent with my investments, diversify and buy on weakness as those opportunities present themselves. What do you think about my recent buys? Are any of the names mentioned on your watch list? Please let me know below.
Disclosure: Long GIS, HRL, GWW, BMS, CCP, LTC, TEVA, AMGN, GILD, PFE, JNJ, ABT, ABBV, CAH, BDX, MCD, CL, UL, KMB, PEP