Recent Stock Purchase November 2017

With three weeks of November in the rear view mirror and the signpost up ahead reading “Thanksgiving weekend next exit,” it is time, once again, for me to report my monthly buy(s) and look forward to tuning out all the financial headlines and noise, at least for a few days.

 

As I always say, there is never a perfect time to buy. You just have to look at your portfolio, see what’s missing or needs to be bulked up, look for good relative value and a safe yield and just go for it. Too often we try to “out think” the market as if we, or anyone else for that matter, has a clue as to what will happen in the near term or long term for that matter. I’m perfectly content making my monthly buys knowing full well we’ll see the market continue to rise for many more years or fall dramatically within days. As long as my passive income keeps rising on an annual basis it does not matter to me. With that being said:

 

I have added to my taxable account 14.5173 shares at $55.11 for a total investment of $800.05 in Cardinal Health, Inc. (CAH). With this recent purchase my taxable account holdings in CAH now totals 42.1465 shares with a market value of $2,355.57.

 

To me Cardinal Health, Inc. (CAH) represents an opportunity to average down my cost basis on a stock that’s clearly had a rough 2017 while still yielding well over 3% with room for future growth which is my main focus. I realize there’s no shortage of near term headwinds affecting this company as Bert of Dividend Diplomats pointed out recently, but that’s precisely one of the best times to buy into a stock. Just look at General Mills, Inc. (GIS) and Hormel Foods Corporation (HRL) bouncing of their recent 52 week lows. Seemingly, when everyone is/was crapping all over a stock, especially a dividend champ, aristocrat or king, etc. take notice. While never a guarantee, more often than not the dividend champs, aristocrats, kings, etc. put into action a play book that returns them to better days given enough time. Remember when McDonald’s Corporation (MCD) was left for dead a little over two years ago? Dover Corporation (DOV) was another company raising dividends for multiple decades that was on its way “out” two years ago and has since mounted an incredible comeback. How about Johnson & Johnson (JNJ) about five years ago? Boy talk about negative headlines for that dividend stalwart back then (Tylenol recalls anyone?). I think you get the point I’m trying to make. Is General Electric Company (GE) the next big comeback story we’ll be reading about in 2020? Who knows but I’d be willing to bet on it. While these are examples of individual stocks I’ve mentioned, the same holds true for the market in general. Every single day you can read about how the market is in dangerous territory and can collapse at any time (when the DOW, S&P fall) or how the market still has legs and 2018 will be a great year (when the DOW and S&P rise). Again, no one knows what will happen.

 

Not that long ago, (January 2016) we witnessed one the worst starts ever of the new year for the market. Look where we are today. How about the Brexit panic? The Hollywood “elite” moving to Canada if Trump wins. Get over it. Put on the blinders, look forward, save, invest and ride the highs and lows. In other words, don’t sweat it, don’t over think it. We’re humans. We crave burgers, junk food, sweets, fat as well as healthy choices. We’re lazy and greedy by default too. There will always be a corporation to capitalize on our innate human nature and I’m willing to bet on them long term whether it’s Pepsico, Inc. (PEP), General Mills, Inc. (GIS), Hormel Foods Corporation (HRL), Yum! Brands, Inc. (YUM), McDonald’s Corporation (MCD), The Coca-Cola Company (KO) and many, many more.

 

What do you think about my recent buy? Have you been buying in November as well? Please let me know below.

 

Disclosure: Long HRL, CAH, GIS, GE, PEP, KO, YUM, JNJ, DOV

39 thoughts on “Recent Stock Purchase November 2017

  1. I agree, a lot of great stocks have taken flack recently. But time in the market usually prevails, especially for the best of dividend stocks. It is the down times after all, that let you build up your position and DRIP dividends at a faster rate. The down times lead to greater heights long term as long as the company turns around eventually. But risk level is a thing too and some people may not be willing to take that level of risk. I like CAH and have also been looking to lower my cost basis. As for HRL, it jumped up 5% or so today after beating earnings. So if anyone did not buy more, you probably missed you opportunity for now. One day can change the companies on your watch list, funny. This buy will add a nice amount of dividend income as well. Thanks for sharing. Looking forward to seeing what happens to GE long term too.

    • Hi DD,

      You said it best. Time in the market does usually prevail which is why one shouldn’t panic when things aren’t rosy. It’s the ability to withstand a downtrend that defines a long term dividend growth investor and it’s those downtrends that offer the best buying opportunities for the long haul. Time will tell whether GE mounts a successful turnaround. I’m sticking with my shares for now and may add some more if prices remain in the teens. Thank you for stopping by and commenting.

    • Hi FV,

      Can’t blame you for wanting to nibble on CAH. Seems like many of us are considering or already bought into the stock as its price slump has given us much better buying opportunities. As always, I appreciate your comment.

  2. DHut,

    “Get over it. Put on the blinders, look forward, save, invest and ride the highs and lows. In other words, don’t sweat it, don’t over think it. We’re humans. We crave burgers, junk food, sweets, fat as well as healthy choices. We’re lazy and greedy by default too.”

    Damn straight. A long time ago when I actually went to church, I was asked what my favorite Bible verse is. Most people usually say something feel good or whatever, mine was Ecclesiastes 3: To every thing there is a season, “A time for every purpose under the heaven…” I am not religious in anyway as an adult, but that always stuck with me. Everything has a purpose and a time, sometimes people forget that like how for each action there is always an equal and opposite reaction.

    – Gremlin
    I like CAH too.
    Dividend Gremlin recently posted…2017’s Dividend IncreasesMy Profile

    • Hi DG,

      It’s funny you mention Ecclesiastes as that is my one favorite book from the Old Testament. While it can read with a pessimistic tone it does really capture the essence of life and human nature the best and can be related to our modern lives today . As I mentioned in the post, investing in a corporation that feeds off of human nature probably has the best chance of survival. Thank you for commenting.

  3. DH,

    Congrats on the purchase. I’ll quote you tonight when I tell me girlfriends vegan daughter “We’re humans. We crave burgers.” I need to make a position purchase decision by Friday. It’s been crazy busy here and I don’t have anyone specifically tee’d up.

    Brian
    singledadmoney recently posted…New Debt – Old DebtMy Profile

    • Hi singledadmoney,

      I wonder how that quote went over with your girlfriend’s vegan daughter 🙂 What’s true is true though. We’re human beings and that’s just how we are naturally. You can’t fundamentally change human nature which is why certain industries will always thrive no matter how digital our world becomes. Thank you for stopping by and commenting.

    • Hi MDD,

      Hope enjoyed that burger 🙂 I think we all try to outsmart the market/stocks, etc. when in fact we’re just human beings that behave and act a certain way because that’s just who we are naturally. I suspect we’ll still be greedy, lazy, meat craving species for the foreseeable future which is why investing in those companies that serve those needs for the long haul might always make sense. Thank you for sharing your thoughts.

    • Hi Passivecanadianincome,

      I always like to read about the buying that’s going on among our dividend investing peers. Just goes to show that there are always opportunities to invest even when the market is making new all time highs almost every week. I put my blinders on, ignore all the noise and just keep making my monthly buys. Congrats on your recent pick ups too!

    • Hi DS,

      Hope you enjoyed your Thanksgiving weekend. It was a nice break to not look at my stocks/blog, etc. for a few days. Now, it’s back to the ‘grind’ of finding those quality dividend payers to invest in. CAH is popular these days as many of our fellow peers are considering or already bought into the stock in recent weeks. I still like the fundamentals of CAH and time will tell whether or not the company can right the ship. As always, I appreciate your comment.

  4. Thank you very much for the shout-out Divhut. Much appreciated! I’m completely on board with this purchase and am considering adding some more myself. It is just getting to hard to resist. HRL and GIS are some great examples of companies that have gone through some rough patches. I believe in my article, you also cited the likes of MCD and CAT storries, laggards and the beaten down companies from a few years ago that are just on a tear now. The important thing is showing that companies can survive and grow their dividend through many economic cycles.

    Thanks again and congrats on the purchase.

    Bert
    Dividend Diplomats recently posted…Bert’s November Dividend Stock Watch ListMy Profile

    • Hi DD,

      Always a pleasure to mention DD on my blog 🙂 You seem to have the correct investment thesis with CAH these days too. It’s a company facing serious near term headwinds but still shows some pretty strong fundamentals with a dividend that’s safe and has room for growth which is my primary concern. I think having patience with stocks that are currently under the gun is fundamental to long term thinking and investing because as you know, given enough time these dividend stalwarts tend to climb out of their seeming nose dive. Thank you for commenting.

  5. I like the buy also. I being adding strongly to CAH for the past few months and continue averaging down along with MKC who is a new addition. I’m looking also to add again ABC here will see but all 3 represent a great buying opportunity here in my opinion. Thanks for sharing!

    • Hi CD,

      CAH, MCK and ABC are the three ‘big boys’ in the space and each have been performing pretty weak in 2017. For now, I plan to stick to CAH at these levels but it’s always nice to see others buying into the space as well. Thank you for stopping by and commenting.

    • Hi P2F,

      I haven’t really considered the lawsuits facing CAH when deciding to make my buy. In fact, lawsuits rarely come into my investing thesis. The reality is that every major, mid and minor corporation on Earth faces a never ending barrage of lawsuits. By that reasoning, one wouldn’t touch QCOM, AAPL, GOOG, JNJ, MCD or any stock for that matter because of looming lawsuits. Fundamentally, CAH still looks strong and dividend still appears to be safe with room for growth which is why I decided to nibble this month. Lawsuits are always an ‘X’ factor for any company but rarely does it unseat a major corporation. Thank you for sharing your thoughts.

  6. DivHut, Agree with your primary thesis and most of the companies you highlight. It is tough to keep a good company down. For the reasons you mention, JNJ and MCD have been very good investments for me. I bought them when the consensus was that they were dead money. On the other hand, GE is a tough one for me being a long time holder and suffering two dividend cuts. After the first cut in 2009, I thought like you that such a quality iconic company will come back strong so I held. Not so sure this time. As the old saying goes….fool me once shame on you (GE), fool me twice shame on me. Good luck with CAH. They have been a quality company for a long time even though I have never purchased. Solid company to buy when out of favor. Tom
    Tom @ Dividends Diversify recently posted…The Lights Are on But No One is HomeMy Profile

    • Hi DD,

      As mentioned in the post, while never a guarantee, more often than not the dividend champs, aristocrats, kings, etc. put into action a play book that returns them to better days given enough time. Sure, that hasn’t been the case, yet, for GE but who knows where the company/stock will be in five or ten years from now. We may look back and see that is has been dead money or one of the best investments of the decade. Of course, only in hindsight will we know the answer and while I haven’t added to my GE at these depressed levels I am considering it for a potential buy in December. In the meantime, I’ll collect those reduced dividends, reinvest and simply hold on for the ride. Thank you for sharing your thoughts.

    • Hi DI,

      It seems that a lot of us are liking CAH at these levels. I’m fully aware of the risks associated with the stock at present but I believe the negativity surrounding the company will eventually subside and CAH will rebound. In the meantime, I’ll hold, collect those dividends and reinvest at these depressed levels. As always, I appreciate your comment.

    • Hi AIS,

      Clearly there is a lot to like about this company looking at the fundamentals which is why I decided to make it my November buy. The yield has gone up quite a bit because of its stock price slump and there is still room for future growth so why not buy when others are screaming sell and just wait and see where the stock will be once the negative headlines subside. It may take some time but I’m patient. Thank you for stopping by and commenting.

  7. Thanks for the update. I don’t know why, but I’ve been reluctant to write about my actual holdings. Admittedly, the bulk of our net worth is in index funds while less than 1% is held in individual securities. We’re starting to change though.

    We recently liquidated a few small cap bio tech names and an oil name. We did ok on 1 and lost a little on the other. I guess the lesson learned is we really do want to stick with buy and hold as we do with the bulk of our investments.

    • Hi BD,

      Do what you feel comfortable with. It would be nice to see your actual holdings one day but I understand your reluctance to share this information online. As you can see by my portfolio, 100% of my holdings are in individual stocks. While I have nothing against funds I just feel more comfortable creating my own buy and hold portfolio with individual names. Again, it all comes down to what your personal preference and risk tolerance is. Thank you for sharing your thoughts.

  8. One to add to your list of stocks that recovered well is Wal-Mart. It broke $100 the other day before pulling back a little. Glad I held onto my shares!

    CAH is a good stock to look into, now that I’ve sold PFE. Thanks for the update!

    • Hi FerdiS,

      Thanks for sharing that bit of good news with WMT. As I stated, while never a guarantee, more often than not dividend champs, aristocrats, kings, etc. tend to recover given enough time. These companies learn to adapt to changing consumer tastes and trends and can yield some positive results for those willing to hold during the tough times. Keep finding those bargains now that you have some PFE cash sitting in your account. As always, I appreciate your comment.

    • Hi dividendgeek,

      CAH has been making the rounds among our dividend investing peers as of late. Of course, there’s a lot to like about the company long term and one should be patient with the stock given all the near term headwinds it is facing. Whether you own it outright or via ETF, CAH is a good name to hold. Thank you for stopping by and commenting.

  9. I just took a look at Cardinal Health since it wasn’t on my radar.
    At a first glance the stock’s dividend yield is the highest it has been in many years, with the recent slump in the stock price, the growth in dividends has outpaced the stock price by a fair margin.
    The stock is also trading at the lowest multiple of its ttm earnings in the last 7 years.
    The payout ratio is healthy, and the company could withstand reduced earnings.

    I think it deserves further inspection. I pulled all this information out by looking at a few graphs on uuptick, the stock analysis platform I co-developed.

    I enjoy reading you at divhut, and while I’m more of a lurker than a commenter, I would appreciate if you took a quick look. If you like the idea, maybe we can figure out a way of working together?

    Best,

    Sam

    • Hi SK,

      I appreciate the lurking and commenting even more on DivHut. Thank you for that. CAH is definitely a stock that has been under the gun as of late with quite a few headwinds still facing the company. Of course, with a slumping stock price comes better dividend yields that are still safe with room for future growth which is why I decided to nibble on the stock this month. I’ll have to visit your site. Thank you for the suggestion.

    • Hi JC,

      CAH still looks like a good deal in this market. It seems that the selling was a bit overdone. As you know, the time to pile into a stock is when it’s on the ‘operating table.’ Of course, it’s tough to buy when everyone is screaming ‘sell.’ GE might be a nice turnaround story given enough time. As always, in hindsight time will tell all. Thank you for commenting.

  10. I usually like to “water the best plants and pull the weeds,” but CAH is very tempting to me right now as well. CAH has been one of my worst performers, but I’m really thinking about adding a few shares next month. You’re right – similar to HRL, lots of historically good performers go through low points sometimes.

    • Hi DD,

      It can always be tough to buy or add to a position in a company that is not doing well. Of course, that’s usually the best time to buy. CAH, while rebounding a bit from their lows, is still looking attractive at current levels with a safe and growing dividend yield. It’s one of my potential picks for December. Sometimes you have to ignore the negative noise and ask yourself if the company you are planning to invest in will still be around in a year or two or five or ten. Can they survive? Thank you for stopping by and commenting.

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