Recent Stock Sale November 2019

Here we go. My third post in the “Recent Sells” category as I continue to whittle down my portfolio to only hold stocks that I originally intended to own rather than hold on to “new” companies that resulted from mergers or spin offs. This month brought two recent sells for me.

I have sold in my taxable account 183 shares of Amcor plc (AMCR). AMCR came into my portfolio after it merged with packaging dividend stalwart Bemis (BMS). While AMCR does pay a generous dividend, it only gets distributed twice a year. I prefer my dividends quarterly or monthly. AMCR is also based in Switzerland which means that all dividends are subject to withholding taxes at 35%. That just sucks. I would like to own a packaging company in my portfolio once again. I know many like WestRock Company (WRK) or International Paper Company (IP) and would appreciate any insight one way or the other.

I also sold in my taxable account 3.0055 shares of Wabtec Corporation (WAB). WAB entered my portfolio as a result of the GE Transportation business merging into Wabtec. Again, nothing inherently wrong with WAB it’s just not a business I ever wanted to hold on its own.

It’s funny how investing in quality stocks for the long term can yield many additions to your portfolio. Some of those spin offs or mergers actually work out well over time while others are simply duds that suck your money into a vortex of weak share price and or little or no yield.

What do you think about my recent sells? Are you holding on to your spin offs or merged companies or shuttling them? Please let me know below.

Disclosure: Long GE

16 Comments

  1. Hmmm interesting. Dont know most of these names — but makes sense why you would want to cleanup your portfolio.

    Looking forward to see where you put the funds going forward
    R2R

    1. Hi R2R,

      Not sure why many have not heard of BMS. It has been a stock raising dividends for decades and I was happy to hold it in my portfolio. Of course after the AMCR buyout I decided it did not deserve a place in my portfolio. Time to move on 🙂

  2. Every now and then I think it is wise to prune the tree some. Remove some dead or weak branches and make room for healthy new (and better) ones. I am sure whatever you decide will turn out to be for the best. 🙂

    1. Hi MDD,

      Well said. While I bill myself as a buy and hold investor I’m not against pruning the tree, as you said, once in a while especially if I am “given” stock in a company that I never intended to own in the first place.

  3. I was a bit surprised to see a stock sale post. But I don’t blame you one bit for getting rid of these companies. That 35% withholding tax is crazy high. I’m curious to see where you put the proceeds.

    1. Hi JC,

      It’s not often I write about stock sales because I am a buy and hold investor for the most part. But, every now and then you are subjected to a stock buyout and are given shares in a company you never intended to own. That “new” stock also may be subject to withholding taxes or not pay any dividends at all.

  4. DH –

    A little clean up doesn’t hurt. Smart on the withholding move, assuming you’d receive that back 1 for 1 for foreign tax credits, right? Obviously not ideal..

    -Lanny

    1. Hi DD,

      Sometimes we all have to do a little clean up. We start with small portfolios and over time they just seem to snowball. That’s not necessarily a bad thing but when you start holding stocks that you never intended to hold it can become a concern especially if the stock does not pay a dividend or is subject to a huge withholding tax.

    1. Hi desidividend,

      BMS was a solid dividend stock for decades and then they were bought out by AMCR. Sometimes you have to decide to shuttle certain stocks that you never intended on holding. This was the case here.

  5. I’ve been buying Westrock. They recently increased the dividend (only 2.5% but growth nevertheless) and they are also paying off debt.

    1. Hi RFI,

      WRK has been on the radar of many in the DGI space recently. I can see why with it’s attractive dividend yield among other reasons. Even though that recent raise was only 2.5% you are getting a juicy yield in the interim.

  6. Hi Div

    I’ve actually had both IP and WRK on my radar but they have yet to pass my screen to buy. Out of the two I was close to pulling the trigger on WRK about 2-3 months ago, but the debt levels made me pause and go figure they’ve both run up about 20% since then. I thought WRK was a better buy because better FCF coverage of the dividend going back a couple years, slightly higher dividend yield, better dividend growth as compared to IP. Also I think estimates on growth were rosier for WRK.

    1. Hi D4J,

      I only held IP a long, long, long time ago but wouldn’t mind adding a packaging corp. to my portfolio once again. Bemis (BMS) was a great dividend stalwart for many years and sometimes buyouts are beyond your control. Thanks for sharing your opinion on WRK and IP.

  7. A bit belated, but I believe AMCR is Australian not Swiss. The tax rate you state is correct but as Lanny points out it’s eligible for a 1:1 credit on your tax return, thereby reducing your tax liability. Form 1116 is required only when foreign dividends exceed $300 ($600 married/joint). I get your point on non-quarterly dividends but have generally found the higher foreign yields offset this inconvenience (assuming stable FX rates).

    I agree on the spins and am looking to reduce some of mine in 2020. On GE, the only reason I held as long as I did was for Wabtec until they assigned it an unattractive price.

    1. Hi Charlie,

      Yes, but headquartered in Zurich, Switzerland. Foreign tax credits don’t always equate to savings and I would rather be paid at least four times a year given a choice. Bottom line, after holding some stocks for over a decade my portfolio has grown via spin offs and it was time to do a little house cleaning.

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