Watchlist (October 22, 2012)

by FI Fighter on October 22, 2012

in Stock Watchlist

Well, I don’t usually intend to update the Watchlist so frequently, but the market pullback on Friday and continuing losses seen today are forcing me to re-shuffle the deck and come up with a new gameplan. I’ve initiated new positions with Abbott Laboratories (ABT) and Air Products and Chemicals (APD) since the last update.

Here are some new companies that are now on my Watchlist, in addition to ABT, IBM, and APD:

McDonald’s (MCD): McDonald’s saw its share price drop 4.45% last Friday after earnings, as revenue was flat at $7.2 bilion, and net income declined 3%. MCD continued sliding a bit more today, down $0.27, and closed at $88.45. I don’t think much really needs to be said for this industry giant, but the stock is starting to become very attractive from a valuation standpoint. The P/E is now 16.7, and the yield is 3.48%. MCD recently announced an increase to the dividend, which is now $0.77/share. I would be interested in establishing a position at around $86-88 range.

 

Genuine Parts (GPC): Genuine Parts is down 1% as of closing today. GPC is another dividend aristocrat on my Wishlist, having increased dividends for 56 years in a row. The P/E is at 15.3, and yields 3.25%. Adding GPC would help add exposure to the automotive industry (50% of GPC sales), which is currently under-represented in the portfolio. I would be interested in adding shares at $56-$58 range.

 

Coca-Cola (KO): Coca-Cola is another dividend aristocrat on my Watchlist. I guess we found our theme for this rendition 😉 I last added shares back around February, before the split, and have been wanting to load up on more since. KO has had a nice run-up this year, but has been down about 3% in the past two weeks. KO isn’t a very volatile stock, so in some ways it is more difficult to buy this one on dips. Since this is a Core Holding of mine, I’m always on the lookout to add more shares. It would be nice to be able to add some as the yield approaches 3%, but this would require KO to trade at $34. I would be a buyer around $35-$36 range.

 

There appears to be a lot of good deals right now. The market looks to be in “correction” mode, which is only good news for us long-term, dividend investors. Hopefully this is just the start of the sell-off, as everyone likes a sale. Happy hunting and best of luck!

{ 7 comments… read them below or add one }

1 JC @ PassiveIncomePursuitNo Gravatar October 23, 2012 at 5:06 am

I’m hoping to pick up some more MCD this morning since the market is scheduled to open lower by a significant margin. I’m actually just about to transfer some more funds over to my brokerage account to start setting a limit order.

Reply

2 JC @ PassiveIncomePursuitNo Gravatar October 23, 2012 at 5:10 am

I meant to also add that KO is on my watchlist but I think I need it to pullback some more before I’d be adding to my position. I’d like to get some exposure to the auto industry so GPC might fit in. I currently have nothing tied to that sector.

Reply

3 FI FighterNo Gravatar October 24, 2012 at 10:44 pm

JC,

Nice move on the purchase of MCD. It’s looking like a very good buy right now. I’m watching KO and GPC closely, but I agree that they will need to pullback just slightly more. I would like to get KO below $36 if possible. $35 would be a steal.

Best wishes!

Reply

4 Compounding IncomeNo Gravatar October 24, 2012 at 3:20 am

I like MCD off your list as the best pick at today’s prices. I’d love to add more KO if it goes under $35. I want to get my grubby little hands on GPC, but it’s stubborn and doesn’t want to reach my target prices! Damn you GPC. Haha

I see LNCO announced its first dividend. It’s only 1.5 cents lower than LINE! I’m pretty sure it’s going in my ROTH. I thought corporate taxes would play a bigger role… It’s currently trading at a nice discount to LINE and which seems to make it a good buy right now. Hmm I could buy some and still make the payment next month… Will have to mull that one over!

Reply

5 FI FighterNo Gravatar October 24, 2012 at 10:48 pm

CI,

I agree with you, MCD looks to be the most attractive of those three. Yep, if KO hits $35, I will have to back up the truck. GPC is getting there, and closing in on under $60.

LNCO has a very enticing dividend! I was expecting the difference between the LNCO and LINE dividend to be greater. That’s great news. I always wanted to add LINE in the past, and with the recent unveiling of LNCO, it basically makes it a no brainer (no more tax complications). Very good long term buy. LNCO and KMI are two I really want to load up on.

Happy hunting!

Reply

6 Dividend MantraNo Gravatar October 24, 2012 at 4:49 pm

FI Fighter,

Great list here. I definitely like MCD at these levels. GPC and KO are both solid long-term companies and KO specifically is priced at a premium to reflect that. I really, really want to buy more KO though as my allocation to this wonderful company is much lower than I’d like it to be. In a perfect world I’d like it to be one of my larger positions.

I like MCD, GD, SBSI, NSC, KMI, EMR, LO and PM at current levels.

Great time to be a long-term investor!

Best wishes.

Reply

7 FI FighterNo Gravatar October 24, 2012 at 10:57 pm

DM,

Yeah, it’s very difficult to get KO at a bargain price. It’s definitely priced at a premium, but it’s such a strong company/holding, that even if you do have to overpay a bit, many investors still prefer to add KO as opposed to an alternative.

In my case, I want KO to be a Core Holding. I’m ok paying more for quality, since I also value peace of mind. Sometimes, you just want to have that one trusted holding that you never have to worry about.

Great list you’ve got there! You already know how I feel about MCD. Looks like LO got hit pretty good today, along with NSC (which I added). KMI is another favorite, which is getting cheap again.

Too many stocks… too little money 🙂

Happy hunting!

Reply

Leave a Comment

 

Previous post:

Next post:

Copyright © 2012 FI Fighter