Stock Watchlist (March 07, 2015)

by FI Fighter on March 7, 2015

in Stock Watchlist

Screen Shot 2015-02-15 at 12.04.55 PM

Well, I’ve blown through a bigger chunk of capital faster than I would have imagined when I first completed the cash out refi. It’s funny how that works, isn’t it? It takes eons to save up funds, but in a mere matter of seconds, I can find many ways to invest the money…

Luckily, I still have some ammo left, and with the market finally reversing direction, I’m seeing a lot of good opportunities popping up.

This past week, I made two transactions: 1) I picked up 100 shares of Coca-Cola (KO), which is a stock I would like to make a Core Holding in my portfolio. 2) I initiated a position with Emerson Electric (EMR), also purchasing 100 shares.

Looking back, these two latest moves are some of my more “boring” acquistions. Further, with the stock market pulling back so significantly this past Friday, you could argue that I didn’t probe deep enough to unearth some better bargains…

When it came down to it, I decided to stick to my plan, and since I knew that I wanted KO as a Core Holding, I decided to make the move now. I’ve believed all along, and still do, that if you have a long-term plan in place, then the minor fluctuations of today will ultimately not matter much in the end; I’m not investing to day trade, but to buy and hold. Never say never, but my mentality with constructing this new stock portfolio is to acquire holdings that I want to hang on to for the long haul. In other words, if I have full conviction that I want to own lots of shares of KO for the future, why not go ahead and get started right now? With compounding, time is your best friend, but you must play…

By picking up 100 shares now, I’m executing the plan. I would consider my position in KO partially filled, and if there is a much more significant pullback in the near future, I’ll look to add more shares. I’ve never had a problem with dollar-cost-averaging down… But at least I’ve got some shares now!

The next purchase, EMR, is another unsexy pick. EMR is not a growth stock, and with the dollar strengthening, near-term business and revenue could easily find itself struggling. With this pick, I went with a Dividend Aristocrat that has been able to pay a growing dividend for 58 years straight. EMR is also sitting near 52 week lows, and again, because I’m investing for the long-term, I’m not going to get caught up with all the headlines of today. Historically, EMR at a P/E of around 18 and a dividend yield of 3.3% is a pretty attractive buy. I kept things simple, and proceeded with the purchase; my allocation in EMR is now complete in my portfolio.

But as mentioned earlier, there are many attractive opportunities right now. Going into next week, I have my eyes on the following stocks:

Toronto-Dominion Bank (TD): This is a Canadian bank that I’ve always liked and wanted to buy. I even completed a stock analysis on TD many million years ago… And although I’ve always admired TD from afar, I’ve never pulled the trigger and actually bought any shares. TD closed at $43.03 on Friday, and looks very attractively priced right now. The dividend yield is very high at 3.79%.

Initially, when I first put together my “I Hope This Works Fund”, I left off TD and settled on 22 other companies. After some reflection, I’m thinking I made a mistake by not including TD. Although I would like to keep the portfolio somewhat more simple, I believe there’s enough room for one more!

Outside of a huge market rally next week, I’m almost certain I will initiate a position with TD and pick up a few shares. I’m hoping for an entry point below $43/share.

AT&T (T): AT&T just recently got booted from the Dow Jones index, being replaced by Apple (AAPL). I think this is more a hit on reputation than anything else, but if the news causes the stock to sell off some, then I will be paying attention and looking to pick up some discounted shares. T is an interesting stock… It’s not a growth story, and even the dividend growth is mediocre… but at 5.6% yield, it’s an extremely attractive income stock. For the longest time, there has always appeared to be a floor at around $32/share. T closed on Friday at $33.48/share. If T breaches below $33/share, I will be interested in making a purchase.

Exxon Mobil (XOM) and Chevon (CVX): Oil is still getting beat up, and shares of XOM surpassed their previous 52 week low mark on Friday. Time to initiate a position? Perhaps… I realize that things could get much worse soon, or stay flat for a good period of time, but had you told me even just a few months ago that I would have an opportunity to “steal” XOM at under $86/share, or purchase CVX with a 4.0% dividend yield, I would have said, “sign me up!”

Again, when you’re buying with a long-term perspective in mind, today’s headwinds don’t seem as daunting or scary… At these prices, all I see are great opportunities to load up on some discounted shares of some of the world’s best energy companies.

For next week, I’m hoping CVX can dip below $100/share again. XOM already looks cheap… I can see myself adding either one of these stocks next week. Right now, I’m leaning more towards CVX and its more attractive 4.0% dividend… But don’t be surprised if I buy some XOM, instead.

If prices keep dropping? Well, stash some more cash and buy more! These are good times, indeed…

Amgen (AMGN): AMGN closed on Friday down almost 3%. Biotechs got hit pretty good, and this is one stock that I would love to add on further weakness. Contrary to some of the more defensive stocks in my portfolio, this is one I would be banking on for growth — both the share price and dividend.

I would love the opportunity to pick up some shares at around the $150/share range.

Coca-Cola (KO): Even though I just picked up 100 shares of KO, I’m still eyeing this one. My allocation is not yet complete, and if KO can fall below $41/share, I will be very tempted to pick up say another 100 shares or so…

 

Quite a few companies on this latest Stock Watchlist… When the market drops, it’s always a most exciting time! Hopefully things stay “bad” and we investors get even better opportunties to load up on some quality holdings.

 

Happy Hunting! 🙂

{ 18 comments… read them below or add one }

1 Income SurferNo Gravatar March 7, 2015 at 4:20 am

Thanks for sharing Fighter. KO has been my largest holding since 2008, and I’ve been reasonably happy with it…..not with management mind you, but with the business as a whole. I added to our CVX holdings a few months ago at a shade over $100. I’d like to add more, but I think the oil glut will continue. Could be wrong, but I don’t see any reason to be a hero.

This past week I initiated a position in Fastenal (FAST). It might be worth a look, although growth will continue to slow in the coming months.
-Bryan

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2 FI FighterNo Gravatar March 7, 2015 at 9:11 am

Bryan,

Yeah, I’m also a big fan of KO long term. It’s a stock that will let me sleep easy at night, and I need some (or a lot) of that in my portfolio.

CVX under $100 looks very appealing to me… It could tumble even further than that, but long term, I don’t think I’ll have any regrets getting in near the $100 mark, which is why I’m tempted to add some more shares now. Of course if it goes to $80 or something, that’ll be an opportunity of a lifetime.

Thanks for the tip on FAST and I hope it performs very well for you!

Best wishes!

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3 No Nonsense LandlordNo Gravatar March 7, 2015 at 4:28 am

Mortgaging a property and buying stocks is a high-risk opportunity. Hopefully it works out. I think the market is getting frothy, and may even be time to get a bit defensive. After a 33%+ run-up, followed by a 13%+ year, this year will likely be 7% at best. And in 2016 maybe a down year, even though it is a presidential year.

Interest rates go up, creating competition for stocks. Buyers have put all their capital to work. Companies will slow down their repurchase plans as other investment alternatives get put into place. And when the show shine boy is making stock recommendations, you know it’s time to get out.

Hopefully this works out, but I cannot help but see too many red flags.

Reply

4 FI FighterNo Gravatar March 7, 2015 at 9:15 am

Eric,

I agree and think the overall markets are too frothy right now… With that said, I feel like there still are some good deals and discounts with individual stocks…

For instance, oil is getting hammered, and the industrials with it. Even financials like TD look ripe for the picking at these levels.

But I think it’s wise to heed your caution and keep lots of cash in the bank. The storm is approaching and 2016-2017 might be a time to buckle up.

It’s been an interesting ride these past few years, but like always, all good things will come to an end.

All the best!

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5 Roadmap2RetireNo Gravatar March 7, 2015 at 5:27 am

Those are some excellent choices, FIFighter. I am keeping a close eye on AMGN and T as well…..although I should just go ahead and start investing in KO or PEP – those stalwarts are missing from my portfolio, and I always find an excuse not to pay the premium.

Good stuff on picking up shares in EMR and KO. They will serve you well and will form a good core position in your portfolio. Thanks for sharing

R2R

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6 FI FighterNo Gravatar March 7, 2015 at 9:19 am

R2R,

Yeah, I hear you there about paying a premium for KO and PEP. It’s funny how that works… As investors, we want to find the best value, so a lot of times we hold out for better buying opportunities. Then, there’s also that saying that with these “best of breed” stocks, we should be able to blindly buy them at anytime and not worry about the market price b/c if they are indeed quality holdings, they will perform and work out in the end…

I prefer to buy low as well, but with a Core Holding like KO, I’m more willing to just buy some shares at retail. This might turn out to be a mistake, but that’s a risk I’ll take for a safe haven stock. I wouldn’t do the same for T or EMR, but those stocks are starting to look affordable in their own right.

Yup, like you I’m also a fan of the biotech companies and AMGN is at the top of my list right now. I’ll be following that one very closely.

Happy hunting!

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7 My Dividend PipelineNo Gravatar March 7, 2015 at 1:10 pm

FI Fighter,

I think you are dead on with these choices. I own almost every thing you mentioned. Another company that I really loaded up on this week is PM…over $7k invested. I also added $4k in CAT which looks great at 3.5% yield.

Also, Chevron and Exxon have been on my buy list for several months now.

Best of luck with your future purchases.

MDP

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8 FI FighterNo Gravatar March 10, 2015 at 1:39 pm

MDP,

Good to know we are on the same page! Perhaps I’m taking a few pages out of your own book.

CAT at 3.5% yield looks pretty enticing, and I did pick up a few shares earlier this year. PM is another great dividends tock.

I still haven’t pulled the trigger on XOM, but will probably do so shortly.

All the best!

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9 FerdiSNo Gravatar March 8, 2015 at 10:00 pm

Thanks for the writeup and list of prospective stocks. I recently bought more shares of AT&T and Chevron. If KO comes down a little more, I’ll be very interested!

Cheers
FerdiS

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10 FI FighterNo Gravatar March 10, 2015 at 1:39 pm

FerdiS,

You bet! I added some T today and would love to add more CVX under $100.

Take care!

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11 JimNo Gravatar March 9, 2015 at 5:39 am

I’ve been a longtime shareholder of TD and the only mistake I made is not buying more shares. I’m not sure if you can get it in the US, but look into the DRIP, as you pick up shares at a discount to the current stock price. It’s a great way to build a solid position over time. Keep in mind over half of their business is in the US and they report in CAD, so when the CAD drops against the USD, their profits go up.

If you’re looking a value play, take a look at Badger Daylighting. The stock got hammered when oil prices dropped, but it’s a great company with tons of torque for when oil prices recover. It’s pays a small dividend while you wait.

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12 FI FighterNo Gravatar March 10, 2015 at 1:41 pm

Jim,

TD is a great stock and one I’ve wanted to own for years. I finally picked up some shares this morning and can finally cross that one off my list…

Well, maybe not, b/c I’ll probably want to buy more shares in the future.

I do like the fact that TD is diversified outside of just the Canadian economy and has a strong US presence as well.

Thanks for the tip on Badger Daylighting, I’ll take a look.

Best wishes!

Reply

13 MartinNo Gravatar March 9, 2015 at 8:59 pm

Welcome back to the stock market 🙂
The market is reversing, but it may not last long. We are still in a bullish trend which doesn’t seem to be ending. Maybe just a small correction. But it still offer a good opportunity to enter some good stocks. Like energy stocks, for example.

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14 FI FighterNo Gravatar March 10, 2015 at 1:42 pm

Martin,

Thanks, it’s good to be back! Yeah, real estate appears pretty bullish for 2015, so I’m guess the stock market will be up as well. The market has been down quite a bit already this week, so I’ve gone through a ton of capital rather quickly.

I’m really liking energy stocks right now.

Best wishes!

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15 NunoNo Gravatar March 10, 2015 at 4:20 am

Your diversifying and that is great!
From a dividend investor/collector, the market still offers great deals!
Take care!

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16 FI FighterNo Gravatar March 10, 2015 at 1:42 pm

Nuno,

Yes, now seems like a good opportunity to load up on solid dividend stocks. But who knows, maybe the fun is just starting and the market will correct even more in the upcoming months.

Take care!

Reply

17 billyNo Gravatar March 10, 2015 at 7:35 am

How’s your Tesla and Alibaba doing?

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18 FI FighterNo Gravatar March 10, 2015 at 1:43 pm

Not well, thanks for asking.

All the best!

Reply

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