08-29-2015, 10:32 PM
(This post was last modified: 08-29-2015, 11:09 PM by Dividend Watcher.)
Dan, as I said, my time frame was the deciding factor for me. If I had 10 or more years to go, I probably would've held on to GE. I think most everything will be resolved in a few years but the uncertainty and the higher yield from the replacements pushed me over the edge despite the headwinds both EMR & ETN are facing.
I said I would continue about a week ago and finally had a few minutes to jot down some things. I'll start with the wife's portfolio.
Once the dust settled down from the Baxter split and the new dividend rates were formalized, I started thinking what to do with them. Wouldn't you know it but when I had reached a decision, Shire plc put Baxalta (BXLT) into play. Obviously someone saw some value in BXLT. I was willing to get past a couple quarters financials as an independent company before I made any further decisions. Despite the yield going to next to nothing, the combined price post-split price of the two brought the total value up to a bigger gain. When the market started to get choppy mid-month I sold BAX but hung on to BXLT for now.
With the proceeds, I added a little COP at a 16% drop from her cost basis. I know full well about the cash flow squeeze in the oil sector but still felt comfortable with COP for the long run. With yield hovering around 6%, I was willing to hang in there.
I also added another batch of Norfolk Southern (NSC). Turns out I was a little premature buying at a couple bucks above her cost basis but yield is now close to 3% -- something we haven't seen from NSC in a while.
The Friday before the "flash crash" last week, I put in a limit order for JNJ at $95 thinking I'd be lucky for it to fill at that. JNJ's price had held up well around the $100 mark all through the turmoil of the week. When I checked the Asian markets on Sunday night, they were opening the week with another large sell off and when I woke up Monday morning, the European market was continuing the drop. So I dropped the limit order to a stink bid of $92 thinking it wouldn't fill. Much to my surprise, the market opened in the dumper and by the time the trade executed, she bought it at $85 and change. Nice surprise and price, IMO.
This is how the portfolio ended up at the end of August 2015:
The big changes in sector allocation was the drop in COP's (and ESV's) price bringing the energy down a little, selling BAX caused healthcare to drop a little although the JNJ add mitigated some of that and adding a little SO a while back and starting a position in LNT brought the utility sector up to a bigger allocation.
We now sit with an open limit order to bring BMO to a full position. Looking ahead, the goal is to add to LNT at a decent valuation, decide what to do with BXLT and, surprisingly, add a little to ESV under $20. I keep going back over ESV's financials and I keep thinking that there's some bright spots in the balance sheet. As I thought over what management has been doing, the dividend cut and stacking older rigs namely, I think it's the same thing I would've done if I were on the board to keep the business viable. A well-run company dealing with a tough oil market and an unforgiving stock market at the same time.
I've also turned on the drips for everything but HAS (high value) and MCD (already over a full position). We'll collect a few extra shares since things are still within sight of fair value for the rest of them before adding any new positions.
I said I would continue about a week ago and finally had a few minutes to jot down some things. I'll start with the wife's portfolio.
Once the dust settled down from the Baxter split and the new dividend rates were formalized, I started thinking what to do with them. Wouldn't you know it but when I had reached a decision, Shire plc put Baxalta (BXLT) into play. Obviously someone saw some value in BXLT. I was willing to get past a couple quarters financials as an independent company before I made any further decisions. Despite the yield going to next to nothing, the combined price post-split price of the two brought the total value up to a bigger gain. When the market started to get choppy mid-month I sold BAX but hung on to BXLT for now.
With the proceeds, I added a little COP at a 16% drop from her cost basis. I know full well about the cash flow squeeze in the oil sector but still felt comfortable with COP for the long run. With yield hovering around 6%, I was willing to hang in there.
I also added another batch of Norfolk Southern (NSC). Turns out I was a little premature buying at a couple bucks above her cost basis but yield is now close to 3% -- something we haven't seen from NSC in a while.
The Friday before the "flash crash" last week, I put in a limit order for JNJ at $95 thinking I'd be lucky for it to fill at that. JNJ's price had held up well around the $100 mark all through the turmoil of the week. When I checked the Asian markets on Sunday night, they were opening the week with another large sell off and when I woke up Monday morning, the European market was continuing the drop. So I dropped the limit order to a stink bid of $92 thinking it wouldn't fill. Much to my surprise, the market opened in the dumper and by the time the trade executed, she bought it at $85 and change. Nice surprise and price, IMO.
This is how the portfolio ended up at the end of August 2015:
The big changes in sector allocation was the drop in COP's (and ESV's) price bringing the energy down a little, selling BAX caused healthcare to drop a little although the JNJ add mitigated some of that and adding a little SO a while back and starting a position in LNT brought the utility sector up to a bigger allocation.
We now sit with an open limit order to bring BMO to a full position. Looking ahead, the goal is to add to LNT at a decent valuation, decide what to do with BXLT and, surprisingly, add a little to ESV under $20. I keep going back over ESV's financials and I keep thinking that there's some bright spots in the balance sheet. As I thought over what management has been doing, the dividend cut and stacking older rigs namely, I think it's the same thing I would've done if I were on the board to keep the business viable. A well-run company dealing with a tough oil market and an unforgiving stock market at the same time.
I've also turned on the drips for everything but HAS (high value) and MCD (already over a full position). We'll collect a few extra shares since things are still within sight of fair value for the rest of them before adding any new positions.
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“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan
“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan