Thursday, May 28, 2020

May 2020 Buys and Sells

Getting Old Gremlin here to talk about my buys for this past month.  I turn 35 next month, and I am going to go out on a limb and state this will be the lamest birthday this far in my life, but better now than in my 20s! Anyways, the market seems wildly out of line with reality.  I have also recorded several dividend cuts and suspensions, which resulted in my action to sell my first stocks in over a year.  I do not have a fast and hard criteria set for selling, however I do have some general guidelines.  1 - does the cut or suspension show me something new about their financial and market position?  2 - Is the cut a complete cut or suspension or a partial cut?

If #1 is answered yes, then if it is clearly negative and their market share is impacted then they will be sold (an example of this was TUP, which has lost its market dominance over the years). If #1 is no and #2 is only a partial cut and done in a way to eliminated debt or deal with some unusual circumstance, I will likely keep the stock assuming it can eventually resume growth (examples include KMI, WRK, and KHC). If it is a full cut, I will sell the position.  In addition, I operate under the same mantra as Maynard Keynes: "When my information changes, I change my mind. What do you do?" No sense in being stuck in the mud due to an idea. Also as a reminder my horizon is decades.

No purchase or account fees were paid this month (* indicates a new position, which will be discussed below):

SALES: DNKN and DIS - all shares, approximate profit of $190 (total proceeds of $1234.66)
MMM - 1 share @ $149.45, $5.88 income added
CM - 2 shares @ $61.7 ($123.40 total), $7.10 [approx. $CAD]
RTX* - 10 shares @ $54.50 / share ($545 total), $19 income added
BKH* - 10 share @ $56.40 / share ($564 total), $21.4 income added
MDT - 1 shares @ $92.89 / share , $2.32 income added
CSCO - 2 shares @ $44.23 / share ($88.47 total), $2.88 income added
Total Invested = $1563.21
Annual Income Added (AIA) = $58.58

Income lost due to DNKN, DIS, GPS, and KTB cuts = $65.2
Net: -$6.62

AROW - 1 share @ $25.02 / share, $1.44 income added
GLW - 3 shares @ $20.52 ($61.57 total), $2.64
Total Invested = $86.59
AIA = $4.08

Standard IRA:
FLIC- 5 shares @ $14 / share ($70.03 total), $3.6 income added
WTRG - 1 share @ $40.27, $0.94
Total Invested = $110.30
AIA = $4.54

Invested = $1760.10
AIA [net] = $2

*New Positions:
RTX: I only own one other defense company, GD.  I feel these companies are built for the next 20 years and will only continue to be financially rewarded and rewarding. Militarily, the USA has a technological dominance and it will always work to maintain that.  In addition, RTX has a massive portfolio of technologies it supports to the US government, other national governments, and to private industry. There are only a few major international players in these markets (NOC, LMT, etc.), most of which I also want to own.  I plan to at least double this position as long as costs stay reasonable and I have the money to do so.

BKH: I only own two other utilities, D and WTRG. Nominally, I really like utilities, especially ones that are in less contested regions or those that are not in the midst of multi decade declines. BKH meets all those and was temporarily priced in an attractive fashion. Indeed BKH has been on my watchlist now for years.  I believe that it along with D, SO, and WEC are among the best managed electric utilities.  I plan to build double this position as long as costs stay reasonable and I have the money to do so.

Sales and Cuts:
DNKN & DIS: Both of these stocks decided to suspend their dividends for the remainder of 2021.  I would buy back into both, but I found these decisions to be very disappointing considering their size and financial positions.  Of the two, the suspension from DIS left me with a bitter taste in my mouth, and it will be years before I think about deploying capital here.
GPS & KTB: Both of these companies suspended dividends for the remainder of the year.  Their share values dropped so hard that I have held them, but I will sell them as soon as they hit a number I am comfortable with.  It will be a miracle if I ever touch these two again, the quality and resiliency is just not there.

I will update my portfolio page at the end of the month.

What do you think of these companies?

- Gremlin
- Long most tickers mentioned, except TUP, DNKN, DIS, SO, and WEC.

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