Usually during the third quarter of each year I analyze my portfolio’s performance, do a little tweaking and cast about for an underlying strategy for the new year. 2016 was especially difficult due to a couple of mergers wreaking havoc on my portfolio structure as well as the uncertainty caused by the election. The easy fix is to add to my anchor, core and satellite holdings at reasonable price points to get them to their target weightings. This is illustrated by my recent purchases of KMB, CLX and SBUX with more to come. The more difficult issue was identifying potential value plays for an ancillary portion of the portfolio.
January saw DOW 20,000 being attained before dropping under once again. The post inauguration euphoria beat a hasty retreat in the wake of record protests, a wave of executive orders and a record number of lawsuits filed against a president in his first eleven days. In finance terms, this uncertainty translated into concerns about the the ability or time required to effect change through the legislative process – in particular tax reform. This month The S&P gained 1.79%. while my portfolio recorded a gain of 3.51% largely due to the final significant merger completing. After a great 2016, I’m making some changes in my 2017 strategy that will (hopefully) accelerate performance in 2018. Meanwhile I’ll be content with a slight win versus the S&P this year.
Headlines impacting my portfolio:
- 1/5 – WMT ends V ban in Canada
- 1/9 – SBUX discontinues Evenings concept
- 1/10 – NWBI divests MD assets to SHBI
- 1/13 – LSBG/BHB merger completes
- 1/17 – ADP acquires Marcus Buckingham Co.
- 1/20 – IRM acquires Kane Office Archives LLC through BK court
- 1/23 – AMC acquires Nordic Cinema
- 1/24 – Executive order moving Keystone (TRP) forward signed
- 1/25 – DOW 20,000
- 1/25 – BLK moves 1T$ from STT to JPM
- 1/26 – JNJ to acquire ALIOY then spin R&D unit to ALIOY shareowners
- 1/30 – GDOT buys UniRush (RushCard)
- 1/31 – BX prices INVH IPO
posts under consideration for Feb are Methods to my Madness Pt 3 update, Anti-Trump strategy, My Coca-Cola strategy and The Commonality Between Trump and Me
- Added to CLX
- New position – CCLAY
- New position – BHB (LSBG merger)
- New position – SWRAY
- January delivered an increase of 15.46% over January 2016. This requires normalization due to PEP and WRE paying in January rather than December, KO paying in December rather than January and BUSE paying in February. On a normalized basis, this represents a Y/Y increase of 3.1% which is attributable to dividend increases (Y/Y). This means my October purchases from merger proceeds were successful in maintaining my Jan,Apr,Jul,Oct income stream.
- January had a 3.0% increase over the prior quarter.
- Declared dividend increases averaged 7.44% with 19.65% of my portfolio delivering at least one raise (1 cut – YUM).
- Dividends received were 9.2% of total 2016 dividends and if the current run rate is maintained would exceed this total around October 15th.
The MET spin (Brighthouse Financial – BHF) remains pending.
Agrium/POT, JNS/HGG.L remain pending
I enjoy visiting others’ blogs and reviewing their portfolios. At times my investing approach is validated other times I get a fresh viewpoint. There are occasions when a company that is not on my radar grabs my attention. Such was the case when I ran across Dividenden Investor‘s holdings. In his depot, Coca-Cola Amatil can be found. The name Coca-Cola was the reason for my intrigue and just had to figure out what sort of creature this one was.
Coca-Cola Amatil trades on the Australian exchange under the symbol CCL with their ADR trading in the states as CCLAY. They are one of Coca-Cola’s (KO) anchor bottlers under the 21st Century Beverage Partnership Model that KO is evolving towards. Amatil’s territory includes Australia, New Zealand, Indonesia, Papua New Guinea, Fiji and Samoa. They are a bottler for Coca-Cola products plus liquor (Jim Beam, Maker’s Mark, et.al.), coffees and foodstuffs. Coca-Cola has a 29% ownership.
Coca-Cola Amatil pays a dividend twice per year on an interim/final schedule with franking credits. Recently, the credit has been between 75-100% which translates to no or minimal double taxation for US investors. At yesterday’s purchase price, the dividend yield translates to roughly 5.9%. There is a risk of currency fluctuation as dividends are declared in Aussie$.
This is a continuation of my theory of the US$ being overvalued so my intent is to buy while it’s high and collect increasing dividends through the exchange rate. Of course there’s the risk the US$ will stay strong if a border tax is enacted.