June 2019 Update

The market went on a tear this month hitting new records. With several companies attempting to tamp down expectations for the second half, my belief is the inflow of money is due to the lack of relatively safe investment options available as long as the trade truce holds. With earnings season on the horizon, it will be interesting if we see a continuation in July. This month the S&P gained 6.45% (almost erasing last month’s loss) while my portfolio gained a meager 5.56%. For the year, I’m still ahead of the benchmark by 0.45%. You can call it neck-to-neck.


PORTFOLIO UPDATES

  • increased my CL position
  • increased my DGX position
  • increased my EBSB position
  • increased my GNTY position
  • increased my HTH position
  • increased my MSCI position
  • increased my JNJ position
  • increased my ETF positions (VGK, JPMV, EWA, EWW, CUT)

DIVIDENDS

My primary focus resides on dividends with the goal being a rising flow on an annual basis, I’m placing less emphasis on the quarterly numbers as the number of semi-annual, interim/final and annual cycles have been steadily increasing in my portfolio.

  • June delivered an increase of 15.42% Y/Y.
  • June delivered a 1.78% decrease over last quarter (Mar) due primarily to timing issues (a Japanese dividend arrives in July).
  • Dividend increases averaged 9.31% with 50.22% of the portfolio delivering at least one increase (including 4 cuts (two being OMI)). This is off last years’ pace and I believe a new personal record for dividend cuts in a single year since about 1980.
  • 2019 Dividends received were 55.35% of 2018 total dividends putting me on target to exceed last years’ total in late October. The YTD run rate is 107.27% of 2018, slightly under my 110.0% goal.

Note: I updated my Goals page to provide a visual of these numbers.  Based on Mr All Things Money’s instruction set with a conversion to percentages.  My code only updates when the monthly Y/Y number is exceeded.  Otherwise, the prior year actual is used.

SPINOFFs

On Oct 4, 2018 MSG filed a confidential Form 10 to spin the sports business which remains in progress.


MERGERS

XRX merger with Fujifilm cancelled (still being litigated). Pending settlement expected in September.

TSS to merge into GPN (all stock, .8101 sh GPN for each TSS sh) estimated to complete in October – Upon the announcement, I was prepared to sell my TSS position to book almost a triple in just over 4 years as GPN currently pays only a penny per share dividend per quarter. However, page 14 of their slideshow states: Dividend – maintain TSYS’ dividend yield. This would appear to indicate an increase in GPN’s dividend, so for now I’ll hold.

PB to acquire LTXB for 0.528 shares and $6.28 cash for each LTXB share. I plan to vote in favor of the transaction (on both sides), pocket the cash and sell the new shares – retaining the old and perhaps use some of the cash to purchase additional PB shares post-merger.

VLY to acquire ORIT for 1.6 sh VLY to 1 ORIT. This merger will result in a slight dividend cut November forward as the rate will be normalized to VLY’s current rate. In my view, the other positives outweigh this negative.

SUMMARY

Overall, no complaints. The performance isn’t stellar but being ahead – even a little – in this market is no mean feat. Looking forward into the second half sees a little consolidation by migrating to a slightly risk off stance.

Here’s hoping your month/quarter was successful!

 

January 2019 Update

The new year began with a flourish shrugging off the December selloff and recovering most of the losses. With the month exhibiting minimal turbulence outside some earnings misses, my purchases were essentially toppers to existing holdings (except one) – all in the first week. The S&P rose 7.29% while my portfolio lagged a little rising 6.48%. In reality, I was probably even but my cash position was abnormally high as I failed to deploy the cash received from a merger (I exclude cash from my investing positions). I expect this will normalize during February.

PORTFOLIO UPDATES

  • Lost GBNK, GNBC and SHPG via mergers
  • Added TAK and regained IBTX via mergers
  • Added new position BDXA
  • Increased VGK, MSCI, SF, JPMV, HTH, GNTY, EBSB, EWA, DGX, CUT, CL, BNCL and BHBK positions

DIVIDENDS

While my primary focus resides on dividends with the goal being a rising flow of dividends on an annual basis, I’m placing less emphasis on the quarterly numbers as the number of semi-annual, interim/final and annual cycles have been steadily increasing in my portfolio.

  • January delivered an increase of 19.63% Y/Y, the impacts being dividend increases, special dividends and reinvesting merger cash proceeds into the portfolio.
  • January delivered a 0.83% decrease over last quarter (Oct) – the impact of two dividend cuts.
  • Dividend increases averaged 8.84% with 20.81% of the portfolio delivering at least one increase (including 2 cuts (GE, OMI).
  • 2019 Dividends received were 9.33% of 2018 total dividends putting me on target to exceed last years’ total in October.

Note: I updated my Goals page to provide a visual of these numbers.  Based on Mr All Things Money’s instruction set with a conversion to percentages.  My code only updates when the monthly Y/Y number is exceeded.  Otherwise, the prior year actual is used.

2019 conversion remains pending

SPINOFFs

GE‘s rail unit to spin then merge with WEB. This was restructured in January to generate more cash for GE – end result being a taxable event for shareowners

GE to spin 80% of the health business

NVS proposed spin of Alcon scheduled for shareholder approval Feb 2019

On Oct 4,2018 MSG filed a confidential Form 10 to spin the sports business

MERGERS

XRX merger with Fujifilm cancelled (still being litigated).

BNCL to merge into WSFS

BHBK to merge into INDB

SUMMARY

To escape January’s dividend cuts relatively unscathed is monumental. Back in October my expectation was for the effects to linger through the first quarter. Now I can just put my head down and focus on the long game.

July 2018 Update

The markets generally shook off potential tariff impacts, choosing instead to focus on earnings and GDP.  Any future concerns being tabled by investors to essentially celebrate the present.   Being a contrarian by nature brings out the caution signs when the market ignores some warning signals.  Tariff advocates Alcoa and Whirlpool took hits when they acknowledged the benefits anticipated were not materializing as expected.  Signs of profiteering are beginning to emerge.  The list of companies indirectly impacted continues to grow.  Technology had issues due in part to China exposure.  Perhaps I can be forgiven for seeing the glass half empty rather than half full.  This month had me on the sidelines with only one transaction to report.  July saw a rise in the S&P of 3.6% while my portfolio outperformed by registering an increase of 5.36%.  YTD I’m now ahead of the S&P by 1.06%.

Portfolio Updates:

Performed a rebalance on a portion of the portfolio.  I reduced the overage in DGX created in May and added shares to the others in this group (ABM, AMT, ARD, BLL, CASY, CHCO, KOF, CCE, CTBI, CCI, AKO.B, HOMB, IRM, LAMR, OUT, NWFL, OCFC, ONB, PLD, QCOM, SRC, SMTA, BATRA, UNIT, VALU, VER).  My DGX holdings remain higher than they were in May and the increase in dividends on this rebalance is negligible.

DIVIDENDS

My main focus resides on dividends.  Market gyrations are to be expected but my goal is to see a rising flow of dividends on an annual basis.  I’m placing less emphasis on the quarterly numbers as the number of semi-annual, interim/final and annual cycles have been steadily increasing in my portfolio.

  • July delivered an increase of 29.76% Y/Y, the biggest impact being a June dividend paid in July.   Pro-forma was 19%.
  • July delivered a 3.29% decrease over last quarter (April) due to an interim/final cycle (and would’ve been greater without the dividend move).
  • Dividend increases averaged 14.39% with 66.51% of the portfolio delivering at least one increase (including 1 cut (GE).
  • 2018 Dividends received were 70.19% of 2017 total dividends putting us on pace to exceed last year in early November.

Note: I updated my Goals page to provide a visual of these numbers.  Based on Mr All Things Money’s instruction set with a conversion to percentages.  My code only updates when the monthly Y/Y number is exceeded.  Otherwise, the prior year actual is used.

Spinoffs:

GE‘s rail unit to spin then merge with WEB

GE to spin 80% of the health business

Mergers:

XRX merger with Fujifilm cancelled (now being litigated).

SHPG to merge into TKPYY

GBNK to merge into IBTX

COBZ to merge into BOKF

GNBC to merge into VBTX (semi-reverse)

Summary

All in all a good month but it appears my continuing financial overweight is literally reaping dividends.  This probably needs to be addressed in 2019.

Hope all of you had a good month as well.

May 2018 Update

The month was fairly normal until the final week with Italy followed by Trump’s tariff rollout.  In between we saw the on again – off again negotiating style with North Korea and China.  Other than a couple of down days it appears the market is learning to ignore the noise.  Again I used the dips to my advantage and stayed the course.  May saw a rise in the S&P of 2.16% while my portfolio outperformed the index by registering a rise of 2.24%.  YTD I still lag the S&P by 0.35%.

Portfolio Updates:

  • Added to CMCSA (making another round lot)
  • Added to my ETF group (CUT, EWA, EWW, JPMV, VGK)
  • Added to GE (on the rail spin (WAB) news)
  • Added SMTA (via SRC spin)
  • Added to BKSC (via 10% stock dividend)
  • Added to DGX on news of UNH strategic partnership

DIVIDENDS

This is where my main focus resides.  Market gyrations are to be expected but my goal is to see a rising flow of dividends on an annual basis.  I’m placing less emphasis on the quarterly numbers as the number of semi-annual, interim/final and annual cycles have been steadily increasing in my portfolio.

  • May delivered an increase of 12.97% Y/Y fueled by dividend increases.
  • May delivered a 15.98% increase over last quarter (February).
  • Dividend increases averaged 12.14% with 55.98% of the portfolio delivering at least one increase (including 1 cut (GE).
  • 2018 Dividends received were 46.53% of 2017 total dividends putting us on pace to exceed last year in early November.

Notes: the Q/Q shows an increasing trend line due only to timing of dividend payouts (pay date shifts).  Y/Y is only on par with dividend increases as dividends received were used to purchase next quarter (rather than current quarter) dividends.

Spinoffs:

GE‘s rail unit to spin then merge with WEB

Mergers:

XRX merger with Fujifilm cancelled.

SHPG to merge into TKPYY

Summary

Any month with increasing dividends and beating the S&P has to be considered a good one.

Hope all of you had a good month as well.

Jan 2018 Update

The market came out of the chutes and barely looked back this month, the catalysts being the realization of the tax plan’s impact on corporate earnings and few earnings reports being significant disappointments.  The lower tax rates started trickling  into paychecks (average about 3.5%) but the average gas price nationwide increased by roughly 5% primarily due to the weakness in the US dollar  (caused in part by the prospects of increased deficits from the tax plan that haven’t been offset by jobs, productivity or GDP gains yet).  At least we can watch commercials touting unrealized benefits even though it is way too early for any tangible impact to  be realized.  Kind of makes me wonder a little.  For the month, the S&P index increased by 5.62%% while my portfolio value increased by merely 3.81% putting me behind by 1.81% to start the year. Continue reading

October 2017 Update

This month was pretty solid with the market continuing its upward grind.  Earnings season was in focus with good reports outweighing the bad.  Most of the attribution to the hurricanes was legitimate but a few did raise my eyebrows.  The US dollar turned in a second rising month.  The S&P index increased by 2.22% while my portfolio lagged (again) by only increasing 2.03%.  The two culprits were international currency weakness and a drop in value in my October (speculative) purchase.  For the year I’m still ahead of the index by 2.7%.

Headlines impacting my portfolio (bold are owned):

  • 10/3 – IRM acquires Bonded Services Holdings from Wicks Group, LLC
  • 10/4 – IBM acquires Vivant Digital (pvt)
  • 10/5 – YUMC initiates quarterly dividend scheme
  • 10/5 – IRM buys CS datacenters in London and Singapore
  • 10/6 – K acquires Chicago Bar Company LLC (RXBAR)
  • 10/11 – BHB sells insurance business
  • 10/11 – FHN acquires Professional Mortgage Co.
  • 10/16 – SJI buys NJ/MD assets from SO
  • 10/17 – SYY acquires HFM Foodservice
  • 10/18 – India approval for POT/AGU merger received. awaiting  US and China.
  • 10/18 – DGX to acquire Cleveland Heart Lab
  • 10/19 – JNJ acquires Surgical Process Institute
  • 10/25 – AAPL acquires PowerbyProxi
  • 10/30 – DGX aquires some California Laboratory Associates assets
  • 10/30 – TU to acquire Xavient Information Systems

Portfolio Updates:

  • initiated position in NXNN

Dividends:

  • October delivered an increase of 24.59% Y/Y with the about half of the increase being attributable dividend increases and the other half purchases.
  • October delivered an increase of 8.53% over last quarter (July).
  • Declared dividend increases averaged 10.91% with 70.62% of the portfolio delivering at least one increase (including 2 cuts and 1 suspension).
  • YTD dividends received were 103.83% of total 2016 dividends which exceeded last years’ total on October 25th.

Spinoffs:

Spirit Realty Capital (SRC) has been announced.

Mergers:

AGU/POT (Nutrien) remains pending.

Summary

With the primary goal of exceeding last year’s dividends completed, my focus turns to developing a strategy for 2018.  Meanwhile adding NXNN (speculative) in October and DRE for November’s primary purchase.  DRE as they go ex-div next week and a special dividend is likely in December as a result of the sale of their Medical buildings to HTA this past May.

September 2017 Update

This month for my portfolio was choppy to say the least.  Impacts were the start of calculating hurricane damage, data breaches, fears of a primary tenants’ possible bond default, continuing geopolitical fears and a strengthening of the US dollar at month end (again). With a portfolio currently weighted 15.35% pure international and a little overweight towards Texas it’s not too surprising the S&P index outperformed by increasing 1.93% versus my 0.36% increase.  For the year I’m still ahead by 2.9%.  On the other hand, dividends received set a new monthly record.

Headlines impacting my portfolio (bold are owned):

  • 9/7 – SQ to apply for UT banking license as an industrial loan co.
  • 9/7 – BANF acquires First Wagoner Corp and First Chandler Corp
  • 9/7 – EFX announced massive dB hack
  • 9/11 – UNH makes formal offer to acquire BANMEDICA.SN
  • 9/11 – Cdn approval for POT/AGU merger received. awaiting  US, India and China.
  • 9/14 – MMP forms JV w/ VLO for marine termimal in Pasadena, TX
  • 9/21 – GBL (Mario Gabelli) increases stake to 7.74% in BATRA
  • 9/25 – GE sells industrial solutions unit to ABB
  • 9/28 – DGX acquires Shiel Medical Laboratories from FMS
  • 9/28 – IVZ buys Guggenheim Ptnrs ETF business
  • 9/29 – AIG sheds SIFI designation

Portfolio Updates:

  • added to FFIC prior to ex-div on market weakness (N. Korea)
  • added to NWFL (stock split)
  • added to AROW (stock dividend)
  • added to HOMB and lost SGBK (merger)

Dividends:

  • September delivered an increase of 47.56% Y/Y with the about half of the increase being attributable dividend increases and the other half purchases with an assist from a merger premium.
  • September delivered an increase of 16.87% over last quarter (June).  Semi-annual payers, a purchase and dividend increases being the reasons.
  • Declared dividend increases averaged 10.98% with 65.54% of the portfolio delivering at least one increase (including 2 cuts and 1 suspension)
  • YTD dividends received were 92.61% of total 2016 dividends which if the current run rate is maintained would exceed last years’ total in late October.

Spinoffs:

Spirit Realty Capital (SRC) has been announced.

Mergers:

AGU/POT (Nutrien) remains pending, SGBK/HOMB completed September 26th.

Summary

With the primary goal of exceeding last year’s dividends in sight, my focus turns to developing a strategy for 2018 – which will likely hinge on the degree of success – if any – to be expected in Year 2 of this administration.  Otherwise I’ll probably continue with the current adding to the underweight holdings unless news erupts.