Jul 2016 Update

Last month the sky was falling primarily on Brexit concerns.  Just a few short weeks later, the S&P and DOW are setting all time records.  Similarly you can choose a Cleveland view of the US economy (“it’s on the cusp of a recession”) or the Philadelphia view (“Tremendous progress has been achieved”).  Sadly reality probably sits squarely in between.  Meanwhile, I’m keeping an eye on Italian banks.  For good measure, the S&P outperformed my portfolio for the first time this year – 3.56% vs 3.0%.  For the year though, I’m ahead by 11.65%.  Headlines related to my portfolio this month include:

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April 2016 Update

April was generally favorable for the markets.  Earnings reports presented few surprises although the trend of beating analysts’ expectations while presenting lower year over year results continued.  Financials were modestly positive while old technology seemed to disappoint.  Until month end, the market was drifting higher.  Then Apple’s and Starbucks reports were weak, the BOJ failed to raise rates and Carl Icahn announced he sold his Apple position over China fears.  So the month ended basically flat managing a gain of .27% – at least it was positive.

My portfolio value managed a 2.66% gain with the weaknesses (KMB, SBUX and AAPL) being offset by M&A activity (Comcast (CMCSA) acquiring Dreamworks (DWA) and First Cloverleaf (FCLF) being acquired).

Blog Updates

  • I changed my portfolio reporting to measure % of dividends provided instead of market value.
  • Updated the Blog Directory

Portfolio Updates

  • Sold Monarch Financial (due to upcoming merger).
  • With the proceeds, initiated positions in SRCE, BKSC, CVLY and AROW
  • Moved CVX from DRIP to brokerage resulting in a fractional share sale
  • Added to LTXB prior to their earnings release.
  • Added to SBUX after earnings.
  • Added to AAPL after earnings(and the Icahn announcement)
  • Added to XRX – I anticipate a reverse split prior to – or in conjunction with – the spinoff.  So trying to position myself more favorably in this event.

Dividends

  • April delivered an increase of 38.7% over April 2015.  This was due primarily my first dividends from NJR and SJI coupled with dividend increases.
  • April was also up slightly from last quarter by 4.4%
  • Announced dividend increases currently average 10.05% with 48.6% of my portfolio having at least one raise so far this year. .

First Cloverleaf Merger

fclf

This evening we received notice that First Cloverleaf (FCLF) was being acquired by:

fmbf

This transaction will be performed as either (my choice):

  • A stock transaction exchanging .495 shares of FMBH for each FCLF share, or
  • $12.87 cash for each FCLF share

The deal is subject to proration, with FMBH wanting to pay 25% in cash.  This translates into roughly a 24.4% gain in less than two years.  My guess is I’ll take the shares to roll the capital gains into the future, but I’ll base the decision on the spread between the two a few months down the road.

The good news, besides the premium, is FMBH pays a slightly higher dividend.  The downside is the dividend is semi-annual rather than quarterly.