Recent Buy - DOW Inc (DOW), Delta (DAL), and 3M Co (MMM)

It feels like it has been forever since I made my last purchase and cash has been piling up in the meantime.  When it comes to investing, we all know that patience is most certainly a virtue one needs to exhibit on a regular basis, whether it comes to waiting for reasonable valuation to present itself or simply buying and holding a basket of investments in an attempt to delay the gratification of what a sum of dollars can buy today and instead investing that sum of money in a security and then waiting for it to exponentially grow into a greater sum of dollars over a decade or two in sum cases much longer.  Well, with the ongoing global coronavirus scare and the number of confirmed cases growing on a daily basis, Mr. Market has begun to panic and as a result has agreed to sell me some shares at much more reasonable valuations than what he was willing to do just a few months ago.  In response to Mr. Market's panic, I've put $7,500 in capital to work in the past month with the average yield of 4.0% for an additional $297 in annual dividend income. See below for the details on the latest transactions in recent weeks.

Recent Buy - Goldman Sachs (GS) and 3M Inc (MMM)

Recent buys this month include include one purchases that added a new position to the portfolio, namely, Goldman Sachs.  See below for details on each of the recent purchases.

Recent Buy - 3M (MMM), Cardinal Health (CAH), and DOW Inc (DOW)

Well, it has been nearly 3 months since I last purchased shares of any stock.  With the recent political shenanigans surrounding trade and the Fed's anticipated actions the markets have seen some greater than usual volatility.  Today was no exception as such, seized the opportunity add to some existing position in addition to a purchase I made earlier this week which resulted in a new position to the portfolio.

Recent Buy - DOW Inc (DOW)

I've been cautiously watching the market over the past several weeks reading up on various stocks as there always seems to be at a least a handful appealing valuations hiding in plain sight.  One franchise that has caught my attention in recent weeks has been DOW Inc. (DOW).  This company was recently spun off from  DowDupont (DWDP) conglomerate that merged a few years back which disclosed the intent of eventually dividing the combined company into three separate publicly traded companies.  The material science division of DowDupont was the first to be spun-off, effective April 1, 2019, and is now known as the "new" DOW Inc. See below for details of the purchase along with some additional metrics and information obtained from the 2018 investor day.

Portfolio Impact of the DIS and FOXA Transaction

In March, the Disney (DIS) and Twenty-First Century Fox (FOXA) transaction was completed.  Over a year ago, Disney agreed to purchase a portions of FOXA assets at a value of $71.3B.  This post is published to record the impact on the portfolio as well as my subsequent allocation between my accounts.  Below are the details of these transactions.

Recent Buy - Wells Fargo & Co (WFC)

I started a position in WFC a few years back and have experienced very little total return at this point.  As is well known, the company has been in the headlines for unfavorable reasons that past couple of years and as a result has been the favorite target of a handful of politicians.  The most recent CEO, Tim Sloan, resigned a few short weeks ago and so the company is currently conducting a search for his replacement.  The vacant CEO position combined with the revised guidance the company outlined with the recent quarterly report is of course weighing stock valuation. Despite these headwinds, I believe the company is attractively valued for the long term and so I decided to increase my position.  See below for the details of the purchase.

Recent Buy - CVS Health Corp (CVS) and Cardinal Health, Inc (CAH)

Both of these stocks are roughly 5% below my cost basis and neither position is a very large portion of my portfolio at the moment.  Both CVS and CAH decline nearly 4% on the day following the announcement of Walgreen Boots Alliance, Inc. (WBA) Q2 results pre-market which weighed heavily on much of the healthcare sector, including CVS and CAH.  See below for the details of both purchases.

Recent Buy - CVS Health Corp (CVS)

While waiting the span of several weeks after the first of the year, I recently made another purchase within a span of week from the first purchase in 2019.  This most recent purchase is a new position for the portfolio, CVS Health.

Recent Buy - Bayer AG (BAYRY)

I've finally made my first purchase of the year, last week, on the 81st day of 2019.  I certainly did not anticipate waiting this long.  The rapid rebound in the overall market's valuation during this first quarter of the year I think took many by surprise and I was certainly hoping to add to positions at much more attractive valuations on the whole than can currently be found.  Even BAYRY has been begun creeping back up to the low $20's in recent weeks but that came to a halt when additional verdicts against the company came to light in recent weeks which is playing a part in the stock now retreating below its previous 52 week lows in the mid $16 range. And now, this week, JNJ and BAYRY announced a $775M settlement related to the drug Xarelto despite winning all 6 cases that went to trial according to the Dow Jones Newswires likely adding to the further weakness in both stocks.  See below for additional details on the recent purchase.

Recent Buy - Phillips 66 (PSX) and Bayer AG (BAYRY)

Phillips 66 (PSX) valuation has come down quite a bit in, coinciding of course, withe the fall in the price of crude oil.  This company is a cash flow generating machine that nearly prints money despite the volatility in the oil market.  What makes it an even better company is that management very shareholder oriented; consistently raises dividends and buys back stock.  See below for details on the purchase of PSX and BAYRY.

Recent Buy - Cardinal Health, Inc (CAH), Kraft Heinz Co (KHC), and Bayer AG (BAYRY)

Today with the market further it's decline as of late I initiated a new position in, Cardinal Health, Inc. (CAH), which has increased its annual distributions each year for over two decades.  In addition, I bolstered my equity weight in two existing positions, KHC and BAYRY, which I have been buying frequently as of late.  See below for details on the transactions.

Recent Buy - Broadcom Inc (AVGO) and General Mills Inc (GIS)

We've all witnessed the volatility of the market in recent months and in particular, the wild swings within the technology sector.  Broadcom Inc.(AVGO) has not been immune to these swings and despite what many would agree was a fairly good earnings report for Q4 and full fiscal year 2018, the after hours spike was tempered Friday afternoon as the general negative market sentiment as of late weighed heavily on nearly all stocks.  AVGO is a new position for the portfolio and while adding this position, I also picked up some additional share of General Mills Inc. (GIS).  General Mills, along with what seems all other consumer staple stocks, remains out of favor on wall street despite rapidly approaching a 5.0% dividend yield and 10% FCF yield.  Take a look below for details of the purchase and a few of the metrics that are considered prior to purchase.

Recent Buy - Kraft Heinz Co (KHC) and Bayer AG (BAYRY)

I know what your thinking, "c'mon mix it up a little bit, same 'ol, same 'ol."  While I don't blame anyone for thinking that, I can't promise the companies I've been actively purchasing will change anytime soon.  KHC and BAYRY are two positions I have been adding to quite frequently it seems as of late.  KHC may not be an aggressive growth stock with a corresponding high dividend growth rate, but it does remain a cash cow with a yield getting closer to 5% week by week it seems as overall market valuation continues to decline.

With respect to BAYRY, nothing has changed with my rather strong conviction concerning what I believe to be a rather significant price discrepancy between Mr. Market's perceived risk associated with the company versus the potential long term reward with owning the stock.  My plan to continue to make purchases of BAYRY remains in tact so long as the valuation remains at unusually depressed levels.

Recent Buy - Leggett & Platt Inc (LEG)

I must admit I was pretty excited when I checked the market this past week and saw that Leggett & Platt (LEG) was trading down > 7% after their earnings release.  Apparently, Mr. Market not too happy to hear management revise guidance lower for 2018.  The latest earnings presentation for Q3 2018 can be seen here and corresponding press release can be read here. Despite the revised EPS guidance for the current year, the company's decline in valuation leaves investors paying a Forward P/E ratio of less than 15x, which is a very reasonable valuation for this industrial company that is also very shareholder oriented.  See below for additional details on this purchase.

Recent Buy - Bayer AG (BAYRY)

Part of my routine each morning is to open the Yahoo! Finance application on my phone and see what the market is up to.  On Tuesday morning, it was clear heading into the market open that the market would open in negative territory based on where the DOW futures where trading leading into the open.  One stock on my watch list stood out like a sore thumb and it is a current holding of mine, namely, Bayer AG.  Within the first few hours the stock had fallen > 8.5% which brought it back down to similar levels as when I first picked up shares not too long ago.  As the week progressed, the valuation continue to decline with the rest of the market and I continued to buy.  See below for the details on this most recent purchases.

Recent Buy - Delta Air Lines (DAL)

I realized things got interesting Wednesday afternoon when I checked in on the markets and saw that they were in midst of a precipitous decline for the day.  I keep a lengthy list of stocks on my watch list and whether the markets panic for one day or weeks on end, I have always made sure to have a pile of cash handy to take advantage of perceived price discrepancies.  From this watch list, I always have an even shorter list of stocks that are presently in or are nearing a valuation range where I would be willing to initiate a new position (or add to an existing position) should the right price present itself.  I think this is a pretty typical characteristic of any self directed long term investor.  Well, on Wednesday, the stock I decided to pull the trigger on was DAL.  The stock has retreated back to the low $50s and I have decided the value offered for the price provides and adequate margin of safety.  See below for the details of the purchase, some metrics, and additional commentary.

Recent Buy - J.M. Smucker Co (SJM)

Recently made my first purchase for this month.  I've had a handful of companies on my shortlist of potentials buys and most of them are companies I have a current position in, such as J.M. Smucker.  This company is back down near their 52 week lows and the industry as a whole is out of favor with Wall Street.  SJM along with GIS have made some acquisitions recently to spur some growth and questions remain surrounding the price paid versus value received. See below for the details of the purchase along with some additional notes regarding valuation and purchase.

Recent Buy - Bayer AG (BAYRY)

I've had Bayer (BAYRY) on a watch list I have listing many companies that I would consider owning at reasonable valuations.  Those who follow the markets will know that Bayer has captured some headlines in recent years.  First, the company announced some time back that it would be acquiring Monsanto and the $63 billion transaction was completed in recently weeks.  However, just before the transaction was closed, the company found itself in the headlines again as result of California court awarding a plaintiff $289 million who had sued Monsanto, claiming that the company's herbicide had helped cause the plaintiff's cancer.  What's more, Bayer recently revised its guidance for 2018 downward by about (~7%), which results in a forward P/E multiple of 12.7 (resulting in an earnings yield of 7.87%).  With all this relatively bad news, one may think "what the heck are you doing investing your precious capital in this company?".  Well, in short, I think the long terms benefits greatly outweigh the near term risks.  I'll have additional commentary below, but before I get there, let's take a look at some of the basic metrics I typically review in consideration of a stock purchase.

Recent Buy - Kraft Heinz Co (KHC)

Earlier this week I added to my KHC position, nearly doubling its size.  I initially bought 50 shares back in April and have wanted to further grow the size of this position but have been patiently waiting for the price to retreat below $60.  Shortly after their earnings release, I thought that my opportunity might not come again as speculation arose that KHC might be a potential suiter for an acquisition of Campbell's Soup Co (CPB), which I also happen to own.  This speculation combined with the KHC beating analysts' expectations for Q2 earnings led to a one day jump in price, amounting to an +9% increase in stock price on August 3rd.  However, as the past few weeks have shown, this valuation jump did not last.  Details on the purchase along with the updated valuation metrics can be seen below. 

Recent Buy - AT&T (T) [second purchase in July 2018]

Just a short post here to mention that I added a few more shares to my AT&T position earlier this week.

Purchased:  34 shares x $31.029 = $1,054.99 (+ $4.95 commission fee)

Dividend Income: $2.00 sh/annually x 34 shares = $68.00 in additional dividend income

Comments: This latest purchase brings my total share count in T to 194 shares which equates to a investment value of $6,018 with annual dividend income of $388. My last purchase of T was just over a week ago.