Market down 10% is last two trading secession. I deployed 2% of my cash over last two secessions and have 2%-4% cash ready for Monday. The key are the stocks I am buying; most are adds to current positions but did start a few new positions w/ Alexandria Real Estate Equities (ARE) several small buys Friday and at a 0.07% portfolio size w/ goal to make a 1% portfolio position.
Alexandria Real Estate Equities, Inc. is a urban office real estate investment trust (REIT) with particular focus on collaborative life science, agtech and technology campuses. The company believe in the utmost professionalism, humility, and teamwork. The companies tenants include multinational pharmaceutical companies; public and private biotechnology companies; life science product, service, and medical device companies; digital health, technology, and agtech companies; academic and medical research institutions; U.S. government research agencies; non-profit organizations; and venture capital firms. Alexandria also provides strategic capital to transformative life science, agtech, and technology campuses through our venture capital platform. The company believe these advantages result in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value. Alexandria Real Estate Equities (ARE); Price/FFO = 8.5x (new multi year low at $81/share) 2024 FFO growth 5.65%; div yield 6.46%; portfolio position 0.7% goal is a 1% portfolio position
I do not see any significant impact from tariffs; leases are long term over 10 years, US leads the world in life science, adtech research. I see this to continue to grow at/above 5.65%.
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Adds:
SCHWAB US DIVIDEND EQUITY ETF - I plan on small adds every 3% lower as I build this position.
Agco Corp (AGCO) - continue to add to this position. They have a large manufacturing facility located in Mn for domestic production; 0.39% portfolio position
Applied Materials (AMAT) - continue to make small adds to my position 14x PE; could see below $100 and will add in size to complete portfolio position at a 1.5% portfolio position. Currently a 1% portfolio position.
Dell Technologies Inc (DELL) - New position small tracking w/ adds every 2%-5% lower may/could see 20% lower 9x Forward PE w/ 2.5% div yield. 0.07% portfolio position would like to build to a 1% portfolio position
Dow Inc (DOW) - Continue to build this cyclical position close to 0.6% portfolio size now w/ several adds last two days; five year low 19x PE (cyclical so large PE changes) 9.93% div yield but I do expect a dividend cut. 0.5% portfolio position
Honeywell International Inc (HON) - started tracking position 19x PE company plans to spin off two of their divisions; possible 20% more downsize. tracking position allows me to add more every 3%-5% lower
Johnson & Johnson (JNJ) - several small adds last week
South Bow Corp (SOBO) - continue to add to this new position; recent spin off from TPL; 8.3% div yield huge debt but this is being paid down; operates the XL-pipeline; 0.2% portfolio position
Inmode Ltd (INMD) - 9x PE; Israel company w/ reciprocal tariffs less than 10%; company ; build medical devises; 1.1% portfolio position
Kontoor Brands Inc (KTB) - several small adds last few days as I buy back shares sold earlier this year; 0.35% portfolio position; pays a 3.5% div; 70% of their products manufactured in US; the other stuff in Mexico
Organon & Co. (OGN) - tiny tracking position for the medical spin off by MRK; Huge debt 8.58% div yield but this may/could be cut; only a 0.09% portfolio position
United Microelectronics Corp ADR (UMC) - 12x PE; 5.6% div yield specializes in providing foundry services for high performance semiconductor applications. Foundries in TWN; According to a report by Nikkei Asia, UMC was in discussions with U.S. contract chipmaker GlobalFoundries Inc. about a potential merger; 0.1% portfolio position; A US merger may/could expand exports
FMC Corp (FMC) - sever small adds for the Ag Science Company; Most sales are domestic but some exposure to foreign markets; 11.6x PE 6.555 div yield; 0.1% portfolio position; shares added well below avg cost; will peel off high cost shares on any reversion to 5 year mean at/above $90/share.
Gold Resource Corp (GORO) - small gold/silver miner in NV; may/could be profitable in 2026 especially w/ current gold prices. A spec position started in March, 0.08% portfolio position
Dupont Denemours Inc (DD) - started tracking position in this cyclical; 15.5x PE; 2.6% div yield; 0.08% portfolio position; would like to build to a 0.5% portfolio position; still proceeding with the spin-off of its Electronics division. This separation is targeted for November 1, 2025 (DuPont announced that it would no longer spin off its Water division. Instead, the company will retain the Water business within its portfolio)
Leggett & Platt Inc (LEG) - several small adds as company is in a long term restructure; Sold one division earlier this month for $268 Billion (includes 3 facilities); Company to consolidate it's other facilities to less than 20; Was moving to Mexico but may keep those plants in the US. 6.6x PE; 2.78% div yield; 0.9% portfolio position; It's a late 2026 stock; Could be +300% by early 2027 reversion to the 10 year mean.
Vishay Intertechnology (VSH) - 23x PE semi component manufacturer; facilities in US, Mexico; Asia & Europe; only a 0.5% portfolio position; 3.5% div yield possible double reversion to mean at/near $20/share
Teradyne Inc (TER) - 22x PE leading provider of automated test equipment. Primary manufacturing in North Reading, Massachusetts, USA; Also another facility in Singapore. They have operations in 13 countries. 0.2% Portfolio position
Manitowoc Company (MTW) - 16x PE , small cap crane builder; 3 segments: America, Europe & MEAP (Middle East); have built a 0.7% portfolio position w/ a few small adds last week.
United Parcel Service (UPS) small add and now a 1.5% portfolio position; 12.8x PE; div 6.68% yield
Merck & Company (MRK) - 9.6x PE; 3.8 % div yield small add; drug/pharma pipeline constrained but big recent investments in China for drug discovery.
More REIT adds:
Kimco Realty Corp (KIM) - 5.1% div yield; still building position 0.5% portfolio position
Saul Centers (BFS) - 6.88% dividend; still building position 0.8% portfolio position
Plymouth Industrial REIT Inc (PLYM) - 6.5% div yield; still building position 0.4% portfolio position
Brixmor Property Group Inc (BRX) - 4.67% div yield 0.19% portfolio position (new this month)
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Still holding 8% cash in the Brokerage account yielding 4% in the Treasury Fund. Would like to deploy at least 3% of this Monday. Also have 40% cash sitting in the Vanguard Treasury Fund that can be deployed over time if/when we see 'extreme' values. Have this set aside for a real estate project but could be used if similar capitalization rates can be achieved from equities.
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I have small sells in WMB, UNFI, HR & SBRA, SJM, ZBH, ENB, GOOGL
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Goal is to find low PE stock w/ good dividend (higher than my Treasury yield of 4%). Have focused on my basket of REITs. Still have oversized gains in pipeline companies as well as several of my long term hold from 2019/2020. I see the recent selling as an opportunity to get some of this cash back in the market.
Unfortunately not enough panic, so I expect another 10% - 15% correction as PE's contract especially in the Tech Area. Earnings, growing FCF and little to no debt are key metrics I am looking at. Scale into your positions over week/months |
