Here are some recent buys and sells in all portfolios from 1/14 to 2/1. The strategy is to continue to build my MLP & REIT portfolio(s) adding what I consider better value names based on (1) current distribution yield and/or (2) better future growth candidates (vs equivalent fixed income from preferreds).
I have focused on selecting companies that have growing and/or stable revenue streams based on undervalued core producing assets. My value proposition is to own those revenue streams but paying an undervalued price (relative to peers and/or other sector plays).
Summary:
MLP basket (19 stocks), blended yield 6.99% Capital gain since purchase: 5.4%
Preferred basket ( 6 stocks), blended yield 8.74% Capital gain since purchase: 8.1%
(Note: objective is 10% annual return: combined annual distribution & capital gain)
Buys
El Paso Pipeline Partners, L.P. (NYSE: EPB) - upped current holdings by 30%
Atlas Pipeline Partners, L.P. (NYSE: APL) - upped current holding by 30%
EXCO Resources Inc. (XCO) -NYSE - Added 20% from "rights" offering at $5.00/share
Campus Crest Communities, Inc. (NYSE: CCG) - Started new position in ROTH
Sells
Taubman Centers, Inc. Preferred (NYSE: TCO-PK) - Peeled off 40% as a source of funds (small gain)
Excel Trust, Inc. 8.125% Series (NYSE: EXL-PB) - closed out position as source of funds (small gain)
CVR Partners, LP (NYSE: UAN) - Sold high priced shares for gain, 80% of shares remain w/ avg cost of $15.92/share
My buys are at/near 52 wk lows, yield between 7.5%-8%, are in a sector I believe is growing and should see growing revenue streams and distributions in the next 12-24 months. My sells were either from my basket of preferred stocks or from high cost lot buys where I have gains and need to reduce the avg cost of my combined lot buys.
I use my basket of preferred shares as a source of funds and sell if/when I have a gain and/or I can peel off shares that under perform the avg yield (my basket of preferred have a blended yield of 8.74%) and/or I can replace the individual security yield w/ some other name (usually a specific MLP and/or REIT) that (1) has equivalent or better dividend yield and (2) has better future growth potential and/or (3) better debt profile and/or (4) a new sector that I feel I need exposure in.
I agree w/ Grommit that my best gains have come from being in the right sector. I have selectively bought into those sectors that were avoided and/or sold off (usually those at/near 52wk lows) creating a value opportunity for the patient investor. If you are in the right sector along w/ selecting a company w/ a low risk debt profile, you provide yourself the opportunity to out perform "the market".
FWIW, I reluctantly started a position in Campus Crest Communities, Inc. (NYSE: CCG) not wanting to add to the nations student loan debt bubble. Student housing is a basic need when attending college away from home and can be financed w/ most of the student loan programs now available. President Obama in his State-Of-The-Union did mention his concern over the growing student loan debt and had submitted program changes to help students from getting over extended w/ new debt. Housing will continued to be financed and CCG should benefit from the proposed changes.
Looking forward, many college courses will be available online and a new hybrid college model is developing where students are housed in new destination locations (not necessarily at/near universities) where learning is done on-line. Retired PHD professors help w/ one-on-one tutoring while students can still experience the "college/campus" experience at a much more affordable cost. CCG is positioned to transition to this new learning model.
This is an emerging education model that will benefit our nation and I will be looking for investment opportunities that will further the goal of creating the best educational system while reducing overall student debt.
EKS |
