Re: Old Folk Portfolio -- Add On Buys and Sells
Today the position in CLX and CMI was sold. Positions in NEE and SO were trimmed. Both NEE and SO were a couple of the largest positions in the portfolio and since this portfolio is in the withdrawal phase, funds for reinvestment must come from within the portfolio, so trimming overweight positions becomes a source for generating cash.
LMT was added to today, one of several times LMT has been added to over the last couple of months as I bring the position up in size while it is still considered fairly valued, I had been building while it was still undervalued.
LMT seems fairly valued with a PEG of 2.09x that is inline with the Aerospace & Defense industry median of 2.22x, which is supported by a PE of 17.10x that is also inline with the industry median of 18.97x.
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TXN was added to today after having beaten earnings and revenue expectations in their latest earnings report. As reported on the conference call:
Starting with fourth quarter results and the market environment. The company's revenue grew 19% year-over-year, driven by strong demand in the industrial and automotive markets. Analog revenue grew 20% year-over-year, and embedded processing grew 6%, our other segment grew 35% from the year-ago quarter.
And while there is a growing recognition that the near-term supply/demand imbalance will end at some point, the secular growth of semiconductor content per system will continue to increase, and this requires a robust manufacturing capacity road map for 2025 and beyond.
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ENB was added to today as I want to take advantage of the rising oil prices and inflation. These market conditions indicate that energy should outperform the market over the near to intermediate term. ENB is also an income play offering a 6.33% yield.
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SJM was added to today as I try to bring that position up in size. There is nothing exciting about SJM at this time, it's value lays in its steady and reliable performance, it is a company with a 2.89% yield and 6% dividend growth.
What really stands out for SJM at this time is it financial strength and currently has some of the strongest ratings of any company we own.
Jefferson Research Ratings:
Earnings Quality - Strongest
Cash Flow Quality - Strongest
Operating Efficiency - Strong
Balance Sheet - Strongest
Valuation - Low Risk
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ORI was added to today as I wanted more exposure to the financial sector and I wanted some of that exposure to come from insurance companies. ORI just came off a nice earnings report and the company announced that they are very pleased to report that ORI produced another terrific quarter, as well as a third consecutive record setting year. Both our major segments, General Insurance and Title Insurance posted outstanding results.
I like buying strength and 3 consecutive years of record setting results sounds like strength to me.
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The remaining purchases today were all CEF's, most of them Muni-bond funds for federal tax advantages. Those funds are:
AFB - 4.76% yield
EIM - 4.85% yield
ETX - 4.20% yield
EVN - 4.56% yield
KTF - 4.42% yield
The remaining CEF added to was GDV. For those of you who know Doug Albo, here is what he had to say.
Top 2022 Value Pick
It's not easy to find low valued equity CEFs that have a good track record and an above average yield as equity CEFs continue to trade at some of the highest valuations I've seen in years.
That said, my top 2022 value pick definitely falls into the value category not only with its discount but also with its portfolio. The Gabelli Dividend & Income fund ( GDV), $27.00 current market price, $29.73 NAV, -9.2% discount, 4.9% current market yield, is not the most exciting fund to own, but it will get you where you need to go.
Gabelli (GAMCO) has been a well-respected name in equity investing for years and they are the only CEF fund family that I know of that uses an aggressive leveraged strategy on their all-stock portfolios without including any defensive measures like fixed-income or options to try and help reduce the volatility that leverage brings. |
