Stock Swap Today, Selling ALK, Buying AMAT

I'm selling Alaska Air in total.  I bought ALK back in 2013 at a price of $42.30 per share.  I'm selling the position today for around $67 and change.  Here are the approximate stats for the sale:



Around 11% annual return on the investment.  In addition, I sold a chunk in 2016 at $88/share, so the return is actual greater than shown.

My rationale for selling is twofold.  One, I'm not thrilled with the forecasted EPS shrinkage at ALK.  Their recent purchase of Virgin is questionable for me, and I think I can find a better value investment elsewhere,  which should give me a better return on my investment capital.

That better investment for me today is AMAT.  Here is the FASTGraph for AMAT:

AMAT has a lower/better valuation, better growth prospects, a similar dividend yield, better credit rating, and superior return on invested capital.  In short, I'm trading up, and getting a good quality stock at a very attractive price.  Trade war rhetoric and tariffs are baked into today's price, so I see some real upside in the event that negotiations with China turn more positive.  If not, current forecast holds.

I placed limit orders today to sell my entire ALK position, and buy a 1/2 position in AMAT, to which I will add in the coming month or two.

Neither stock is really a perfect dividend growth stock, but I like to own a few low dividend yielders, in exchange for a bit more growth potential.  This is the role of this stock - more growth, less yield.

Best,

Chump

Mid-Year Holdings Summary

Attached below is my Chump IRA Portfolio Mid-Year (July 20 actually).  I plan to start providing more regular updates going forward.  As a bonus, I'm also attaching my taxable account holdings for review. 

My IRA holdings tend to be all dividend growth focused, with yields above 2.5%.  My taxable account tends to contain lower yielding, higher growth stocks.

Both are focused on value, and when the prices get high enough, I trim or sell.

1st, The Chump IRA:

and below is my taxable account:

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What Looks Attractive after the Recent 8% Drop in the S&P? Added VTR, IRM

Keeping a watch list is really important to move quickly into great stocks when the market corrects.  I keep a list for the Chump IRA, mostly names with yields north of 3%, and a list for my taxable brokerage account with yields below 3%.  Here are some of the most attractive stocks from those lists as of Friday.

First, here are stocks I already own in the Chump IRA, and are now 4* rated by Morningstar (undervalued).  If I own a less than full position in any of these, I'm likely to add this week:

The list contains REITs, Utilities, and few others.  Next, is my watch list, which contains stocks I've read about, and done a little research on.  As they get close to my buy target prices, I do additional research, and if positive, I then add.  This can happen in an hour or two, so consider this list partially screened.  Also, I have to be careful not to get too overweight in a particular market sector.  The sectors tend to get undervalued as a group, so I try to only add a few from a specific sector like health care REIT for example, or REITs in general.

Recent adds to the Chump portfolio include Ventas (VTR), and Iron Mountain (IRM).

For my taxable account, I'm watching the following:

From this list AGN (Allergan) looks pretty compelling at recent prices, so I've started a position...

That's all for now,

Chump

Chump IRA Holdings for January, 2018

I've been a bit lazy the past few months, and haven't been too good about updates.  I'll catch up in the coming week or two.  In the mean time, I thought it was important that I document my current holdings.  Here they are below, sorted by % size in the portfolio....

The portfolio contains 39 stocks, and around 4% cash.  REITs were off last year a bit, and this was reflected in my overall performance for the year, and current red seen in the % gain since purchase column.  In general, the higher yielding stocks have suffered a bit in the current rising interest rate environment, coupled with the ongoing threat of Amazon to the retail REIT sector.

Some recent adds to the portfolio include:

• Ventas (VTR) - an attractively priced healthcare REIT
• PPL Corp (PPL) - an attractively priced electric utility
• Signet Jewelers (SIG) - a very attractively priced retail store

The rest of the holdings have been discussed previously.

Chump