Weekend Update

It is essentially Spring here in Connecticut. The first Winter was extremely mild, which all-in-all is good. So as I sit here on an early Saturday morning enjoying a cuppa joe, I thought I'd do a quick update.

My portfolio is doing great. I am up 13% year-to-date overall. My dividend portfolio is a bit worse, up 10% which is dead-even with the Russell 3000. And I feel good about that. Regarding other benchmarks, my MFI Index rallied a bit after my posting earlier this week and is up 10.4% so far.

Here is my current dividend portfolio:

Stock	Shares	Avg Cost	Current Price	Dividends Received	Pct Change	R3K Change	Diff
AZN	443	47.06	44.95	1,919	4.7%	7.4%	-2.7%
BHK	2,922	12.55	14.00	1,478	15.6%	3.0%	12.6%
CEL	1,531	25.81	12.59	5,875	-36.4%	25.3%	-61.7%
CPL	1,000	22.67	32.81	-	44.7%	19.6%	25.1%
CSCO	2,306	17.51	19.80	304	13.8%	3.8%	10.0%
CSQ	5,140	8.18	9.67	1,739	22.4%	19.1%	3.3%
ENH-PA	1,000	26.12	25.94	484	1.2%	6.0%	-4.8%
FCX	503	36.06	38.78	125	8.2%	15.7%	-7.4%
HFC	731	34.68	35.88	361	4.9%	1.0%	3.9%
INTC	1,280	19.63	27.07	997	41.8%	20.6%	21.3%
JQC	4,483	8.85	9.14	1,598	7.3%	5.7%	1.6%
KMF	1,760	21.68	26.93	1,330	27.7%	15.4%	12.3%
KSW	13,048	3.76	3.77	4,023	8.5%	18.5%	-10.0%
LNC	2,425	24.32	24.70	593	2.6%	13.0%	-10.4%
MPC	569	43.92	43.90	-	0.0%	1.0%	-1.0%
MSFT	953	26.79	31.99	805	22.6%	12.4%	10.2%
NSU	3,200	6.31	3.87	-	-38.7%	4.2%	-42.9%
PM	436	45.63	84.61	1,947	95.2%	28.7%	66.5%
PRE	1,014	61.78	64.20	923	5.4%	7.6%	-2.2%
PVD	397	63.26	75.31	698	21.8%	15.6%	6.2%
RTN	458	46.82	51.83	434	12.7%	4.2%	8.5%
SBS	869	41.02	74.40	4,441	93.8%	19.6%	74.2%
SLF	2,765	27.21	21.36	2,811	-17.8%	6.7%	-24.5%
STD	4,132	7.77	8.05	-	3.6%	2.3%	1.2%
STO	1,000	23.86	28.02	-	17.4%	17.1%	0.3%
USB	1,901	21.76	29.72	923	38.8%	19.6%	19.2%
WBK	489	105.66	109.67	3,636	10.8%	13.1%	-2.3%
Total Open				37,446	13.3%	12.0%	1.4%
Closed					10.4%	7.5%	2.9%
Combined					11.7%	9.4%	2.2%
IRR Since 12/31/10					14.6%
2012 Gain					10.0%

Transactions

You will note a couple of changes since my last posting. On the dividend side I sold MNDO at $2.35. In retrospect, that was early as they spent most of yesterday around $2.42. Then I did buy back all of the STD I sold in January at $7.78, which ended up being a better price than my sale (so I felt good about that).

On the non-dividend side, I made two buys during the sell-off on Wednesday, CJES and UIS (MFI stocks). They are both up over 6% since my buys (I feel good about that as well).

I am actually sitting on quite a bit of cash right now. I will likely stay in cash as I don't see any compelling stocks to buy right now. I do expect the markets to keep their upwards momentum for another month (early April). The market invariably seems to go up the last month that people can fund their IRAs. I will look to sell some positions in the next 30 days, with the most likely candidates being UIS, CJES and CVI... which are three non-dividend stocks I bought on a speculative basis (CVI is down about 5% for me). I am also thinking about selling SLF, which is a large dividend position for me. I am pretty long life insurance (with SLF, GNW and LNC). I do worry about a dividend cut at SLF as they seem to be struggling in today's low interest rate environment and they are not as "cheap" (as a function of price to book value) as the other two.

Watch List (aka The Big Five)

I do have some stocks I am thinking about buying or adding to my positions.

• FCX - They have dropped from about $47 to $38.78. I still think this is a premier metals play (and they recently bumped their dividend). If they drop another 5% I will almost surely double my position.
• PGR - this is Progressive Auto Insurance. There is not a more savvy insurance company out there. They are a bit pricey, but they have a 2% dividend and in my mind are primed to be taking market share from State Farm and Allstate over the next 5 years, and be profitable doing it as they understand the risks better (they are at $21.27 today... so if they sell-off to around $20 I will likely buy-in big).
• TEVA - I bought this Israeli pharma about 5 years ago and did quite well. The stock has pulled back a lot to $44.90. They pay almost a 2% dividend and as the patent cliffs continue for the branded pharmas, companies like TEVA will benefit.
• WAG - If Buffett is buying a stock, you have to at least think about it. They are at $33.70 and have a 2.9% dividend. In my MFI rankings they are #575 with a 13% earnings yield and 26$ ROIC. I think if they can move up to the top 400 I need to consider as a long-term play on the aging of America.
• WY - Lumber should be anther great inflation hedge (better than gold in so many ways). This is not only an inflation hedge, but a play on the inevitable housing recovery. The stock is around $21 and pays a 2.9% dividend.
  

I have all 5 of these stocks on a daily watch list and intend to be patient as the market will invariably have a swoon at some time in 2012.

Non Dividend Commentary

Here is some commentary on my non-dividend holdings:

• RIMM - I bought the flailing Blackberry maker after I saw David Einhorn and Prem Watsa were in it big time. So far they have been a "house of pain". I plan to hold for a year to see if they can hit bottom and start moving up again.
• NEP - Arghhh! This is the last of my Chinese stocks and life would not be complete if I didn't get bad news on them as well. Their trading was suspended as the SEC made some comments about company money finding it's way to executive pockets.
  
• LYSCF - this is a recent buy in my IRA as a rare earth play. They shot up 10% yesterday. It is not a stock for the faint of heart.
• TROX - I wrote an extended piece on this stock (I picked from Seth Klarman portfolio). I am thrilled with it so far (up about 18%) and I will hold through their catalysts (getting listed on NYSE and completing merger and getting off-shore).
• CVI - this is an inexpensive refiner (18% earnings yield) that Caril Ichan offered $30 for. They are under $28 and I would not be surprised to see some other companies looking at them.
• GNW - continues to be one of my favorite stocks, leveraged to US recovery like a BAC. They trade at $9 (26% of book value) and they are trading at 6x forward earnings. Seth Klarman is in there as well and I think GNW has a lot of upward potential (they were above $30 pre-crisis).

That is pretty much it. I will keep everyone informed on how things go. Have a great Spring Weekend!