Shopping List

Making A List

With the markets becoming faster and faster moving, I find it is helpful at times to already have a list of stocks you are thinking about buying, along with some price targets you think would be acceptable.  Obviously, almost all stocks that I currently own, I am watching regularly and if I think they get "marked down" inappropriately, I will be a buyer.  SLCA this past week was a great example of that.

I really want to try to accomplish several goals when I am building my portfolios.  Obviously, I want to buy stocks that i think are a good value.  But I also want to try and get some diversification within my portfolio (not be too over weight in a sector).  Finally, I want to try and manage my total number of positions.  This can be in conflict with my diversification goal.  If I am looking at my dividend portfolio, I would like yields in excess of 2% and if they are on the lower side, I want companies that I think can grow the yield.  Keep in mind I generally try to have at least a one year time horizon when I buy a stock/security.  So it helps if it is a good company.

MFI/Dividend Ideas

I mentioned that I was going to build a portfolio of stocks that were on the MFI lists and had a decent (2.6% or greater) dividend.  At first I thought I would buy the entire list, but I am settling on ten ideas.  Here are the ones I am thinking about right now.  Note that I do not want to over-think these picks.  They are acting as a portfolio, with not too much in any one stock:

Stock	Amount	Yield	Dividend	Current
PBI	10,000	5.1%	510	14.64
DLX	10,000	2.7%	270	36.59
STX	10,000	3.5%	350	44.01
HLF	10,000	2.6%	260	43.63
INTX	10,000	8.7%	870	9.05
LO	10,000	5.2%	520	43.61
QCOR	10,000	2.9%	290	36.29
RTN	10,000	3.3%	330	67.41
RGR	10,000	3.9%	390	47.99
VCI	10,000	4.8%	480	26.28

Other Dividend Ideas

This list is really a blend of stocks I already own and stocks I am watching.

Stock	Amount	Yield	Dividend	Current
INTC	20,000	3.6%	720	24.59
KKR	50,000	5.0%	2,500	19.56
STO	20,000	5.1%	1,020	22.38
PSEC	40,000	12.7%	5,080	10.26
ABBV	50,000	3.6%	1,800	44.00
RIG	20,000	4.4%	880	50.68
PNC	50,000	2.5%	1,250	71.10
HFC	50,000	2.8%	1,400	47.26

A couple on this list are areas I think I need for my diversification goal. ABBV is part of spin-off from Abbott recently.  I really do not have pharmaceutical exposure.  Then PNC is a Pennsylvannia-based bank.  When I sold my USB and JPM, I no longer own any banks.

Other Ideas

I spend a lot of time looking at what smart people are doing.  I think one area I may want to get into more is life insurance.  I do own GNW, which gives me some exposure to the space.  I mistakenly sold LNC in the fall when I incorrectly predicted they would hit $20 before they hit $30.  But LNC, HIG, MET and PRU are all quality life insurers that are still selling under book value.  As the interest rate environment improves, their earnings leverage will increase (ironically, their book value may decrease due to large fixed income assets on balance sheets).

Then I really like KLIC, which is one of my MFI holdings.  They have so much cash.  I think when they signal what they will do with the cash, that could really propel the stock (especially if it is a buyback or dividend).

My last stock idea(s) is from David Tepper and Warren Buffett.  I do expect the US to start re-investing in infrastructure.  So some of the construction plays like FWLT, KBR and FLR are appealing to me.  Maybe even AGX.

So I have the list. I have the cash.  Just waiting for entry points.  If any of these stocks drop 10%, I have an alert set up.  I will at that time evaluate whether I want to be a buyer.

Have a great weekend everyone!