More Thoughts About Upcoming Tranche

First, let us salute the May 6th, 2013 tranche:

5/6/2013	Start	Current	Dividend	Pct Gain	R3K Gain
KLIC	$11.40	$12.14	$0.00	6.5%	18.2%
CYOU	$29.24	$28.06	$0.00	-4.0%	18.2%
RDA	$9.74	$17.78	$0.10	83.7%	18.2%
NVDA	$13.85	$18.56	$0.32	36.3%	18.2%
CF	$183.97	$242.34	$2.80	33.2%	18.2%
Totals				31.1%	18.2%

This has been a terrific tranche.  CYOU is the real laggard, but even it had a fair share of excitement during the year. Unbelievably, it got to $41 in past 52 weeks.

Assuming everything holds, this will be my 3rd straight tranche to beat the R3K.  Of my total of 7 tranches, 6 have won or are winning nicely.  That puts a lot of pressure on the upcoming picks.

Is It Time To Go Big?

I have commented many times about how MFI stocks greater than $700m in market cap have done well. In addition, those that pay a nice dividend (I have used 2.6% as a bright line) have done well. Finally, I have mentioned about how I think in general, smaller cap stocks have gotten ahead of themselves.  So what if I simply picked the 5 largest stocks in the top 50?  That might actually achieve both the goals of being larger and having a dividend.

1. MSFT - been on a tear. In the past year up 40%. But still looks cheap on so many metrics. Last time I made a list, they were #39 of all stocks. And they have a 2.8% dividend.  Check, double check!
2. AAPL - always a lightening rod for controversy.  But I am going to bet you right now, that if the overall market started to struggle, AAPL would hold up better than the averages.   They are #28 in my list of all stocks and pay a 2.3% dividend.
3. CSCO - the third head of the old tech trifecta monster. I was a bit upset with CSCO, but perhaps I have been hasty. And it should also be a safe port in a storm. They yield 3.3% and are #15 on my list.
4. KRFT - I know I commented a month or so ago that I did not think Kraft really belongs on the list. My digging shows they are on the list largely due to a great year in investments in 2013.  That does not really seem like operating income. So they are not really cheap, although per formula they are #42. They do pay an eye-popping 3.8% dividend.
5. NOC - I have looked at this defense contractor a couple of times, looking at their stock chart - I should have pulled the trigger. Up about 70%! They are a bit further down my list (#58).  They sport a 2.1% dividend yield.
6. LO - in case I were to bail on KRFT, LO is the next option.  I keep waffling on the tobacco plays, but in tough times - it might be smart. They have a 4.7% dividend.

Looking at these stocks, if one really believes that the upcoming year could be a bit rocky, you could do a lot worse.  I know my picking household names isn't particularly exciting, but I am not entirely sure this is the time to reach for excitement.

And in total, the stocks average a notch over a 3% dividend.

Stay tuned.