Investing – My Investment Shopping list 8/10/2015

George H Puck Investing, , , , , , , ,

DIS

Last week was wild, a couple of words during the Disney conference call led to a huge sell off in all media stocks.  Disney went from $121/share down to $105/share before recovering later in the week.  The drop was caused entirely over fears of ESPN/ABC etc losing cable subscribers.

I purchased a little over $3000 @ $108.39/share. (I already owned some shares) I thought it was a great time to buy more shares for several reasons.:

  1. Its the top media company.  DIS has rich content in sports, animation, film, content etc.
  2. It reported a fantastic quarter.  EPS +13% qtr over prior year quarter.  YTD vs py YTD up 16%, 19% if you take out one time charges.  And the prior year comparison included Frozen.
  3. The next episode of Star Wars comes out in Dec and it may well be the most profitable film in history.  I expect we will see a huge blockbuster in Q4 and on into 2016.  Then an episode of Star Wars or a Star Wars spin off comes out every year for the foreseeable future.
  4. Disney China opens up shortly and will impact earnings in 2016.
  5. Disney has a history of being big buyers of their stock when the price drops, I suspect they will be big buyers here.

Look, yes we may see some cord cutting, but its going to take some time to happen in a meaningful way. And there is every reason to believe that Disney will be in a great spot to profit in this bold new world, they specialize in content and monetizing that content.  Disney will be well positioned in a cord cutting environment.

I could see some additional turbulence in the stock market, but Disney is now down about 10% and they will be in there buying.

DOW

I trimmed out half of my position in DOW.  I really like DOW over the long term, but the market is just hammering all industrials.  There seems to be a repricing going on that factors in a slowdown in China.  I think there is additional downside in the market that could continue to bring down DOW and I felt as though Disney had more  upside. (Plus we own a fair amount of GE, Boeing, and Berkshire Hathaway.B)

Verifone

I sold half of my position in Verifone.  Its getting hammered, clearly the market believes this is a company that is getting hit by the strong dollar.  When I bought Verifone, I thought it was a good time to get in as the credit card companies are pushing merchants to install smart chip readers, and I thought Verifone would benefit.  Buy selling some Verifone, I open up some cash to buy Apple as a play in part on the growth of Applepay.

My Shopping list:

  1. Raise some additional cash. I am going to look very closely at what stocks I own.  I really think the market is headed for some tough times between now and Oct.  There is a high probability that the fed tightens in Sept, Aug is usually a soft month, the averages arent acting very well, and October at least has the reputation for being bad.  Unless I really love a stock, I am going to get rid of it. I think now is a good time to have a little more cash than normal on hand to pick up bargains if we get a selloff.
  2. I may pick up some additional Apple shares.  Apple is cheap on a PE basis trading around 12x’s earnings, 10x’s if you back out the cash they have on hand.  They had a big quarter in terms of growth, earnings, and free cash flow.  Even if growth slows down there is a ton of free cash flow for Apple to increase dividends or buy back stock.  And Apple has a very good reputation for buying back selectively, I suspect they will be in the market buying after falling 14% off of their April highs.
  3. KMI – I bought some a couple of weeks ago at $35.15.  Since then its dropped to around $32/share.  If it is at that level tomorrow, I will buy some.  A 6.1% dividend is too tempting to pass up.  I talked about why I liked KMI in an earlier post.  Motley Fool weighs in: http://www.fool.com/investing/general/2015/08/09/3-reasons-investors-should-ignore-the-oil-crash-an.aspx?source=eogyholnk0000001
  4. COP/CVX and perhaps as a domestic spec EOG.  Oil has to bottom here soon, I may buy some more if we see it get into the $30’s.  This may be an area where I wait to see how the market shakes out over the next couple of months.
  5. Financials, I may add to my position in WFC.  I might initiate something in either GS or JPM.  If the fed raises interest rates, then the banks should benefit.  In addition GS &/or JPM should benefit from additional volatility in the commodity, currency and stock markets.

What stocks/mutual funds are you buying?

7 thoughts on “Investing – My Investment Shopping list 8/10/2015”

  1. Love the DIS purchase and you’ve gotta like AAPL at these prices. Maybe it will drop even further tomorrow now that the yuan has been devalued 2 days in a row?

    COP/CVX/KMI are also on my radar but I’m going to hold out a bit longer and wait for a bottom to settle in. In the long run, those are great buys though.

    Take care!

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  2. Thanks for stopping by, love the discussion.

    the overall market is still looking terrible, China is messing with their currency in a big way since I posted this. And the fed might raise rates in Sept. So there may be a little more downside between now and October.

    I think KMI bottoms before the rest of the oils. I think their income streams are tied less to oil than the market thinks. But I agree its falling like a knife.

    In all three cases of Dis, AAPL and KMI I feel like these are great long term core holdings, I am willing to double down on all three if they drop more the rest of this year.

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  5. Thanks for stopping buy.

    I have a fair amount of our retirement plans in Vangard funds, so I hear your advice, and we do utilize index funds for a lot of our investments.

    I do need to get our portfolio up on the blog one of these days.

    I do like being able to reduce risk after a big run, and to buy more shares when there are corrections. We have raised a bit of cash by taking a little off the table out of our gains, and we plan on selectively reinvesting it when opportunities arise.

    I also think that indexing to the S&P is fine, like I said we have a fair amount in S&P funds, the investment return over decades has been very solid. But I also enjoy reading and staying up on the market. I am not entirely sold on having 100% our investments managed by an index. I understand the research, and the thought behind it. But I believe that there are some reasons to diversify.

    And while there arent a ton of great actively manage funds that beat the market. I do think they exist. I like and have been invested in SEQUX. It has lower Beta and higher alpha than the S&P, and it has beaten the S&P over 1, 3, 5, and 10 year time frames.. I am not knocking the S&P, like I said we have a fair amount (for us) invested in the S&P, just saying I think there are opportunities

    And I think its possible to beat the market with less Beta if you are willing to actively stay involved. This year our actively managed account is handily beating the S&P. We have taken advantage in some of the biotechs, some of the security names. and actually as a whole seem to have a lower than market Beta.

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  6. HI,
    I met you on Danny’s Meet and Greet. You indicated you enjoyed networking, so I came over. As far as your post, my husband invested us in insured bonds. Nice to meet you.
    Janice

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