BHB Portfolio – Weekly Update – 10.07.20
- Portfolio up 1.9% from previous week
- Top of the Class: BABA, GVC, PAF, SPCE, TSG, TTWO, AAL
- Naughty Step: BP, RCH, NOK, SMDS, WBA
- Purchases: SMDS, TSCO, RR, CSCO
- Sales: None
- Dividends: TSCO
Weekly Performance: + 1.9%
2020 Performance: +0.8%
We saw a bit of a pull back across the market this week so I took the opportunity to top on a few of the current holdings again. I am still only topping up in small portions as there is probably going to be better price opportunities over the coming months.
I also opened new positions this week in Cisco Systems Inc (CSCO) and Rolls-Royce Holdings Plc (RR.). CISCO Systems Inc (CSCO) has been added as part of the income strategy as it is still paying a 3% dividend yield and has potential for growth. Rolls-Royce Holdings Plc (RR.) has dramatically cut back on the dividend so is part of the growth strategy. It is in a tough industry right now but the price has dropped significantly and there is potential for a lot of growth over the years if things return back to normal.
Also received on dividend payment this week from Tesco Plc (TSCO) which has increased again and currently has a forecasted yield of 4.26%.
Tesco Plc (TSCO)
Buy Price: £2.20
Fair Value Calculation: £2.32
Analysts Estimates: £2.81
Dividend Yield: 4.19%
Another top up on Tesco Plc (TSCO) as I have been doing through the year. Although they are only at 2% of the Income Portfolio, I will start to slow down on Tesco Plc for a while as the valuation models as starting to show a decline in fair value. Although they have had strong performance through out the virus crisis, it has come at a cost and they are already carry a fair amount of debt. I will keep an eye on the incoming financials and valuation models to make sure I’m buying with a margin of safety.
DS Smiths Plc (SMDS)
Buy Price: £2.77
Fair Value Calculation: £2.95
Analysts Estimates: £3.35
Dividend Yield: ***
DS Smith just pulled their dividend for the interim payment and it sounds like they are going to pull the final one too. This isn’t a good results for a stock that is in my income portfolio, however I am going to keep adding here as I think they will start again next year. The rest of the market did not appreciate the dividend being cut and the price dropped over 10%. Although the earnings report did show a drop in volume etc. as expected they still made a profit. They are strong enough to survive this virus, so this could be a great entry point for the longer term.
Rolls-Royce Holdings Plc (RR.)
Buy Price: £2.62
Fair Value Calculation: £3.95
Analysts Estimates: £3.72
Dividend Yield: 0.7%
Rolls-Royce Holdings Plc (RR.) is a new addition to portfolio. I have added this to the Growth Portfolio as the price has dropped significantly due to the current issues and economy changes. There is risk with this investment, but in the long term if things do start to normalise there could be significant upside for the stock price. Even though this is part of the long term portfolio if there was a decent price increase in the short term I would be tempted to take profit and close the position.
Cisco Systems Inc. (CSCO)
Buy Price: £37.11
Fair Value Calculation: £45.75
Analysts Estimates: £49.25
Dividend Yield: 3.08%
Cisco Systems Inc (CSCO) is another new holding. It is one of the large strong tech companies that have not become hugely overvalued in my opinion. The price dropped a little recently to become under fair value to my calculations and so I add to the portfolio. As Cisco Systems Inc. are still paying dividend at a yield of over 3% they will be part of the Income portfolio.
BHB Radar & Wish-list
I will be looking out for any opportunities to add to current holdings as I normally would do. The only new stocks I currently have my eye on are The Coca-Cola Company (KO) and Caterpillar Inc. (CAT). I’m also starting to look into Molson Coors Beverage Company (TAP) but I need to investigate a little more.
As it is coming up to earnings season I will be watching closely to see what happens. Some of the figures are going to be bad however, it looks like analysts have projected the worst so it wont take much for companies to beat those expectations even though the results are very bad. How the market reacts to this is anyone’s guess so I will be taking it steady over the next few weeks.