Tuesday, July 9, 2013

Reallocations and a Quick Flip

In my pursuit of reducing the number of names in my portfolio and concentrating my bets, I sold two positions to increase stakes in two other existing positions today. Also, I made a day trade around earnings news for a recent position.
I sold my positions in Pilgrim's Pride (PPC) and Aflac (AFL) today. I've owned PPC since it re-IPOed out of bankruptcy. The company doesn't pay a dividend, though the main reason for the sale is the price has run up too far, too fast. I think there could still be upside, but I've made quite a bit of money and will wait for a pullback to get back in to this takeover candidate.

I sold Aflac after purchasing in February, netting a nice 10% gain. I kept thinking about the exposure Aflac has to Japan and it made me uncomfortable. I have a positive view of the company, but don't know enough about the industry to make an informed investment decision. I decided to take my gains and run.

I used the proceeds to increase my holdings in Conoco (COP) and Dr. Pepper Snapple (DPS). DPS is a truly undervalued name, with great brands, a solid dividend history, and strong industry outlook. Conoco is a blue chip (at least in my head) and has a nice 4%+ dividend yield. It also goes ex-dividend in a week, which necessitated the haste. I now hold a clean 100 shares of COP and 225 shares of DPS.

I sold WD-40 in the after-hours session yesterday after the company reported strong earnings and raised guidance. The stock soared 12% or more at various points. I managed to sell at $65/share. Later in the day today, the stock actually traded below yesterday's close, so I picked up my old shares at $57.50. Basically, I maintained my existing position but brought in something like $250 dollars in the process. Not a bad deal, if you ask me.

2 comments:

  1. I like COP.

    DPS has been on my watchlist for a while now, but I hesitate to buy a company which is so beverage-dependent. I would probably buy PEP ahead of DPS or KO for this reason. But DPS does seem to have a better valuation at the moment.

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    1. Valid concerns on DPS being very beverage-dependent. I guess the modest valuation puts my concerns to bed. And if the shares got too weak/cheap, somebody would buy them - i.e. KO, PEP, or a larger food conglomerate.

      COP finally increased the dividend today after a few years without an increase. Good sign!

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