Today, I want to lay out my broad stock portfolio for 2019, as it stands today.
Portfolio Wealth Global has been one of the only newsletters to show the following:
- 3rd Presidential Years: Back in November, we showed the historical precedence of what we’re seeing right now – the third year in office for presidents is, on average, the best for markets.
- Republican President, Democrats in Congress: Despite the illusion that this type of political showdown causes stagnation in Washington, we pointed out that this kind of scenario has actually been very bullish for markets over the decades.
- The Big Blow-Off Top Design: Over a year ago, we highlighted the reasons that bull markets don’t end just like that. Mass euphoria comes before indices finally peak in price.
In 2018, we published the most extensive information about the importance of dividend investing for our wealth and long-term dynasty.
We included some of my highest-conviction companies, such as this innovative brand, this worldwide leader, and this European dominator. Since December, two of them are trading at fresh, all-time highs; and Walgreens, the pharmacy giant, is currently – in our view – the most undervalued stock in the world (risk-adjusted).
2019 started out with a bang. In 1955 – the last time that markets were this green to start the year, as the chart above shows – the year ended with a 26% profit.
Investors are beginning to chase yield instead of growth. This is in preparation for a bear market, in which dividends make up a bigger part of the gains than multiples expanding via price appreciation.
We don’t see the bull market ending just this second, but it doesn’t matter if it does or not. Our strategy is to analyze individual businesses, figure out their intrinsic value, and wait for the price to be discounted to allow for a margin of safety – then we make our move.
Bear markets actually speed-up this process.
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EXISTING POSITIONS: SELLING THESE ONES
- Omega Healthcare – In one of our earliest alerts ever, we published HERE the highest-quality retirement stocks. Omega Healthcare, the largest REIT of its kind, was among them.
Since we profiled it for $26.44, it has gained close to 40%, not including dividends.
I’m going to update our high-yield page by profiling 3 new companies, so we want to clear the existing winners from it.
These are the companies currently at the top of my list for income investing – and I’ll be publishing an alert once they reach the price I’m willing to pay for them: Altria Group (6.57% yield), Kraft Heinz (5.25% yield), AT&T (6.70% yield), AbbVie (5.29% yield) and Enterprise Products Partners (6.17% yield).
- Boeing – I visited company headquarters in Seattle, and it was actually the tour guide who really made it apparent to me just how much momentum the business has.
When I visited, Boeing had back-logged orders to the tune of tens of billions of dollars.
There’s actually a shortage of pilots due to how affordable aviation has become, as well as the scope of travel that the Chinese are doing for the first time.
I’m taking profits, since the stock doubled in less than a year – that’s more than I anticipated, and since airplanes are a very cyclical industry, a recession would really hurt Boeing.
The reason Portfolio Wealth Global covered Boeing more than 18 months ago is because we were on the hunt for fast-growing blue-chip companies.
On our list right now are Starbucks, which has gotten expensive; Johnson & Johnson, which is growing again and innovating; and FedEx, which is currently trading for a bargain valuation. I’ll publish a lengthy report on it later this month.
I’m not pulling the trigger for now, but it does look like a trade deal, even a potential one, will send FedEx shares much higher.
HOLDING POSITIONS: STAYING LONG
The following are companies that continue to maintain great future prospects and are already part of the portfolio. I continue to generate dividend revenue from them, while their respective management teams are doing a remarkable job with each: Abbott Labs (bought for $41.55), Cisco Systems (bought for $32.01), Procter & Gamble (bought for $73.67), Novo Nordisk (bought for $35.06), American Express (bought for $65.63), Intel (bought for $27.48), and Medtronic (bought for $62.23).
Keep in mind that these positions are, for the most part, over 18 months long. One of the keys to long-term investing success is patience. Stay LONG companies that grow and perform well.
CURRENT BUYS: GOING LONG
Right now, the companies that offer the most value are Walgreens and Cardinal Health. For WBA, I’m not willing to pay anything over $70.00. For CAH, the maximum buy-up price is $52.00. Of course, FedEx – for which I’m in the process of determining a fair price – is part of this group as well.
Apart from these two, keep on your list of prospective companies the following: Aflac (insurance), Axis Capital (insurance), Royal Bank of Canada (banking), Anheuser-Busch InBev (alcohol), Walt Disney (entertainment), and Kimberly Clark (consumer staples).
Lastly, with the huge news of JP Morgan issuing their own coin for transfers, we’re undergoing a 3-week research marathon – we have uncovered a company that specializes in tokenization, which is becoming 2019’s most important blockchain development.
Because of the 2018 bear market, there are businesses priced for liquidation valuations, without any premium. It took us 94 days, but we’ve found a monster in the making.
I’ll have all the details out shortly!
Research Partner, PortfolioWealthGlobal.com
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This work is based on SEC filings, current events, interviews, corporate press releases and what we’ve learned as financial journalists. It may contain errors and you shouldn’t make any investment decision based solely on what you read here. It’s your money and your responsibility. The information herein is not intended to be personal legal or investment advice and may not be appropriate or applicable for all readers. If personal advice is needed, the services of a qualified legal, investment or tax professional should be sought.