Another month has gone by and it’s time for another review of my portfolio, this time for the month of September 2019.
Let’s get into it:
Apple (AAPL) – 8.85%
Unilever (UN) – 5.38%
Cisco (CSCO) – 5.01%
AT&T (T) – 4.91%
Abbvie (ABBV) – 4.21%
Royal Dutch Shell (RDS.B) – 4.15%
Bank of America (BAC) – 4.07%
Vanguard Emerging Markets ETF (VFEM) – 3.82%
Pfizer (PFE) – 3.79%
Caterpillar (CAT) – 3.78%
Vanguard USD Corporate Bond ETF (VUCP) – 3.33%
Cash and Cash Equivalents – 48.67%
New Positions
Cisco (CSCO)
An interesting fact is that Cisco was the first stock that I wanted to buy once I started learning about investing. It was even the first company for me to ever add to a Watchlist. It’s fundamentals looked really solid, it was priced weirdly low, had a solid management and a pristine balance sheet.
The price of the stock was around $25 back then and it soon started taking off with a recent high of the stock at around $57. But still I never invested in it during all that time. Initially I didn’t do it, because I didn’t understand the business well enough to be comfortable holding it.
Finally a year or so ago I felt confident enough that I know their business model and would be happy to invest. But the price of more than $55 was stoping me, or at least until now.
Now I have finally started a position in Cisco and I feel this is the right moment for me. I don’t regret missing out on the recent gains, because now I am a much more informed shareholder. I understand their business way better now and have no problems holding the company during a downturn or some turbulences.
As for what drew me into the stock there are a couple of things :
Solid Management
I like how their management team has been operating the company in recent years. They have been working under the radar and have solidified the positions of Cisco in the tech world. They have transitioned the company for a better outlook in the future and all that with keeping their top-notch balance sheet.
Solid Metrics
The company in the moment offers around 3% dividend yield, a forward PE of 13 and a payout ratio of 45%. They also have great operating margins at 28% and a return of equity at around 30%.
Add to this around $3.5bln. of steadily increasing operating income every quarter and you have a farily-valued cash-generating machine.
Well-Positioned
Cisco have their foot in an array of different tech industries and is a partner with a huge part of the tech companies around the world. They are also well-positioned for the future as more and more industries are hugely dependant on technology.
We had the industrial revolution back in the days and I feel like now we are part of the tech revolution. More and more industries are moving to being online and the trend is only going to continue with 5G and IOT(internet of things). Cisco is very well-positioned to benefit from all that.
And yes there is going to be a lot of competition, but they have huge amounts of cash on hand to fight it. They have also shown that they can navigate the changes in the tech landscape over the years.
If you want to know more on how I evaluate companies you can check This Guide.
Plans for the Month
1. Reduce my Cash Position
If you have been following my monthly reviews you probably know that I had quite a big cash position at the beginning of the year. All of the volatility recvently has allowed me to pick up great companies at a good value.
Still I would like to reduce my cash position a bit more and I am sure we will see new good entry points at some point this year. I have a fair share of companies that I am following closely and would probably have a chance to start some new positions soon.
2. Buy More Low-Yield Stocks
As you know I am a dividend investor and my goal is to have dividends paying for my future expenses. Right now I have a good part of my portfolio in very high dividend yield companies.
I would like to bring some balance and add some high-growth companies to my portfolio. I am still going to look for dividend payers, but ones with bigger growth potential and low payout ratio.
3. Follow the FED Meeting
We have a new FED meeting at the middle of the month and I am curious to see how it goes. I am also very curious to see how the markets are going to react on their decision.
I feel like this one can go either way so I am not going to predict what is going to happen. My plan is to just wait and see how it goes. Having some cash sitting around is also a bonus for me.
Conclusion
It has not been the most interesting month for me stock market-wise as I have been very ocupied with my job and other things in my life. Still I am very happy that I managed to finally open a position in Cisco.
I am currently developing the best possible way to track my dividends month to month so I hope I can start sharing this with you.
Thank you all for reading, wish you all the best. Don’t forget to subrscribe if you want to stay updated on new content.
Full Disclosure : I am/ we are long AAPL, UN, T, BAC, PFE, ABBV, CAT, RDS.B, VFEM, VUCP, CSCO
Additional Disclosure : This article is meant to identify an idea for further research and analysis and should not be taken as a recommendation to invest. It does not provide individualized advice or recommendations for any specific reader. Also note that I may not cover all relevant risks related to the ideas presented in the article.
Readers should conduct their own due dilligence and carefully consider their own invesing objectives, risk tolerance, time horizon, tax situation, liquidity needs and concentration levels. I am not a financial advisor and this article is for educational and personal accountability reasons only.
Additional Disclosure : From now on I am only going to track my publicly-traded companies in my portfolio reviews. This is why I have removed Freertrade from my monthly reviews. For the record I am still a shareholder in Freetrade, but I am not going to track any crowdfunding investments in my portfolio reviews.
This is done to ensure the most optimal way to track my portfolio for me and my readers.