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Things to buy?
#1
Looking for ideas of things to buy in my taxable account and trying not to double up on things I already own in my Roth.  Some sectors are hurting more than others, I'd appreciate any good recommendations.  I occasionally do a stock sector analysis through Fidelity and it compares against the sector allocation in Dow Jones Total Market Index.  I'm not a strict follower, but try to diversify a bit and this gives me ideas

1.  Energy - no energy stocks at all in my taxable account.  I currently have XOM and CVX in my Roth.  I'm thinking PSX, OXY, maybe COP?
2.  Utilities - no utilities stocks.  I have SO and ED in my roth.  This sector looks very overpriced right now.  I'm tracking D, DUK, WTR, AWR, and WEC, all close to 52 week highs
3.  Communications - None in taxable, T and VZ in Roth
4.  Health Care - MRK and GILD in taxable, ABBV and JNJ in Roth.  Thinking AMGN, maybe UNH or MDT?
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#2
Jeepers, asw, no one's replied yet. I'm of the opinion that, of those you mentioned, and pretty much the whole market is at the least very fully valued. I'm not too excited to put money to work here except for the few smaller positions I'm DRIPping to help them catch up. But, if we were to have a decent pullback, here are my thoughts:

Energy - PSX is basically a refining company. With the drop in oil, their feedstock got cheaper. I suspect if oil "normalizes" much more, they would be facing some headwinds at least for a while. OXY is more integrated and would be my choice if I were to add another energy company. COP, to me, is a stub major that took a beating when oil prices dropped. I think it will take a while for them to clean up the balance sheet once oil gets above it's current pricing. Have you thought about HP or NOV? Eventually someone's going need their expertise once supply/demand swings the other way.

Utes - I agree, they're pretty overvalued to me too. I even turned the DRIPs off even though they're the smaller holdings in my portfolios. Thought I saw a break starting the last couple days but it would take a bigger drop for me to be comfortable. Of those you mentioned, I like D, DUK & WEC. Maybe I haven't paid enough attention but the water companies have been habitually lower yielders even in more "normal times". If interest rate were more realistic, I'd also look at LNT or XEL. I still like ES but no one seems to. Despite the lousy regulatory environment, they've still grown the dividend at a decent rate for a ute. They are in the middle of expanding their natural gas supplies to alleviate the shortages in New England and bringing in more cheap Canadian hydro power to replace their higher cost legacy plants the regulators want to shut down. There's quite a concentration of wealth in their service area.

Telecoms - Don't know how you feel about being subject to currency fluctuations but BCE or TU have had good returns in their native currency. T still has a decent yield here and is the only US-based telecom I would add a little to here.

Healthcare - Depends on what you're looking for. I prefer companies that make things which is why I'd prefer AMGN. UNH is a pretty good insurance company if you get it at a decent price. My only concern would be the uncertainty of the ACA and all the changes/repeal proposals being bandied around during this political season. At the right price, I wouldn't be too concerned though. MDT, great company but perennially a low yielder. If you're looking for capital gains, I'd dig a little deeper. Other low yielders to consider are ABC and BDX.
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#3
(07-01-2016, 12:38 PM)navyasw02 Wrote: Looking for ideas of things to buy in my taxable account and trying not to double up on things I already own in my Roth.  Some sectors are hurting more than others, I'd appreciate any good recommendations.  I occasionally do a stock sector analysis through Fidelity and it compares against the sector allocation in Dow Jones Total Market Index.  I'm not a strict follower, but try to diversify a bit and this gives me ideas

1.  Energy - no energy stocks at all in my taxable account.  I currently have XOM and CVX in my Roth.  I'm thinking PSX, OXY, maybe COP?
2.  Utilities - no utilities stocks.  I have SO and ED in my roth.  This sector looks very overpriced right now.  I'm tracking D, DUK, WTR, AWR, and WEC, all close to 52 week highs
3.  Communications - None in taxable, T and VZ in Roth
4.  Health Care - MRK and GILD in taxable, ABBV and JNJ in Roth.  Thinking AMGN, maybe UNH or MDT?

Sorry, I remember seeing this question and thinking of some names but was short on time so didn't post anything.

Here are a few ideas, for what they are worth.

1. Energy: I'm not big on refiners, but I would probably take PSX if I had to pick one. I also like your OXY pick and think XOM is worth a look at a 3.2% yield. If you want growth potential, I think EOG is one of the best independents, although the yield is low.

2. Utilities: Unless you are buying them strictly for income and have no concerns about capital gains, I would not recommend utilities at current prices. If I absolutely had to pick some, D, DUK, and SO are the only ones on my watch list that I am projecting >5% annual returns on over the next 5 years.

3. Communications: Tough to go wrong with T and VZ.

4. Health Care: From my watch list ABC, ABBV, AMGN, ANTM, CAH, GILD and UNH look reasonably valued. I would throw in CVS as well, although they are technically a consumer staple. Also, PFE has a nice 3.3% yield and decent growth if you are looking for income.
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#4
Personally, I like to keep a list of companies I'd want to own forever. Whenever I have cash to make a purchase, I scan the list for what's undervalued, relative to the other options on the list. For example, right now TIF, LB, and BEN look good to me right now. At the opposite end of the spectrum, many of my companies (K, SBSI, MMM, GE, AFL, CL, PEP, etc) are the the top end of their 52-week range (not that the 52-week range is shorthand for valuation). So, I try to buy from the cheaper end of the spectrum vs. the top end.
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