Portfolio and Tracker Tool Updates

We do not trade often at Blue Harbinger, but we have just made significant updates to both our Income Equity and Disciplined Growth portfolios. This report provides an overview of the changes, as well as details on why we made the changes. We also highlight some updates to the website, such as the new home page and the new portfolio tracker tool (both are designed to be more useful to readers).

The Disciplined Growth Portfolio (27 holdings)

We have made significant changes (trades) to this portfolio. The long-term performance of this strategy continues to be exceptional, and we have changed the holdings to make the portfolio more consistent with its long-term growth objective. Specifically, we moved 6 stocks to our Income Equity strategy (more on this later), we sold 10 positions entirely, and we purchased 15 new stocks.

Here are the details:

1. Accenture (ACN): moved to Income Equity

2. EastGroup Properties (EGP): moved to Income Equity

3. Exxon Mobil (XOM): moved exclusively to Income Equity

4. Johnson & Johnson (JNJ) moved to Income Equity

5. Procter & Gamble (PG) moved exclusively to Income Equity

6. Union Pacific (UNP) moved exclusively to Income Equity

These 6 stocks were moved exclusively to the Income Equity strategy to make room for higher growth names in the Disciplined Growth Portfolio.

The 10 positions we sold are:

1. ADP (ADP)

2. Disney (DIS)

3. Emerson Electric (EMR)

4. First American Financial (FAF)

5. General Electric (GE)

6. Small Cap Value ETF (IWN)

7. International ETF (IXUS)

8. GrubHub (GRUB)

9. US Bank (USB)

10. Healthcare ETF (XLV)

The 10 positions were sold simply because we do not view them as having enough long-term growth potential going forward, and we wanted to make room for new opportunities.

And the 15 new purchases are:

1. Amazon (AMZN)

2. Google (GOOGL)

3. Visa (V)

4. Salesforce (CRM)

5. Fortinet (FTNT)

6. Alteryx (AYX)

7. Beyond Meat (BYND)

8. CrowdStrike (CRWD)

9. DocuSign (DOCU)

10. Livongo (LVGO)

11. Teladoc (TDOC)

12. The Trade Desk (TTD)

13. Baozun (BZUN)

14. Sea Limited (SE)

15. Splunk (SPLK)

These new positions are all very high growth companies, consistent with the portfolio’s long-term growth objective. These new positions will be volatile (hopefully a lot more upside volatility). In our view, the long-term upside appreciation potential is great.

Income Equity Portfolio (40 Holdings)

This strategy continues to deliver high income while it grows in value over time. The strategy also continues to be contrarian, with significant exposure to sectors of the market that have lagged (particularly in light of the coronavirus), including REITs, financials (mainly BDCs) and energy. The strategy is positioned for a continuation of its strong rebound from the depths of the coronavirus panic just several short months ago. Noteworthy, we have combined the positions of our Alternative Fixed Income (AFI) strategy into the Income Equity Portfolio given the similar nature of these two strategies.

The New Purchases in The Income Equity Portfolio, are:

1. AbbVie (ABBV)

2. Walmart (WMT)

3. Oaktree Strategic Income (OSCI)

4. The Geo Group (GEO)

5. OwlRock Capital Corp (ORCC)

For the five positions listed above, we like the dividends, and we especially like the prices (i.e. attractive price appreciation potential—in addition to income).

The following positions were sold from The Income Equity Portfolio:

1. Income Opportunity Fund (Wells Fargo) CEF (EAD)

2. Nuveen Floating Rate CEF (JFR)

3. Nuveen Preferred & Income Securities CEF (JPS)

4. Pfizer (PFE)

5. Nuveen Preferred & Income CEF (JPI)

6. Triton International (TRTN)

7. Dow Inc (DOW)

8. Ventas (VTR)

9. The Williams Companies (WMB)

10. Energy Transfer (ET)

11. Oxford Square (OXSQ)

12. BlackRock Corp igh Yield (HYT)

13. IBM (IBM)

14. HealthPeak (PEAK)

These 15 positions were removed to make room for better opportunities. In many cases, we hold similar positions (similar sectors/ industries/ sub-industries). The total portfolio holdings number is 40.

The main theme for all of these Income Equity Portfolio changes is to take advantage of current market opportunities (a lot of healthy high income securities are trading at prices far too low), while continuing to deliver high income.

Portfolio Tracker Tool

You’ll notice the Portfolio Tracker Tool has been updated, and it is now available via the 3 buttons on the homepage. Our goal is to make to tool more convenient and more useful. You can see all of the portfolio changes described above in the portfolio tracker tool. We recognize that the changes we’ve made are quite significant, and we make these type of changes very infrequently. However, we wanted to take advantage of current market opportunities and to position the portfolios for continuing long-term success.