We’ve updated the holdings and “buy under” prices for all three of our top idea portfolios for April, and all the details can be accessed using the links below. We do NOT trade often (we’re long-term investors), but we do have a small handful of trades to update you on. We believe the changes position the portfolios for more long-term success.
The Disciplined Growth Portfolio:
As mentioned, we recently added entirely new positions in Datadog and Shoals. Both of these companies have attractive long-term upside and are trading at attractive prices (relative to their value) now.
We also recently added shares of Medtronic (MDT) and JP Morgan Chase. These are both very strong companies that have been underperforming their value, and we believe they both have strong price appreciation ahead. They’re also in sectors (healthcare and financials) that add valuable diversification to this portfolio (the Disciplined Growth Portfolio is heavily concentrated in “growthier” sectors of the market, such as technology).
We also completely sold a variety of smaller positions that had performed well over the last month (including DocuSign, Pinterest, Unity Software, Magnite and Digital Turbine). This leaves us with a more concentrated 38 current positions (diversified across sectors and market caps).
Finally, we did do a variety of “rebalancing” trades; these are noted in cells with gray shading and green (increased position size) and red (decreased position size) text. Notably, we increased our position sizes in Amazon, Albemarle and Enphase, and decreased our position size in Nvidia (as those shares are up enormously this year and now trade at a rich valuation—even after factoring in growth).
You can access the updated portfolio here.
The Income Equity Portfolio:
In this portfolio, we completed one new buy, one complete sell, and a variety of “rebalancing” trades. For starters, we added shares of big-dividend BDC Hercules Capital (HTGC) to take advantage of market disruption (and a low share price) that came about following the Silicon Valley Bank disruption. We also completely liquidated our position in Starbucks (SBUX) as those shares have recently experienced strong gains and now trade at a rich valuation. Finally, we increased our existing position size in Medtronic (this blue chip dividend growth stock is simply way too inexpensive (attractive) now), and added to our positions in Royce Small and Micro Cap funds (RVT and RMT) as the entire small cap space is due for a contrarian rebound as the market eventually regains its footing (remember, stock prices are forward looking).
You can access the updated portfolio here.
High Income NOW Portfolio:
There were no changes to this portfolio, however a few important notes on how this strategy is positioned. For starters, we believe big-yield bond CEFs are well positioned for a healthy rebound as interest rates stop rising (and are now even expected to fall by the end of 2023). As rates rise—bond prices fall (this is what has happened), but as rates fall—bond prices rise (this is part of the reason we expect these funds to rise). For a little more perspective, you can check out the recent premium/discount movement for our top bond fund CEF holdings in this report.
Overall, we’ve seen some higher than normal volatility, especially for income-focused securities, but the strategy has continued to deliver the big steady income payments (that makes weathering the volatility much easier). We continue to believe this strategy is very attractively positioned to keep delivering big steady income payments to investors.
You can access the updated portfolio here.
The Bottom Line:
As you know, we believe in prudently-diversified, GOAL-FOCUSED, long-term investing. Each of the strategies described above is designed for specific investor goals. As an investor, you need to stay focused on your goals, and drown out all the distractions.
Disciplined long-term investing is a winning strategy! Be smart. Stay focused on your goals. You can access our updated portfolio holdings here.