A New Approach

OK, I'm going to try something a little different. So far, my posts have been fewer and farther between than I would like. I also have struggled with how to make recommendations. From now on I'm going to play with a totally open hand so you can see all of my positions. Also, I will try to post something on the blog every day and then have a weekly roundup where I give my thoughts on each stock that I'm holding. Time for the first weekly roundup...

Dividend Growth Stocks - These stocks are the foundation of my portfolio. To qualify as a dividend growth stock, the company must have increased it's dividend at least once every year for the last fifteen years and the average of those increases must be 10% or greater. I also like for the stock to have a current yield of at least 2.5% when it's added to my portfolio.

Eaton Vance Tax Advantaged Dividend Income Fund (EVT) $24.91 - This is a closed end fund which I have been holding for over a year. It pays a great dividend as it now yields over 7%. The fund holds high yielding preferred and common stocks which tend to increase the dividend every year. The fund is a little bit of an exception to the rule because it hasn't been in existence for fifteen years. However, most of the stocks in the fund have been increasing their dividend every year for much longer than that. The fund tends to own a lot of financial and energy names and those two groups are headed in opposite directions at the moment. I don't know if the fund will be able to increase the dividend this year or not because of the financial exposure, but I expect that to resume in the years ahead. I'm not looking to add to my position at the current level.

General Electric (GE) $30.02 - This stock was taken to a new 52 week low this week. It's currently yielding 4% which is historically high. I think investors are punishing the stock a little too much for their financial exposure. I want to add to my position if the stock drops to $29.75

Coca-Cola (KO) $55.80 - Coca-Cola is the largest beverage company in the world and I really like what they are doing to become more of a beverage company than just a soft drink company. They have great international exposure and I expect the stock to hold up better if the market continues to decline. I would like to add to my position below $55.


McDonald's (MCD) $56.95 - In January, when the stock dropped below $50, I sold some January 2009 65 calls and then used that money to buy a few January 09 55 calls. When the stock moved up toward $60 a few weeks ago, I sold the 55's for a nice profit. I'm not looking to add any more shares at the current price.

Altria (MO) $21.53 - This stock is as defensive as you can get. The recent spinoff of the international business will allow the company to buy back stock and continue to raise the dividend. At current levels it's yielding just under 5.4%. I would like to add to my position at or below $21.

Philip Morris International (PM) $50.50 - This is the internatiopnal business that used to be under the Altria umbrella. It sports a lower dividend than MO, but it has better growth prospects. For now I'm holding the stock and awaiting the next quarter's earnings report which will be the first for this company.

U.S. Bancorp (USB) $32.07 - It's been a really tough year for financials in general, but this bank has done much better as they avoided the sub-prime mortgage crisis. The stock is currently trading right around my cost basis. I would like to add to the position at or below $30.

Growth Stocks - These are stocks which I want to own because I believe there is some underlying factor that will make the stock go higher over the next six to twelve months. However, I don't have as much patience with these stocks as I do the dividend growth stocks. I typically hold them for at least a few months and I usually add to my position if the stock goes lower after my initial purchase, but I will sell when I think the fundamentals have changed.

BE Aerospace (BEAV) $26.98 - This stock has been really tough to own lately. Investors have focused on the sad state of the domestic airlines and driven this stock much lower. I added to my position twice this week, but maybe I should have cut my losses. For now, I will continue to wait for some official word from the company to substantiate the speculation that has ruled the stock lately.

Burlington Northern Santa Fe (BNI) $110.40 - I absolutely love the rail stocks right now and this is the best positioned of the bunch to take advantage of higher commodity prices. I also like the cost savings element of the railroads. Most of us remember, when we were kids, we used to count the rail cars on a train when we got stopped on the way to Grandma's house. Seems like there was always about 100 cars on a good sized train. Anyway, in my first job we used to load 60 tons of chicken onto one rail car and we could load about twenty tons onto a truck. If you do the math it shows that a train, which takes two guys to drive across the country, can carry about 6,000 tons of stuff and a truck which takes one guy to drive across the country can carry about twenty tons. It's not hard to figure out that rail is a much cheaper means of shipping your product and with fuel prices climbing almost every day, people who need to move freight will continue to move toward the rails. This stock hardly ever pulls back, so maybe I should just pull the trigger and buy more. For now, I'm hoping to add to my position at my current cost basis of $108.50

Bucyrus International (BUCY) $75.36 - The coal stocks are another group I love, but as I have mentioned before on the blog, it's hard to figure out which ones stand to benefit the most. That's why I chose to go with the mining equipment stocks instead. I believe they will continue to benefit no matter which coal stocks do well. This stock is another that doesn't ever seem to pull back much. It recently split 2 for 1 and it's above my cost basis. I would like to add a little more to my position if it dropped closer to $70

Chesapeake Energy (CHK) $58.05 - This is a natural gas stock which has done really well so far this year. The company has a consistent record of growing reserves and production which is what you want to see with oil and gas companies. The insider buying here has been incredible. Two weeks ago I was lucky to add to my position below $52 and I sold those shares on Friday just above $59. I still own a pretty sizable position in this stock, but if it drops below $55, I would like to buy back the shares that I sold on Friday.

Freeport McMoran Copper & Gold (FCX) - This stock is very volatile, but it's also very cheap. Freeport is either the number 1 or number two producer of gold, copper and molybdenum in the world. Many analysts believe the stock will go much higher this year. I think if it can break above $125, then we will probably see an extended move higher. In the meantime, I would add to my position at or below $110, but I'm hoping we see the stock make that move above $125.

Foster Wheeler (FWLT) $75.76 - I have been lucky enough to sell most of my positio in this stock for a good profit over the last month. I have a limit order in now to sell the last portion at $80. The stock would probably have to move closer to $65 before I would consider adding to my position.

Google (GOOG) $567 - I really like Google because it's such a leader in it's industry. The share price tends to scare people, so I tell them to use the divide by ten rule. I'm not interested in adding to my position at current levels. The next earnings report should be coming up soon, so we'll need to be on the lookout for that.

Goldman Sachs (GS) $169.44 - This company is the absolute best-of-breed when it comes to the brokers. They have continually posted great earnings numbers compared to their peers and they managed to hedge themselves effectively against the sub-prime mortgage crisis. Unfortunately, it tends to trade in line with a lot of its peers on most days instead of trading on its own merits. I expect they will announce another good quarter, but the path of least resistence right now is lower. I'm very interested in adding to my position if the stock drops into the 150's

Microsoft (MSFT) $27.49 - Everyone knows about Microsoft so I definitely don't need to explain what they do. Recently, the stock has been brought down by the potential Yahoo merger. I expect the stock to trade in a tigh range until we get some resolution on the Yahoo deal. I believe, at current levels, the stock is undervalued. I would like to wait to see what happens with Yahoo before making any more moves in this name.

Quanta Services (PWR) $31.27 - This company is the leading maker of windmills, but is also involved in a lot of other businesses. Most of the businesses are related to energy. My position here consists of some Jan 2010 calls. I see this a long term play as earnings are forecast to grow by over 50% in 2009 after only fractional growth in 2008. If the stock moves below $30, I would likely add to my position.

Raytheon (RTN) $59.99 - Raytheon is one of the larger defense contractors. I like them because they have a really cheap valuation in an industry I expect to grow no matter who is the next President. That's because they are beginning to get a lot of contracts from foreign governments. Unfortunately, whenever the news of the day indicates that Senator Obama is likely to be our next President, all of the defense contractors tend to trade down. The stock is below my cost basis and I added to it at $60 on Friday. If it continues to move lower, I will continue to add shares.

US Oil Fund ETF (USO) $112.17 - I have owned this ETF a few times since last Fall. Since the oil market has been so volatile, it has been a good trading vehicle. I have been selling covered calls against my position every time I've bought. Twice I have been called out of the stock at a nice profit while I kept the money every other month and improved my cost basis. This month it looks like I will get called out of the shares again for a nice profit. I'm not looking to buy any more shares at this point and will wait until the third Friday in June to settle my position one way or the other.

United States Steel (X) $180.27 - Steel stocks are enjoying great pricing power at the moment and I'm really excited about this stock. I was luck enough to get a chance to add to my position this week at $175. I would still like to add more shares if the stock pulls back. Luckily, it's a little more volatile than BNI and BUCY, so I will probably get that chance. I don't want to look at selling until the stock is at least at $200 as I believe this company has several good quarters of earnings reports ahead of it.

Short term trades - These stock represent a small portion of my portfolio. These are names in which I believe I can take advantage of a short term overreaction to make money.

Currently, I have no trades in my account.