Friday, July 31, 2015

Some Major Moves This Week

This week I made some big moves in an IRA that I manage. I liquidated two positions and rearranged the proceeds into three. Here is what I did:

  1. Sold all shares of Home Properties (NYSE: HME). I've held onto this apartment REIT for several years, but the company recently sold out to private equity at $75 per share. When I sold, shares were $73 or thereabouts. Home Properties was already a little above fair value, and with the mini-pullback, last week there were a good number of stocks well below fair value, so it was really time to sell. I got in at the $50s and am happy to have logged a nice capital gain in addition to the generous dividend.
  2. Sold all shares of Occidental Petroleum (NYSE: OXY). I originally got into Oxy believing that there was significant upside from the breakup of that company. Then the oil crash happened. I expected Oxy to rise to $140 some. I got in at $100 and now it's under $70. I chalked it up as a victim of the bear market in oil. Time to put money in better places.
  3. I put roughly 40% of the proceeds into Kinder Morgan Inc (NYSE: KMI). I never thought this pipeline would yield 5.6%, but sure enough it now does, and I increased my position in this company by 60% or so. Kinder Morgan Inc is now the second largest holding in my portfolio just behind AT&T.
  4. I put the other 40% of the proceeds into Ventas Inc (NYSE: VTR). I've been adding to my Ventas position here overtime. While Ventas isn't the screaming deal Kinder Morgan is, this name is still undervalued and I am happy to get that dividend at 4.8%-4.9%. I'll take it. Ventas is now my third largest position in this IRA.
  5. I put the remaining 20% of proceeds into ConocoPhillips (NYSE: COP). If I'm going to be in an E&P, it might as well be the best one. I doubled my position in Conoco and it is now the fourth-largest holding in this IRA. 

 I made these moves to either shift into better value or cut out of a thesis that was not working. All-in-all, this move significantly increases my dividend income as Kinder Morgan, Ventas and ConocoPhillips each have yields significantly higher than that of Home and Oxy. 

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