I bought AT&T a few days too early. Two days after I bought in to increase my position, they announced their cord cutting news, and coupled with their earnings my flat position is now in the red. I still have confidence in T, and their more attractive looking yield, but I'm going to step back a bit because the weight of my staples has dropped below discretionary (again). This is also because last Monday I bought into my smallest holding, the financials.
I bought 15 shares of Main Street Capital Corp. (MAIN). It has been on my watchlist for some time, and is quite attractive. Why I hadn't bought in sooner is because of it being at its 52 week high. This hasn't changed for quite a while. Great *monthly* yield, P/E, dividend record, etc etc. They also have a semi-annual dividend which I will get in December, and my spreadsheet and broker don't know how to handle or record it. My broker had it on the list for December, but then took it off and had not included the June one. I added a little calculation in my spreadsheet with the current semi-annual valuation which I will need to keep tabs on if it changes in the future. I know Jim Cramer was asked about MAIN in his lightning round, and he stated that he doesn't like financiers in a specific market. The main reason people don't like MAIN (ba-dum ching) is because it is a BDC (Business Development Company) and it has a low yield compared to 5 other BDCs. However, it has good coverage of its dividend, and BDCs either do great - or don't. They tend to make risky lending decisions hoping they pan out. MAIN seems to be conservative in this manner, or at the very least, has some reliable companies owing them for a long time. I will probably add more into ORI before revisiting MAIN due to risk, but after the hurricanes possibly affecting ORI, MAIN is a good place to be right now.
It is no secret that the worst valuations in my portfolio are my consumer staples. Thanks in part to Amazon playing halloween scare tactics on the food staples, HRL and GIS are deep in the dumps. I am not even sure if averaging them down is worth it right now, because they possibly haven't hit the bottom. While I have confidence in HRL, GIS is on relatively shaky ground, and is a prime candidate for being bought out. The other black hole in my portfolio, other than AT&T, is Philip Morris. I am confident they are going to pull through one way or another but I am so overweight on tobacco right now in staples and my portfolio in general thanks to averaging down Altria. Averaging down Altria, incidentally, really paid off. It is tempting to do the same with PM, but I would rather diversify right now. Which is why I am looking at Proctor & Gamble with a suddenly 3%+ yield, Colgate-Palmolive, and Clorox. The former because of the yield opportunity, the latter two because they don't primarily sell food. Because of my $1k goal for 2017 and staple shortages, I am looking real good at PG over the other two. My next purchase will be a week from now in November, and earnings will be in for many of my other holdings which could change all this. Before the end of the year I would like to buy more AT&T, Old Republic, Realty Income, and maybe a utility or two. Once January hits I'm going to be buying some more under 3% yield staples which will hopefully be bargains.
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