📊 Portfolio Update June '24
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Table of Contents
Portfolio Overview
1.1 Total Portfolio Value
1.2 Performance Overview (Year-to-Date)
1.3 Allocation BreakdownRecent Transactions
2.1 New Acquisitions
2.2 Stocks Sold
2.3 Rationale for Each TransactionStock on the Watchlist
Outlook
Conclusion
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June has been a relaxing month for me. As some of you might know, I’ve been to Malta to take some time off, a small vacation. Due to my being in Malta for most of June, I did not open new positions or close any positions in my portfolio.
Nevertheless, let us take a closer look at my portfolio!
Portfolio Overview
1.1 Total Portfolio Value
My current portfolio value is €15.431,25. In June, my portfolio gained 3.33%, while the S&P 500 gained 5.40% over the same period.
As mentioned in my previous portfolio update, I could see more months of underperformance compared to the S&P 500. Due to reallocations and my refined strategy, I am handing over gains in the shorter term, which is fine. My goal is for the longer term to have an outperformance.
1.2 Performance Overview (Year-to-Date)
Unfortunately, YTD, I’m underperforming badly compared to the S&P 500. This was expected because I refined my investment strategy and reallocated my cash to different holdings, which made me more active.
Although I did expect some degree of underperformance, I did not expect it to be by 12.90% as of today! In my worst-case scenario, I had hoped for a maximum of 4%-5%. As we can see, I almost tripled this. This gave me a reality check on how I performed, managed my emotions, and what works and what doesn’t. I have realized these things with these updates and can move on to become a more efficient investor, thankfully.
1.3 Allocation Breakdown
As shown above, my stock positions are spread almost evenly. I do not own any bonds.
I’ve read about having positions smaller than 3% and having no use in being in a portfolio, which I almost completely agree with. Therefore, I shifted, and still am shifting, to make the smallest position, about 4%. This requires me to reallocate more, and I will continue doing so in the coming months.
Adobe, you can see the average on some metrics from my portfolio; let us review some of them! :-)
Market Cap ($418.27B) and Total Enterprise Value ($453.04B): This suggests that my portfolio comprises large-cap stocks, typically well-established companies.
Dividend Yield (1.02%): This indicates that my portfolio has a modest focus on dividend income. The yield is relatively low, suggesting a focus on growth rather than income.
Revenue 5Y CAGR (18.27%) and Revenue 3Y CAGR (18.23%): My portfolio companies have had strong revenue growth over the past 5 and 3 years, suggesting they are expanding rapidly.
EBITDA Margin (27.99%), Operating Margin (23.95%), and Net Profit Margin (18.6%): These margins indicate that the companies in my portfolio are generally profitable with strong operational efficiency.
Return on Equity (22.06%), Return on Invested Capital (17.57%), and Return on Assets (12.62%): High returns indicate that my companies are effectively using their equity and capital to generate profits.
Forward P/E (24.49) and Forward P/FCF (24.44): These ratios suggest that my portfolio stocks are trading at a premium, which is typical for companies with strong growth prospects.
Diluted EPS 10Y CAGR (30.6%) and Net Income 10Y CAGR (31.01%): High earnings per share and net income growth over the past 10 years indicate strong financial performance and growth potential.
Gross Profit Margin (50.61%): This high margin suggests that the companies have a significant competitive advantage and can sell products at a good markup.
CapEx to Revenue (0.05): This indicates a low capital expenditure relative to revenue, which could mean the companies in my portfolio are less capital-intensive.
Free Cash Flow per Share ($10.77) and Free Cash Flow Margin (23.1%): My portfolio companies generate substantial free cash flow, which can be used for dividends, buybacks, or reinvestment.
Net Debt ($16,501.06M): A relatively manageable level of net debt, given the high market cap and TEV, indicating solid balance sheets.
EPS ($8.85): Reflects the earnings power of your portfolio companies on a per-share basis.
Recent Transactions
2.1 New Acquisitions
In June, I only added Adobe to my portfolio; as we speak, Adobe is up 23,12%. I bought Adobe before its earnings. After Adobe released its earnings soared 15%, lovely coincidence there. ;-)
2.2 Stocks Sold
I sold out of Ingersoll Rand to free up space for Adobe.
2.3 Rationale for Each Transaction
In my new investment strategy, Ingersoll Rand was no longer a quality business with its current fundamentals. The stock price was soaring, but the underlying fundamentals did not support this.
I saw Adobe trading at a fair value of around €455,78. After a deeper dive into the fundamentals, future growth, industry, management, and possible headwinds, I decided to invest in Adobe. Adobe is a powerhouse of a business, and I’ve always wanted to add this powerhouse to my portfolio. I am pleased that I’ve taken the right steps to do so.
Stocks on My Watchlist
I’m sorry to disappoint you here, but there’s nothing on my watchlist. :-)
Outlook
There will be some minor changes to my portfolio allocation since I have smaller positions, which I do not consider an added benefit.
I’m scouting stocks to see if I can find another quality compounder at a reasonable value to add to my portfolio, but for now, it will be a quiet month.
Conclusion
June has been my most relaxing month, especially regarding the transactions and outlook.
From a performance perspective, I’ve noticed that, as mentioned earlier, I need to dive deeply into my emotional state. I am more than pleased with the road ahead of me, and I’m eager to see what next month will bring.
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Very interesting! I like your portfolio. The poor performance of stocks like Starbucks en Lululemon aren’t helping your performance, but longer term they look excellent.