Key insights
- The author is seeking to add one more large-cap, wide-moat stock to their portfolio, focusing on diversification and valuation. They are considering RTX, LMT, and JPM. The author anticipates a potential 3-5% drawdown in the S&P 500 in May. The potential market influence is slightly positive, reflecting a bottom-up stock picking approach with a defensive tilt.
main portfolio: $2.5K cash
AMZN - Amazon - 22 shares - $5,813
AVGO - Broadcom - 12 shares - $5,056
TSM - Taiwan Semiconductor - 10 shares - $4,056
META - Meta Platforms - 5 shares - $3,381
GE - GE Aerospace - 10 shares - $2,841
SPGI - S&P Global - 6 shares - $2,633
CAT - Caterpillar - 3 shares - $2,494
NVDA - NVIDIA - 14 shares - $2,913
NOC - Northrop Grumman - 5 shares - $2,878
GOOGL - Google - 6 shares - $2,068
GS - Goldman Sachs - 2 shares - $1,853
smurf portfolio - $3k cash
MSFT - Microsoft - 7 shares - $2,940
I decided to axe Brookfield Corporation (BN) from my main portfolio, because I wanted more visibility into company operations. Overall, I thought that holding 10-15% cash in the past months have been quite successful strategy, as I bought heavily into the dips. I am deep into the green for a lot of these companies, and I look forward into earnings next week.
My question is what is one more stock into the main portfolio that make sense here following rule of relatively large cap, wide moat, good valuation, hopefully provide some sort of momentum diversification. My plan is to buy into defense sector and financial data weakness (NOC & SP Global) until both at least $3K+. I am being quite stingy on GS as I copped 2 shares at high $700s should have bought at least $2K. At the same time, V shape recovery often met with period of consolidation, I expect some May drawdowns maybe 3-5% takeback from SP500 rally.
Ideas:
RTX Corporation: $175 - maybe a rare fair value moment for RTX such a high quality defense company, but I fear it might just resemble NOC trade which kind of defeat the purpose, but Pratt & Whitney also compliment GE Aerospace.
Lockheed Martin: $513 - I would say best value relative to growth out of the defense powerhouse probably with the best upside and amazing portfolio, but I think execution for LMT always have been horrible with amount of cost overruns despite high quality desirable defense portfolio.
J.P Morgan: $308 - High quality, perhaps less momentum slower movements add stability to the portfolio.
Mastercard / Visa: I always have a very positive or respect for these companies out of pure quality of moats and growth. At the same time, it quite unacceptable to underperform SP500 by that much in 5 years, I expect to outperform in near term.
Netflix: It could make a lot of sense opening up a new field to my portfolio, reliance on strong execution but I think there is room to run.
Give me some of your suggestions, let me know!