Review of Argus Model Portfolio Changes For November (MDT, EPD, KRFT, MDLZ, FE, ADI, ED, HPQ, HCP, ACN, CAKE, UTHR, PAY, JCP)

Source: Jon Ogg
The markets are currently closed for trading due to storm concerns in the areas all around the surrounding New York City. Still, investors may want to review and consider some of the key changes which have recently been made to the model portfolios published by Argus Research for November.

For equity-income portfolios, i.e. dividend portfolios, the changes were to add Medtronic Inc. (NYSE: MDT) with a 3.5% portfolio weighting and to add to the existing position of Enterprise Product Partners L.P. (NYSE: EPD) for a 4.1% weighting. Now that the break-up has been exacted, Argus is recommending for profits to be taken in shares of Kraft Foods Group Inc. (NASDAQ: KRFT) and Mondelez International Inc. (NASDAQ: MDLZ). Argus is also recommending that the position in FirstEnergy Corp. (NYSE: FE) be liquidated entirely.

For the growth and income portion of the model portfolio, the changes were as follows: purchase Analog Devices Inc. (NASDAQ: ADI) for some 3.5% of the portfolio and to purchase Consolidated Edison Inc. (NYSE: ED) for 3.1% of the portfolio; it recommends selling all of the position in Hewlett-Packard Co. (NYSE: HPQ) position and also to sell all of the HCP Inc. (NYSE: HCP) position. Argus recommended selling one-fourth of a position in Accenture plc (NYSE: ACN).

As far as the mid-cap growth arena, Argus made the following changes: purchase Cheesecake Factory Inc. (NASDAQ: CAKE) for a 2.9% weighting and to purchase United Therapeutics Corp. (NASDAQ: UTHR) for a 3% weighting; shares of VeriFone Systems Inc. (NYSE: PAY) and J.C. Penney Company Inc. (NYSE: JCP) are listed as positions which should be liquidated entirely.

Implied yields for each of the income-oriented additions are as follows:

  • Analog Devices, Inc. (NASDAQ: ADI) at 3%;
  • Consolidated Edison Inc. (NYSE: ED) at about 4%;
  • Enterprise Product Partners L.P. (NYSE: EPD) at 4.7%;
  • and Medtronic Inc. (NYSE: MDT) at 2.2%.

Unfortunately, a couple of these positions have not turned out too well. Hewlett-Packard Co. (NYSE: HPQ) has been a disaster with a loss of 60% since it was added to the portfolios in November 2010. The addition of United Therapeutics Corporation (NASDAQ: UTHR) was also earlier in October when the stock was at $57.00 versus Friday’s close of $45.25.

As a reminder, these are model portfolios and each asset group of equity-income, growth and income, and mid-cap growth each represent their own portfolios or asset classes.


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