Fortress Portfolio

Beware The Valuations Of The Dividend Kings Fortress Portfolio

One of the great benefits for subscribing to The Dividend Kings service are the carefully-selected portfolios presented in our portfolio tracker.  However, I want to caution the subscriber that these portfolios should not be looked at as simply cut-and-paste investment options.  Instead, I believe our subscribers should understand that these portfolios are suggested research candidates that could help them meet differing objectives for investing in dividend stocks.  Additionally, the subscriber should recognize the difference between a buy decision, a sell decision or a hold decision.

Q2 hedge fund letters, conference, scoops etc

In this context, the constituents of the Fortress Portfolio are truly each Super SWANs in their own right.  In other words, I would suggest that the quality of each of our constituents are first rate.  However, I would also point out that not all of them are currently attractively valued.  Furthermore, some of them I would personally classify as momentum plays.  To me a momentum play is a very popular stock whose prices are trading above levels that fundamental values would support.

Since I am known by many as “Mr. Valuation” and since I committed to being The Dividend Kings designated valuation policeman, I feel compelled to point out that although the majority of the Fortress Portfolio holdings are both high-quality and attractively valued, there are some that I recommend being cautious with.  My valuation discipline and perspective have taught me that you make your money on the buy side.  Moreover, even the best companies can become overvalued in the marketplace.

As a result, I offer the following FAST Graphs analyze out loud video covering some of my valuation concerns of the Fortress portfolio’s current constituents.  Additionally, and for contrast, I will also cover a few examples that I consider attractively valued today.  To be clear, and to summarize, there is not a single Fortress Portfolio constituent that I would not be proud and excited to own, if and only if their valuations made sense.

FAST Graphs Analyze Out Loud Video: The Fortress Portfolio Valuations

In this video, I’m going to briefly cover 5 of the Fortress portfolio constituents:  Ecolab (ECL), Microsoft (MSFT), Boeing (BA), Cullen Frost Bankers (CFR) and Texas Instruments (TXN).  Although I consider each of them of impeccable quality, I do consider 4 of them overvalued enough to possibly be considered dangerous.  However, I will also be pointing out that each of these 4 overvalued constituents are currently very popular and therefore possess great momentum.  Nevertheless, just like playing musical chairs as a child, you want to be sure you have a chair when the music stops.  Regarding common stock holdings, the chair is fundamental value.

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Disclosure:  No positions.

Article by F.A.S.T. Graphs


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