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Changes in the "growth" Value Line portfolio this week - Haliburton (HAL) out, Chevron (CVX) is in............
Portfolio II for Above Average Dividends
Portfolio III for above Average Growth
Note: Stocks in the Growth portfolio tend to remain there for quite a while. The Dividend portfolio (II) tends to have higher turn-over. Both can be used with AIM, however.
Best wishes,
OAG
This week Value Line replaced Autoliv (ALV) with Phllip Morris (PM, yield = 4.7%) because of current dividend yield. ALV in about a year's time has risen in stock price faster than dividend increase. That pushed its effective yield down to around 2.2%/Yr. This isn't all bad since the stock price rose to $122.52 from $85.10 at the start. This occurred in their Model Portfolio II.
This sort of swap happens once in a while as Value Line's #II model as it has a "dual mandate" of seeking above average yield while also looking for reasonable price appreciation potential. In this case, ALV satisfied the price appreciation while the dividend remained steady.
For AIM users, ALV may still be a viable choice for a longer term investment. AIM would have done well with the price appreciation while harvesting the yield along the way. The three year chart for ALV looks like AIM would have been selling more than buying but there were a few "round trips" along the way.
https://schrts.co/NrxIusBs
Best wishes,
OAG Tom
Hi R, Re: Value Line's Stock Screener..........................
Sorry for the late reply, I need to check in here more often!
I've tinkered with the Stock Screen function at Value Line with some success in generating investment ideas to fuel my AIM method. It's been interesting, but I can't say I've found it to be the perfect answer. I'm not sure I've put one of the screen selection stocks into my portfolio as of yet.
I have found that if I load the screener up with too many conditions, it tends to make the lists VERY short. My suggestion would be to try one condition at a time and then trim its range to get a manageable list length. Jot down the condition and range for future reference and/or print the short list. Try again with the next condition and see what you get. Save or print and repeat for the next one.
You may find a common theme and that may help you focus on a specific business sector that's currently depressed and ready for a rebound. I tend to concentrate on three goals when selecting stocks.
1) Price Appreciation over Time
2) Dividend Capture over Time
3) Profitable Volatility Capture over Time.
AIM will manage the holding with all three goals, so I just sort for things I think will satisfy these. This gives me the overall "Total Return" target through all sorts of market conditions. One stock may be stellar for Dividends in one era and good for Growth in another. Another era might have reasonable frequency and amplitude of price movement that will drive AIM's profit capture mechanism. AIM's ability to adapt to the situation is why I consider each of these three goals when choosing a new investment.
Let me know if this helps.
Best wishes,
OAG Tom
Do you use the Value Line "Stock Screener" If so, what settings do you use to find a candidate stock? i.e. Beta, Price stability, % Chg in 52 week high, % Chg in 52 week low, Sales Growth 5 years, Book value growth 5 years, ??any other parameters?? Thanks.
Correction:
Euronet is EEFT and its long term history looks like it would have been very well benefitted by AIM's management method...........
https://schrts.co/BDFeeuht
....and Starbux would have also benefitted from Mr. Lichello's magic.
https://schrts.co/PBWdMjKX
Best wishes,
OAG Tom
Value Line swapped out VST this week in their Dividend model portfolio. It's been their best performer in that model for 2024, but that has diluted the dividend to just around 1% or half the VL average dividend. They still like the company, but felt the need to pick a better yield.
They chose HP, Inc. (HPQ, yield = 3.7%) as the replacement. They like it for longer term growth and also for the nice current yield.
Happy Hunting and be sure to take careful AIM.
Best wishes,
OAG Tom
Here's the latest on the two Model Portfolios I watch at Value Line.............................
Above Average Dividends...........................
Above Average 3-5 Year Appreciation Potential......................
The "Growth" list is quite stable and these stocks don't rotate very often. This is good for AIM as Mr. Lichello's management method takes TIME to provide its benefits. This makes a great shopping list when the markets are in correction.
The "Dividend" list provides a good source of stocks for long term total return (dividends + price appreciation + AIM management). Rarely do these stocks fall precipitously, so they seem well suited for long term AIM management.
Best wishes,
OAG Tom
Tom, this was super helpful, thank you!!
Do you have a suggestion on where to look for the latest aggregated wisdom for AIM?
For example, what's the most current recommendation for:
1. How to manage a portfolio of stocks? (AIM individually, or as a portfolio?)
2. Best values on Portfolio Control, Cash Balance, frequency of rebalancing, etc etc?
Trying to find 1 place with all the latest info, instead of piecemealing it together from various posts. :)
Thank you again!
Hi T, Re: Value Line Model Portfolios for long term AIMing................
The two lists have several suitable candidates for AIMing. The above average dividend list may seem a bit stoggy but might offer good total return (price growth + dividend capture + profitable volatility capture). The 3-5 year list doesn't change positions very often if that makes a difference to you. Most libraries at universities and public libraries will have Value Line for your review.
Look for those stocks with the higher 3-5 year growth potential as a first filter. Next, check the BETA of those stocks you choose. The higher the better for AIM in general. BETA gives a feel for correlation of the stock price with market direction as well as a feel for amplitude of price change. So, a high BETA will generally trade in the same direction as the market but with a bit more amplitude. One of my favorite Value Line measures is on their individual stock pages in the lower right hand corner. It's labeled "Stock's Price Stability" and also helps to give a bit of personality to the issue in question. A lower number indicates higher price volatility where a higher number indicates higher stability. For instance, EXAS, a medical test maker, has a Stock's Price Stability of just 15. INTC comes in around 70 by comparison. Price Stability and BETA may help you trim these lists down a bit. Note that neither gives you any "quality" measure, however. Financial Strength, debt structure and profitability need to be looked at also.
The higher dividend stocks on Model II's list can be evaluated in similar fashion. AIM might not trade these stocks as often, but AIM always trades effectively.
Using StockCharts.com's Zig Zag graphing function can also help when viewing your stocks on a 'Weekly' basis. ZigZag can help guide you toward proper SAFE settings for your chosen stocks. If you are trying to choose between, say, INTC and AMD, if both are fundamentally sound companies, then you could use the same ZigZag setting for both and see which one has historically has more 'round trip' moves over the previous 3 years. That might offer a tie breaker for selection.
Hope this helps,
OAG Tom
I'm interested in fundamentally sound stocks (often with dividends).
The VL Stocks fit this quite well.
The question is: Are these stocks volatile enough for AIM?
Do you manage these stocks with different AIM settings?
Here are the latest Value Line "Model Portfolios" I follow. One is for above average dividend yields and the other is based on their above average 3-5 year appreciation potential.
In the Dividend portfolio this week they removed CVS Healthcare (CVS, yield = 3.26%) and replaced it with Autoliv (ALV, yield = 3.96%). Their rational was that CVS hadn't lived up to their stock price hopes where they felt ALV's dividend plus potential share price growth offered better total return.
Best wishes,
OAG Tom
Re: Value Line's Model Portfolios for Income and Long Term Growth.........
Here's the latest scans from Value Line for these two strategies. Note they include the original starting date and price of each position.
The "growth" portfolio has a very slow turnover rate, which should be expected with its 3-5 year time horizon. This makes the components good potential AIM candidates as AIM takes TIME.
With the rapidly changing interest rate environment the "income" portfolio has had some higher turnover. The market decline improved the average dividend level of Value Line and new stocks therefore met the goal of being above average yield.
Best regards,
OAG Tom
great advice, I will peruse better and look to add more when it is worth
Another new stock added to VL's Portfolio III (3-5 year appreciation potential).
Generac Holdings is a Wisconsin based "alternative energy" company I've followed closely since 2014.
This week, we are buying
Generac Holdings, a Wisconsin-based manufacturer of residential and commercial
back-up power systems. The company has a strong balance sheet, a dominant
market position, and bright earnings prospects, as it has targeted a very promising
sector of the economy. Many countries around the world, including the United
States, have electric grids that need to be upgraded. Indeed, rising demand for
electricity has not been met by utilities building additional base load units. Due
mostly to ESG concerns, new capacity has generally been derived from wind and
solar power, which are both interruptible. Many homeowners and businesses have
witnessed how long and devastating some electric outages can be. With a second
independent power source, homes and commercial concerns can continue to
function. What’s more, both markets are barely penetrated. In addition to natural
disasters, many regions do not have an easy time meeting peak demand. Just
recently in Texas, usage was so high that the grid almost crashed. As it is still
spring, it raises concerns over what may happen during an extended heat wave.
In any case, priced at about $220 a share, Generac is trading at less than 20
times 2022’s estimated earnings. While this is higher than the current market P/E
ratio of 16.2, it is well below the stock’s P/E of nearly 45 when it peaked at $524 a
share late last year. - Value Line
GNRC is a long time favorite of mine and has done well with AIM, too.
While a bit out-of-date, this history of AIM's management of GNRC should tell us something about both the company and AIM's risk management.
Best wishes,
OAG Tom
Value Line continues to offer investors with longer term horizons some good choices. Note in the right column how long some of these stocks have been on this list. Some a decade or more.
I keep this list handy when I'm looking for something to add to my "stocks" portfolio. Here's the same stocks with the column second to the right showing their gains since being recommended:
I'm sure there are stocks here that would have benefitted from AIM's management along the way.
Best regards,
OAG Tom
You're quite welcome CRL, Re: Value Line's models................
Here are the latest for these two hunting grounds for AIM candidates:
Note the columns on the far right show when these stocks were first added to these lists. Both are relatively stable lists so offer good potential as long term AIM holdings.
Best wishes,
OAG Tom
Thank you very much! You are a good teacher and giver
Tom thank you as always for posting! I have been using these lists for a long time now. Now I am researching and studying better the Leap concept of Jeff with AIM. Do you know where I could find historical quotes of expired Leaps options? i read all of Jeff books, I would appreciate your personal opinion. Indeed, leaps option would give much volatility to safe 1 good stocks.
Here's a quick view at the latest Value Line Models' holdings, how they've done since being added (last two columns) and some other interesting info:
Portfolio II - Dividend oriented Stocks
Portfolio III - 3-5 Year Growth Potential Stocks
These stock models can be found in Value Line's "Selection and Opinion" section each week. They don't change very much or very frequently, but that's all the better for AIM since Mr. Lichello's management method takes time to develop and produce profits.
Best wishes,
OAG
Good morning S, Re: LEAPS and AIM...................
I agree these would be good sources for searching out AIM LEAP contracts. I'll capture the most recent lists and put them here later.
OAG
Might be worthwhile to do A.I.M. with LEAPS options on Value Line stocks with high rankings.
Here are the two model portfolios (dividends and LT Growth) from Value Line that I feel have some good choices for AIM Users:
and
Like any model portfolios there are some that are better than others. Of these two, the dividend income portfolio has had more changes over the last year in components than the "growth" portfolio. I own and AIM some stocks in my "sandbox" that have been on both lists at various times.
OAG Tom
Hi C, Re: VAlue Line's latest model portfolios.................
Here's the latest. Note there haven't been a lot of changes in either, but lately Portf II has had some.
Portfolio II is currently showing a modest loss of about 12% on average for the stocks listed. This is on higher dividend paying stocks, making it a surprise because of their defensive nature.
Portfolio III is break-even right now on average. It's fallen from a higher profit level than P II but is just at the threshold of going negative. There are some good values here, too.
OAG
thank you Tom, always a pleasure to read and learn
Good question,
Generally I've been sticking with them as long as the fundamentals remain okay. For instance, I still own Kraft Heinz (KHC) even though it was dropped from the list and tanked badly. I'm expecting they will plug the holes and right the ship eventually. There are several very valuable divisions that might be sold to help in the process.
VL Port drops a company...
Hi Tom,
How are you handling the case where you use the VL ports for company selection for AIM, initiate a position, and then the company is subsequently dropped from the VL portfolio?
Thanks
Hi Toof, Re: Appreciation Potential.................
That's been the cautionary note in Value Line for some time. So many
stocks, in their opinion, have been at or near their 3-5 year potential
range. Not a lot of upside potential there. This is partly why my Sandbox
portfolio had more dividend payers in it now than a couple of years ago. I
figure I might as well get paid for the wait.
While the dividends are soothing, recently several of my picks from these
lists have been generating some buying activity. The market swoon affected
stocks across many sectors. Most of the stocks in my portfolio are set up
with something similar to AIM-High. I'm trading 10% of Portfolio Control on
most as a minimum trade.
Hi Tom
Doesn't look like a lot of appreciation potential at the current time.
Toofuzzy