Here is our portfolio update for Q2 2023 along with July as well!This is long overdue 🙂
Major Changes
One major change in our portfolio for the quarter was that we completely sold our position in Broadcom (AVGO) at an average price of $834 per share for a total of $7,390.98. This represents a gain of roughly 48%, including dividends.
There are a few reasons why we decided to sell out of AVGO. Earlier in the year, Apple announced that they are developing their own in-house Wi-Fi and Bluetooth chips, with the goal of having the chips in their devices in 2025.
What this means is that they are trying to cut down their reliance on chip suppliers such as Qualcomm and Broadcom by 2025, and Broadcom’s revenue portion from Apple is going to be affected. And with Apple being roughly 20% of Broadcom’s revenue, this does not look good for Broadcom, having to prepare to diversify away from Apple’s portion of revenue.
This also points to Broadcom’s moat not being as wide as we thought it would be. While Apple only announced that it’s trying to replace only Wi-Fi and Bluetooth chips, once succeeded, they might extend it to other parts in their devices as well.
Other changes to the portfolio also include selling out of our Home Depot (HD) and Lowe’s (LOW) for a total of $10,413.97.
We sold HD and LOW because both of these companies have too much debt on their balance sheets. For the last 12 months, HD has $1.26B in total cash and $49.43B in total debt, and LOW has $3.37B in total cash and $40.6B in total debt.
While we think that HD and LOW are still gonna do well in the future, given their dominance in the home improvement market, the amount of debt that they hold present too large a risk for us.
While their free cash flow can cover their portion of debt that has reached maturity, we don’t like that they have to rely on it to fund their dividends and stock buybacks.
We then allocate the proceeds into other positions such as TROW, BLK, AXP, V and SCHD.
Portfolio Overview
With that said, currently our portfolio value is at $107,862 by the time of this post. With a total of 12 holdings, our top 5 positions are SCHD, TROW, V, VICI, and TSM, totaling to around 53% of our portfolio.
Our current estimated annual dividend is $2,774, which is a 2.6% yield.
We received a total of $721.82 in dividends from April to July 2023. As for Q2 2023, the dividend we received is $619.66, a 49.45% year-over-year increase from Q2 2022 ($414.63)!
Closing Thoughts
Overall, the market has been going well since the beginning of the year due following the AI hype, meaning less companies are undervalued.
However, that doesn’t change our investing mentality at all. We still believe in investing our money regularly, despite all the noise and volatility of the market.
If there’s one thing we learned so far about investing, it is that the market does not make sense, and no one knows which direction the market will go tomorrow (even if they say they do) 🙂
So, we will continue to buy into companies that we think are high quality companies with healthy balance sheets, combining with fast growth, and we’ll hold them until their fundamental start to change.