• Dividends Rose 6.31% in Q4
    Posted by on January 3rd, 2018 at 12:07 pm

    Last quarter was another good one for dividends for the S&P 500. Dividends rose by 6.31% over Q4 2016. This is the 31st quarter in a row of dividend increases for the index.

    For the year, dividends were up 7.07% over 2016. Over the last seven years, dividends are up 115%. That’s actually a tiny bit slower than the S&P 500. In other words, the index has gotten cheaper on a yield basis.

    The blue is the S&P 500 and it follows the left scale. The black is the rolling 12-month dividends and it follows the right scale.

    For some reason the y-axis indicators didn’t show up, but both axes are scaled at a ratio of 50-to-1. That means that whenever the lines cross, the S&P 500’s dividend yield is exactly 2%. As you can see, it’s tracked near 2% fairly well for the last 15 years.

    Both axes are logarithmic. The left goes from 600 to 3,000 while the right goes from 12 to 60.

  • The S&P 500 Breaks 2,700
    Posted by on January 3rd, 2018 at 11:17 am

    For the first time ever, the S&P 500 broke 2,700 this morning. The index was last below 27 in March 1954 (it was still below its 1929 high). That’s a 100-fold gain in 64 (and 89) years.

    We only have about 4% or so to go for the S&P 500 Total Return Index to be five times where it was at the March 2009 low.

    Yesterday’s market was interesting because high-beta stocks did well while low vol stocks lagged along. Today’s market is more balanced but small-caps are leading the pack.

    Before the market opened, we learned that the ISM Manufacturing Index was 59.7 for December. That’s a good number, and it was up from 58.2 in November. We also learned that construction spending rose 0.8% in November. In the past year, construction spending was up 2.4%.

  • Morning News: January 3, 2018
    Posted by on January 3rd, 2018 at 7:05 am

    Germany’s Jobless Rate Drops to Record Low as Economy Booms

    MiFID Shake-Up Gets Real as Wary Traders See Volumes Dry Up

    New in the West Bank: A Credit Boom Waiting for a Real Economy

    Bitcoin Loses Some Dazzle as Second-Tier Crypto Coins Catch Up

    Peter Thiel Is a Bitcoin Believer

    Meet The Crypto Billionaires Getting Rich From Ripple’s XRP

    American and Southwest Airlines Promise ‘Tax Bill Bonus’ for Employees

    Time for Jack Ma to Step Up

    Amazon Will Buy Target This Year, Gene Munster Predicts

    Tesla’s Scant Disclosures on the Model 3 Leave Wall Street Guessing

    McDonald’s Tests New Fresh Beef Burger

    A Saucy App Knows China’s Taste in News. The Censors Are Worried.

    Jeff Carter: The Next Big Thing Is Hard

    Michael Batnick: The Math Doesn’t Work

    Cullen Roche: The 2018 Global Financial Asset Portfolio

    Be sure to follow me on Twitter.

  • The S&P 500 Sectors in 2017
    Posted by on January 2nd, 2018 at 8:30 am

    Here’s an interesting chart. This shows the relative strength of the major S&P 500 sectors during 2017.

    Sorry I had to cram the legend on there.

    To be clear, this isn’t how well the sectors did overall. Instead, it’s the sectors divided by the S&P 500. In other words, a rising line means the sector is beating the market while a falling line means it’s trailing. I used the total return figures.

    A few things stand out. First, this was a tough year for Energy stocks. They badly trailed the market during the first part of the year. (I didn’t include Real Estate, Utes or Telecoms. The chart is crowded enough as it is.)

    The Tech Sector was the big winner; however, there were two pullbacks, one in June and another in November.

    Most of the other sectors could fairly be said to be market performers. Healthcare was strong during much of the year, but it tailed off after Labor Day. Financials were weak through May but picked up steam later in the year.

    I think I was most surprised by the weakness in Consumer Staples from May to November.

  • Morning News: January 2, 2018
    Posted by on January 2nd, 2018 at 7:04 am

    Bitcoin May Be Struggling — But Ethereum Just Posted a Fresh All-Time High

    Europe’s Record Factory Growth Puts the Squeeze on Resources

    OPEC Deal Doesn’t Stop Russia From Record Oil Output in 2017

    China Bulls Out in Force as Stocks, Yuan Start Year With Gains

    LeEco’s Jia Defies China Return Order, Sends Family Instead

    California Rolls Its Own Recreational Pot Sales Out For 2018

    The $15 Minimum Wage Movement Is Winning, And That’s Bad News For Cashiers

    BP Takes $1.5 Billion Charge Related to U.S. Tax Overhaul

    With Disney Deal Looming, Murdoch’s Empire Is Fractured

    UPS: If The Founders Were Alive Today

    Those Seatback Screens on Planes Are Starting to Disappear

    Toasts to the Deals (and Other Winners) of 2017

    Ben Carlson: Upside Risk Management

    Jeff Miller: What Should Worry Investors in 2018?

    Howard Lindzon: I Love 2018…and Trump Made American Stocks Below Average in 2017

    Be sure to follow me on Twitter.

  • Morning News: January 1, 2018
    Posted by on January 1st, 2018 at 7:56 am

    How China Will Shake Up the Oil Futures Market

    Goldman Sees Crypto, Credit Shadowing Robust 2018 U.S. Economy

    Wall Street Eyes 2018 Gains with a Side of Caution

    The Pessimist’s Guide to 2018

    Start of a New Year of Trading, and Jobs Report from December

    As U.S. Budget Fight Looms, Republicans Flip Their Fiscal Script

    Tax Law Offers a Carrot to Gig Workers. But It May Have Costs.

    A Retailers’ Guide to Curbing Online Gift Returns

    How Do You Turn an Ad Into a Meme? Two Words: Dilly Dilly

    Japan’s Nippon Life Eyeing M&A for Foreign Boutique Bond and Alternative Funds

    8 Changes to Social Security in 2018

    Louisiana Man Charged in ‘Nigerian Prince’ Scheme

    Josh Brown: Snowballing into 2018

    Michael Batnick: These Are the Goods

    Jeff Carter: ICO Accounting

    Be sure to follow me on Twitter.

  • The 2018 Buy List
    Posted by on December 31st, 2017 at 6:17 pm

    Here are the 25 stocks for the 2018 Buy List. It’s locked and sealed, and I can’t make any changes for 12 months.

    For tracking purposes, I assume the Buy List is a $1 million portfolio that’s equally divided among 25 stocks. Below are all 25 positions with the number of shares for each and the closing price for 2017. Whenever I discuss how the Buy List is doing, the list below is what I’m referring to.

    Company Ticker Price Shares Balance
    AFLAC AFL $87.78 455.6847 $40,000.00
    Alliance Data Systems ADS $253.48 157.8034 $40,000.00
    Becton, Dickinson BDX $214.06 186.8635 $40,000.00
    Carriage Services CSV $25.71 1,555.8149 $40,000.00
    Cerner CERN $67.39 593.5599 $40,000.00
    Check Point Software CHKP $103.62 386.0259 $40,000.00
    Church & Dwight CHD $50.17 797.2892 $40,000.00
    Cognizant Technology Solutions CTSH $71.02 563.2216 $40,000.00
    Continental Building Products CBPX $28.15 1,420.9591 $40,000.00
    Danaher DHR $92.82 430.9416 $40,000.00
    FactSet Research Systems FDS $192.76 207.5119 $40,000.00
    Fiserv FISV $131.13 305.0408 $40,000.00
    Hormel Foods HRL $36.39 1,099.2031 $40,000.00
    Ingredion INGR $139.80 286.1230 $40,000.00
    Intercontinental Exchange ICE $70.56 566.8934 $40,000.00
    JM Smucker SJM $124.24 321.9575 $40,000.00
    Moody’s MCO $147.61 270.9844 $40,000.00
    Ross Stores ROST $80.25 498.4424 $40,000.00
    RPM International RPM $52.42 763.0675 $40,000.00
    Sherwin-Williams SHW $410.04 97.5515 $40,000.00
    Signature Bank SBNY $137.26 291.4177 $40,000.00
    Snap-on SNA $174.30 229.4894 $40,000.00
    Stryker SYK $154.84 258.3312 $40,000.00
    Torchmark TMK $90.71 440.9657 $40,000.00
    Wabtec WAB $81.43 491.2195 $40,000.00
    Total $1,000,000.00

    The five new stocks are Carriage Services, Check Point Software Technologies, Church & Dwight, FactSet Research Systems and Torchmark.

    Also, thanks to the recent merger, Becton, Dickinson will take the place of CR Bard.

    The five deletions are Axalta Coating Systems, Cinemark Holdings, Express Scripts, HEICO and Microsoft.

    Danaher is now our largest stock, with a market cap of $65 billion. The Buy List is mostly large- and mid-cap stocks. Only two are smaller than $7 billion. Continental Building Products is about $1 billion, and Carriage Services is $410 million.

    Only AFLAC and Fiserv have been on the Buy List all 13 years. This is Stryker’s 11th year. FactSet is returning for the third time to the Buy List.

    Here’s a brief look at our five new stocks.

    Carriage Services (CSV) is a Texas-based funeral-home operator. They currently operate 178 funeral homes in 29 states, and 32 cemeteries in 11 states. Barely anyone on Wall Street follows Carriage, but the numbers look good.

    Check Point Software Technologies (CHKP) is an Israeli-based computer-security firm. It’s not cheap at 19.7 times this year’s earnings, but I think that’s not a bad price considering their growth.

    Church & Dwight (CHD) is a company I’ve wanted to add for many years. They’re a consumer-products stalwart. C&D owns several well-known brands like Arm & Hammer, OxiClean and, of course, Trojan.

    FactSet Research Systems (FDS) is a financial-data and software company. They help provide all the numbers that investors love to crunch. The stock was previously on the Buy List from 2006 to 2009 and again in 2013. I probably should have had them on the whole time.

    Torchmark (TMK) is a stock I’ve wanted to add to the Buy List for years. This is a very well-run insurance company based in Texas. Torchmark specializes in serving the middle-income market. The company almost always grows its operating income by 7% to 10% per share each year.

  • The 2017 Buy List
    Posted by on December 31st, 2017 at 5:32 pm

    The 2017 trading year is on the books! For 2017, the S&P 500 gained 19.42% while our Buy List gained 20.58%. However, if we include dividends (and total return is what really counts), then the S&P 500 gained 21.83% while out Buy List gained 21.79%.

    In other words, we lost to the market by 0.04%! That comes to down to one penny over the whole year for every $25 invested.

    I’m very competitive, so I hate losing to the market, even if it’s by a teeny amount. I will, however, add a few words in my defense. This was a difficult market to beat because a small number of very large companies did very well. That tended to distort the market’s overall return. About 55% of the stocks in the S&P 500 failed to beat the S&P 500.

    Still, over the long haul, our Buy List has done very well. Over the last 12 years, the total compounded gain for the Buy List is 228.09%, compared with 176.11% for the S&P 500.

    Our biggest winner this year was Moody’s (MCO), which gained more than 56%. HEICO (HEI) came in second. HEI was our #1 performer in 2016. Twenty-one of our 25 stocks finished in the black in 2017. Our biggest loser was Signature Bank (SBNY), which lost 8.6%.

    For people who care about such things, the “beta” of our Buy List in 2017 was 1.0092. The correlation of the daily changes of the Buy List to the changes of the S&P 500 was 83.6%.

    The chart below details the Buy List’s performance. I’ve listed each stock along with the number of shares and the starting and ending prices. For tracking purposes, I assume the Buy List is a $1 million portfolio that starts out equally divided among the 25 stocks.

    Stock Shares 12/30/16 Beginning 12/29/17 Ending Profit/Loss
    AFL 574.7126 $69.60 $40,000 $87.78 $50,448.27 26.12%
    ADS 175.0547 $228.50 $40,000 $253.48 $44,372.87 10.93%
    AXTA 1470.5882 $27.20 $40,000 $32.36 $47,588.23 18.97%
    CERN 844.4163 $47.37 $40,000 $67.39 $56,905.21 42.26%
    CNK 1042.7529 $38.36 $40,000 $34.82 $36,308.66 -9.23%
    CBPX 1731.6017 $23.10 $40,000 $28.15 $48,744.59 21.86%
    CTSH 713.9033 $56.03 $40,000 $71.02 $50,701.41 26.75%
    BCR 178.0468 $224.66 $40,000 $331.24 $58,976.22 47.44%
    DHR 513.8746 $77.84 $40,000 $92.82 $47,697.84 19.24%
    ESRX 581.4799 $68.79 $40,000 $74.64 $43,401.66 8.50%
    FISV 376.3643 $106.28 $40,000 $131.13 $49,352.65 23.38%
    HEI 648.0881 $61.72 $40,000 $94.35 $61,147.11 52.87%
    HRL 1149.0951 $34.81 $40,000 $36.39 $41,815.57 4.54%
    INGR 320.1024 $124.96 $40,000 $139.80 $44,750.32 11.88%
    ICE 708.9685 $56.42 $40,000 $70.56 $50,024.82 25.06%
    MSFT 643.7078 $62.14 $40,000 $85.54 $55,062.77 37.66%
    MCO 424.3131 $94.27 $40,000 $147.61 $62,632.86 56.58%
    ROST 609.7561 $65.60 $40,000 $80.25 $48,932.93 22.33%
    RPM 743.0801 $53.83 $40,000 $52.42 $38,952.26 -2.62%
    SHW 148.8427 $268.74 $40,000 $410.04 $61,031.46 52.58%
    SBNY 266.3116 $150.20 $40,000 $137.26 $36,553.93 -8.62%
    SJM 312.3536 $128.06 $40,000 $124.24 $38,806.81 -2.98%
    SNA 233.5494 $171.27 $40,000 $174.30 $40,707.66 1.77%
    SYK 333.8619 $119.81 $40,000 $154.84 $51,695.18 29.24%
    WAB 481.8116 $83.02 $40,000 $81.43 $39,233.92 -1.92%
    Total $1,000,000 $1,205,845.20

    Note that HEICO (HEI) split 5-for-4 on April 19.

    Note on CR Bard (BCR). The company was bought out by Becton Dickinson (BDX). The deal was completed on December 29, the final trading day of the year. For the year-end price, we used the final price for BCR, which was $332.24, although BCR didn’t trade during the day on December 29.

    Here’s how the Buy List performed throughout the year:

    Here’s the data behind the dividend-adjusted returns. I’ve listed each stock’s beginning price, ending price and dividend-adjusted starting price. My source for dividend-adjusted prices is StockCharts.

    Symbol Start Finish Adju Start Gain Gain w/Divs
    AFL $69.60 $87.78 $68.03 26.12% 29.03%
    ADS $228.50 $253.48 $226.49 10.93% 11.92%
    AXTA $27.20 $32.36 $27.20 18.97% 18.97%
    CERN $47.37 $67.39 $47.37 42.26% 42.26%
    CNK $38.36 $34.82 $37.20 -9.23% -6.40%
    CTSH $56.03 $71.02 $55.67 26.75% 27.57%
    CBPX $23.10 $28.15 $23.10 21.86% 21.86%
    BCR $224.66 $331.24 $223.86 47.44% 47.97%
    DHR $77.84 $92.82 $77.46 19.24% 19.83%
    ESRX $68.79 $74.64 $68.79 8.50% 8.50%
    FISV $106.28 $131.13 $106.28 23.38% 23.38%
    HEI $61.72 $94.35 $61.65 52.87% 53.04%
    HRL $34.81 $36.39 $34.10 4.54% 6.72%
    INGR $124.96 $139.80 $123.30 11.88% 13.38%
    ICE $56.42 $70.56 $55.73 25.06% 26.61%
    SJM $128.06 $124.24 $124.85 -2.98% -0.49%
    MSFT $62.14 $85.54 $60.78 37.66% 40.74%
    MCO $94.27 $147.61 $93.11 56.58% 58.53%
    ROST $65.60 $80.25 $64.96 22.33% 23.54%
    RPM $53.83 $52.42 $52.60 -2.62% -0.34%
    SHW $268.74 $410.04 $266.06 52.58% 54.12%
    SBNY $150.20 $137.26 $150.20 -8.62% -8.62%
    SNA $171.27 $174.30 $168.17 1.77% 3.65%
    SYK $119.81 $154.84 $118.70 29.24% 30.45%
    WAB $83.02 $81.43 $82.55 -1.92% -1.36%
    Total 20.58% 21.79%

  • Every Buy List Stock
    Posted by on December 31st, 2017 at 1:45 pm

    Here are all 81 Buy List stocks and when they made the cut.

    Stocks ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18
    ABT X
    ADS X X X
    AFL X X X X X X X X X X X X X
    APH X X X
    AXTA X
    BAX X X
    BBBY X X X X X X X X X X X
    BCR X X X X X X
    BDX X X X X
    BER/WRB X X
    BIIB X
    BLL X
    BMET X X
    BRO X
    CA X X X
    CBPX X X
    CERN X X X
    CHD X
    CHKP X
    CLC X
    CNK X
    CSV X
    CTSH X X X X X X X
    DCI X X X X
    DELL X
    DHR X X X X X X
    DLX X
    DTV X X X
    EBAY/PYPL X X
    ESRX X X X X
    EV X X
    EXPD X
    F X X X X X X
    FDS X X X X X X
    FIC X X
    FISV X X X X X X X X X X X X X
    GDW/WB X
    GGG X
    GILD X X
    HCBK X
    HD X
    HEI X X
    HOG X X X
    HRL X X X X
    HRS X X
    IBM X
    ICE X X
    INGR X X
    INTC X
    JNJ X X X
    JOSB X X X X X X
    JPM X X X
    LLY X X
    LNCR X
    LUK X X X X
    MCD X
    MCO X X
    MDT X X X X X X X X X
    MOG-A X X X X X X X X
    MSFT X X X X X
    NICK X X X X X X X
    ORCL X X X X X
    QCOM X X
    RAI X X X
    RESP X X
    ROST X X X X X X
    RPM X X
    SBNY X X X X
    SEIC X X X X X
    SHW X X
    SJM X X
    SNA X X X X
    SRCL X
    SYK X X X X X X X X X X X
    SYY X X X X X X X
    TMK X
    UNH X X X
    VAR X X
    WAB X X X X
    WFC X X X X
    WXS/WEX X X X X

    A few notes. AFLAC and Fiserv are the only two left that have been on every year. Stryker is on for the 11th year in a row.

    Cinemark and Axalta depart after just one year on the Buy List. FactSet returns to the Buy List for a third time.

  • CWS Market Review – December 31, 2017
    Posted by on December 31st, 2017 at 11:40 am

    The 2017 trading year has come to a close. Overall, this was a very good year for the stock market. Plus, it was one of the least-volatile years on record.

    For the year, the S&P 500 gained 19.42%. Including dividends, the S&P 500 gained 21.83%.

    Our Buy List had another good year. For 2017, we gained 20.58%. Including dividends, we were up 21.79%.

    That’s right—we lost to the market by 0.04%. In simpler terms, that’s one penny over the course of a year for every $25 invested.

    I’m very competitive, so I hate losing at anything, even by such a small amount. In my defense, this was an unusual year for stocks. That’s because a small group of very large companies did well. Roughly 55% of the stocks in the S&P 500 failed to beat the index this year. I also think of how things would be different if Axalta had accepted the $37-per-share offer from Nippon Paint.

    Still, our long-term track record is very good. Over the 12 years of the Buy List, our total compounded gain is 228.09% compared with 176.11% for the S&P 500.

    The Final Numbers for 2017

    With the Buy List, I always try to be as transparent as possible. The table below details the Buy List’s performance for 2017. I’ve listed each stock along with the number of shares and the starting and ending prices. For tracking purposes, I assume the Buy List is a $1 million portfolio that starts out equally divided among the 25 stocks.

    Stock Shares 12/30/16 Beginning 12/29/17 Ending Profit/Loss
    AFL 574.7126 $69.60 $40,000 $87.78 $50,448.27 26.12%
    ADS 175.0547 $228.50 $40,000 $253.48 $44,372.87 10.93%
    AXTA 1470.5882 $27.20 $40,000 $32.36 $47,588.23 18.97%
    CERN 844.4163 $47.37 $40,000 $67.39 $56,905.21 42.26%
    CNK 1042.7529 $38.36 $40,000 $34.82 $36,308.66 -9.23%
    CBPX 1731.6017 $23.10 $40,000 $28.15 $48,744.59 21.86%
    CTSH 713.9033 $56.03 $40,000 $71.02 $50,701.41 26.75%
    BCR 178.0468 $224.66 $40,000 $331.24 $58,976.22 47.44%
    DHR 513.8746 $77.84 $40,000 $92.82 $47,697.84 19.24%
    ESRX 581.4799 $68.79 $40,000 $74.64 $43,401.66 8.50%
    FISV 376.3643 $106.28 $40,000 $131.13 $49,352.65 23.38%
    HEI 648.0881 $61.72 $40,000 $94.35 $61,147.11 52.87%
    HRL 1149.0951 $34.81 $40,000 $36.39 $41,815.57 4.54%
    INGR 320.1024 $124.96 $40,000 $139.80 $44,750.32 11.88%
    ICE 708.9685 $56.42 $40,000 $70.56 $50,024.82 25.06%
    MSFT 643.7078 $62.14 $40,000 $85.54 $55,062.77 37.66%
    MCO 424.3131 $94.27 $40,000 $147.61 $62,632.86 56.58%
    ROST 609.7561 $65.60 $40,000 $80.25 $48,932.93 22.33%
    RPM 743.0801 $53.83 $40,000 $52.42 $38,952.26 -2.62%
    SHW 148.8427 $268.74 $40,000 $410.04 $61,031.46 52.58%
    SBNY 266.3116 $150.20 $40,000 $137.26 $36,553.93 -8.62%
    SJM 312.3536 $128.06 $40,000 $124.24 $38,806.81 -2.98%
    SNA 233.5494 $171.27 $40,000 $174.30 $40,707.66 1.77%
    SYK 333.8619 $119.81 $40,000 $154.84 $51,695.18 29.24%
    WAB 481.8116 $83.02 $40,000 $81.43 $39,233.92 -1.92%
    Total $1,000,000 $1,205,845.20

    Note that HEICO (HEI) split 5-for-4 on April 19.

    The 2018 Buy List

    Now let’s turn our attention to the new Buy List. Here are the 25 stocks for 2018:

    AFLAC (AFL)
    Alliance Data Systems (ADS)
    Becton, Dickinson (BDX)
    Carriage Services (CSV)
    Cerner (CERN)
    Check Point Software Technologies (CHKP)
    Church & Dwight (CHD)
    Continental Building Products (CBPX)
    Cognizant Technology Solutions (CTSH)
    Danaher (DHR)
    FactSet Research Systems (FDS)
    Fiserv (FISV)
    Hormel Foods (HRL)
    Ingredion (INGR)
    Intercontinental Exchange (ICE)
    Moody’s (MCO)
    Ross Stores (ROST)
    RPM International (RPM)
    Sherwin-Williams (SHW)
    Signature Bank (SBNY)
    JM Smucker (SJM)
    Snap-on (SNA)
    Stryker (SYK)
    Torchmark (TMK)
    Wabtec (WAB)

    The five new stocks are Carriage Services (CSV), Check Point Software Technologies (CHKP), Church & Dwight (CHD), FactSet Research Systems (FDS) and Torchmark (TMK). I’ll have more on those in a bit.

    Also, thanks to the merger, Becton, Dickinson (BDX) will take the place of CR Bard. I’m starting out BDX with a Buy Below price of $228 per share.

    The five sells are Axalta Coating Systems (AXTA), Cinemark Holdings (CNK), Express Scripts (ESRX), HEICO (HEI) and Microsoft (MSFT).

    Here’s the new $1 million portfolio, now divided equally among 25 stocks. Below are all 25 positions with the number of shares for each and the closing price for 2017. Whenever I discuss how well the Buy List is doing, the list below is what I’m referring to. The Buy List is now locked and sealed, and I can’t make any changes for 12 months.

    Company Ticker Price Shares Balance
    AFLAC AFL $87.78 455.6847 $40,000.00
    Alliance Data Systems ADS $253.48 157.8034 $40,000.00
    Becton, Dickinson BDX $214.06 186.8635 $40,000.00
    Carriage Services CSV $25.71 1,555.8149 $40,000.00
    Cerner CERN $67.39 593.5599 $40,000.00
    Check Point Software CHKP $103.62 386.0259 $40,000.00
    Church & Dwight CHD $50.17 797.2892 $40,000.00
    Cognizant Technology Solutions CTSH $71.02 563.2216 $40,000.00
    Continental Building Products CBPX $28.15 1,420.9591 $40,000.00
    Danaher DHR $92.82 430.9416 $40,000.00
    FactSet Research Systems FDS $192.76 207.5119 $40,000.00
    Fiserv FISV $131.13 305.0408 $40,000.00
    Hormel Foods HRL $36.39 1,099.2031 $40,000.00
    Ingredion INGR $139.80 286.1230 $40,000.00
    Intercontinental Exchange ICE $70.56 566.8934 $40,000.00
    JM Smucker SJM $124.24 321.9575 $40,000.00
    Moody’s MCO $147.61 270.9844 $40,000.00
    Ross Stores ROST $80.25 498.4424 $40,000.00
    RPM International RPM $52.42 763.0675 $40,000.00
    Sherwin-Williams SHW $410.04 97.5515 $40,000.00
    Signature Bank SBNY $137.26 291.4177 $40,000.00
    Snap-on SNA $174.30 229.4894 $40,000.00
    Stryker SYK $154.84 258.3312 $40,000.00
    Torchmark TMK $90.71 440.9657 $40,000.00
    Wabtec WAB $81.43 491.2195 $40,000.00
    Total $1,000,000.00

    Danaher is now the largest stock with a market cap of $65 billion. The Buy List is largely large- and mid-cap stocks. Only two are smaller than $7 billion. Continental Building Products (CBPX) is about $1 billion, and Carriage Services (CSV) is $410 million.

    Only AFLAC and Fiserv have been on the Buy List all 13 years. This is Stryker’s 11th year. FactSet is returning for the third time to the Buy List.

    Our Five New Members

    Here’s a brief look at our five new stocks plus their starting Buy Below prices. I’ll have more to say on each stock in upcoming issues.

    Carriage Services (CSV) is one of those stocks that I’m sure has you thinking, “Poor Eddy has lost his mind.” Carriage is a funeral-home operator based in Texas. The company is also far smaller than most of the other companies on the Buy List. Still, it’s good to have a below-the-radar company in your portfolio. Barely anyone follows Carriage, but the numbers look good. I’m giving Carriage a Buy Below price of $28 per share.

    Check Point Software Technologies (CHKP) is an Israeli-based computer-security firm. It’s not cheap at 19.7 times this year’s earnings, but I think that’s not a bad price considering their growth. Buy up to $111 per share.

    Church & Dwight (CHD) is a company I’ve wanted to add for many years. They’re a very strong number in consumer staples. They own several well-known brands like Arm & Hammer, OxiClean and, of course, Trojan. Church & Dwight is a buy up to $54 per share.

    FactSet Research Systems (FDS) is a financial-data and software company. They help provide all the numbers that investors love to crunch. The stock was previously on the Buy List from 2006 to 2009 and again in 2013. I probably should have had them on the whole time. I’m starting FactSet as a buy up to $202 per share.

    Torchmark (TMK) is a stock I’ve wanted to add to the Buy List for years. This is a very well-run insurance company based in Texas. The company almost always grows its operating income by 7% to 10% per share each year. Buy below $97 per share.

    One last item. RPM International (RPM) will release its fiscal Q2 earnings on Thursday, January 4. The consensus on Wall Street is for earnings of 59 cents per share. That’s up from 52 cents the year before.

    That’s all for now. The new trading year begins bright and early on Tuesday morning. We’ll get some of the key turn-of-the-month econ reports. ISM comes out on Tuesday. The ADP payroll report is on Thursday. Then the big jobs report comes out next Friday. Be sure to keep checking the blog for daily updates. I want to wish everyone a happy, healthy and profitable New Year. I’ll have more market analysis for you in the next issue of CWS Market Review!

    – Eddy