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Stocks to buy in May 2015

April finished surprisingly well and stocks I selected for April mostly rallied. If you bought those stocks at the beginning of April, you would end up with 7.32% profit. That’s not bad considering how volatile the market is these days and that investors are expecting the market to crash.

I created a screener which browses my dividend stocks watch list consisting of about 200 dividend stocks (there are a few growth stocks too). Every month the screener selects stocks which are undervalued based on their P/E, PEG, current earnings and future earnings, and forward P/E among others and assigns a rank to each stock. The first 30 stocks are then selected for my portfolio.

I buy those stocks in my Motif Investing account and rebalance every month by removing stocks which are no longer on the selected stocks list and add new stocks. You can see the April selection here.

I also use the screener to buy stocks in my ROTH IRA account. Unlike at Motif investing where I can buy fractional stocks and thus the entire portfolio of 30 stocks at once, in my ROTH IRA account I typically select a stock with the highest rank to add and invest the entire amount into that one stock.

For example, in April I could add a new stock into my ROTH IRA account as I saved $1,000 amount (a minimum amount to minimize negative effect of commissions). To decide which stock to buy I looked at my screener result and found out that ConocoPhillips (COP) had the highest rank as the most undervalued stock. So, I bought the stock.

And here is a new selection for May 2015 which I am also using to rebalance the motif in my Motif Investing account:

 

You can buy this motif if you want if you open an account with Motif Investing. Then you can buy the entire portfolio the same way as a mutual fund – you buy all positions at once with minimum $250 investment. You will be buying fractional shares if you do not have large amount of money.

As I mentioned above, I rebalanced the “Undervalued Stocks” motif removing stocks no longer valued as “undervalued” such as VNR (+14.00% gain), NGLS (+13.30% gain), MSFT (+18.75% gain), BSMX (-5.72% loss) and replacing them with TIS, MBT, PCH, and GME. I also trimmed gains achieved in other stocks and reallocating to those less performing to bring the entire portfolio to equal weight balance.

 

 

 

I purchased this motif myself to show confidence in my stock selection. You can open your account too and if you start investing, you will receive a $150 bonus from Motif Investing.

I am rebalancing this motif every month. Let’s see, how well this portfolio will do at the end of the year.

Good luck to all of you!
 

Previous selection :

Stocks to buy in January 2015
Stocks to buy in February 2015
Stocks to buy in March 2015
Stocks to buy in April 2015
Stocks to buy in June 2015

 





2 responses to “Stocks to buy in May 2015”

  1. Kurt says:

    What do you think of Chevron (CVX)?

    • Martin says:

      Kurt,
      I currently have it ranked in my screener as a buy as undervalued stock. Per my metrics based on current earnings and future earnings the stock is set to make more money in the next 12 months than it is valued at the market (it is called a P/E gap). It pays amazing dividend – $4.28 annual dividend rate per share, gosh, that is a nice payment! It pays dividends since since 1912 and increased it for 19 consecutive years at average 10% rate!! What else do you want!. To me it is a perfect buy and it will be my next purchase in my ROTH IRA account.

      Morningstar considers a fair value to be at $115, current price is at $107.56. If you use a DCF model you get $107 fair value too, so it is a good buy. It will fare better as oil will be recovering, so I believe it is a right time to add stocks. But you should do your own homework before investing.

      Thanks for stopping by.
      Martin

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