After you receive this alert, we will make the following trades:
- Sell 25 shares of Costco Wholesale (COST) at or near $537.50. Following the trade, the portfolio will own 240 COST shares, roughly 3.5% of the portfolio.
- Buy 135 shares of McCormick & Co. (MKC) at or near $90.50. Following the trade, the portfolio will own 1,415 MKC shares, roughly 3.5% of the portfolio.
As we mentioned on today's Daily Rundown video, the stock market has made some great strides since mid-June with the S&P 500 moving more than 16% higher including today. We've seen a number of our positions move considerably further in that time and while we too are enjoying the market action, we will continue to prudent investors with the portfolio.
Earlier this week that meant realizing some of the gains in Morgan Stanley (MS) and Ford Motor (F) shares, while leaving the majority of the position intact. We are doing that again today with COST shares, which have soared ~24% since the last time we bought the shares on May 18 at $434.81 vs. the corresponding 8.45 move in the S&P 500.
We continue to see Costco extremely well positioned in the coming quarters, which is why even after this trade we will still have ~3.5% of the portfolio's assets in COST shares. Our price target on COST shares remains $620.
As we did with the other trades this week, here too we will be funneling a portion of the realized gains from the COST trade into the shares of McCormick & Co. This not only builds our exposure to this dividend dynamo company, but it does so as the company enacts its latest price increase just as we move into its seasonally strongest time of year.
For now, we'll keep our MKC price target at $110 and our Two rating intact. Should we see data pointing to the shift to dining at home/grocery accelerating from dining out/restaurants, we'll look to revisit both that target and our rating.
(Please note that we are looking to execute these trades at or near the share price mentioned above. Once the trade is completed, subscribers can see the trade's executed price here. Be sure to toggle the chart to sort by Purchase Date.)