Andy Schornack September Monthly Investment Report (O, CINF, XLF, VNQ)


Author: Andy Schornack

Disclaimer: Andy owns O and CINF in his Covestor Financial Services Model.

September 2, 2010:  The market experienced a fairly large pull back during the month of August and the portfolio did experience a decline but not nearly as much as the benchmarks, the S&P 500 and XLF, and slightly more than VNQ.  With the passing of August, the portfolio has experienced its first full year and I am very pleased with the results.  The portfolio handily exceeded the S&P 500 and XLF over the previous 12 months, 9/30/09 – 8/31/10, and was slightly behind the VNQ for the period.
During the past month, the portfolio added positions in Realty Income Corporation (NYSE:O) and Cincinnati Financial Corporation (NASDAQ:CINF).  Both companies have great dividend histories, good management, and good balance sheets.  Realty Income provides monthly dividends with an annualized yield over 5% as of September 1, 2010, a history of annual increases, and stable tenant base. Cincinnati Financial Corporation has a quarterly dividend, also currently yielding over 5% as of September 1, 2010, and good potential upside with the industry underappreciated and the business experiencing historically higher catastrophe losses that should subside to historical levels.

The portfolio has a good cash position that allows for flexibility on market entry opportunities. Over the next month to two months, I will continue to revisit positions in the portfolio and may add/subtract investments with the total investments remaining ideally in the 10-15 range.

As always, the goal of the portfolio is to pursue a stable dividend income with the opportunity for capital appreciation. I look forward to the challenge of repeating the performance for the next 12 months.

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Andrew Schornack
Andrew Schornack
My goal is to leverage my experience in the financial and real estate sectors in an effort to make profitable investment decisions that offer more potential reward than risk.

Since 2005, I have worked in the banking industry. My current position is as a Senior Commercial Lender. It involves assessing risk in arranging working capital, real estate acquisitions, and other loans for clients.

I also am the owner of Schornack Capital LLC, which mostly invests in commercial buildings leased to the United States Postal Service.

As a portfolio manager on the Covestor platform, I focus only on the financial services and real estate sectors - the two industries that I personally feel that I know the best. I seek companies in those groups with stable history of past dividends that I believe are trading at a discount based on intrinsic value and will continue to pay dividends.

I am a Minnesota native, and received my BSB in Finance and Entrepreneurial Studies from the University of Minnesota. My MBA degree is from University of St. Thomas Opus College of Business.