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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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.