These Are My Current Top 10 Dollar Holdings

Readers often ask about changes to my personal portfolio’s composition.

Here is a current update as of April 25, 2024.

Since February three stocks fell off my top-10 list. Those were Dollar General DG, Berry Global BERY and Masonite DOOR. 

I took profits on Dollar General from after the company downgraded FY 2024 guidance to below what I had expected. I still like the shares for the long-term with a $200 price target but no longer see a near-term catalyst to push it significantly higher right away.

Accordingly, I exited my share position on DG (average cost basis $111.15/share) while maintaining my naked put exposure out to January 2025 and January 2026.

Berry Global still appears very underpriced. I decided to exit some of my shares simply to redeploy that cash into my now favored names like Jack in the Box JACK, Cracker Barrel CBRL, Sealed Air SEE and Sonoco SON. BERY is a relatively slow-paced mover and seems less likely to make a huge pop in the near-term.

Berry remains a decent sized position but is no longer among my top 10.

Masonite DOOR was an easy sell decision as it was already trading very close to its accepted takeover offer of $133.

JACK and CBRL became much larger holdings since February as they each fell to new multi-year lows recently. They moved up from seventh and tenth place on my top-10 list to second and fifth. Major additions to JACK pushed Caleres CAL back into third place from second. 

I allowed some of my American Woodmark AMWD shares to be called away last week reducing my overall position size in it. It remains my #1 largest holding. Year-ahead upside potential on American Woodmark seems to be between 33% and 66%. That said, year-over-year comparisons will be much tougher after AMWD’s record profits in FY 2024 (ends Apr. 30, 2024.)

This is what my list looked like about two months ago. 

Nobody should ever put all their money into just one stock. I don’t do that either. That said, if someone put a gun to my head and forced me to pick just one name to hold for the coming 12 months my choice would be Jack in the Box.

No matter how I slice and dice its numbers I see a minimum goal price of about $95 and a potential upturn to north of $125 by this time next spring.

Buying now, with the shares near their best valuation of the past 10 to 12 years locks in a secure, and likely to rise, 3% current yield. I look forward to selling covered calls on my newly acquired shares in JACK once the stock heats up again.

Option premiums on JACK’s calls and puts are typically very generous due to its high implied volatility. JACK could easily jump towards $100 quite quickly. It topped out at $99.56 as recently as July 31, 2023, less than nine months ago. JACK has changed hands as high as $86.20 year to date in 2024.

Earnings per share for FY 2024 (ends Sep. 29, 2024) are now expected to come in between $6.30 and $6.40. FY 2025 appears set to challenge FY 2021’s stimulus-based record year when JACK earned $7.19.

Early in 2021 JACK set its all-time peak of $124.50.

Pessimism on CBRL pushed those shares to a new multi-year low recently. The shares yield about 8.4% at today’s rate. Net profit margins are historically anemic but are likely to start rebounding dramatically over time.

Cracker Barrel has proven earnings power of $6-$9 per share. Once they regain that range of profitability these shares can be back to between $110 and $150. CBRL changed hands at $121 to $185 at some point during each of the 11 calendar years from 2013 through 2023.

Watching CBRL attract solid buying during a major market selloff suggests further positive momentum awaits. At its worst point Thursday the DJIA was off by over 700-points.

Patient investors are getting paid well to take positions while the stock is cheap. Future gains should end up being quite dramatic.

At the time of publication, Price was long shares and short options of every stock on his April 2024 top-10 list.