Illinois Tool Works looks impressive indeed – R. Freedland (ITW, MOS, MCD)

Manager: Bob Freedland
Covestor model: Buy and Hold Value

Reviewing the activity in the “Buy & Hold” model during the month of April, 2011, I sold my shares in McDonald’s (MCD) and Smucker (SJM) on concerns of food inflation pressuring margins. I was similarly concerned about the sharp rise in costs of raw materials, including coffee and sugar for Smucker (SJM).

Both of these stocks actually rebounded and have held up well since my sale.

In their place I added Mosaic (MOS) on April 21, believing the stock might appreciate as a fertilizer company in the face of food inflation. On May 11, however, I sold Mosaic from the portfolio, as it failed to demonstrate any positive price momentum and failed to meet my own expectations.

With the economy appearing to recover slowly, I chose to add a position in Illinois Tool Works (ITW) after this company reported a strong quarterly report that exceeded expectations and raised guidance. They impressed the Wall St. Cheat Sheet and they certainly impressed me adequately that I added shares to the portfolio.

I continue to work on this portfolio, seeking to find long-term success stories that can produce superior results with low volatility, while simultaneously trying to quickly step aside when possible when results appear to significantly disappoint.

“Worries about rising costs cast pall on McDonald’s” Christina Rexrode. Associated Press, 4/21.
“Agribusiness Recap: Goldman Sachs Shakes Commodities” Wall St. Cheat Sheet, 4/17.
“Food Inflation Spreading? MOO Kicks Its Heels As Mosaic, Potash Climb 1%” Murray Coleman. Barron’s, 4/4.
“Illinois Tool Works Earnings Cheat Sheet: Hot Quarter On All Cylinders” Wall St. Cheat Sheet, 4/ 26.