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September, 2005: 6 23 27
Disclaimer - IMPORTANT - Read this first!
| Investor's Journal is a diary focused strictly on investments and personal finance issues, primarily from a contrarian and retiree point of view. Follow along with an average guy's failures and successes as he learns, by trial and error, the fine art of value investing. |
9/6/05-As noted with the previous entry, it is evidently too early to count out the Leapin' Lizards (LL), in our tracked portfolio competition since 10/4/04. Earlier I had thought the contest essentially over and that Classic Value (CV) had won, attaining better returns with lower risk than the LL selections. However, with the average holding period of the portfolio assets still only about 169 days, once again the LL, up 14.30%, are well in advance of the CV assets, which are up 11.19%. Despite their much shorter average contest asset holding period, a combined LL plus CV tracked portfolio would have beaten the S&P 500 Index's buy-and-hold record since the competition's inception (337 days) by 12.75% to 8.92% (all statistics as of today's close). (The figures are based strictly on price appreciation, which excludes dividends. Commissions have been subtracted from the portfolio results and not from the S&P 500 Index record.)
On an annualized basis, a hypothetical combined LL + CV portfolio would have a 29.69% appreciation vs. 9.70% for the S&P 500 Index.
The next contest stock will be added to the CV tracking portfolio at its market price early tomorrow, 9/7/05. The top candidates this week are: MRI/A; PROG; UGP; UNTD; and WOR.
My choice among them is United Online, Inc. (UNTD) (recent price $13.20). UNTD has a market capitalization of $815.38 million, a P/E of just 7.25, a hefty 6.10% dividend (with a dividend payout ratio of 11.00%), a price to sales ratio of 1.64, a return on equity of 42.98%, a price to book value of 2.60, a current ratio of 1.87, a debt to equity of only 0.21, and positive free cash flow. It meets both Benjamin Graham value and safety criteria for a bargain asset.
9/23/05-The average holding period of the competition portfolio assets has been about 177 days vs. twice that for a hypothetical S&P 500 Index holding, since the 10/4/04 inception. With 24 assets each currently in the Leapin' Lizards (LL) vs. Classic Value (CV) contest portfolios, CV is once again ahead, with a gain of 12.94%, while LL assets are up 9.23%. Despite their much shorter average contest asset holding period, a combined LL plus CV portfolio would have beaten the S&P 500 Index's buy-and-hold record since the competition's inception by 11.08% to 7.60% (all statistics as of 1:55 PM today, eastern time). (The figures are based strictly on price appreciation, which excludes dividends. Commissions have been subtracted from the portfolio results and not from the S&P 500 Index record.)
Given the current stats, on an annualized basis, a hypothetical combined LL + CV portfolio would have a 24.20% appreciation vs. 7.85% for the S&P 500 Index.
The next contest stock will be added to the LL tracking portfolio at its market price early Monday, 9/26/05. The top candidates this week are: BCF; HNT; MHS; PSAI; and PSS.
My choice among them is Burlington Coat Factory Warehouse Corp. (BCF) (recent price $36.58). BCF has a market capitalization of $1.64 billion, a P/E of 15.60, a small (0.10%) dividend (with a dividend payout ratio of 26.00%), a price to sales ratio of 0.50, a return on equity of 11.97%, a price to book value of 1.74, a current ratio of 1.71, a debt to equity of only 0.14, and positive free cash flow. It's price has risen 58.85% year to date, 75.39% in the past 12 months, and 65.80% relative to the S&P 500 Index over the past 52 weeks.
With this new purchase (BCF), the annual portfolio target of 25 assets will be achieved for the LL hypothetical portfolio. A purchase next week will complete the 25 asset target for the CV portfolio, shortly before the end of the first year since the contest's inception. Thereafter, each new asset will replace one held for at least a year, and both open and closed positions will be tracked in the calculations of appreciation for each portfolio.
9/27/05-The average holding period of the competition portfolio assets has been about 179 days vs. twice that for a hypothetical S&P 500 Index holding, since the 10/4/04 inception.
With 25 assets currently in the Leapin' Lizards (LL) portfolio vs. 24 open positions and one closed position now in the Classic Value (CV) portfolio, CV is once again ahead, with a gain of 16.11%, while LL assets are up 10.45%.
Despite their much shorter average contest asset holding period, a combined LL plus CV portfolio would have beaten the S&P 500 Index's buy-and-hold record, since the competition's beginning, by 13.28% to 7.42% (all statistics are as of today's close of New York trading). (The figures are based strictly on price appreciation, which excludes dividends. Commissions have been subtracted from the portfolio results and not from the S&P 500 Index record.)
Given the current figures, on an annualized basis, a hypothetical combined LL + CV portfolio would have a 28.95% appreciation vs. 7.57% for the S&P 500 Index.
The next contest stock will be added to the CV tracking portfolio at its market price early Wednesday, 9/28/05. The top candidates this week are: BNSO; CYD; MTL; PHG; and PKX.
My choice among them is Posco (ADS) (PKX) (recent price $55.91). PKX has a market capitalization of $19.50 billion, a P/E of only 4.60, an above average (3.10%) dividend, a price to sales ratio of 0.73, a return on equity of 27.03%, an operating margin of 24.45%, a price to book value of 1.12, a current ratio of 2.31, a debt to equity of only 0.14, and positive free cash flow.
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