Again, I apologize for not updating this portfolio more often. I promise to do better. I have dumped nearly all of the former stocks (for example, I dropped DST at 112 a few months ago). But I am retaining AAPL, CELG, ORLY, and SKWS and adding 5 new picks. Here is a round up of my thoughts:
I inadvertently omitted Verizon (VZ). It remains a core holding as it pays an attractive, safe dividend.
I apologize for not updating you on my portfolios. Yes, I have been busy, but also I have been a bit reluctant to speak, given the poor performance of some of my picks. But today, I will go over the Core Portfolio and offer my opinions and updates on each stock:
Hello, fellow investors. I hope that this note finds you well and that your investments are doing well too. I hope that you took my advice on Skyworks Solutions since it is up about 54% since I recommended it in November.
I am not making updates to the portfolio, but I do need to comment on some recent developments. Many of you are probably worried about IBM. I share your concern as the stock has grossly underperformed. I am going to give the CEO a few more quarters to show evidence of a turnaround before making a change. As for McDonald’s, I am also concerned with the CEO’s performance as results have been disappointing and some of his decisions have been questionable. But let’s give him some more time as well while we collect our dividends. As to United Technologies, I was surprised to hear of the resignation of the CEO today (11/24). That is troublesome but again let’s wait and see because I think UTX is a solid company with good growth prospects in several areas. Finally, as to Verizon, which was recently downgraded, I am not worried. The stock is still cheap at 14 times forward earnings and it pays a solid dividend. So hold on despite what Citibank says.
I finally have some updates for the portfolio. I am dropping DXPE and KLIC. DXPE has performed well but I think there are better choices, while KLIC has gone nowhere. In their place, I am buying Outerwall (OUTR) and Skyworks Solutions (SWKS). Outerwall is the operator of Redbox and Coinstar kiosks. Even with today’s outside gains due to the announced price hike in Redbox prices, I think that the stock is grossly undervalued as the intrinsic value is about 148. Revenue growth over the past 5 years was 29%, EPS growth was 46%, return on equity is 33% and estimated earnings growth is about 18%. As for Skyworks Solutions, they are an innovator of high reliability analog and mixed signal semiconductors. I put its intrinsic value at about 92, so the stock is undervalued as well. Past revenue growth was 23%, EPS growth was about 33%, return on equity is almost 20% and estimated earning growth is about 19%. I think both of these stocks are great choices for the coming year.
Folks, welcome to the new website. Mark Bates has selected new software for posting messages and portfolio updates. I am researching new opportunities as well as reviewing the Miley Fundamental and Core Fund current holdings. I will provide an update soon. Until then, happy investing!
Conservative. Smart. Investing.