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:
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 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.
Well, folks, it has been a while. First, I have to admit defeat on VMI. I sold it at a loss on February 21 after the company reported disappointing earnings and outlook. I apologize for this pick, but even Warren Buffet makes mistakes. Now for my replacement pick. I am recommending Spirit Airlines, Inc. (SAVE). This discount airliner has a solid balance sheet (no long term debt), its revenue growth was 16%, EPS growth was 39%, PE is 23, ROE is 26% and expected EPS growth is 25%. I calculate the intrinsic value at 119, so I rate this stock a strong buy at about 57 (I bought the stock personally last week at 55). So I am adding this stock to the fundamental fund as well.
Conservative. Smart. Investing.