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:
- Apple – I am maintaining my position in this one. I believe that Apple is still a great pick, even if earnings only grow at an anemic rate of 6%, the stock is still undervalued and should be at least 128.
- Celgene – Even with the recent bad news, I still think Celgene is undervalued and should sell for 116, a significant upturn from its current price. Don’t expect instant gratification but I advise staying with them.
- O’Reilly Automotive – I am maintaining my position in this one. It is fairly valued at these levels so I wouldn’t buy more.
- Skyworks Solutions – This stock has been pummeled along with Apple. But I think it is still undervalued and should be accumulated.
- United Therapeutics Corp (UTHR) – United Therapeutics Corp is a biotechnology company. The company is engaged in the development and commercialization of products to address the unmet medical needs of patients with chronic and life-threatening conditions. This stock is my top pick. With an ROE of 49% and expected growth north of 22%, I think that this one will be 200 by this time next year.
- Avago Technologies (AVGO) – Avago Technologies Ltd is a designer, developer and supplier of semiconductor devices with a focus on analog III-V based products and complex digital and mixed signal complementary metal oxide semiconductor, or CMOS, based devices. With an ROE of 35% and expected growth of 26%, I see this stock reaching 141 (it currently sells for about 126).
- Taiwan Semiconductor (TSM) – Taiwan Semiconductor Manufacturing Co Ltd engages in the manufacturing, selling, packaging, testing and computer-aided design of integrated circuits and other semiconductor devices; it also manufactures masks. With an ROE of 30% and expected growth of 15% I see this stock reaching 41 from its current level of 21.
- Gentherm, Inc. (THRM) – Gentherm, Inc. is engaged in the design, development, and manufacturing of thermal management technologies. The Company has two reportable segments for financial reporting purposes: Automotive and Industrial. With an ROE of 27% and expected growth of 25%, I see this stock reaching 100 from its current level of about 39.
- Maximus, Inc. (MMS) – Maximus Inc provides business process services to government health and human services agencies in the United States and to foreign governments. With an ROE of 27% and expected growth of 19%, I see this stock reaching 64 in a year from its current level of about 52.
Well, this is the new, improved Fundamental Portfolio. I will do a better job monitoring it for you. But, of course there are few reminders:
- You need to do your own research before making any investment decision.
- Be patient, it often takes the market a long time to recognize true values.
- No guarantees, expressed or implied, are included with my picks.
- The fundamental portfolio may be more volatile than the rest of the market.
- Only invest in individual stocks if you are prepared for losses as well as gains. And even index funds can lose you money if you sell at the wrong time.
I wish you the best in all of your investing (and life) endeavors.