Miley Fundamental Update

Dear Friends,

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:

  1. 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.
  2. 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.
  3. O’Reilly Automotive – I am maintaining my position in this one.  It is fairly valued at these levels so I wouldn’t buy more.
  4. Skyworks Solutions – This stock has been pummeled along with Apple.  But I think it is still undervalued and should be accumulated.
  5. 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.
  6. 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).
  7. 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.
  8. 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.
  9. 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:

  1. You need to do your own research before making any investment decision.
  2. Be patient, it often takes the market a long time to recognize true values.
  3. No guarantees, expressed or implied, are included with my picks.
  4. The fundamental portfolio may be more volatile than the rest of the market.
  5. 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.




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