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The stock added to the Stellar Seven Portfolio is WD- 40 (WDFC). Not only is this one of the best brands in the world, WD directly benefits from the lower crude prices since they do use petroleum in their products. The stock is also at a 52 week high as the company continues to roll on with it very high return on equity (RoE) of around 25%. With a brand portfolio full of recognizable names such as the Lava Soap, Carpet Fresh, 2000 Flushes, No Vac, and the lucrative Wd-40 franchise, WDFC could be one of the safest stocks to own in the current bear market.
In Search of the Stellar Seven
Used to have this format for a portfolio on my very first stock site ages ago called GARP Investor. Still have the domain, but the site itself has not been active for many years. Thankfully, around 2000 I saved a copy of it and my own work at WallStreetCity.com (which is also loooong gone). Many of the companies are gone from that time (especially tech) and technologies have definitely had time to evolve.
That said, think it is time to bring this particular portfolio back. These stocks will be from various industries instead of tied to technology like the Shooting Stars Portfolio. Also buying in a nasty bear market that has fed on many weaker stocks across nearly all industries. Some of these stocks will also have dividends for safety. Some were even bought by me around the year 2000. Surviving over 16 years says a lot about a company, especially in the current environment. Stay tuned because the first stock will be selected tomorrow.
Stellar Seven Portfolio
100 Shares of WDFC at $105.73
100 Shares of CPB at $60.90
100 Shares of JNJ at $104.24
For stocks, 2016 has started off like an automated riding lawnmower through a bunch of weeds. It just cuts through no matter if good flowers are amongst the weeds or not. The Shooting Star Portfolio has certainly been trimmed pricewise as a few of the components are basically ruined for the foreseeable future post mowing. Twitter and GoPro have both fallen to scary levels. A few others like Skyworks and NXPI have also received hefty trims after rising high for most of the past year. Taser has also fallen quite a bit, but is still above where it was purchased for the portfolio.
I like Brian Sullivan’s analogy on CNBC today that this is a Colonel Kurtz market. Basically, I believe the meaning is that people are just selling everything they can and getting out in this new year. That is a very extreme and scary viewpoint, but does not seem to miss the mark as much as it should. In fact, it could be spot on if the selling pace of today and recently continues.
January 13,2016 Portfolio Prices
Netflix (NFLX) – $106.56
Twitter (TWTR) – $18.68
Avago (AVGO) – $123.31
Taser (TASR) – $15.41
Gilead Sciences (GILD) – $92.54
Skyworks (SWKS) – $62.16
Gopro (GPRO) – $14.61
NXP Semiconductors (NXPI) – $74.25
Although a few stocks should have been sold long before this point and a couple are no longer growth stories going forward, none would be sold yet. Gopro and Twitter are the top candidates to be sold on any type of strength. Taser will be kept because still believe in it for the long haul.
After running GameOgre.com for over 12 years, I have seen many popular gaming trends come and go. For example, I was able to register FreeMMORPG.com for just $8 because it never been registered before. Before that, I wrote a large stock series on game companies for Telescan/WallstreetCity.com. Come companies also tend to come and go. Some have been very hot and made investors tremendous profits while others started as laggards and stayed there. Below are the companies that have made it for years and are likely to keep on doing so on the strength of their biggest game franchises.
Game industry Stocks:
TTWO (Take-Two Interactive) – $35.60
- Grand Theft Auto
- WWE
- 2K Sports
- Evolve
- Borderlands
- Bioshock
ATVI (Activision Blizzard) – $37.51
- Call of Duty
- World of Warcraft
- Diablo
- Starcraft
- Heroes of the Storm
- Guitar Hero
- Candy Crush Saga (post merger)
EA (Electronic Arts) – $72.42
- Madden NFL
- Star Wars
- Battlefield
- Mass Effect
- The Sims
- Titanfall
- Dragon Age
- Crysis
- FIFA
- Plants Vs. Zombies
Winners
Although the portfolio has a few laggards like Twitter and Microsoft, The winners are continuing to expand. Netflix is the biggest winner so far on a dollar per share basis. It is now up a few hundred dollars per share and thinking about offering a stock split again. Other big winners include GoPro, Skyworks, Avago, and Taser.
Sells
The following stocks are being sold from the portfolio because they are no longer viewed as Shooting Stars.
Microsoft (MSFT) – 100 shares at $43.63 is being sold at $45.73 for $4573
Lifelock (LOCK) – 500 shares at $16.42 is being sold at $16.51 for $8255
Qualcomm (QCOM) – 100 shares at $71.89 is being sold at $67.28 for $6728
Alibaba (BABA) – 100 shares at $87.97 is being sold at $88.29 for $8829
These transaction adds $28,385 in cash to the portfolio.
As an individual investor, it sometimes makes more sense to buy shares in companies that trade with a low share price, but pack as much punch as possible. If you only have a $1000 to invest it is not like buying a stock trading for $500 to $1200 per share makes a lot of sense. At best you make get a couple of shares and at worst not even one. However, a stock trading from $10 to $20 can get you between 100 to 50 shares. Those are much better for that type of money, but you still need to try to pick the best stocks possible in that range. With this in mind, here are several stocks that can provide plenty of bang for your portfolio.
$10 to $20 Stocks:
AVID = Avid Technology provides various professional video creative tools. The stock has came back along way from being delisted from the Nasdaq in 2014 as can be seen by its chart above.
AFOP = Alliance Fiber Optic Products has been on a steady rise since early December. The stock has a nice PEG ratio of .62.
KKD = Krispy Kreme is moving in the opposite direction of the two picks above. It just recently entered this price range. As much as shares have dropped, the valuation is now attractive with a PEG Ratio .85.
LOCK = LifeLock is the one stock in this range that was also bought for the Stock Universe portfolio. The company narrowly beat estimates this quarter, but the stock has been down for nearly all of 2015 so far.
BCOR= Bluecora, formerly InfoSpace, operates various Internet businesses including Dogpile.com, WebCrawler.com, and HowStuffWorks.com. The company most recently beat earnings estimates by 12 cents and packs the lowest PEG Ratio here with a .61. This one could end up being the best of the five.
I do not like AAPL because it is the biggest stock in the world and still has a valuation that is nowhere near bubble territory. I also do not like Apple because I have always owned a Mac. In fact, I have never owned one nor have I wanted one. I do own an iPad and an iPhone, but only bought them in the last few years.
What I do like about Apple is that it was on the outside looking in with Microsoft for years, but did not stop trying to innovate. Actually, it is that continued innovation despite years of failure that took the stock from the year I started investing (1994) at around $4 a share to the current $124.43 a share it trades at now. Of course, that is split adjusted, but you can see what type of return long term investors could have had just by holding on to the stock.
If you take an Apple Product Timeline and put it by an Apple historic price chart you can get a good idea of what turned the table of fortune for the company. The iPod launched in 2002, but did not help the stock price until late 2004 to 2005. The product that apparently first started the real upward trend in the stock was the launch of the iPhone in 2007. Almost as soon as it was launched the stock started moving up. This was the product that finally got them out from under Microsoft’s lengthy shadow. The launch of the iPad in 2010 only appeared to further the stock price growth as tablets joined in the mobile revolution party.
In 1999, I wrote a series of articles proclaiming the death of the PC and prophesying that giant servers would deliver all the data to small clients. Over 15 years later and though some of it has finally happened and some has not, Apple’s true success can be tied to the fact that it went outside the bulky PC box and became the undisputed leader in mobile devices. Not only that, but it also eclipsed its old rival many times over. Not bad at all for a company that was written off for dead many times over the years.
Now that they are a mobile device giant, Apple is more at home these days innovating their best products such as the iPhone and iPad. The iPhone especially has became the top of the line and most sought after of all mobile products. On the flip side, new product innovation has slowed. The Apple Watch is not serving a great need like the iPhone, iPad, and even iPod did. Still, it would not be wise to discount anything Apple does in mobile. They have came a long way and will not be dethroned any time soon.
Source:
http://en.wikipedia.org/wiki/Timeline_of_Apple_Inc._products
Everybody would love to buy a stock for under $10 and then have that stock rocket up to over $100 in no time. Although it has happened over the years, it should never be expected. With that in mind, it is a wise move to do the research in order to find good quality companies that are trading in the single digits. Although not exactly penny stocks, larger investors tend to snub investments trading in that price range.
Not only can a young company rise from obscurity to become a Wall Street Darling, but an established company can be going through a rough time and reside under the $10 price line for a while. When I first started buying stocks, Apple was in the dumps and Microsoft was flying high. Ford has spent time under $10 not too long ago. More recently, biotechs have been the biggest movers and shakers with incredible investment returns from the high flyers.
The stocks below are under $10 as of this writing.
PMCS – $9.48
PLNR – $6.03
STM – $9.43
VJET – $7.86
ANAD – $1.04
The Shooting Star Portfolio on StockUniverse.com continues to have its share of winners and losers through the first couple of months of 2015. However, the winners have been big such as can be seen below.
BABA ($87.97) = $82.97
NFLX ($357.09) = $435.06
TWTR ($48.77) = $45.84
AVGO ($77.15) = $125.12
MSFT ($43.63) = $42.03
TASR ($15.05) = $21.84
LOCK ( $16.42) = $13.21
GILD ($102.21) = $98.83
SWKS ($80.86) = $91.20
AMBA ($54.69 ) = $66.66
Summary of Performance Thus Far:
Out of the 10 stocks that were in the portfolio, ups and downs were at five each. The losses were not that much in dollars or percentage terms, but a few of the gains like NFLX, AVGO, and TASR sported tremendous upside and have been even higher until recently. SWKS and AMBA were later additions but have provided a lot of excitement to the portfolio. BABA was up well over 110 since falling hard recently and giving up all of its gains and then some. In fact, Baba along with LOCK could be the first stocks that are sold from the portfolio. Rounding out the list, MSFT, TWTR, and GILD are acting a little tired price wise.
New Additions:
The Dow Jones may have fell 333 points today, but still seeing some leaders amongst some of the damage.
QCOM – 100 shares at $71.89
GPRO – 200 Shares at $38.73
NXPI – 100 shares at $97.55
As cyber crimes have become the most expensive crime in the world, the need for cyber security has never been stronger. Here are a list of the main cyber security stocks and little information about each one. Keep in mind that these are pure security plays :
Qualsys (QLYS) = Provides cloud security. The stock has been moving steadily up since October and, though while pricey, is making money.
Fire Eye (FEYE) = One of the leading Cyber Security companies but has not rallied like other tech stocks have recently. Is not currently making any money.
CyberArk (CYBR) = Plunged 16.96% in one day after a downgrade. CYBR makes IT security software solutions that protect organizations from cyber attacks both in the United States and internationally.
Proofpoint (PFPT) = Supplies solutions for email security, data encryption, and privacy protection among others. Not profitable at this time.
Imperva (IMPV) = Provides virtual data center security solutions as well as many cloud security solutions. One of the smaller security companies with a market cap of $1.24 billion. Do not be surprised if this stock hits a new 52 week high in a couple of months.
Checkpoint Software (CHKP) = One of the oldest and most proven cyber security stocks. Just added prevention software with the acquisition of Hyperwise. Also sports the best valuation here with a PE of 24 and a PEG ratio of 2.16. The stock is still selling at it s highest level since 2000 with a current 52 week high of $82.70. Stands as the biggest company here with a market cap of $15 billion.
Palo Alto Networks (PANW) = Provides global enterprise security solutions. Is one of the biggest companies with a market cap of $11.13 billion. The current share price of $138.20 is the highest of any other stock listed in this article. Although the valuation is rather high right now with a PEG ratio of 3.93, look for this to be one of the best performers going forward as cyber security spending will definitely be on the rise for the foreseeable future.
Going to try something somewhat new here. Going to start reviewing stocks based on 10 fundamental and technical criteria that involve both the stock and the company. Each value will get a score of 1 to 10 and will carry a maximum of 100 points. The score for each category will be shone. Here are the criteria that will be used:
Industry: The type of industry is extremely important as some industries will go through growth spurts while some will be on the way down or in a tough period.
Industry Leadership: Industry leaders are usually the best to buy in most industries, especially if they are the undisputed best in the industry.
Assets (Debt/cash): Companies rich in cash and no debt carry less risk than those companies with huge amounts of debt.
Margins: This is key to profitability. The higher the gross and net margins the better.
Return On Equity: Basically net income minus preferred dividends and divided by common equity.
Earnings Growth: The growth of the bottom line.
Sales Growth: The growth of the top line.
Valuation: Will use a few few different ratios such as the P/E Ratio, the Price to Sales( P/S) Ratio, and the Price/Earnings to Growth (PEG) ratio.
Technical Health: Charts will be used to determine overall price momentum.
Recent News: News will be checked to make sure nothing has been announced that could affect the company or the stock.
In my years away from stocks, I did two general things: ran a game website and participated in storage auctions. The latter endeavor enabled me to cross paths with several self-storage companies including one named Uncle Bob’s which is owned by Sovran Self Storage (SSS). Uncle Bob’s self-storage facilities are located all over South East Texas where most others are owned by mom and pops. Self-storage is an interesting business because all they do is allow customers to store stuff for a fee every month. Some of the storage is located outside, while the more expensive storage is climate controlled. It doesn’t matter what the person is storing, they have to pay every single month. It can be something valuable or just garbage, the cost is the same. If the person does not pay on time, management can then place their own lock on the door to the storage unit. After a few months or so ( it may vary depending on the owners of the facility), the unit can be placed in a storage auction for sale to the highest bidder. The contents are then sold to recover the fees that are owed after paying the auctioneer. This method does encourage a lot of people to pay before that happens.
Uncle Bob’s stood out from the rest because they have a caravan of storage auctions throughout the area every single month. No other storage company comes close to that in my area. It starts art 8:00 AM in the morning and then goes to 4 to 7 different Uncle Bob’s in the area ending around noon usually. It is a good system that helps them recover late fees and clean out lockers without having to use labor. Whoever buys the locker at the Auction has to clean out the whole thing or they are not allowed back to the Auctions. Neat how that works huh?
Getting to the stock, SSS is not only a high flying stock with a great yield, but it is also a REIT (real estate investment trust) with a very healthy dividend of currently 3%. It is in 52-week high territory now as it is a clear leader in what it does and is packaged with a nice yield.
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