The Long Term GARP model had a satisfactory month in November. The portfolio increased 1.0% (net of advisory fees), which outpaced the S&P 500 Index's (SPX) gain of 0.3% as of November 30. The month was eventful: President Obama won the election and several companies in the portfolio announced earnings or had noteworthy events specific to the company.
December is usually a strong month for the market, but the irresponsibility of the political leadership leaves the regulatory environment unsettled. From a planning perspective, it becomes very difficult for any industry to have certainty about hiring or capital expenditures.
In 2013, I believe GDP growth might tick up to close to 2.5% or even 3%. The stock in my portfolio which I feel will perform the best is BP Plc (BP). The oil giant has made moves to improve efficiency and that may boost operating performance.
Updates on some holdings:
Liberty Interactive (LINTA) is owner of QVC, Bodybuilding.com, Provide Commerce, Buyseasons.com, and Backcountry.com. The company reported earnings on November 6, 2012.
Iconix Brands (ICON) is the owner of a broad range of well known brands like OP, Mossimo, Joe Boxer, Peanuts, and Sharper Image. Iconix Brands announced the acquisition of the Umbro brand from Nike for $225 million. The acquisition builds on the existing ownership of athletic apparel brands Starter and Danskin. The company recently reported earnings on November 1, 2012.
Intuit reported earnings on November 15, 2012.
Starbucks (SBUX) is the largest coffee and tea company in the world. Starbucks recently opened its first stores in India at the end of October. The company reported better-than-expected results on November 1, 2012 and raised its dividend by nearly 25%.
Liberty Media’s (LMCA) holding company owns assets such as Starz Media, the Atlanta Braves, 40% of Sirius Satellite (SIRI), almost 20% of Live Nation (LYV), and 16% of Barnes & Noble. Liberty announced that it will be spinning off Starz Media into a separate company by the end of 2012. Liberty Media announced earnings on November 6, 2012. The company also increased its stake in Sirius (SIRI) Satellite Radio to nearly 50%.
VCA Antech (WOOF) is the second largest owner of animal hospitals in the United States and also owns the laboratories for diagnostic testing of animals. The company announced a 12.6% jump in revenue in its 3rd quarter earnings report and continues to buy new animal hospitals to build the scale of the enterprise.
IAC Interactive (IACI) owns Ask.com, Match.com, Meetic, Service Magic, Vimeo, CollegeHumor.com, and the Daily Beast, among other web sites. The company reported a 38% jump in revenue for the 3rd quarter of 2012.
British Petroleum (BP) is one of the largest integrated oil companies in the world. BP recently announced an agreement to sell its 50% stake in TNK-BP of Russia, and will then take a 20% ownership position in Rosneft. BP will receive over $10 billion of cash by selling the stake. BP also announced better-than-expected earnings for the 3rd quarter of 2012 and raised its dividend by 24%.
Quidel Corporation (QDEL) is a health care and diagnostic company, which makes influenza tests. The company is also expanding its product line into strep throat, graves disease, and other molecular assays. The company's most recent earnings report exceeded market expectations.
Unilever (UL) is a massive food company that gets over half of its nearly $50 billion of sales from emerging markets in Asia and Africa. The company has the goal of doubling its sales by 2020 and reported better-than-expected revenue growth of 5.9% in its latest earnings report.
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Disclosures: Performance discussed is net of advisory fees, and includes reinvestment of dividends or other earnings.
The investments discussed are held in client accounts as of November 30., 2012 .These investments may or may not be currently held in client accounts. The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or investment decisions we make in the future will be profitable.
Any index comparisons provided in the blogs are for informational purposes only and should not be used as the basis for making an investment decision. There are significant differences between client accounts and the indices referenced including, but not limited to, risk profile, liquidity, volatility and asset composition. The S&P 500 is an index of 500 stocks chosen for market size, liquidity and industry, among other factors.
Certain information contained in this presentation is based upon forward-looking statements, information and opinions, including descriptions of anticipated market changes and expectations of future activity. The manager believes that such statements, information and opinions are based upon reasonable estimates and assumptions. However, forward-looking statements, information and opinions are inherently uncertain and actual events or results may differ materially from those reflected in the forward-looking statements. Therefore, undue reliance should not be placed on such forward-looking statements, information and opinions.