Sunday, April 10, 2016

Weekly Market Review & Portfolio Adds

The market ended the week on a down note. That is to be expected considering the rally from January lows, and the lackluster sideways action most of March. Traders and other participants have to take their profits eventually. There were no major economic releases so institutions, traders, and investors alike were left to their own perspicacity.

There will be more economic news next week as we get the Fed Beige Book, CPI, Michigan Consumer Sentiment, Retail Sales, and Industrial Production. Industrial production and Retail Sales will be especially important.




For the week the S&P fell 1.3% .A down week does not mean the cliff is falling. Although after the last year a lot of people are still on edge. Believe me there are plenty of reasons to worry.  Central banks that send different messages every other month, negative interest rates, currency swings, and social unrest in many parts of the world can leave the average investor feeling apprehensive. But worrying short term is a futile exercise in human discernment. Especially when it comes to investing. Because short term obstacles do not stop long term progress. If that were the case the Berlin Wall would never have fallen, or women would not have gained the right to vote(almost everywhere) the last few centuries.

I also highlighted the other day how high quality names were outperforming the overall market.  I expect that trend to continue and I'll try to re-focus my efforts to make sure the portfolio doesn't stray to far away from the best names around.

Now to some portfolio news.

Global Payments smashed it's quarterly results topping EPS estimates at $0.70(non-gaap). Remember when the stock took a dive on news of it's Heartland acquisition? We can thank those investors for being short sighted as it allowed us to enter the stock at a much better valuation. The company should complete the transaction within a month. The stock is now closing back in on it's all time high.

Facebook announced a big update to its video platform.   Now you can stream live video to your friends, family, groups, and even schedule live video events. While I don't see this as a head on challenge to YouTube it certainly puts the video sharing site closer within the crosshairs.

Morningstar downgraded IBM.  I think that's ill-advised at this point in time. The analyst cited a bunch of concerns even the most novice of investors have known for awhile now.  I think the company turnaround is about to hit full steam in the next year, and I'm sure investors will begin to anticipate the change in trend.

I also made some adds to the portfolio on Friday.  Shares of WWAV were added, and also a completely new pick UVV.

WWAV is a buy I hope to not regret.  The problem is each time I buy their plant based milk I fall in love with the company even more. They are the market leader and I'm impressed with how quickly the company has turned itself into a leading organic and plant based food company.  The balance sheet is not the strongest, but I stated before that if no more acquisitions are made the company will be fine.  The stock has been stuck in a downtrend for awhile now, and I think the worst is over for the time being.  I can't envision sales growing at the solid clip from 2013-2014, but I think better than 7% is an achievable target for the next few years.

Universal Corporation (UVV) is in the tobacco industry. They are the primary tobacco merchant in the country. The company also provides a variety of other services including supplies for vapors and e-cigs. They also sport a solid and fat dividend associated with the sector. I'll have a write-up regarding the buy in the next day or two. I think this company will add some extra dividends and safety I'm seeking for the portfolio.

Earnings season will kick off in earnest this week.  A slightly weaker dollar should put some of the wind back into company earnings. We'll see how everyone is managing in this tough environment. Also I'll keep my eye out for any quality stocks that get knocked down unnecessarily on a quarterly miss.

Also don't forget to follow on Twitter.

Cheers
The Long Haul Investor



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