Monday, October 3, 2016

Portfolio Results - Q3

What a wild end we've had to Q3 this year. July and August were very mundane. They were so boring in fact many people wondered what happened to the markets.  Then right after Labor Day, and seemingly on cue, the markets started springing back to life, but not always in the way we enjoy. You can view the Google spreadsheet here

I had mentioned last week I was concerned the portfolio would probably not outperform the benchmark S&P 500 ETF SPY for the quarter. A few reasons being the sudden down move in Cognizant Technology Solutions, headwinds from tobacco stocks lagging, and Boston Beer representing such a large portion of the portfolio on a weighted basis.

Since the portfolio was started
it's up 8.44% including dividends. Not to shabby for roughly 1 year's worth of performance. Since then an investment in the SPY ETF would have netted you a gain of 10.69%. I bet most people would be surprised to see they are up over 10% in the SPY since last year considering the volatility. This is the worst I've performed against the ETF since I started. I don't expect my lagging performance to continue, although I'm facing some big challenges.

For one the portfolio was dealt a lot of blows this quarter. From HAIN to CTSH crashing down on bad news, to tobacco names taking a breather from rate hike's getting priced in it was rough lately. You can see the full portfolio spreadsheet here. And it did get a bit messy with calculations this quarter since some columns update automatically. That required me to add columns this morning to get the actual analysis again. Next time I'll remember to make a copy the day the quarter ends.

One bright spot is how I compare the portfolio on a price basis only.  With that metric I'm actually doing quite well versus SPY as I'm up 9.58% vs 8.47%. Clearly I'm doing a decent job overall with my buy prices which shows better than average chart interpretation and discipline. The difference lies within dividends received. The portfolio doesn't yield nearly as much as SPY despite having some heavy dividend payers. Just goes to show you how cold hard cash can make a difference.

TickerCumulative
Buy Price
Q3 PriceYTD GainQ2-Q3
% Change
2016
Dividends
Dividends
Since
Inception
Q3 Cumulative
Gain
Q3 Mkt Val
& Div
Q3 Return
BTI111.28127.6515.73%-0.38%$6.06$6.0614.72%261.358417.44%
BUD114.91131.413.17%-0.21%$4.60$6.3714.36%269.19217.13%
CHD42.9447.9211.45%-6.52%$1.07$1.0711.60%96.90512.84%
CMI106.87128.1546.18%14.90%$5.95$7.9019.92%264.223.61%
COST158.16152.51-6.44%-2.62%$2.20$2.20-3.57%307.22-2.87%
CTSH66.8747.71-15.23%-16.65%$0.00$0.00-28.65%143.13-28.65%
DEO108.34116.046.68%4.55%$2.54$2.547.10%350.667.89%
EMR45.7754.5113.17%5.44%$1.90$1.9019.10%110.9221.17%
FB92.40128.2722.31%12.24%$0.00$0.0038.82%128.2738.82%
GPN58.0476.7618.40%7.55%$0.03$0.0332.25%76.7932.33%
HAIN42.5835.58-12.03%-28.48%$0.00$0.00-16.44%35.58-16.44%
HCP37.4237.95-1.36%8.86%$3.45$4.021.43%79.9156.80%
HSY94.8695.66.47%-15.30%

0.78%95.60.78%
IBB258.95289.46-14.80%12.51%$0.25$0.2511.78%289.7081611.88%
IBM142.01158.8514.64%5.56%$8.20$9.5011.86%327.215.20%
MA87.53101.775.12%15.82%$0.95$0.9516.27%204.4916.81%
MKC82.1099.9215.43%-5.95%$1.72$2.1521.71%201.9923.02%
MO60.4763.237.82%-7.44%$3.96$5.654.57%258.576.91%
PG73.7289.7511.48%6.83%$2.00$2.6621.74%92.408225.35%
PM84.7597.2211.28%-3.44%$6.12$7.1414.72%201.5818.93%
PX109.55120.8318.03%8.16%$1.50$1.5010.30%122.3311.67%
PYPL34.2240.9712.38%12.22%$0.00$0.0019.74%122.9119.74%
RAI47.0647.151.71%-11.77%$3.78$4.500.18%240.252.10%
SAM194.53155.26-22.86%-9.22%$0.00$0.00-20.19%310.52-20.19%
UVV55.0758.223.10%1.77%$0.53$0.535.72%116.976.20%
V70.3082.77.01%11.70%$0.84$0.9817.65%166.3818.34%
VGR21.8421.53-9.07%2.62%$4.00$4.40-1.42%94.8263.38%
WAB84.9081.6514.99%16.43%$0.52$0.60-3.82%163.9-3.47%
WWAV40.1454.4340.14%15.96%$0.00$0.0035.61%163.2935.61%





$62.15$72.899.58%$5,297.068.44%
Benchmark Comparison








SPY$199.41216.35.88%3.78%$3.21$4.428.47%220.71794210.69%

Laggards
From the table you can see HAIN and CTSH were some of the biggest laggards during Q3. Also you do notice that CHD and MKC were both down 6.5% and 5.9% respectively.  That seems to go with the underlying trend within the market to flow back into riskier names, and away from staples. On a weighted basis SAM has a big footprint in the portfolio, which in reality it shouldn't be since it has one of the smallest market caps here. Yet that along with COST helped keep a lid on the portfolio. Also as mentioned tobacco for the most part was down. UVV and VGR managed to eke out gains.

Outperformers
Upon closer inspection we see PYPL, V, MA, GPN put together a solid quarter as a group. PYPL leads the pack here with a 12.38% gain. I'm happy to have recently added to this position. Also noteworthy is the solid performance seen from CMI and WAB. It looks as if industrial's have come back into vogue a bit too.

Other names providing support were IBB, IBM, EMR, DEO, PG, PX, & FB.  I'm going to keenly watch EMR, DEO, and PG. I thought about adding PG during the quarter, and maybe I should have. Despite it's challenges the company is still performing well. DEO was almost added again, but my limit order wasn't quite reached. I'm going to keep it there and hope another volatile day will send it all the way to my buy price. Also recall during the quarter PX was in merger talks with Linde AG. Those seem to have broken down, but the stock has managed to make it near highs again.

Best Performers
Some of the best performers since tracking started have been FB, WWAV, PG, & GPN. Quite the mixed group there. WWAV is being bought out by Danone which contributes to the nice performance there. FB I guess come as no surprise since the company keeps performing well.  Although the longer term weekly chart is showing some weakness, but I'm not inclined to say a collapse is near. I think maybe shares won't be heading higher as fast as they have historically. Of course a pullback is entirely possible, and not unexpected. The company has made it's way into the top 5 most valuable companies.

So that's the results. What does everyone else think and how have you performed?

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