An analysis of my current positions.
Please don’t put too much stock in the exact order of the size of the positions, as they can change from day to day as determined by the stock prices. Note that values are based on yesterday’s closes. (Weds).
I currently have 16 positions so an “average” position would be about 6.6% of my total portfolio.
At the current time I have 4 positions that are a lot larger than the others. They average 12.5% allocations, which they have grown into, rather than being bought anywhere near this large. These are, in order, BOFI, SWKS (Skyworks), CELG (Celgene), and SKX (Skechers). These four make up just under 50% of my portfolio, but at least they are widely diversified, being in Banking, Semiconductors and Internet of Things, Biotech, and Footware. As you know, I aim for companies that are growing very rapidly but have normal PE’s, whenever possible. These top four tend to exemplify that policy. Let’s take them in order:
BOFI is a very high conviction internet banking company, doing everything right, growing earnings last quarter at about 40% and growing tangible book value at 37%, and in spite of that is priced at a trailing PE ratio of an incredible 18 times earnings. For more information see Fletch’s wonderful summaries on the BOFI board.
SKWS is growing amazingly fast. The last two quarters for example they grew EPS at 54% and 75%. These were up sequentially as well by 34% and 35%! And it’s not just earnings, it’s revenue too. Last quarter revenue was up 50.5%. And we are not talking small numbers here. They are growing some BIG numbers incredibly fast. That was $718 million, up from $477 million. The quarter before was $587 million, up from $436 million (34.6%). What kind of PE ratio might you expect with these results?.. Well this company is selling at just about 20 times earnings! It’s up a lot this year, but what the heck?
CELG is my only biotech company. It has a flagship product but also has a lot of other products, flagship wanna-be’s building up their sales. And they contract with small biotechs with interesting early products. CELG finances the research and development for rights to market the product (giving the early biotech royalties). Their revenues have had regular year-over-year gains for at least 15 quarters, which is as long as I have tracked them. The same for earnings. CELG only grows at about 20% per year, but it’s like clockwork. Their trailing earnings are now about $3.46, which gives them a PE of 33. They’ve had the guts, and confidence, to put out an outlook for 2017 for about a year now. It’s for earnings of $7.50. They did a 2-for-1 split earlier this year but their price is back up to $114.
SKX is the fasting growing of even this fast growing quartet, in spite of a very reasonable PE of about 22. Its 2013 earnings were up 500% from 2012. Its earnings so far in 2014 are up 175% from 2013. Its revenues are also doing very well and are up 29.5% so far this year. And they are growing fairly big numbers as their revenues will be well over $2 billion this year. However clothing is always faddish and I’ll keep a close eye on this one.
I’ll continue with subsequent positions in another post but we are having guests for the weekend and I have to sign off for now. I will welcome questions or comments and will try to respond promptly.
For FAQ’s and Knowledgebase
please go to Post #4490