Another month has flown by, and it was full of ups and downs (especially this last week).
I was a LOT more active in April than March. Of the 28 positions I held at some point during the month, only 8 remain unmolested since the end of March. Mostly just adding or trimming, but I did sell out of seven altogether, and started five new ones.
If you did the math, you’ll see that I still have 21 current positions. I really, at heart, do think that 20+ positions is too many. But my small positions, though I have 11 of them, only make up about 20% of my portfolio. These are low conviction positions, but companies that interest me, and most of them have the potential to grow into significant positions, if and when I become better acquainted with (and more comfortable with) the company.
3 of my positions have grown to “very large” positions. SKX (14.6%), FIT (12.4%), and LGIH (12%).
I have 7 medium to large positions (4% - 7% of my portfolio), in order they are INFN, PERI, PN, INBK, SSW, SEDG, and XPO.
Lastly I have 11 small positions (3% or less of my portfolio). In order, they are SWKS, DY, HRTG, GBX, LC, SCMP, CYBR, ERI, GDEN, TPLM, and INVN.
I have 6.6% in cash, mostly because I haven’t yet reinvested all of the proceeds from my recent sale of TWTR.
Previous Month Summaries
January: I didn’t start doing this until February
At one point this month, I was up almost 6%. Then TWTR and INFN gave their quarterly results, and the picture got much less rosy. And after the last couple days of April were down in general, I sit with a monthly gain of just 0.66%. Still beats the S&P’s 0.27%, but I gotta tell ya, that doesn’t make it feel much better.
Also, I’m still down 4.56% on the year, and the S&P is up 1.05%.
It’s almost embarrassing posting these results when I know Saul is going to report a killer April and I’ll feel even more like a dunce, but it’s not a competition, and if it were, I wouldn’t pick Saul to compete with.
Changes this month, and why I made them
I sold a bunch of stuff.
I sold out of Arcos Dorados. I made a little money on my value play, great. But by no means is this company doing well. I was happy to take my profits, and put the money in things that are growing rapidly, and have more short- as well as long-term potential.
I sold out of Energy Focus. This is a company that could do just about anything. They haven’t had any exciting announcements in the last couple months, so unless there are some great surprises, there could be an opportunity to buy back in even cheaper after earnings. It strikes me that this is the opposite of a “Saul stock.” They do NOT have predictable and growing earnings. Very hard to predict. There’s a lot of potential, though. They’re still on my radar.
I sold out of LABU. I want to invest in actual companies, and there are so many good ones to focus on.
I liquidated the tiny bit of Aeropostale I owned. They’re on the way to bankruptcy.
I got out of Spirit Airlines. Just not a business I feel like I need to be in.
I finally got rid of all of my AHGP. Coal isn’t exactly growing. I still think there might be a little value there, but it just isn’t worth the risk/trouble. Plus after they pay out their (reduced) dividend in a couple weeks, they’ll probably go down a bit.
Lastly, I sold out of Twitter. This was a tough one for me. I was hoping they would have a good Q1 and guide high for Q2. Instead, they are really struggling. Q2 especially is looking dismal. The growth story is just off here, and I’m out until I see signs it might resume.
I decreased my position in GBX – it’s another I don’t want to follow too closely, but it’s such a good bargain right now, I couldn’t quite bring myself to part with it. I’m just keeping my position tiny because I don’t want to focus on companies that aren’t growing rapidly.
I also trimmed my position in INFN ever so slightly…on a day when it was up around $16. Wish I would have trimmed it more…might not be back to 16 for a while. Lesson I took from earnings is just that it will continue to be volatile. Lumpy sales, future margin growth…it’s still a growth story and it’s risky. I still like it and haven’t sold any of my shares since earnings came out…not a good point to sell, in my opinion. But I wish it wasn’t my 4th largest position. I may trim bit by bit…or not. I’m young.
I also bought a lot!
I added to Skechers. FOUR times, actually. My position went from just 3% of my portfolio at the end of March, to almost 15% now. It is my largest position.
I added to FIT. I expect them to crush earnings/guidance next week.
I added to LGIH. This is a powerhouse selling like a sour mouse. See what I did there?
I added to PERI twice. This company went on sale after Q4 earnings. They had a big goodwill write off for an old acquisition. But they also have some new acquisitions which I think are working out much better. I even wrote to Investor Relations about the likelihood of future write downs, and was pleased with the response. Looking forward to the quarterly report.
I started 5 new positions! Yikes! They’re all quite small, though, and very much on a try-out basis. I don’t know the companies very well yet.
I started a small position in Sucampo Pharmaceuticals (SCMP), after invain brought it to the board here: http://discussion.fool.com/newbie-help-evaluating-scmp-32179669…
I started small positions in Cyberark (CYBR) and LendingClub (LC), and really small positions in Eldorado Resorts (ERI) and Golden Entertainment (GDEN).
My Current Allocations
Skechers USA 14.6% Fitbit 12.4% LGI Homes 12.0% Infinera 7.0% Perion Network Ltd 5.5% Patriot National 5.5% First Internet Bank 4.9% Seaspan 4.4% Solaredge 4.4% XPO Logistics 4.0% Skyworks Solutions 2.9% Dycom 2.3% Heritage Insurance 2.2% Greenbrier Co 2.0% LendingClub 1.8% Sucampo Pharmaceuticals 1.8% Cyberark 1.7% Eldorado Resorts 1.3% Golden Entertainment 1.2% Triangle Petroleum 1.2% Invensense 0.5% CASH 6.6%
Random Thoughts and Conclusions
I think what I’ve learned from April is that I really need to listen to myself regarding large positions. I knew INFN was too big, but I only trimmed 10% of it. Now it’s still too big, but I can’t bring myself to sell at the (hopefully) bottom.
TWTR is a very different story. I had exactly the amount of TWTR I wanted. It didn’t work out, and I sold immediately. I actually think I handled it well.
As always, I welcome your thoughts! Here’s to a May full of great returns, monetary and otherwise!