One of my favorite things on this board is seeing Saul’s monthly summaries of his holdings and what he did during the month. I’m going to start compiling my own summaries, similar to his. I think I’ll learn a lot from it, and I’ll be able to look back instead of tricking myself into mis-remembering what I was thinking at any given time. I’ll post these here, and I’d love feedback…and I’d also love to see similar posts from other folks on this board.
Let me first say that, of course, I understand this is Saul’s Investing Discussions. By posting these, I am NOT implying that my investing activities are as instructive as Saul’s. But I think it does contribute something, and it will only be 1 post a month, so feel free to ignore it.
Since this is the first time I’ve done this, here’s a little background on me. Demographically, Saul and I couldn’t be much more different. I’m 35, and while I’ve had a 401k since my mid-twenties, only in the last year or so have I started taking the reigns and investing it in individual stocks. The results have been mixed…I was up 25% or so in the first half of 2015, but since then I am down 26% from the high. That’s a much bigger net loss than 1% (just to remind you how the math works there).
My investing strategy is similar to Saul’s – I would also describe it as “modified buy and hold.” I try to focus on growth AND value. I sell if I have a better place to put the money. I sell if something gains a ton and no longer fits the value side of my investing thesis. If a stock I’ve sold corrects and looks like a good buy again, I buy it back. I typically miss out on stocks like NFLX and FB. I try to keep no more than 20 positions at a time. 15 would be better, but it always seems to creep up.
I held INFN and SKX before finding this board in late 2015. Since then I’ve added to INFN and started positions in SWKS, SEDG, LIGH, INBK and DY. I would like to take this opportunity to express my gratitude to Saul and all of the contributors here, for all the great content. I’ve learned a lot in a few months, I’ve become a much better investor, and I’ve never felt more informed about my holdings.
So without further ado, my portfolio at the end of February:
Large Positions (8%+ of my portfolio)
INFN (12%) – This became my largest holding this month. I have added furiously as I sold some of the chaff formerly cluttering my portfolio. I purchased about half of my total position in the last month or so at under $14/share. I don’t intend for this to stay my largest holding, but it got big fast because I have been, so to speak, taking advantage of the sale.
TWTR (10%) – I first bought Twitter on Jan 20, and then continued to purchase at prices ranging from 15.16 to 17.22. Obviously with any company like this (or NFLX, FB, etc), it isn’t a value play at all, but depends greatly on what the market thinks. I don’t usually like this, because the downside risk is increased. But in this situation, I’m confident that the market’s temporary insanity will eventually abate. With its market cap down to ~13B, I’m looking for a double or more in the next couple years. If market cap got over 30B again (it’s been close to 50B in the past), I would sell it all, because I think that would be getting pricey and I could find better opportunities elsewhere.
EFOI (9%) – This is my biggest gamble. I don’t actually remember how I heard about the company, but I took a small position a couple months ago. Then I listened to their last conference call and felt very optimistic that the incredible growth through the last few quarters will continue. I added a bunch at 10.59, and more at 8.78, and with it back up to ~13 you can see why it has so quickly become my 3rd largest holding. It’s not a Fool rec, it’s tiny…I consider this high risk. But at a market cap of just over 150M, and with sales and EPS exploding in the last few quarters, the sky is the limit here.
AHGP (8%) – This is an “MLP,” a commodity producer (coal)…a dividend play…so basically, pretty off topic for this board. I’ll be brief. I’ve accumulated this holding in the last few months because the stock is down from 2014 highs around $73 to, currently, $13, and the dividend has not been cut, so it currently yields close to 30%. I think this is a huge market over-reaction. Am I missing something?
Large-ish Positions (5 -6% of my portfolio)
SWKS, LGIH, SEDG (5 - 6% each) – I think everyone is familiar with these. Simply dirt cheap and growing like weeds (esp LGIH and SEDG). The downside seems limited and the upside does not. Easy plays to make. I added to LGIH this month at 21.21 and SEDG at 24.12.
SSW (5%) – I actually really like this company, but I don’t know if it’s as good a buy as some of the “Saul Stocks” I’ve been adding recently. I sold more than half my position this month, because it was too big for my liking…and I wanted to re-allocate.
Small-ish Positions (3 -4% of my portfolio)
SKX, HRTG, GBX, SAVE, INBK (3 - 4% each) – no changes this month
XPO, FIT, PERI (3 - 4% each) – I started all these positions this month. Basically they all got too cheap to resist. PERI is the odd man out, but I have my reasons I like it.
Small Positions (< 2% of my portfolio)
DY, ARCO (2% each) – Starter-size positions. I’ve had ARCO for a few months. Bought DY at 51.76 on 2/16.
That’s about 90% of my portfolio. I have a few very speculative positions, so small (1% or less) that I don’t count them, and about 6% of my portfolio is in cash. I’m thinking about buying PN.
What have I been selling? In February, PII and GWR. The PE’s are reasonable for these two, but growth is not even close to what I’d want to see (in fact they are expected to be flat or shrink for the next year or so). When rapidly growing companies can be found this cheap, I don’t see any reason to hold things that aren’t growing. These ticked up a bit in February and I took the opportunity to divest.
Overall, I gained 4.9% in February while the S&P 500 was basically flat (moved from 1940 to 1932 in Feb). I’d like again to thank everyone on this board for helping me find some great companies to invest in.