Hi All, over the past year I have gone from 60ish businesses down to the list below, 32 in all. Getting rid of 30ish stocks has been relatively easy but now I’m having a hard time deciding which stocks to keep and which to get rid of. I would really really appreciate input from all of you.
Here is my list in order of position percentage.
PRAA 10.02%
BOFI 6.12
MIDD 5.79
FB 5.12
SKX 5.06
NFLX 4.75
LNKD 3.51
SSW 3.49
CMG 3.43
DIS 3.34
SWKS 3.07
AMZN 3.04
PRLB 2.97
XPO 2.96
ELLI 2.96
INFN 2.43
BRK-B 2.36
CNI 2.2
LL 2.2
HAIN 2.09
SCTY 1.91
UA 1.88
WFM 1.85
IPGP 1.81
CRTO 1.76
SWIR 1.63
HHC 1.62
UBNT 1.35
TSLA 0.94
WAB 0.93
IMAX 0.73
POL 0.7
Not included in my portfolio is about a 20% cash position that I need to invest, and I add about 1% to the portfolio every 2 weeks from my paycheck. Nothing is sacred, feel free to not pull your punches.
Thank you!
Ethan
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Hi Ethan, If you are asking what we would do in your place, I would obviously keep the ones you have that I have actually decided to keep for myself (naturally). Those include my big four SWKS, BOFI, CELG, and SKX. But I’d also keep FB, XPO, CRTO, WAB and POL.
Now, which to get rid of. Tougher question as I’m not familiar with many of them. I’ll only venture an opinion on those I have some knowledge of.
I love Elon Musk and have a lot of confidence in him. However, I can’t really figure out what SCTY’s prospects are, and how to evaluate them, so I’ve passed for now. I’d love a TSLA car, but the car business is very capital intensive, and TSLA the stock is being valued like a shooting star. I won’t fault you if you decide to keep them. Just saying. I’m out of ELLI, having been ticker guide at one time, because their earnings have been flat since the beginning of 2012, which is too long for me. They keep saying they are spending to grow, and it sounds good, but I’m looking for something a little more dynamic. I’m sure you know about the 60 minute exposé on LL. The alternative idea is that they are so far down they are bound to go up. Too complicated a story for me. AMZN is a great company, but they seem to have no interest in making a profit. I’m not sure why UBNT has quit growing its earnings, but it has for now. How many doubles can WFM have left?
That’s it.
Saul
4 Likes
Hi Ethan,
It’s not clear to me what your goal is…do you have some rough target as to the number of businesses you want to get down to, or are you simply trying to prune a few here and there?
For your bottom 4, are they the ones you have the least conviction in? Or are they tracking stocks, meaning you own them but only a small position because you want to make sure to keep track of them?
BRK-B sticks out like a sore thumb from the rest of them in terms of style. How does it fit with your overall strategy?
Ears
Hi Ethan,
My opinion – when in doubt and you don’t have a clear pathway, take your time and in the meantime do nothing. I hold many of the stocks you have, and obviously like them.
WFM is my largest position and I think its a great “core” stock to have and potentially have room to grow some 4x over the next decade. I also really like XPO, TSLA, CRTO, PRLB, BOFI, MIDD, SWIR, SCTY, UA, LNKD, and FB. I don’t know much about some of the other tickers above, but I can comment on a few that look like out of place in your list of stocks:
-
BRK: I know many folks like to use this as a core stock. If so, it makes sense to have. I thought about BRK hard and then sold my position for a number of reasons. One, I thought they couldn’t really grow at the rate they grew over the last two decades. If I want a BRK like exposure, then MKL and to some extent LUK provided potentially much better upside.
-
INFN and IPGP: I don’t know much about INFN but know that they are in a cyclic industry. IPGP I have written puts in the past but today’s valuation looks on the high-side. I would check the valuation of these two companies and then decide if it makes sense to continue holding.
My 2 cents …
Anirban
2 Likes
Hi Saul,
Just wondering, which of your current holdings do you feel is the most compelling buy right now and why? I would just like to learn a little more of the thought process. Thank you!
Chad
Ethan, I agree with anirban that IPGP seems to highly valued at present.
Saul
Hi Saul, Just wondering, which of your current holdings do you feel is the most compelling buy right now and why? I would just like to learn a little more of the thought process. Thank you!
Chad, that’s a tough question, which I’d have to think about. My thoughts about what to buy are naturally colored by what my current position size is. For example, I wouldn’t be buying SWKS because it’s my biggest position by a considerable margin. Other stocks which are small positions, and I am adding more of gradually, would not be as compelling as SWKS if they were all small positions. Other positions are small and I’ll keep them small because they are not liquid, or I’m not sure of them. If anyone didn’t have any WAB, I certainly recommend it, but tis not an exciting stock, just a plodding steady gainer, etc, etc. Sorry, that may be the best I can do.
Saul
1 Like
Thanks everyone for the replies. Here is my thinking so far.
BRK-b holds a place in my portfolio only for sentimental reasons. I’ll sell since I am trying to achieve 20%+ gains
INFN - in a cyclical industry, they look richly valued because we are in the beginning of a cycle. Personally I feel they are a great investment but one to watch closely.
@ earslooking, I appreciate your really insightful question. I’ll opportunistically add to WAB, not sure what to do with POL, I’ll sell IMAX, and hold tsla.
IPGP - cyclical industry, i’m torn if i should hold/add or not. They have done a ton of investment in the company and should be growing a lot in the near future. Any one have thoughts?
ELLI - I hear you Saul that they have been relatively flat. My understanding is that their future depends on the mortgage market. If that picks up they will grow earnings like wildfire as they have been gaining marketshare in a down mortgage market. I’m torn on this one too. Holding for now.
LL- I bought this recently, went bottom fishing 
What is everyones thoughts on PRLB?
Thanks for all the advice so far
Ethan,
I too went bottom fishing with LL.
PRLB I really like a lot. It’s taking on a fragmented industry, and using software and processes to create efficiency. I also like their new CEO Vikki.
Anirban.
1 Like
I recently sold BRKB and CNI. I am starting to second-guess CNI because it has given a nice return over a short time, and it is an essential-type business.
I also own UA and I love the company but the valuation scares me a little, but I am keeping it, trying to decide whether to add more.
I own DIS (love), FB (addictive), SSW (because of advisor rec, but this one is not going to be a big growth story, is it? – nice dividend though).
I wonder about my shares of CMG, expect 10% year gains? Is that enough growth? Great brand though, great trend, like the company.
I had previously sold out of NFLX, LNKD, TSLA, AMZN. The only one I would be interested in coming back to is NFLX but that’s because I love TV. Have you heard about what Audi is doing with electric / gas hybrid for $40k, coming to America in the Fall? I live in the heartland, and I don’t know if Tesla will make it out here. Cramer calls it a “cult stock”.
The one in my port that I am doubting a little is Google (growth?, maybe, probably…)
Have fun and good luck with your choices.
Karen
3 Likes
Karen,
No MIDD?
It’s been talked about a lot in RB, and it looks like MFOne
may include in their portfolio (I’m guessing here):
http://newsletters.fool.com/1069/coverage/updates/2015/03/25…
The case for future growth sounds good, but I’d like to do my
homework before biting this one.
Kris
If you have access to the Fool Fest videos (I believe they are via Pro and One – or was it a Fool podacast? I don’t remember), but there was a fantastic interview between Tom Gardner and Middleby CEO Selim Bassoul.
I was very very impressed with Basosul.
However, I’m not sure about MIDD. I don’t know much about it either. I don’t dislike it but should I be a raving fan? Their PE is 30.
I want to learn more about growth rates and how to calculate them to help assess some of these companies.
Karen
1 Like