AAPL

MANIFEST 40 (December 2013)

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The Stocks You Follow: December 2013 Update. 8 1/4 years. We’ve continuously monitored the 40 most-widely followed stocks by our community of subscribers at Manifest Investing for that long. We think it’s more than a fair assumption that many of these are in your real money portfolios … and for that, we’re optimistic and grateful. This managed “tracking collection” of your collective favorites has outperformed the Wilshire 5000 by +3.1% (relative rate of return, percentage points). The aggregate absolute return has been 9.0% during a period when the annualized total return for the general stock market has been 5.9%. With 8.25 years in the can, the average holding period is 5.7 years.

Peak Performance

Our MANIFEST 40 is a celebration of collective excellence in stock selection, strategy and disciplined patience.

With an average holding period of 5.7 years, the annualized relative return of the current tracking portfolio is approximately +3% versus the Wilshire 5000, approaching our long-term objective. With above average growth (8.5%) and a return forecast of 8.9% (vs. 5.3% for the general market) we see continuing solid performance ahead …

“We have always believed that the collective
decisions made by our community of
like-minded, long-term investors
are worth huddling over …
a place where ideas are born.”

A little over eight years. We established and have been tracking your most widely-followed stocks for more than eight years. Many of the original “40” are still on the list. There have been relative few kings-of-the-hill, including Bed Bath & Beyond (BBBY), Stryker (SYK) and current pole position and community favorite, Apple (AAPL).

Bottom Line(s)

The annualized rate of return for this tracking portfolio is 9.0%. The Wilshire 5000 has gained approximately 6.0% (annualized) since inception … so the relative return (alpha) of these community favorites is a stellar +3.0%.

The relative return of the ACTIVE, current 40 positions, in the tracking portfolio is also +3.1% annualized.

21-of-38 active entries have outperformed the Wilshire 5000 since selection for an accuracy rating of 55.3% compared to 62.5% in September 2013. 62.5% is well above “average” for selecting “winners” by the overall universe of investors and traders.

MANIFEST 40 (December 27, 2013). These are the most widely-followed stocks by subscribers at Manifest Investing. Current leader Apple (AAPL) was added to the list back on September 24, 2009 and steadily climbed the ranks while generating a relative return of +21.3% (annualized) over the trailing three years despite the swoon of 2013. Figures in parentheses are the ranking back on September 30, 2013.

Chargers

Qualcomm (QCOM) has, once again, continued to move up the charts, going from #16 to #12 over the last three months. QCOM had the greatest percentage gain in dashboard appearances. Other companies making strong showings of interest include recent Solomon Select feature Cognizant Technology (CTSH) and Portfolio Recovery (PRAA).

The results of $100 positions investing in any of the Top 40 companies can be viewed at any time at:

http://www.manifestinvesting.com/dashboards/public/manifest-40

Strongest Performers

The three top performers in the MANIFEST 40 since inception — based on annualized relative return — are Portfolio Recovery (+40.3%), Cognizant Technology (33.7%) and Buffalo Wild Wings (30.6%). $100 invested in Cognizant Technology (CTSH) on 12/15/2008 is now worth $572

Newcomers

We pay considerable attention to the chargers and new additions to the list. Apple was a new addition back on 9/24/2009 and $100 invested then is now worth $564 (relative return = +21.3%).The two newcomers are actually returning former residents: Intuitive Surgical (ISRG) and Gilead Sciences (GILD).

Alpha Central: Alive and Well

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It’s become something of an annual pilgrimage. The Mid-Michigan chapter of NAIC, the umbrella organization for investment clubs, started a stock picking challenge twelve years ago. Clubs and individuals submit their entries and the results are tracked over the course of one “Halloween” to the next. (The annual breakfast is always between Halloween and Thanksgiving.)

This year, a club that goes by the name of Street Smarts (Saginaw, Michigan) took home the top prize by turning $100,000 into $175,000 over the 12-month period. 75%. Yowza. Wowza.

They were joined by another (16) clubs with returns besting 30% — in other words, out performing the market by at least five percentage points. In contrast, only 12-of-28 failed to beat the market … and the average result was 29%. Their consensus selections essentially matched the market — but the track record is strong as the consensus portfolio has beat the market in 10-of-11 years.

Kudos. I attend a lot of these. I watched recently as similar groups in other parts of the country handed winner’s certificates to portfolios finishing closer to 30%. Eddy Elfenbein of www.crossingwallstreet.com is closing in on another victorious year — hopefully his 7th in a row — with a Buy List portfolio tracking at 34-35% YTD.

The leaders of our annual Groundhog Day-to-Groundhog Day Iditarod are no slouches, either. Our defending champion investment club, the Broad Assets (St. Louis) stand at +83% in the current contest. (Since 2/2/2013) We chronicled their exploits for 2012 here as they finished #1 with a +27.5% total return last year. The finish line for our contest (2/2/2014) is still on the horizon, but Broad Assets has a mammoth lead going into the home stretch.

2013 Groundhog Challenge Scoreboard

We’ll be taking entries for Groundhog 2014 during the last week of January. All individuals and groups (clubs) are invited to submit 5-20 investments.

The fact that 57% of the Mid-Michigan entrants beat the market is not unusual. 51.7% of participating Groundhogs have done the same over the trailing 8 years.

It’s how they/we do it that matters. The swinging-from-the-heels is actually kept to a minimum. The list of top performers include Apple (AAPL), Bio-Reference Labs (BRLI), Coach (COH), Cognizant Technology (CTSH), Google (GOOG), IPC Hospitalist (IPCM), Qualcomm (QCOM), ResMed (RMD) … you get the idea. Many of our community favorites represented by our 40 most-widely held companies are present and accounted for, along with a suitable dose of promising small- and medium-sized companies that keeps the overall growth forecast of the portfolio where it should be (12% or more).

Companies of Interest

Would you be surprised if I told you that Edwards Lifesciences (EW) is on the radar screen of these successful Mid-Michigan stock pickers? Because it is. You shouldn’t be surprised. The road to Alpha is paved with companies with superior return forecasts in combination with high quality rankings.

Materially Stronger: Johnson & Johnson (JNJ), McKesson (MCK)

Materially Weaker: Cutera (CUTR), Thoratec (THOR), Nissan Motor (NSANY), Caterpillar (CAT) 1, Astec Industries (ASTE), II-VI (IIVI), Rofin-Sinar (RSTI), Abaxis (ABAX)

1 Would not usually make this list, but dropped from $105 to $95.

Market Barometers

The median Value Line low total return forecast (VLLTR) is now 3.7%, down from 3.9% last week.

Round Table (November 2013)

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Join us Saturday morning (11/23 11 AM ET) for the November 2013 Round Table as we explore, discover and CELEBRATE the performance results of the tracking portfolio.

FREE webcast! Register at: http://www.manifestinvesting.com/events/136-round-table-november-23-2013

The mood is certain to be festive — grateful, even — as we celebrate a legacy of stock selection in/with a COMMUNITY of long-term investors who are no strangers to the land of alpha and positive relative returns. We’re not afraid to keep score and we’re always seeking lessons and best practices to make us all better.

The annualized relative return since inception is now at +3.1% with an overall outperformance accuracy of 57.9%.

Approximately 2% of 20113 funds achieved better performance over the trailing 3-years. [Source: Morningstar]

Ken Kavula, Hugh McManus, Mark Robertson and special guest damsel, Susan Maciolek will share our favorite Thanksgiving stock ideas.

Tune in to see if Hugh McManus can actually find a deep value stock that captures his attention … he’s “passed” a few times lately and believes that bargains are a little more challenging to find than usual even as Black Friday approaches.

Companies Likely To Be Studied/Presented:

  • Apple (AAPL)
  • Cognizant Technology (CTSH)
  • Panera Bread (PNRA)

References:

Round Table Tracking Dashboard

Red October: Forbes Best Small Companies for 2013

Bottom Fishing (6/13/2013)

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In this month’s cover story, we took a closer look at one of the screening methods used by Hugh McManus. In a nutshell, he searches for high-quality companies trading near a selected low price. The current price is compared versus a selected low price which is dependent on the company’s growth rate. The higher the growth rate, the further back Hugh goes in history to compare.

The following results illustrates why he’d avoid Apple (AAPL) and keep in mind that he’s generally disinterested unless this ratio (price-to-selected low price) is less than 25%.

Position screen 20130613

Apple (AAPL)

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With products that are pervasive and ubiquitous and the #1 ranking in our MANIFEST 40 most widely-followed stocks, it’s time for Apple to join the Solomon Select tracking portfolio. We’ve waited patiently for the stock price to drop from $705 to $400 and the fundamentals are still very much intact. Our anecdotal analysis of price disruptions on the heels of relative strength breakdowns and breaches in momentum suggests that the worst may be over.

On a CNBC appearance yesterday, Jeff Gundlach confessed that DoubleLine is now “long” Apple after rocking the investing world with his expectation of $300-something while it was soaring in the upper $600s 9-10 months ago.

Growth, Profitability, Valuation

The Manifest Investing sales growth forecast for AAPL is 14.2%.

We’re using 23.2% for the projected net margin. Value Line has a 3-5 year projected net margin of 26.6%.

The median P/E for the period 2008-2017 is 15.2×. We’re using 14x for the projected average P/E.

At the time of selection (5/31/2013), the stock price is $449.73, the projected annual return is 20-21%. The quality RANKING is 98 (Excellent) and the financial strength rating is 90 (A+).

The company has historically held no long-term debt but recently committed to low-interest rate bonds as an offset vehicle (tax optimization) to ‘proxy’ a repatriation of offshore cash reserves to fund buybacks and dividends for shareholders.

Points of View

Morningstar has AAPL with a fair value of $600 for a price-to-fair value ratio of 74% and rates the company a “buy.” S&P rates the company a “strong buy” at fair value of $473.20, or a P/FV of 94%.

Ira Sohn Stock Selections (2013)

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About The Conference

Since 1996, the world-renowned Sohn Investment Conference has been the premier investment forum, bringing together the world’s savviest investors to share fresh insights and strategies in support of pediatric cancer research and treatment.

Wall Street’s best and brightest investors participate in this unique, “must attend” event to share their expertise with an audience of more than 3,000 people, comprised of portfolio managers, asset allocators and private investors. Most speakers manage large proprietary investment portfolios that have outperformed the market for many years and do not share their insights in any public forum, but they volunteer their time to the Conference for the benefit of the Foundation. All contributions support the Foundation’s mission to support pediatric research and care.

Notes From The Ira Sohn Conference 2013 (via Joshua Brown)

Motley Fool – Sohn Ideas

Gundlach shorts Chipotle, Einhorn goes OIS (Forbes)

WSJ’s Live Blog (Wall Street Journal)

Lincoln center sohn 2013

I wasn’t invited to share any investment ideas, at least not until next year — so here’s my 2013 Sohn Shopping List — we’ll take a look at some of these.

These screening results are based on:

  • MANIFEST Rank in top percentile (MANIFEST Ranking >= 99)
  • Positive Price Momentum (Rate-of-Change, ROC, technical indicator)
  • Positive Price Pressure (based on PnF price target vs. current price)

Sohn shopping 20130510

Here’s the roll call of selections based on $100 invested in each idea at the close on 5/7/2013 (immediately preceding the conference). Note that a number of selections are not covered (at least not yet) by MANIFEST and that the entries in red are short sale suggestions by Messrs. Chanos, Gundlach and Jacobson. It’s not unusual to see an event or listing of stocks like these hedge fund selections to include a number of Jeremy Grantham’s flaky stocks.

And Ackman’s selection of Procter & Gamble (PG)? C’mon, man. Ack. We can only assume he’s too preoccupied with his Icahn jousts to avoid phoning it in. Nothing against PG, great company, but at a return forecast in low single digits?

Mindray Medical (MR) is our entry with honorable mention to Fossil (FOSL) and Synchronoss Tech (SNCR).

http://www.marketfolly.com/2013/05/notes-from-ira-sohn-conference-2013.html

Eddy Elfenbein on Apple (AAPL)

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Eddy Elfenbein on Apple (AAPL) from his weekly Crossing Wall Street note … and a reminder that if you’re owning or watching any of the stocks on his Buy List for 2013, he will help you.

Apple Gives $100 Billion to Shareholders

One of the big catalysts for the stock market this week was the dividend hike from Apple (AAPL). Although the legendary iStock isn’t on my Buy List this year, the company is so large, it can move the market all by itself.

Apple said that it’s raising its dividend by 15% to $3.05 per share. The company is also increasing its share-repurchase program by $10 billion to $60 billion. The combined total of the dividend and share repurchase comes to $100 billion that Apple is paying out to shareholders. To put that in context, the new dividend works out to $12.20 per share for the year. Ten years ago this week, the whole stock was going for $6.60 per share. Apple is now sitting on a bank account of $145 billion. That’s enough to buy every single team in the NFL, NHL, NBA and major-league baseball.

Interestingly, Apple is borrowing money for its dividend and buybacks. That may sound odd, but rates are so low — hey, why not? I think the Apple news clearly gave investors a big confidence boost. This was especially true after the AP’s Twitter account was hacked. The hackers sent out some bogus tweets, and within a few seconds, $160 billion in market value was erased. So yeah, that kind of stuff tends to put people on edge.

Another sign of a calmer market is that the yield spread between junk bonds and Treasury bonds has fallen to a two-year low. This is exactly what we want to see. Investors are willing to take on more risk with their money. That’s why these higher dividends are so important. They can lure money away from rock-bottom yields in the Treasury market.

Shopping By Sector: Technology En Fuego

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Photo Credit: Tc Morgan via Compfight cc

Where to shop these days?

Start by recognizing where NOT to shop and that’s probably the utility sector. The utility stocks have been en fuego. Don’t shop among the ashes of a bonfire, shop where a flammable pile is smoldering — but distinguish ashes from ignition.

The accompanying table has been sorted from highest potential to lowest potential based on projected annual return (PAR) — the return forecast for the ten traditional sectors from S&P.

Technology stocks worth a closer look: Apple (AAPL), Cognizant Technology (CTSH), Google (GOOG), EMC (EMC), Oracle (ORCL), Qualcomm (QCOM) and Intel (INTC).

Keep in mind that the smoldering might take a while as the often unfriendly (to Tech stocks) days of summer swoop in — for investing for the long term …

Sector gps 20130411

Fusion Screen (4/9/2013)

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By Deglr6328 (Wikimedia Commons)

Infosys Tech (INFY) remains among the more interesting stocks in our Fusion Screen.

Recent Solomon Select feature Atwood Oceanics (ATW) continues to represent the Energy sector. Apple (AAPL) may have more short-term downside when it comes to price, but is a solid selection for committed long-term investors.

Screening Criteria:

1. Fusion Ranking = 100. (Combination of Fundamental and Technical Factors)
2. Quality Ranking greater than 60.
3. Bullish Point-and-Figure Sentiment. (Source: Stockcharts.com)
4. Price-to-Fair Value less than 100%. (Sources: Morningstar and S&P)

Fusion screen 20130409

MANIFEST 40 (March 2013)

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The Stocks You Follow: March 2013 Update

We’ve always believed that the collective decisions made by our community of long-term investors is worth huddling over … a place where ideas are born.

Apple (AAPL) continues at the top of the leader board, a position the company has held for several months. AAPL first appeared on this listing on 9/24/2009 and proceeded to ascend to the summit.

Performance Results

It’s here that your favorites shine. The average annualized RELATIVE return for the current tracking portfolio is +4.2%. (The absolute return for the tracking portfolio since inception is 6.4%.)

The accuracy rating (% of outperforming entries) of the current selections is 59.0%.

Including all selections since inception (7.5 years) the annualized relative return of the MANIFEST 40 is +3.0%.

The figures in parentheses are the position of the company during the December 2012 listing of the MANIFEST 40. For example, FactSet Research (FDS) advanced from #17 to #13 over the last three months.

Chargers

What companies are making the strongest gains among the consensus collection? This may be indicative of strong fundamentals (combined with attractive prices and return forecasts) and probably warrants further study.

The stocks making the largest advances (by % of dashboards) since 12/31/2012 are: QUALCOMM (QCOM), Coach (COH) and Bio-Reference Labs (BRLI).

The newcomer this quarter is Coca-Cola (KO).

Strongest Performers

The top performers in the MANIFEST 40 tracking portfolio are: