Ten Years … Gone “Hog Wild”

This started with the top trailing 10-year performers from the S&P 500, which is cool — and at least they got that going for them. But we know the virtues of All-of-the-Above investing, which means the Value Line 1700 list is even cooler. Look what Groundhog Nation did with them.

Carl Quintanilla (CNBC) provided this list of the best performing stocks in the S&P 500 since the market low ten years ago.

It’s been fun and rewarding for many. Take note how many of these have been covered and/or resident in our model portfolios, etc. since then.

Who did we miss? Why?

Spy top 50 performers since 2009 20190308

So what were you doing when the “Great” Recession bottomed on March 9, 2009? CNBC got this whole this started with the S&P 500 but we know that even better opportunity manifests in the Value Line 1700 — and we weren’t disappointed.

There are 1200 stocks with stock price data for 3/9/2009 and 3/8/2019, ten years later. Investing $100 into each of these 1200 ($120,000) would worth $1,012,892 this past weekend — an annualized total return of 23.8%. Sorry, Carl Quintanilla, but the S&P 500 checks in at 17.3%.

  • The annualized total return (10 years) on the Wilshire 5000 (VTSMX) is 17.5%. 655 of the 1200 stocks (54.6%) beat the market. This collective of gainers have an average quality ranking of 69.
  • 1138-of-1200 (94.8%) gained and a have a current value greater than $100. The stocks that lost ground have an average quality ranking of 27.
  • The top performing decile has a sales growth forecast of 9.2%. The bottom decile stands with a 5.3% growth forecast.
  • If the Value Line Arithmetic Average were “investable,” the annualized total return was 19.7% as 999.30 advanced to 6046.07 during the time period. All-of-the-Above Investing works.

Gone Hog Wild (March 2009)

Every year we run a stock picking contest that starts on Groundhog Day and continues until the next Groundhog Day. Back in March 2009, we featured the most-frequently selected stocks as something of a screening exercise. As the accompanying image shows, yes, Virginia, the average return forecast was “north” of 20% at the time.

The Sweet 16 stocks featured back in March 2009 generated a return of 21.2%.

The top performer was the swing-for-the-fences selection of Sigma Designs (SIGM) and every once in a while, Casey does not always strike out. 36.6% can be a wonderful thing. But the rest of the field was also formidable and include a number of community favorites (Manifest Investing 40 residents).

Sweet 16 (3/1/2009) Results — Ten Years Later. As shown the collective performance of the (16) selections known as “Heavy Hogs” delivered a 21.2% annualized total return. Dividends are included. We can’t help but note the strong performance from the companies at the top of the 10-year-old screening results vs. the achievements of some nearer the bottom. Quality Systems (QSII) morphed into NextGen Healthcare (NXGN). [Editor’s Note: If we’d only listened to Cy Lynch and WellCare Health Plans (WCG) at the time, +44.1%.] Buffalo Wild Wings (BWLD) was acquired by Arby’s after a considerable gain. Navellier Fundamental (NFMAX) evolved into a private wrap offering, results shown are from Navellier fact sheet (https://navellier.com/files/3815/4964/8534/fundamental-a-factsheet.pdf).

 

Invest With Your Friends.  The journey can be a most informative, rewarding and entertaining adventure.

 

Start a test drive (trial subscription) at http://www.manifestinvesting.com ($79/year, group discounts for club partners and educators) and participate in the next ten years of going “Hog Wild.”

Questions?

Contact Mark Robertson via markr@manifestinvesting.com or via Twitter by reaching out to @manifestinvest.  Manifest Investing also maintains a “slipstream blog” at Facebook: https://www.facebook.com/manifestinvesting/  Comments and inquiries welcome.

 

Apple & Long Term Perspective

The business model changed …

Growth appears to be plateauing …

P/E ratios are moderating and settling into “mature company” characteristics for this industry …

Stock price follows earnings.

How many times have you scratched your head over questions like these during your studies of companies? Our most widely-followed company, Apple (AAPL) turns out to be a pretty good study of changing conditions for company over a span of a few decades. Here’s the business model visual analysis.

Apple (AAPL): Business Model Analysis (1984-2020). Did you know that the road to “today’s Apple” and the mother ship piloted by Tim Cook was this bumpy and turbulent? There’s a couple of things that stand out — from the long term double digit growth to the years with negative earnings (1996-1997,2001) to what clearly seems to be a new trajectory over the last decade.

Apple (AAPL): Profitability, Net Margin (1984-2020). The volatile profitability of the company is on full display for 1984-2005. When speaking of shifts in business models, it can often be discerned from the profitability profile and Apple is something of a poster child here. Note the ramp up as the iPhone emerged as a ubiquitous necessity and the elevated net margins delivered over the last several years. This is how a company ends up with $80 billion in the check book after paying dividends and buying back 20-25% of shares outstanding.

Apple (AAPL): P/E Ratios (1984-2020). One of the things many investors have wondered about Apple over the decades is “Why the P/E of 10x or so?” The answer lies in the preceding roller coaster of bottom line (profitability) — a condition that inhibits P/E ratios for most companies. The P/E ratio has actually been pretty stable over the years, considering, and a case for low to mid-teens can be made and substantiated. One could also argue that continuing to maintain the current profitability levels could promulgate some higher P/Es …

Tesla Motors (TSLA): Speed Bump?

Some people think Tesla Motors (TSLA) got “crushed” on a weak earnings report.

Tsla crushed

Here’s the aforementioned MarketWatch article:

http://www.marketwatch.com/story/tesla-four-takeaways-from-earnings-2015-02-11

From a short term/trading perspective that first chart is a whack.

But on this chart, it’s a speed bump.

Tsla chart 20150212

This is what a crushing looks like.

Crushed car

I have no idea what the future holds for Tesla, I expect it to be “consumed” by one of the large car companies, but who knows?

But from a long-term perspective, this feels more like a speed bump …

Speed bump poster