This Week at MANIFEST (7/31/2015)

A Wooden Anniversary!

It’s “one of those weeks” as we celebrate five years of monthly Round Table webcasts during our July session on Tuesday night, July 28th at 8:30 PM ET. Anyone and everyone is invited as we’ll take a look back at five years of selections and celebrate a tracking portfolio that is beating the overall stock market. Our intent is to share a few actionable ideas every month — and keep track while demonstrating a time-honored approach to stock analysis (discovery and selection) that has served our community of investors for more than 70 years.

Round Table Tracking Portfolio:

Event Registration:

Companies of Interest: Value Line

The average Value Line low total return forecast for the companies in this week’s update batch is 5.3% — slightly higher than the 4.5% for the Value Line 1700.

Long term forecasts were relatively stable with very few material changes in outlook. Please be reminded that some “upgrades” move stocks from “consider selling” classifications to a “weak hold.” This is likely the case with Foot Locker, Ulta, American Eagle and Zoetis. Fundamentals strengthened but still remain potentially overvalued, just not as much.

Materially Stronger: Dollar Tree (DLTR), Sempra Energy (SRE), Foot Locker (FL), Ulta Salon (ULTA), American Eagle (AEO), Zoetis (ZTS)

Materially Weaker: Weight Watchers (WTW), Francesca’s (FRAN), Sears Holdings (SHLD)

Standard Coverage Initiated:

Discontinued: Mead Westvaco (MWV), Babcock & Wilcox (BWC), Family Dollar (FDO)

Market Barometers

Value Line Low Total Return (VLLTR) Forecast. The long-term low total return forecast for the 1700 companies featured in the Value Line Investment Survey is 4.5%, up from 3.8% last week. For context, this indicator has ranged from low single digits (when stocks are generally overvalued) to approximately 20% when stocks are in the teeth of bear markets like 2008-2009.

Stocks to Study (7/31/2015)

  • Fossil (FOSL) — Highest MANIFEST Rank
  • Weight Watchers (WTW) — Highest Low Return Forecast (VL)
  • Coach (COH) — Lowest P/FV (Morningstar)
  • Iconix Brands (ICON) — Lowest P/FV (S&P)
  • Kate Spade (KATE) — Best 1-Yr Outlook (ACE)
  • Kate Spade (KATE) — Best 1-Yr Outlook (S&P)
  • Sempra Energy (SRE) — Best 1-Yr Outlook (GS)

Note: The price targets from Goldman Sachs are from public releases and represent a partial sample. The price target is logged as of the most recent public analyst report. Although every effort is made to keep this information as current as possible, some of the ratings may not reflect more recent research and updates.

Tin Cup Update

“I would be a bum on the street corner with a tin cup if markets were efficient.” — Warren Buffett

This demonstration portfolio invests the maximum allowable 401(k) in stocks. Total assets reached $1,000,000 in 17 years. Tin Cup has outperformed the S&P 500 since inception (1995) and the annualized total return is now 18.6% vs. 9.9% for the S&P 500.

The total return for the trailing year for Tin Cup is 20.1% versus 13.9% for the Wilshire 5000 (VTSMX).

Tin cup vs vtsmx 20150301

And not to “jinx” the free throw shooter during March Madness … but we can probably start thinking $2,000,000 count down fairly soon.  The second million won’t take nearly as long as the first.

Tracking portfolio for Tin Cup: