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Jelly Roll Capital Equity Research |
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Market Analysis, Education, and Wall Street-Quality Stock Reports |
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Performance Review for May’s Picks |
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While it isn’t quite the end of May, I don’t have much to do as I sit outside smoking some ribs for the Memorial Day cookout, so why not review the performance (or lack thereof) of the top 5 mega-cap and small-cap stocks that was originally posted just before the month began? You can read the original picks as posted earlier here (mega-caps) and here (small-caps). All returns were taken by using the closing price of the stock on May 25th, and assuming the purchase price was equal to the opening price on May 1st. For the mega-cap group, returns were what Benjamin Graham would likely describe as “satisfactory.” The oil-heavy five stock portfolio returned 6.04%, topping the S&P 500’s advance of 2.25% by a nice 3.79%. The mega-caps were lead by a strong showing from ConocoPhillips (COP), which gained 10.9%, followed by 3M (MMM), which returned over 6.1%. In fact, all five of the stocks outpaced the market average for the period, as even relative “laggard” UnitedHealth (UNH) clocked a return of over 2.8%, or more than fifty basis points ahead of our benchmark for this mini-portfolio. For the small-cap group, the returns on individual stocks were lumpier (as one might expect), but the net overall returns were still “satisfactory.” While three of the stocks showed single-digit negative returns, the small-cap portfolio rode CPI Corp. (CPY) and RELM Wireless (RWC) to 38% and 9.5% gains, respectively, to show a total return of 6.85%, or a full 5% better than the Russell 2000 index’s 1.85% return for May so far. Although our proprietary quantitative model is first and foremost fundamental-data-driven, the market has been quick to catch up with the stocks it determines to be solid values. Those of you considering following our strategy here should be aware, however, that such timeliness in stock selection is atypical for pure fundamental analysis, and thus we may not be able to replicate such good results in the future. We can still do what we can to make markets slightly more efficient, and to that end, we will continue highlighting the top stocks (five large, five small, along with the overall top 25) - so look for the updated lists to be added to the site this week. In the mean time, have a wonderful Memorial Day! |