Stock Portfolio Updates: Free Lunch Basket Boosts Gains
By: Christopher Mistal
January 11, 2018
Over the four weeks since last update, S&P 500 climbed 3.2% higher while Russell 2000 climbed 2.3% as of yesterday’s close. The Almanac Investor Stock Portfolio’s blend of cash and long positions climbed 4.2% over the same time period excluding dividends and any trading costs. Our Mid-Cap portfolio performed best, up 8.4% followed by Large-Caps up 6.1%. Small-Caps were essentially in line with the Russell 2000, up 2.1%.
Existing Mid-Cap positions performed well as SMG, ABCB, WAL, BLDR and IIVI all logged solid gains. The addition of four mid-cap stocks from our December 16, 2017 Free Lunch basket also contributed nicely. Crescent Point Energy (CPG) is the top performing position from the basket, up 34.5%. 
All Free Lunch stocks appear in the portfolio table below shaded in light grey. All Free Lunch stocks except Mountain Province Diamonds (MPVD) traded within their suggested buy limit range of -2% to +2% based on their December 15, 2017 closing price and were added to the portfolio. A standard initial investment of $2000 was used for each Free Lunch stock. MPVD trade is cancelled. All other remaining Free Lunch positions are on Hold. We will continue to employ an 8% trailing stop, using daily closing prices, on remaining Free Lunch positions. Today’s 1.7% gain by the Russell 2000 was more than double the gain by Russell 1000. Small-cap outperformance appears to be resuming.
Per standard portfolio policy (located at the bottom of the table below), half the original position in Southern Cooper (SCCO) was sold today at $50. The remaining position in SCCO is on Hold.
Cohu Inc (COHU) traded below its revised buy limit on December 15 and was finally added to the Small-Cap section of the portfolio. Shares of COHU are now up 5.5% and the position is on Hold.
In the Large-Cap section of the portfolio, First American Financial (FAF), Huntington Ingalls (HII) and Synnex Corp (SNX) also traded below their revised buy limits. FAF is the standout in this trio, up 7.3%. FAF, HII and SNX are on Hold.
Absent any substantial in the major indexes over the past four weeks, there are still eight open positions in the portfolio, KBH, LGIH, MTH, ORBK, PATK, G, LII and TOL. All eight of these positions can be considered at current levels up to their respective buy limit. For tracking purposes, all eight will be added to the portfolio using their average trading price on January 12.
All other positions in the Stock Portfolio are on hold. Please see following table for current advice, buy limits and stop losses.
[Almanac Investor Stock Portfolio – January 11, 2018 Closes]
Disclosure Note: At press time, officers of the Hirsch Organization, or accounts they control held positions in, ANET, BUSE, MHO, ORBK, SMG and SNX. They did not hold any positions in the other stocks mentioned in this Alert, but may buy or sell at any time.