Stock Portfolio Updates: Small Caps Pop
By: Christopher Mistal
November 19, 2020
Over the last three weeks through yesterday’s close, S&P 500 jumped 9.1% while Russell 2000 soared 14.6%. During the same time period the entire portfolio climbed a modest 3.1% higher excluding dividends and any trading fees. Our Mid-cap stocks were responsible for the majority of the overall advance, gaining 4.3%. Large-cap positions performed second best, advancing 3.3% overall. Small-cap stocks rose 2.7% on average including the sizable cash balance held in that portfolio.
As was noted in the last update in late October, a new basket of stocks was released last week, one week after our Seasonal MACD Buy signal triggered. Of the 20 new trade ideas presented 19 were added to the portfolio on November 13, the first trading day after. Many of the positions either opened below their respective buy limits or went on to trade below their buy limit on that day. When the stock opened below its buy limit, it was added to the portfolio using its average price on that day. Xpel Inc. (XPEL) is the only position that has not yet traded below its buy limit from the basket. XPEL did retreat today and can still be considered on dips.
Of the 19 new positions added, 14 are positive already while 5 are lower and the overall average gains is 2.4%. The top performing new position thus far is Avid Tech (AVID), up 14.1% as of yesterday’s close. The weakest new position is JinkoSolar Holdings (JKS) off 8.4%. JKS had a major run higher starting in September that lasted through late-October and it appears to be consolidating those gains now. AVID can be considered on dips and JKS could be considered at current levels.
Existing positions in the portfolio had somewhat mixed results over the last three weeks. Small-cap positions AUB, KBH, WSFS and SSB enjoyed solid gains. Their average gain last update was 18.0% and as of yesterday’s close it was up to 38.6%. SSB swung from a modest loss of 2.2% to a gain of 16.9%. Mid-cap stocks AQN and JBLU also moved nicely higher. JBLU jumped the most going from a little over $11 per share to $14.63.
Older large-cap positions did not fare as well overall as some defensive, dividend yielding stocks slipped lower and other simply fell out of favor. Regeneron (REGN) was stopped out on November 18 when it closed below its stop loss for a total gain of 86.4% since addition. REGN had previously doubled so the shares closed out represented the remaining half of the original position. Recent positive vaccine news from other major players likely caused REGN to retreat.
Overall as we head toward the end of the year, the stock portfolio is now a mix of growth, defense and cash. The cash position has declined with the addition of 19 new positions, bit still remains somewhat elevated. Some of the cash will be used to trade Free Lunch positions (emailed prior to the open of December 21) and some will remain. Covid-19 cases are spiking, but a vaccine is also on its way. In the short-term this would appear to be a near perfect recipe for continued market volatility as the market digests incoming headlines and developments. A blend of growth, defense and cash appears to be a reasonable posture for the stock portfolio at this time.
Please see table below for specific buy limits, stop losses and current advice for each position in the portfolio.
[Almanac Investor Stock Portfolio Table]