Focus on: m100 Materials Trading Activity
Currently, Materials stocks make up the 3rd largest sector in the m100 portfolio, making up approximately 12% of total holdings. Most of these holdings fall within the Metals & Minings area, with Steel, Diversified Metals & Minings, and Gold making up the largest three industry concentrations. Here are the m100's top holdings in the Materials sector, as well as some key trades this week.
Top 5 Materials Holdings:
1. Alliance Resource Partners (ARLP) is in the top 1% of the m100 portfolio. The group has trimmed their position by 17% in the last two weeks.
2. Steel Dynamics (STLD) is in the top 1% of the m100 portfolio. The group has not traded the stock in the last two weeks.
3. Southern Peru Copper (PCU) is in the top 1% of the m100 portfolio. The group has increased their holdings by 4% in the last two weeks.
4. U.S. Steel (X) is in the top 2% of the m100 portfolio. The group has increased their holdings by 150% in the last two weeks.
5. Silver Standard Resources (SSRI) is in the top 2% of the m100 portfolio. The group has trimmed their position by 8% in the last two weeks.
Key Materials Trades:
1. Texas Industries (TXI) is in the top 20% of the m100 portfolio. The group increased their position by 50% in the last two weeks.
2. Fording Canadian Coal Trust (FDG) is in the top 20% of the m100 portfolio. The group increased their position by 50% in the last two weeks.
3. U.S. Steel (X) is in the top 2% of the m100 portfolio. The group has increased their holdings by 150% in the last two weeks.
4. Louisiana Pacific (LPX) is in the top 10% of the m100 portfolio. The group increased their holdings by 13% in the last two weeks.
5. Schnitzer Steel Industries (SCHN) is in the top 10% of the m100 portfolio. The group has doubled their position in the last two weeks.
Earnings Releases - m100 Holdings and Trading Data
Monday, October 4th:
Ruby Tuesday (RI) is not currently held by the m100.
Tuesday, October 5th:
Apollo Group (APOL) is not currently held by the m100.
Burlington Goat Facotry (BCF) is not currently held by the m100.
Yum! Brands (YUM) is currently a small position in the m100 portfolio and was not traded during the last two weeks.
Wednesday, October 6th:
Genentech (DNA) is not currently held by the m100.
Monsanto (MON) is currently a small position in the m100 portfolio and was not traded during the last two weeks.
Spartan Stores (SPTN) is currently a small position in the m100 portfolio and was not traded during the last two weeks.
Thursday, Oct 7th:
Alcoa (AA) is in the top 20% of the m100 portfolio. The group has increased its holdings in the last two weeks by 180%, buying in at an average price of $33.21.
Costco Wholesalers (COST) is in the top 20% of the m100 portfolio. The group has not traded the stock in the last two weeks.
Mariott Intl (MAR) is not currently held by the m100.
Friday, Oct 8th:
General Electric (GE) is in the top 20% of the m100 portfolio. The group has not traded the stock in the last two weeks.
Weekly Stockpickers' Journal
Jorge Munoz-Bustamante I bought some Home Depot (HD) based on a P/E near historical lows and earnings per share that keep going up and up. I plan to sell if the P/E gets to the mid 20s.
Vivek Chandra I bought some Turkcell Iletismim (TKC) - which is the Turkish cellphone company. The price seems reasonable and it looks like its going up. And I am eager to buy into some noncyclical positions. It can't all be energy, homebuilders, mortgage lenders, metals and banks!
Last week I sold small portions of my positions in Novastar (NFI) and Impac Mortgage (IMH).
With the proceeds of the sales:
1.) Initiated new positions in American Home Mortgage (AHM) and Thornburg Mortgage (TMA). These are two mortgage REITs that initiate nonconforming loans and securitize them -- just like NFI and IMH, but with a different focus in terms of "type" of nonconforming loan. So I was just keeping this portion of the money in the same sub-subsector of the REIT group.
2.) With a portion of the money I initiated a position in Goldcorp (GG), a gold mining company that pays a dividend. This is in keeping with my increasing position in the precious metals mining area, as a subset of my increasing position in commodity stocks overall.
3.) With a small portion of proceeds increased positions in Ferrellgas Partners (FGP) and Amerigas Partners (APU) -- these are propane distribution companies. They are in the portfolio to provide reliable dividend income with modest growth.
How long will I hold these? I always aim for "forever", until something better comes along. The world changes, and I try to change with it. But I tend to have long holding periods, and the longer I hold the better I seem to do.
This week I purchased shares of AutoNation, Inc. (AN). At the time of purchase, the P/E was 12.8 versus an industry average of 14.3 and a P/B of 1.10 versus an industry average of 1.40. Insiders are also bullish in their trading activity, so I am looking for AN to appreciate in value until it is more in line with the average P/E of Specialty Stores Industry.
My most significant trade this week was finally getting almost all of the Horizon Offshore (HOFF) out of my energy fund and replacing it with San Juan Basin Trust (SJT). HOFF is a very troubled microcap penny stock that hasn't much place in a serious mutual fund. It may recover, but it's just not a wise place for a heavy bet at the moment. SJT, on the other hand, is a high dividend paying energy trust involved in both oil and natural gas. I know oil has been grabbing the headlines of late, but natural gas is hitting some high levels recently as well, and some industry analysts are predicting $10-12 this winter.
I got chosen for the m100 for my energy portfolio, and I certainly do believe that we are entering another age of resource scarcity. So I really believe in oil stocks. But they have just gone up quite a bit, and I also really believe in steel stocks. It is a fact, you need steel, and plenty of it, to get oil. So, when the price of oil goes up, the amount of drilling activity goes up, and this tends to drive the price of steel up, although it is only one component of demand for steel. I think that many people, when they think of steel, think of the steel that we see in our everyday lives. But there is lots more steel use in areas where we don't see it (oil and gas drilling and transport, shoring up gold mines and coal mines, construction of power plants). And those are the places where I believe that steel demand is headed up, for even more demand than there is today. I believe that the steel industry (in North America) is in for at least 10 years of growth. I feel that we need at least half a ton of output per American. By 2015 we should be producing 170 million tons/year.
So I added U.S. Steel (X) to my fund. It had just been slapped with a downgrade by PruBache, so I felt it had some room for immediate recovery. And it went up nicely, so I was happy.
Something hit the price of Caterpillar (CAT) stock too. It might have been a downgrade, but I'm not sure. In any event, I felt that it was too good an opportunity to pass up. I love CAT, they (like steel) are a supplier to the healthy industries. So I bought some CAT for fund, and the next day a CAT exec made some heady comments that sent the price back up.
Then, I also bought some Tech stocks. Tech rallies are quite a bit like hurricanes. No one completely understands these phenomena, but we know the conditions under which they are likely to arise. The warm water of resurgent economic growth needs to find expression, and after the storm starts it feeds on itself, taking on a life of its own. No one can tell exactly which way the storm will head or how strong it will get. But if there are no distractions, it can build up a lot of strength. I think that this time there will be real distractions that will limit the power of this storm to a mere category 3 or lower. But we can have a lot of fun with it in the meantime. I like tech stocks that fall into one of two categories 1) Connectivity (there is really only Google now). 2) Patents done right. Really big companies cannot do patents right. So I am staying away from the Intels and Cisco systems of the world. I am a patent attorney. I look for good patent practice. I also like tech stocks that have some manufacturing supporting role.