Low Enterprise Value Stocks: Rewarding prudent investors
The second half of 2010 was surprisingly quite rewarding. Utilizing our selection criteria, our average stock performance for the High Cash Stock Review that was published was up over 37% percent compared to the S & P 500’s very respectable 20.82%.
In the fourth quarter, the High Cash Stock review was up a strong 20.38% percent compared to the S&P 500’s gains of 9.92%.
Our third quarter 2010 performance was rewarding with a 16.68% compared to the S & P 500’s 10.62%..
The High Cash Stock Review portfolio is based on very low or negative enterprise values while still including our established criteria of strong increases in cash flow, earning, and a qualitative review to ensure it is a good business model. The goals are to select, purchase, monitor, and sell companies in an effort to obtain outstanding performing investments while minimizing risk by finding low values for our clients.
The second half of 2010 based on simple math is:
Time High Cash Stock Review. S& P 500
Fourth Quarter 2010 20.38 % 9.92 %
|Company||Fourth Quarter 2010|
|China Yuchai International Limited (CYD)||63.14 %|
|Homeowners Choice, Inc. (HCII)||* 29.69 %|
|KHD Humbolt Wedag International AG (KHDHF.PK)||22.76 %|
|O2Micro International Ltd. (OIIM)||(- 1.44) %|
|The Bancorp Inc. (TBBK)||44.02 %|
|Tollgrade Communications Inc. (TLGD)||28.10 %|
|Tessera Technologies Inc. (TSRA)||19.55 %|
|Silicon Graphics International Corp (SGI)||11.21 %|
|Sonus Networks, Inc. (SONS)||(-27.76) %|
|Terra Nova Royalty Corporation (TTT)||*14.61 %|
*Dividends not included
Understanding that the very low values may provide protection from a market sell off, positive earning, cash flow providing profit increase, possible stock price expansion helping to increase the often very low values, and above all a exit strategy, we believed this approach is uniquely special. So far, it has done exceedingly well and beyond our in house forecast by such a wide margin, that we are very excited to help others but one must realize that this is a short indicator of performance and their is no guarantee of future success.
The High Cash Stock review appears to mirror the performance of the Income and Investment review (which has the same investment criteria while requiring a dividend payment.) This portfolio returned a whopping 28% in the fourth quarter and this is not including the 4% annualized dividend yield.
Updated portfolio review:
Lojack (LOJN) was added to our clients portfolio along with this published review during the fourth quarter. Even though LoJack provided about a 40% whopping gain in stock value since our article, yet we have not included it in the overall performance since it was not included in the portfolio for the entire time period of the quarter.
Openwave (OPWV) was also added to the portfolio with this published review in the fourth quarter. Openwave also provided a nice improvement for our clients but was not included in our performance numbers since it too was not in for the entire quarter.
Surprising the returns were very similar to our dividend based Investment with Income portfolio that was up over 22% in the 4 Quarter 2010.
No positions were sold during the quarter.
Disclosure: Both Durig Capital and its clients have positions in all the above positions.
Performance is bases on a written reports published as
1) High Cash Stock Review or
2) Income and Investment Portfolio.
These both are hypothetical portfolio illustration and no money was invested by clients or Durig Capital in this enclosed published manner. Hypothetical only takes into consideration all High Stock Reviews or Investment and Income stock position that were written and publicly published plus held for the entire quarter. Any new position or liquidate position that occurred in the published quarter were not included in the performance. This assumes all positions have an equal investment value at the beginning of each quarter. This is purely a hypothetical account and actual performance of individual active accounts have preformed both above and below the hypothetical returns in the past and most probably will in the future. Past returns are no way indicative of any guarantee of any possible future return. Individual suitability and advice should be sought about any particularly matter or circumstance.
Financial Investment Advisor
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