A few weeks ago, I wrote a series of two articles on the yet-to-be-unveiled Obama stimulus package for the economy, arguing that things pointed in the direction of massive infrastructure spending with a green twist. I argued that this would benefit a certain categories of rail-related stocks and electric grid stocks. How am I doing relative to the market as a whole, which has had several positive trading days for the past while on the back of the eventual stimulus plan?
I discussed four railway stocks in an article published on October 18. On October 17, the Dow closed at 8,852.22 and the S&P 500 at 940.55. Last Friday, December 12, they respectively closed at 8,629.68 and 879.73 for losses of 2.51% and 6.47% over that period. My stocks performed as follows:
|Railway Stocks: Oct. 17 to Dec. 12 (Closing pr.)|
|Company||Oct. 17||Dec. 12||Δ %|
|Koppers Holdings (KOP)||20.28||21.99||8.43|
|LB Foster (FSTR)||22.89||31.68||38.40|
|Stella Jones (OTC:STLJF)||20.18||13.25||(34.34)|
|Global Railway Indust.(OTC:GRWIF)||1.00||0.75||(25.00)|
Not bad. Stella Jones and Global Railways are Canadian companies and their primary listings are on the TSX, so they are not directly comparable to Koppers Holdings and LB Fosters which trade primarily on U.S. exchanges. Nevertheless, I chose to include both Canadian companies and they both underperformed pretty badly, so my railway recommendations were good as far as the U.S. went but mediocre overall.
Electric Grid Stocks
I discussed ten electric grid stocks on November 2. The last trading day before that was October 31. On that day, the Dow closed at 9,336.93 and the S&P 500 at 968.75. Last Friday, they respectively closed at at 8,629.68 and 879.73 for losses of 7.57% and 9.19% over that period. My grid stocks performed as follows:
|Grid Stocks: Oct. 31 to Dec. 12 (Closing pr.)|
|Company||Oct. 31||Dec. 12||Δ %|
|ABB Group (ABB)||13.15||13.80||4.94|
|Composite Tech [CPTC.OB]||0.29||0.39||34.48|
|General Cable (BGC)||17.08||16.97||(0.64)|
|MasTec Inc. (MTZ)||8.72||8.78||0.69|
|Quanta Services (PWR)||19.76||18.13||(8.25)|
|Valmont Industries (VMI)||54.78||57.46||4.89|
A little better. Only one of my picks, Allegheny Tech, underperformed both benchmark indexes. If you ignore the two penny stocks (Composite Tech and Resin Systems), which most folks aren't touching at the moment, my picks performed overall decently, with five in positive territory, one that underperformed both indexes, one that underperformed only the Dow and one that's in negative territory but still outperformed the Dow and the S&P 500.
Of course none of the stimulus money has been spent or even approved yet, so at this stage in the game all of this remains speculation. Although I did not recommend any of these stocks specifically, my thematic choices appear to be performing decently and may thus provide decent sub-sets for picking individual plays on the stimulus plan. I will reassess both sets of stocks once the Obama administration is in power and the stimulus strategy is being implemented.
DISCLOSURE: Charles Morand is long ABB.