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The entire portfolio dropped in value by 6% with the drop in the share price of BlackBerry (NASDAQ:BBRY). Beyond that one stock, the portfolio has held up quite nicely. As of Monday I will be selling our entire position in BBRY for the following reasons:

  • Disappointing sales of both the Q10 and Z10 for the quarter.
  • A wider drop in earnings/revenues that had been forecast.
  • I believe that if there are no suitors out there to buy BBRY, the share price will deteriorate further, with the lackluster earnings report and forward looking commentary.

The earnings report stated this quite clearly:

GAAP loss from continuing operations for the quarter was $84 million, or $0.16 per share diluted, compared with a GAAP income from continuing operations of $94 million, or diluted earnings per share of $0.18, in the prior quarter and GAAP loss from continuing operations of $510 million, or $0.97 per share diluted, in the same quarter last year.......The smartphone market remains highly competitive, making it difficult to estimate units, revenue and levels of profitability.

For our purposes, this is not something we like to see. On the heels of several new product launches, the numbers are still not good, and the company is stating that it probably will NOT be good moving forward. While the company has enough cash, that will take them just so far. Cutting our losses here makes sense to me.

How Has The Young And Restless Portfolio Performed?

Obviously, BBRY made the largest impact against this portfolio. The value of the portfolio dropped by 6%, and that is a larger drop than the market indexes. That being said, we still have a strong foundation for potential growth.

Until Monday morning, the "Young and Restless" portfolio consists of BlackBerry (BBRY), Amazon (AMZN), Google (GOOG), Facebook (FB), Yahoo (YHOO), Achillion (ACHN), and Zynga (ZNGA).

StockOrig.PricePrice NowOrig. InvstValue Now%+/-
AMZN23027710,00012,00020%
BBRY131010,0007,500-25%
GOOG64088010,00014,00040%
FB232510,00011,00010%
ACHN8810,00010,0000%
YHOO192510,00012,50025%
ACHN (2nd)8810,00010,0000%
ZNGA3310,00010,0000%
FB (2nd)252510,00010,0000%
YHOO (2nd)262510,0009,500-5%
Portfolio Valuexxxxxxxx80,000106,500xxxx
Cashxxxxxxxxxxxx1,600xxxx
Totalxxxxxxxxxxxx108,10033%

Our gains have come from the sale of Netflix (NASDAQ:NFLX) after it more than doubled, AMZN, GOOG, and YHOO.

I am comfortable with the direction that ACHN is headed and the progress can be reviewed in this highly acclaimed small cap insight article. While my opinion was that the stock could be a trading stock, it also makes quite clear that the pipeline of drugs has been moving in the right direction. We will be holding on to both purchases of ACHN for this portfolio until we get further confirmation, one way or another, about the success of the company.

There is one other stock that I will be adding to our core holdings here, and that would be Galena Biopharma (NASDAQ:GALE). I feel very strongly that this stock could offer considerable upside in the near, mid, and longer term, as I detailed in this highly acclaimed small cap insight article.

By utilizing the cash from the sale of BBRY, we can purchase 1/2 of a full position in GALE and still have plenty of dry powder. Here is how the portfolio will look as of Monday July 1st, 2013:

StockOrig.PricePrice NowOrig. InvstValue Now%+/-
AMZN23027710,00012,00020%
GALE2.252.255,0005,0000%
GOOG64088010,00014,00040%
FB232510,00011,00010%
ACHN8810,00010,0000%
YHOO192510,00012,50025%
ACHN (2nd)8810,00010,0000%
ZNGA3310,00010,0000%
FB (2nd)252510,00010,0000%
YHOO (2nd)262510,0009,500-5%
Portfolio Valuexxxxxxxx80,000104,000xxxx
Cashxxxxxxxxxxxx4,100xxxx
Totalxxxxxxxxxxxx108,10033%

As you can see, our total value is the same but we have moved away from BBRY and into GALE. As we continue to make moves in this growth portfolio, we will have plenty of cash to add another purchase of GALE for a total of $10,000 invested.

Because of the $2.00 price I will not round up or down with this stock for now.

The Bottom Line

Making changes quickly, especially when fundamentals begin to erode, is a hallmark of a portfolio such as this. Selling losers without emotion and seeking alpha in other areas is what will make this portfolio potentially very successful.

Some folks will want to hang on to BBRY feeling that the company is just getting its ducks in a row. I do not see that from where I sit, and GALE could be a bell ringer for a long time to come.

Disclaimer: The opinions of the author are not recommendations to either buy or sell any security. Please do your own research prior to making any investment decisions.

Source: The Young And Restless Portfolio Update: Dumping BlackBerry And Sitting Tight

Additional disclosure: I will be taking a long position in GALE on Monday July 1st.