In April, we looked at "9 Stocks That Gain Every Earnings Day" and compared the results against a list of dividend stocks derived from SeekingAlpha users.
These nine stocks were selected by Bespoke Investment Group co-founder Paul Hickey looked at 2,240 stocks and found just nine stocks that have gone up every time earnings day has rolled around, since the March 2009 market bottom:
- Verifone Systems (PAY)
- Dice Holdings (DHX)
- MWI Veterinary Supply (MWIV)
- Opnet Technologies (OPNT)
- First Cash Financial (FCFS)
- Raymond James (RJF)
- Barrick Gold (ABX)
- Horace Mann Educators (HMN)
- Anadarko Petroleum (APC)
Source: Bespoke Investment Group.
We compare this with the selection from a SeekingAlpha discussion where a group contributed what they thought would be the best dividend stocks to own over the long tern. These are:
- Coca Cola (KO)
- PepsiCo Inc (PEP)
- Johnson Johnson (JNJ)
- Wal-Mart (WMT)
- Altria Group (MO)
- McDonald's Corp. (MCD)
- Proctor and Gamble (PG)
- Abbott Labs (ABT)
- British Alcohol and Tobacco (BTI)
- JPMorgan Chase & Co (JPM)
Finally we use a portfolio of dividend bearing ETFs.
| Asset | Fund in this portfolio |
|---|---|
| REAL ESTATE | ICF (iShares Cohen & Steers Realty Majors) |
| CASH | CASH |
| FIXED INCOME | TIP (iShares Barclays TIPS Bond) |
| Emerging Market | VWO (Vanguard Emerging Markets Stock ETF) |
| US EQUITY | DVY (iShares Dow Jones Select Dividend Index) |
| US EQUITY | VIG (Vanguard Dividend Appreciation ETF) |
| INTERNATIONAL EQUITY | IDV (iShares Dow Jones Intl Select Div Idx) |
| High Yield Bond | HYG (iShares iBoxx $ High Yield Corporate Bd) |
| INTERNATIONAL BONDS | EMB (iShares JPMorgan USD Emerg Markets Bond) |
- 10 Dividend Stocks From SeekingAlpha Readerss -- Total of $10K invested equally in each stock
- 9 Stocks That Gain Every Earnings Day -- Total of $10K invested equally in each stock
- Retirement Income ETFs Tactical Asset Allocation Moderate -- Above funds using TAA (40% fixed income, 30% for each of the top two asset classes)
- Retirement Income ETFs Strategic Asset Allocation Moderate -- Above funds using SAA (40% fixed income, 12% for each of the five asset classes -- funds selected based on price momentum)
April 2011 Portfolio Performance Comparison
| Portfolio/Fund Name | 1Yr AR | 1Yr Sharpe | 3Yr AR | 3Yr Sharpe | 5Yr AR | 5Yr Sharpe |
|---|---|---|---|---|---|---|
| P 10 Dividend Stocks From SeekingAlpha Readers | 16% | 99% | 6% | 27% | 11% | 52% |
| P 9 Stocks That Gain Every Earnings Day | 92% | 332% | 38% | 101% | ||
| Retirement Income ETFs Strategic Asset Allocation Moderate | 14% | 96% | 3% | 16% | 5% | 23% |
| Retirement Income ETFs Tactical Asset Allocation Moderate | 9% | 52% | 10% | 76% | 10% | 66% |
At the end of April, we saw very impressive results for as far back as the portfolio went but we noted that history is short and we should continue to track its progress.
The June earnings are out and we are into choppy waters and it's time to update the portfolio and look at its performance over the past six weeks or so.
We continue to examine different portfolios to see what we can learn and use to further our investment portfolios.
July 2011 Portfolio Performance Comparison
| Portfolio/Fund Name | 1Yr AR | 1Yr Sharpe | 3Yr AR | 3Yr Sharpe | 5Yr AR | 5Yr Sharpe |
|---|---|---|---|---|---|---|
| P 10 Dividend Stocks From SeekingAlpha Readers | 32% | 293% | 11% | 52% | 12% | 61% |
| P 9 Stocks That Gain Every Earnings Day | 81% | 346% | 34% | 92% | ||
| Retirement Income ETFs Strategic Asset Allocation Moderate | 14% | 190% | 6% | 30% | 5% | 26% |
| Retirement Income ETFs Tactical Asset Allocation Moderate | 13% | 180% | 12% | 96% | 11% | 80% |
The first thing we note is that the SeekingAlpha portfolio's returns have jumped for a year -- this is more because the prior year was a low -- but also note that the Sharpe ratio has improved as well. We note that the Stocks that gain every earnings day has dropped although the Sharpe ratio has increased. We are in turbulent times so this is a good result for the portfolio.
Note also that the TAA returns have increased for the ETF portfolio as well as a jump in the Sharpe ratios.
Three Month Chart
(Click to enlarge)
If we look over the past six weeks, we can see that the stocks that gain from earnings have not delivered in the sense that they dropped after the end of the quarter and have only recently returned to the level they were at the end of the quarter and lower than they were in May. The other portfolios have remained more steady.
One Year Chart
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Three Year Chart
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Five Year Chart
(Click to enlarge)
Over the longer term, the stocks that gain every earnings day continues to look good. We would expect to see some drop in portfolio values as stocks are in a challenging market.
One has to consider whether it might be time to change to a more diversified portfolio that includes real estate and global equities as well as having a focus on dividends for those that need income irrespective of whether the markets are up or down.
We will keep tracking this set of equities and see how they perform going forward.
All of these portfolios have solid stocks and they all perform well. The most popular stock still has the highest performance and we will shortly review the list of most popular based on the new portfolios we have examined.
Disclosure: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical. I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
