Before the new year started, I launched my top seven growth names for 2012 portfolio. Today, I am here to update readers on the performance of the portfolio and what each name has done so far. I am not changing any of these holdings, and remain confident that this portfolio will continue to beat my chosen benchmark. Here are the names and how they've done so far.
|Intuitive Surgical (ISRG)||$463.01||$483.00||$19.99||4.32%|
|Boston Beer (SAM)||$108.56||$102.31||($6.25)||-5.76%|
While Apple has been and will continue to be my top growth name for this year, this portfolio will be equally weighted among the seven holdings. So far, this portfolio is up by 8.79% on the year, which I consider to be rather decent for a months worth of trading. As we know, the markets have done quite well so far in 2012. Since most of these names are of fairly decent size (in terms of market cap), I will be using the iShares Russell 1000 Growth ETF (IWF) as my benchmark. So far this year, the ETF is up 7.16%. For trading so far this year, the portfolio has outperformed the benchmark by 1.63%.
But the more important part of this article is the individual analysis. Here is why these names have moved the way that they have.
Apple: We all know that Apple has done well because it blew out expectations when it reported. But Apple was up a few percent going into that report, so not all of the gains are post-earnings. In fact, Apple traded above $460, at almost $470, when it first reported its quarter. For a better analysis of the company, I recently analyzed their 10-Q report. Apple still has plenty of growth ahead of it, and investors are waiting for a new iPad this year, as well as perhaps a new iPhone. They also are calling for a dividend and perhaps a buyback, but I'd rather see a stock split first. My price target for Apple this year is $540 for the fiscal year, which ends in September. Everyone loves the name right now, and the only reason I wouldn't own it here is if you think you can get into the name at a lower price.
Baidu: About half of Baidu's gains so far this year came thanks to the Facebook rally in the internet and social media space. Baidu is the largest and most likely safest name in the Chinese internet space right now, and still offers plenty of explosive growth ahead. Baidu has not reported its quarterly results yet, which should come in late February. Some may say that the valuation just does not make sense, but sometimes you have to pay for growth. This stock has doubled since it split just a few years ago, so obviously people still believe in their growth story. I do, and think this name can go much higher from here.
Mastercard: This name was down for the year until Thursday, but it erased all of those losses and then some thanks to a great quarterly earnings report. There has been a continued movement towards payments via credit cards, and Mastercard is in a great spot in its industry. I said in my predictions for 2012 that I think this name could go to $500 this year, and I still believe that. The company is projected to grow both revenues and earnings by double digits this year, and with the margins their business can earn, this company is a winner.
Priceline: Over the last year or so, Priceline has traded mostly in the $440 to $540 range, so when it ended 2011 towards the lower end of the range I had to pick it. It is clearly the best name in the online travel services category, and the company is expected to show revenue growth of about 25% in 2012, with earnings per share growing even more. Analysts love this name, with the low end of the price target range being $490, which would still have been 6% growth for the year. The midpoint of the analyst range is at $620, which is almost $90 above where we are currently, and the stock has already gained 14% this year. I think that the company will continue to be strong, and remain the leader in its industry.
Intuitive Surgical: One of the top performers of 2011 could easily be one of the best in 2012 as well. The healthcare name continues to be a large presence in the medical device market, known for its Da Vinci surgical systems. The company blew out earnings again recently, and although the stock dropped right after earnings, it has quickly rebounded. I don't want to say too much on the name, as I will have an article on the company coming out early next week. This name has always been one of my favorites, and will continue to be for the indefinite future.
Molycorp: The rare earth processor and producer will report explosive growth this month, and although it will slow down in 2012, it still will be huge. 61% revenue growth is expected in 2012, with similar earnings per share growth, which is why analysts have a price target that is double the current price. Molycorp had taken a beating before this year after a series of disappointments. However, expectations were just too high, and now that they have come down to more reasonable levels, the stock should grow comfortably.
Boston Beer: The beer maker known most for its Samuel Adams brand still has plenty of growth ahead of it. I've noticed that their prices in local liquor stores have gone up lately, and we'll see when they report why this is the case. A number of states are increasing liquor taxes, but if Sam Adams is raising prices itself, I want to know why. Are they selling enough where they can, or are their costs just increasing too much? The company only controls a small portion of the beer market, but there is plenty of room for growth. The company is debt free and pays no dividend, so it is a growth based consumer name. There aren't many of those around.