The Unconventional Portfolio: Mixing Up The Sectors For 2016

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Includes: ATVI, AVXL, BMA, DY, HASI, SA, TSN
by: Matthew McLaughlin

Summary

Despite the safe "blue chip" stocks, there are many unsung hero sectors with high performance in recent times in the market.

Infrastructure, video games, and emerging pharmaceuticals do not seem like the typical blend. Yet, an unconventional blend may be the answer.

The following portfolio contains seven stocks from varied industries, and companies with both emerging and consistent growth.

Your financial advisor will typically recommend a diversified portfolio of big name companies such as Apple AAPL. Yet these so-called blue chip stocks rise and fall with the general economy. Although they offer long-term stability, it may be more essential to become a more active investor in today's economy and to mix up our portfolios more often.

I have created a portfolio representative of that investor looking for a mix-up. The portfolio consists of 7 stocks from varying industries that exhibit both emerging and consistent growth. I would recommend for this portfolio to be held between 9-12 months. This portfolio is not designed for a central portfolio containing the majority of an investor's assets.

Banco Macro S.A. (BMA)

Industry: Banks - Foreign

Price as of 7/8: $75.16

52-week range: $35.93-$76.27

Percent of portfolio: 18%

Banco Macro is an Argentina based private bank headed by CEO Jorge Horacio Brito. Despite Banco Macro being outcompeted by banking giant Banco de la Nacion Argentina, Banco Macro has demonstrated rebound performance from losing $1 million in Q4 2015 to posting net profit of $98 million in Q1 2016.

Dycom Industries (DY)

Industry: Building - Heavy Construction

Price as of 7/8: $94.98

52-week range: $47.10-$95.75

Percent of portfolio: 16%

Unfortunately, America has an aged and deteriorating infrastructure. However, this presents many opportunities for infrastructure and construction companies in the future in rebuilding the highways and bridges across the country. Recently, Congress passed the FAST Act, a long-term, $305 billion act to rebuild infrastructure. Dycom Industries is one of the nation's leading construction and engineering companies and will no doubt have an integral role in infrastructure rebuilding in the future.

Hannon Armstrong (HASI)

Industry: REIT - Mortgage Trusts

Price as of 7/8: $21.66

52-week range: $15.46-$21.75

Percent of portfolio: 12%

Hannon Armstrong is a REIT company that provides equity financing to alternative energy companies. The trend towards alternative energy has shown itself in Hannon Armstrong's financials. It has consistently beat out the REIT industry with a 2.60 P/B ratio versus the industry average of 1.60. It also is up nearly 15% in the last three months and has shown consistent earnings performances.

Anavex Life Sciences (AVXL)

Industry: Medical - Biomedical

Price as of 7/8: $7.58

52-week range: $1.82-$14.84

Percent of portfolio: 11%

Some may hate Anavex while others love it. This stock has had a tumultuous journey this past year when it ran up over 200% in the late fall only to fall over 60% when it was relentlessly shorted by skeptics and big investors. Nevertheless, Anavex is in the production of one of the forefront treatments for Alzheimer's and was recently given FDA clearance for its drug treating infantile spasms. AVXL has risen 80% in the past month.

Seabrige Gold (SA)

Industry: Mining - Gold

Price as of 7/8: $15.02

52-week range: $3.31-$15.88

Percent of portfolio: 10%

One of the highest performing sectors in the market right now is the gold mining sector, and Seabridge Gold is arguably the best performer in the sector. Although the stock took big hits for several years, it has been a consistent riser in the past year, running up over 100%. This is due in part to Seabridge's aggressive and active performance as it has acquired numerous smaller companies and gained access to drilling fields in the past few months.

Tyson Foods (TSN)

Industry: Food - Meat Products

Price as of 7/8: $68.92

52-week range: $39.05-$70.44

Percent of portfolio: 18%

Tyson is a giant in the meat industry, and it will be for a long time in the future. Tyson takes up a larger percentage of the portfolio due to its stability and its strong financials. Tyson has reduced its expenses and subsequently increased its profits during the four quarters of 2015. Net income has risen from $343 million in June 2015 to $432 million in March 2016, a nearly 26% increase in 9 months.

Activision Blizzard (ATVI)

Industry: Technology - Video Games

Price as of 7/8: $41.29

52-week range: $24.04-$41.32

Percent of portfolio: 15%

It is atypical for a video gaming company to take a major piece of a portfolio, but Activision Blizzard has proven to be a solid investment. Activision Blizzard is the parent company of Blizzard Entertainment, which has produced industry successes like World of Warcraft. Recently, it released the online game Overwatch which exploded to over 7 million active players within the first month. Net income has risen 58% in nine months from $212 million to $336 million, and it can be expected to keep rising with its new additions to the gaming market.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.