Our Extended Value Portfolio has been off to a strong start in 2012. View our January article that discusses all positions and why we chose them. The portfolio is a $50K long-term investing portfolio that uses 12-month price targets from our EquityAnalytics department to select equities we believe have upside to outperform the market. This year, we are introducing several new types of positions into the portfolio to help it become an even better long-term portfolio that includes bonds, ETFs and commodity holdings.
We started the year with the following holdings:
- CA Tech (NASDAQ:CA)
- Coca-Cola (NYSE:KO)
- Dollar General (NYSE:DG)
- DR Horton (NYSE:DHI)
- DuPont (NYSE:DD)
- Gildan Activewear (NYSE:GIL)
- McDonald's (NYSE:MCD)
- Microsoft (NASDAQ:MSFT)
- Monster Energy (NASDAQ:MNST)
- Panera (NASDAQ:PNRA)
- Sociedad Quimica y Minera (NYSE:SQM)
- Trina Solar (NYSE:TSL)
- Take-Two Interactive (NASDAQ:TTWO)
- VF Corp. (NYSE:VFC)
- Wal-Mart (NYSE:WMT)
- iShares Barcalys Aggregate Bond Fund (NYSEARCA:AGG)
- United States Oil Fund (NYSEARCA:USO)
- iShares MSCI Canada Index Fund (NYSEARCA:EWC)
- Vanguard Emerging Markets Index Fund (NYSEARCA:VWO)
During the month, we made the following moves.
We added long positions in Tesla Motors (NASDAQ:TSLA), Boston Beer Co. (NYSE:SAM), Papa Johns (NASDAQ:PZZA) and Intuit (NASDAQ:INTU). We like each of these companies to make 10-20% in the next 6-12 months.
We sold one-third of GIL at 24.01 for a 20.96% gain. We sold another one-third of MNST at 56.25 for a 21.25% gain. We sold one-third of VFC at 148.00 for a 9.35% gain. We sold half of USO at 42.00 for a 5.61% gain. We sold half of EWC at 29.00 for a 6.00% gain.
The portfolio is up nearly 6% for the year thus far and we have over $18,000 in cash.
For the coming month, here are some of the stocks we are looking at that we currently have as Buy-rated and are in our Buy range that we may be looking to add to the portfolio:
Thor Industries (NYSE:THO)
Thor Industries has a $40 PT with a Buy below $32. We believe Thor is a solid company with great upside this year. The company looks solid with around 5-7% sales growth this year and next year, and we believe that Thor is undervalued right now at 0.7 price to sales ratio. The RV business has been very solid, and its latest quarter showed a 15% increase in the industry line. We believe that Thor is a business being overlooked and has cyclical strength at the end of a demand cycle.
Constellation Brands (NYSE:STZ)
Constellation Brands is one of our favorite companies in the beverage industry. We have a $28 price target with $22 buy target. The company is sitting at a great entry point right now. A lot of critics are noting that sales are dropping on STZ, but the company has been seeing some sale drops from mostly selling off some undesirable names. We believe STZ is a terrific value play right now trading at 7.53 PE, and we like that the margins are increasing significantly right now. We believe the company has a great lineup of solid companies that sell well and continue to grow well organically. We believe that STZ can increase in its valuation significantly with more organic growth.
Wendy's is a company that we believe is an interesting speculation play right now. We have a $7 price target on the company, and believe it is a buy below $5.50. We like the moves Wendy's is making right now with "barbell pricing" with premium foods and very cheap food mixtures. We believe the company's plan also to move more into the QSR department like Panera and Chipotle (NYSE:CMG) is a welcome blessing. Fast food is definitely taking a hit from QSR, and we like that WEN is moving in this direction. The company is definitely seeing that they cannot make the type of investment they want in fast food any longer. They started by selling Arby's and now are reinventing their image in some ways. We like this speculative play. The stock is dirt cheap, so if it fails, you cannot have too much downside.
We launched coverage on 12 automotive companies this past month as well that led to our addition of TSLA in the portfolio. You can read about our view on Ford (NYSE:F), General Motors (NYSE:GM) and more here.
In March, we are looking to release coverage on computer software/hardware companies like Google (NASDAQ:GOOG), Apple (NASDAQ:AAPL), Dell (NASDAQ:DELL) and more. That should be out in early March. We hope to add one or two of these companies to our mix with that report as well.
Disclosure: We are long CA Tech (CA), Coca-Cola (KO), Dollar General (DG), DR Horton (DHI), DuPont (DD), Gildan Activewear (GIL), McDonald's (MCD), Microsoft (MSFT), Monster Energy (MNST), Panera (PNRA), Sociedad Quimica y Minera (SQM), Trina Solar (TSL), Take-Two Interactive (TTWO), VF Corp. (VFC), Wal-Mart (WMT), iShares Barcalys Aggregate Bond Fund (AGG), United States Oil Fund (USO), iShares MSCI Canada Index Fund (EWC), Vanguard Emerging Markets Index Fund (VWO).