Apple Boosts the 'Rocket Stock' Portfolio

by: MyPlanIQ

We recently reviewed five rocket stocks recommended by Jonas Elmerraji from He searches for companies with short-term gain catalysts and longer-term growth potential and his picks were:

  • Tech giant Apple (NASDAQ:AAPL)
  • DuPont (DD)
  • Accenture (NYSE:ACN)
  • Airgas (ARG)
  • Bed Bath & Beyond (NASDAQ:BBBY)

One SeekingAlpha reader who works in the financial services industry in the Northeast and has a fascination with capital preservation, fixed fractional trading, and trading systems made the following comment:

"If a jumbo jet could be classified as a rocket, your five would fly. Rockets blast of with short spurts of real energy. Rocket stocks must have a bundle of market power behind them and exceed analysts dreams. For those I'd choose real growth stocks: CRR; NFLX; FOSL; TSCO; LULU. Then I'd keep AAPL in reserve as a spare."

Wisdom being derived from the counsel of many, we will enter his portfolio and make a comparison with the and our other three reference portfolios:

  • CARBO Ceramics (NYSE:CRR)
  • Netflix, Inc. (NASDAQ:NFLX)
  • Fossil Inc (NASDAQ:FOSL)
  • Tractor Supply Company (NASDAQ:TSCO)
  • Lululemon Athletica inc. (NASDAQ:LULU)

On the whole question of whether Apple (AAPL) is a backup or a main engine, another reader stated:

"AAPL really hasn't been my spare, more like a main engine. Although companies may be nipping at their heals I have confidence that Apple will continue to dominate consumer electronics. That, with their customer loyalty, are difficult forces to overcome."

This is a fair point and so we added AAPL and reduced the investments in the other equities in the portfolio. We retain the other comparison portfolios.

1. The Fool's Matt Koppenheffer's selection of what he considered five stocks for long term dividend performance. All five have dividend yields well in excess of the S&P's, trade at reasonable valuations.


Dividend Yield

Johnson & Johnson (NYSE:JNJ) 3.4%
McDonald's (NYSE:MCD) 3%
Kimberly-Clark (NYSE:KMB) 4.1%
Sysco (NYSE:SYY) 3.3%
Mattel (NASDAQ:MAT) 3.5%

2. ETF dividend portfolio benchmark:


Fund in portfolio

REAL ESTATE ICF (iShares Cohen & Steers Realty Majors)
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)
Portfolio Performance Comparison

Portfolio/Fund Name

1Yr AR

1Yr Sharpe

3Yr AR

3Yr Sharpe

5Yr AR

5Yr Sharpe

SA Reader 5 Rocket Stocks 175% 566% 83% 207%
2 SA Readers 5 Rocket Stocks 158% 554% 75% 198%
Fool's 5 Dividend Payers to Save your Portfolio 24% 235% 14% 68% 14% 69%
Retirement Income ETFs Strategic Asset Allocation Moderate 19% 221% 6% 31% 6% 26%
Retirement Income ETFs Tactical Asset Allocation Moderate 16% 186% 12% 94% 11% 80%

Three Month Chart

One Year Chart Three Year Chart Five Year Chart

The addition of AAPL has increased returns and also boosted the Sharpe ratio indicating that you are getting better risk adjusted returns. There is no question that Apple continues to perform admirably and there is every expectation that it will continue to do so -- with the one proviso that the high tech business is fickle and that remaining on top is very challenging in this market segment.

Thanks to the readers for their comments and we will keep tracking this to see where it goes.

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.

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