Short Portfolio Update: Green Mountain Coffee Roasters Replaces Apollo

by: Bill Maurer

At the end of last month, I started a $1 million theoretical short portfolio with 7 holdings. Here is the original portfolio for those who haven't read the article:

Company Shares Buy Price Start Value
Amazon (NASDAQ:AMZN) 700 $217.32 $152,124
Sprint (NYSE:S) 60,000 $2.72 $163,200
Netflix (NASDAQ:NFLX) 1,600 $84.14 $134,624
National Bank of Greece (NBG) 250,000 $0.59 $147,500
Suntech Power (NYSE:STP) 44,500 $3.08 $137,060
Apollo (NASDAQ:APOL) 3,000 $48.16 $144,480
Orbitz (NYSE:OWW) 63,000 $1.92 $120,960

Now here's a look at how things stand currently:

Company Current Gain/Loss % Change
Amazon $197.14 $14,126 9.29%
Sprint $2.62 $6,000 3.68%
Netflix $78.06 $9,728 7.23%
National Bank of Greece $0.4899 $25,025 16.97%
Suntech Power $2.34 $32,390 24.03%
Apollo* $45.24 $8,760 6.06%
Orbitz $3.07 ($72,450) -59.90%

*Apollo sold on Thursday, read below for details.

Overall, the portfolio has gained about 2.75%, which trails the S&P 500's 5.4% loss since then. Unfortunately, Orbitz reported a great quarter and the stock jumped 45% overnight, and has added to its gains since then. If you take out Orbitz, the portfolio is up over 11.3%. This shows how one bad decision can eliminate most or all of your gains. But hey, at least it's still down over time. You'd be making money.

So here's why I still like these positions. Amazon has a forward P/E of 100, and I don't see that lasting for much longer. I've detailed my bearishness on Sprint in several articles, so feel free to read those if you are interested. I think Netflix has had its run, and its time is up. I'm looking for another bad quarter. National Bank of Greece in my mind has no value, so I will hold that until it gets to zero. The solar industry is in trouble now, and the Chinese names are faring much worse, so Suntech remains a viable short. Orbitz has killed me so far, but if you look at the charts, these huge pops usually don't last. I may need to cover that position at a loss, but I think we will go down from here.

I was not going to update this portfolio until the end of the month, but I have decided to swap out an old position for a new one. Last week, Green Mountain Coffee Roasters (NASDAQ:GMCR) reported a terrible revenue number and the stock was hammered over growth concerns. It was below $40 but has risen back to almost $52. I will short 2,800 shares of GMCR as I think it will go lower. The GMCR trade was as of Thursday, so that position gained about $3,500 thanks to Friday's 2.4% loss.

To make up for that, I eliminated my position in Apollo. I could have taken gains on either Suntech or National Bank of Greece, which have done extremely well, but I expect those names to go even lower. I've made 6% on Apollo, and since it's the position I follow least of the seven-- I'm going to get out. Everything else will stay the same.

While the overall portfolio's performance has lagged the markets in general, I still would say it's been a few good weeks. A 2.75% gain in just 15 trading days would be great on an annualized basis.

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