My Anniversary: One Year Later, My Articles Outperform The S&P By 50%

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Includes: CAT, CRWS, CSCO, GD, GE, GILD, GWW, HRL, JCOM, KR, LOW, NUE, OHI, T, UNIT, WBA
by: Chuck Walston
Summary

Gains are based on the closing price of the company on the day of an article's debut.

The comparison is to the SPY ETF on the same day.

Dividends are not included.

It is assumed an equal sum invested in each name.

Following a long absence from Seeking Alpha, I returned to write a dozen buy articles in 2017. The results below reflect the closing price of each company on the day of the article debut with a comparison to the SPY ETF’s closing price on the same day. The gain or loss is from those dates until 09/14/18.

Gains and losses to not include dividends.

First The Losers

Crown Crafts (NASDAQ:CRWS)

I’m afraid I owe an apology to readers of my Crown Crafts article. While I made a good faith effort to conduct a thorough investigation of this company, there were key aspects of this investment I missed. Shortly after I bought the stock, I sold the shares for a small profit.

I can’t endorse this company at this juncture. The bankruptcy of Toys R Us hit CRWS hard, and I fear the dividend may be in jeopardy.

Fortunately, this was the least read article of the 44 I’ve published on SA.

$6.55 to $6.00 Loss of 8.4% SPY plus 18.2%

Gilead Sciences (NASDAQ:GILD)

GILD has a strong moat, an excellent management team and a promising pipeline. I’ve increased my holdings in the company since the article debuted, and I firmly believe patient investors will be rewarded. If I received a large infusion of cash into my account today, I would increase my position without hesitation.

$79.95 to $73.38 Loss of 8.2%. SPY plus 13.9%

Now For The Winners, From Least To Best

AT&T (NYSE:T)

I will readily admit that I’m a bit surprised that T has fallen and remained at this level. Although I would be a buyer at this price, provided I didn’t hold a full position (and I do), I must state that I have increasing concerns regarding the company’s management team.

Nonetheless, T operates as a member of a near duopoly. Americans are addicted to cell phones. Combined with the fat dividend, that largely sums up my argument for owning this stock

$33.44 to $33.60 Gain of .5% SPY plus 12.3%

Walgreens (NASDAQ:WBA)

Although I provided my usual lengthy assessment of WBA in this October article, I used satire to drive home a point: Amazon (AMZN) isn’t going to wreak havoc in every industry on this planet.

I had grown weary of explaining why Amazon can’t compete with everyone, everywhere. While Walgreens ranked as one of my poorer performing 2017 investments, I still made a profit.

I sleep well at night with my WBA investment, and I believe it is worth investing in at these levels.

$67.74 to $70.28 3.7% gain. SPY plus 13.7%

Omega Healthcare (NYSE:OHI)

Omega is the last of my single-digit gainers. Investing in this company isn’t for the faint of heart. The long-term healthcare space is a tough market, and some of Omega’s operators are experiencing serious difficulties.

I continue to hold my shares and receive a dividend with an 8% yield for my efforts. I warn potential investors to conduct more than the normal degree of due diligence before considering an investment in OHI.

$31.15 to $33.07 Gain of 6.2%

j2 Global (NASDAQ:JCOM)

This is where I ask my followers to read ALL of my articles. SA contributors see an enormous swing in readership according to the company in question. Unfortunately, that means many of my best ideas go unnoted by the overwhelming majority of readers.

JCOM is a company that is very adept at making serial, bolt-on acquisitions that drive ever-increasing revenues.

Don’t let the goodwill and intangibles scare you away from JCOM: this management team knows how to conduct M&A.

The same is true of the company’s “reliance” on the FAX segment. There is a great deal of evidence indicating FAXs aren’t headed the way of the dinosaur, at least not anytime soon. Meanwhile, JCOM’s FAX income is increasing while becoming an ever-dwindling percentage of overall revenues.

I own JCOM and would purchase additional shares, if not for the fact that I have a large position. I believe JCOM can be a double bagger for the patient investor.

Oh, and I almost forgot: JCOM raises the dividend on a quarterly basis.

$73.20 to $83.16 13.6% gain SPY plus 13.7%

Nucor (NYSE:NUE)

My article of last September accurately predicted that the current administration would take actions that lead to a surge in domestic steel producers’ stock prices.

While I made a good profit on NUE, I (sadly) lost the shares to a covered call.

Read my article if you want to learn of a company with an unrivaled management team. Nucor does everything right, but operates in a very difficult environment.

Would I tell my best friend to buy at this price? I’m straddling the fence on that question. I’ll definitely jump back in should the company experience a significant drop in share price.

$53.48 to $62.58 A gain of 17% SPY plus 16.3%

Uniti Group (NASDAQ:UNIT)

UNIT is another stock that requires a great deal of due diligence. The company has done a good job of diversifying away from Windstream Wireless (WIN), but much remains to be accomplished before this becomes a SWAN.

I originally dipped my toe into the shares, and I warned potential investors to consider this a high risk/reward situation. After a bit of thought, however, I entered into a full position.

Nonetheless, this is still a high risk/reward play, and not for the weak of heart. The current yield is near 12%, and will likely remain sufficiently funded.

$17.36 to $20.34 a 17.2% gain. SPY 16.9%

Kroger (NYSE:KR)

Like Walgreen’s, Kroger's stock was (supposedly) to be crushed by Amazon’s (NASDAQ:AMZN) competition. Kroger is a superbly-managed company, and it has zero presence in many of the states. Consequently, Kroger could expand for years to come. I lost my position twice to covered calls. Even so, I think the company has room to run, especially for those who are buy and hold investors. I purchased additional shares this morning.

$21.13 to $27.80 Gain of 31.6% SPY plus 13.9%.

Hormel (NYSE:HRL)

Like Kroger, Hormel has an outstanding management team. I purchased my shares low and sold for a good profit. I can’t recommend an entry position at current prices, but I’ll keep this company on my radar. Permanently.

$30.15 to $41.90 a 39% profit SPY plus 13.3%.

Cisco (NASDAQ:CSCO)

Cisco had a good run. Chuck took his money and ran. At the time I wrote my article, I considered the company manifestly underpriced. Unfortunately, I don’t hold Cisco’s management in as high an esteem as Hormel, Kroger, Nucor, Gilead and JCOM (are you noticing a theme here?) I also see the company operating in a very competitive space, so I took my profits and I invested them elsewhere.

$32.44 to $47.40 a gain of 46.1%. SPY plus 16.7%.

W.W. Grainger (NYSE:GWW)

My big winner was another company Amazon was supposed to decimate. GWW has a small moat, but I also find nothing exemplary about the company’s management. I sold my shares and deployed the ample gains elsewhere.

I can’t recommend an entry position at these levels.

$163.04 to $355.61 a 116.9% gain. SPY plus 17.8%

My Sole Sell Candidate

General Electric (NYSE:GE)

I worked hard to convince readers that GE was a company to stay away from: three consecutive articles in late 2017.

When my sell article debuted, GE sold for $18.12. Today it is priced at $12.68, a loss of 30%.

My opinion hasn’t changed.

Final Results

Assuming one invested the same sum in each company at the closing price of the stock on the day my respective articles debuted:

Gain (dividends not included): 22.93%

For the SPY ETF: 15.3%

That represents a 49.8% gain over the S&P.

At current levels, the average yield for the 12 listed stocks is approximately 4.1%, giving me a gain greater than 50% above the S&P 500.

A Moment Concerning My 2018 Articles.

I spent the first half of this year extricating myself from California and moving into a cabin in east Tennessee. Consequently, I didn’t write an article until last month.

My three August buy articles are on General Dynamics (GD), Caterpillar (CAT) and Lowe’s (LOW), up 4.3%, 4.5% and 15.3%, respectively.

Disclosure: I am/we are long KR,T,JCOM,WBA,UNIT,OHI,GILD,LOW,GD,CAT.

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

Editor's Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.