The small cap portfolio benchmark, the Russell 2000 Growth Index dropped over 6.7% during the month of June (Russell Website). We have previously noted that we feel our philosophy of owning quality stocks with earnings momentum at a reasonable price provides significant support during times of volatility. In our opinion, the Model’s most recent outperformance can be attributed to this philosophy.
During the month of June, we sold Mantech International (MANT) as they lowered their outlook for the rest of the year. The lowered outlook was the result of a projected decrease in spending on national security programs. With the proceeds from this sale we bought Stec Incorporated (STEC). Stec designs, manufactures and markets solid state drives. Solid state drives are quickly becoming the standard in storage devices as the tech industry moves away from hard disks. Earnings estimates for 2010 have more than doubled and the stock has been gaining momentum.
These changes in the portfolio reflect our commitment and dedication to our philosophy. It is our opinion that the rest of 2010 will be filled with more volatility and uncertainty. We believe the AlphaMark Small Cap Growth Fund is well positioned for these market conditions.
Model SummaryThe AlphaMark Small Cap Growth Model is grounded by an appreciation of risk. The model is comprised of equities with sustainable business models, reliable cash flows and strong management. The maximum market cap is $2 billion.