The wretchedly managed Wax Ink Portfolio was down 0.7% overall for the week.
By comparison, the Dow was down 0.9%, the Nasdaq was down 1.5%, the S&P 500 was down 1.1%, the Russell 2000 was down 1.0%, and the Volatility Index, commonly known as the VIX, was up 22.7%.
Year to date, the Wax Ink portfolio is down 21.1% on a per share held basis, the Dow is up 13.4%, the Nasdaq is up 7.5%, the S&P 500 is up 9.5%, the Russell 2000 is up 19.5%, and the VIX is lower by 22.9%.
The portfolio breakdown is roughly 52% cash, 48% equities, and 0% bonds. The current value of portfolio cash on a per share basis is $25.41 and the current value of portfolio equities on a per share basis is $23.36, making the average per share price $48.77. The average baseline valuation estimate of all equities currently held in the Wax Ink Portfolio is $29.23 and the average market closing price of all equities held in the Wax Ink Portfolio is $25.58, making the current portfolio growth potential factor 12.50%.
Year End Portfolio Summary
The portfolio appeared to suffer during the year with all of the repositioning of assets, the changing of the number of shares held, the different entry and exit points, and all of the things that happen behind the scenes so to speak. As I have said in years past, I make allowances for this activity once a year, and that is at the end of the year.
For 2016 the portfolio ended up holding thirteen stocks, two more than at the close of 2015. In addition, the portfolio contained 29% more shares than it did in 2015, and because of the reallocation of assets, the portfolio ended 2016 with 5% less cash than in 2015. Factoring all of these things together leads to one question and that one question is the basis for sound portfolio management. If I start the year with X amount and end the year with Y amount, what was my return? That's really all that matters, the stuff that happens in the middle simply isn't as important as the starting and ending numbers.
So doing the math, (2016 less 2015 divided by 2015) the Wax Ink Portfolio ended the year up 2.10%.
Two numbers often watched by oil traders are the Crude Spread (Brent Crude less WTI Crude) as well as the Gulf Coast Crack Spread (two barrels of gasoline + one barrel of heating oil - three barrels of crude oil) / 3). These numbers are now apart of The Wax Report.
WTI Crude ended the week at $53.72, up 1.3%, while Brent Crude ended the week at $56.82, up 3.0%, creating a crude price spread of $3.10, an increase of 44.9%. Distillate RBOB Gasoline ended the week at $1.6709, up 2.7%, and Heating Oil ended the week at $1.7282, up 3.9%, moving the Gulf Coast 3:2:1 Crack Spread to $17.26, an increase of 9.3% for the week. Natural Gas ended the week at $3.72, up 1.6%.
Year to date WTI Crude is higher by 45.0%, Brent Crude is higher by 52.4%, Natural Gas is higher by 59%, RBOB Gasoline is higher by 31.5%, Heating Oil is higher by 53.4%, and the Gulf Coast 3:2:1 Crack Spread is higher by 20.5%.
Treasury and Bond Yields
The 5 Year Treasury ended the week at 1.89, down 6.0%, while the 10 Year Treasury ended the week at 2.42, down 4.0%. The 5 Year AAA Municipal Bond ended the week at 1.76, up 1.7%, and the 10 Year AAA Municipal Bond ended the week at 2.56, up 3.2%. Lastly, the 5 Year AAA Corporate closed the week at 2.06, down 9.3%, with the 10 Year AAA Corporate ending the week up 2.0% at $3.03.
Year to date the 5 Year Treasury is up 8.6%, the 10 Year Treasury is up 7.6%, the 5 Year AAA Muni is up 41.9%, the 10 year AAA Muni is up 19.6%, the 5 Year AAA Corporate is up 8.4%, and the 10 Year AAA Corporate is up 3.8%.
Please remember that the minimum holding time for shares in the Wax Ink portfolio is 60 months (1825 days), and unless otherwise stated, I have no position in any stock mentioned in this report.
Baseline Valuation Estimates and Worksheets
Baseline Valuation Estimates are initial valuations which Accredited Investors, after completing their own due diligence, can either increase or decrease in accordance with their individual risk tolerance or investing philosophy.
Financial data used in the creation of each Baseline Valuation Estimate is the most recent SEC 10-K ANNUAL financial data as reported to the U.S. Securities and Exchange Commission.
Archived worksheets may be downloaded by going to the Worksheets page at the site and selecting an industry which will move you to all of the worksheets I have updated for the selected industry.
Worksheets were either created or updated during the week for the following companies.
Baseline Valuation Estimates
Baseline valuation estimates are determined through fundamental analysis of the listed company's most recent annual financial information. Because these valuations are never exact, what is presented here is a baseline valuation range. Baseline valuation estimates were either created or updated during the week for the following companies:
Denbury Rersources, Inc. - $3-$7
Diamondback Energy, Inc. - $64-$70
EP Energy Corporation - $29-$36
Noble Energy, Inc. - $31-$37
Growth Only Valuation Estimates
Growth only valuations are determined utilizing current pricing levels, year over year earnings growth, dividend yield, the current PE ratio, and an earnings growth estimate. Because growth only valuations are EXTREMELY volatile, what is presented here is a single growth only valuation estimate. Growth only valuation estimates were either created or updated during the week for the following companies:
Denbury Rersources, Inc. - ($6)
Diamondback Energy, Inc. - $129
EP Energy Corporation - ($22)
Noble Energy, Inc. - $34
Denbury Rersources, Inc. - Neutral - the current baseline valuation and key performance indicators (KPIs) are mixed for investment consideration at this time (NYSEARCA:HOLD)
Diamondback Energy, Inc. - Negative - the current baseline valuation and key performance indicators (KPIs) no longer favor investment consideration (Sell)
EP Energy Corporation - Positive - the current baseline valuation and key performance indicators (KPIs) favor investment consideration at this time (Buy)
Noble Energy, Inc. - Negative - the current baseline valuation and key performance indicators (KPIs) no longer favor investment consideration (Sell)
Have a great week.
Wax Ink is a baseline equity valuation company not licensed or registered with any government agency
Copyright © 2016 Wax Ink
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.