Sunday, May 6, 2007

WCG Out and ENI In at Portfolio A1

Information technology research powerhouse Gartner (IT) posted a strong first quarter and raised guidance and raised full year revenue and earnings guidance before the bell Thursday, then rode bullish analyst comments up 8% Friday, helping to offset some of the continued weak performance from WellCare Health Plans (WCG), which is being dropped from the portfolio. WCG has been a significant drag on portfolio performance and is largely responsible for reducing the cumulative performance advantage over the benchmark S&P 500 from last week’s 6.8% to this week’s 4.4%.

The story of the individual holdings continues to be one of four strong performers in search of a fifth and final holding that will provide a little more diversification without dragging down performance. With WCG out, the portfolio now turns to Chilean hydroelectric company Enersis (ENI) to see if it can fill that bill. Will Frankenhoff outlined the bull case for Enersis at Motley Fool in February. Since reporting earnings on April 25th, Enersis has moved up another 10%, but Portfolio A1’s stock ranking system is undeterred and believes Enersis still represents a good value.

For the record, the portfolio’s proprietary ranking system ranked 7804 stocks this week. ENI had an overall rank of 35, but was selected because one or more of the following buying rules eliminated the higher ranked stocks:

  • Market capitalization > $250 million
  • Average volume over the past 20 days > 300,000
  • Friday’s closing price > 10

Finally, stocks cannot be added to the portfolio if their inclusion will push any sector weighting to over 30% of the portfolio.

There are no other changes to the portfolio for the coming week.

A snapshot of the portfolio is as follows:


pleadership said...

Interesting pick up in ENI...a little something from my backyard. Big increase in electricity costs in Chile over the last 12 months due natural gas fights with Argentina. Chile faces a major energy crisis as it relies on surrounding countries for supply.

DISCLAIMER: "VIX®" is a trademark of Chicago Board Options Exchange, Incorporated. Chicago Board Options Exchange, Incorporated is not affiliated with this website or this website's owner's or operators. CBOE assumes no responsibility for the accuracy or completeness or any other aspect of any content posted on this website by its operator or any third party. All content on this site is provided for informational and entertainment purposes only and is not intended as advice to buy or sell any securities. Stocks are difficult to trade; options are even harder. When it comes to VIX derivatives, don't fall into the trap of thinking that just because you can ride a horse, you can ride an alligator. Please do your own homework and accept full responsibility for any investment decisions you make. No content on this site can be used for commercial purposes without the prior written permission of the author. Copyright © 2007-2023 Bill Luby. All rights reserved.
Web Analytics