These Five Stocks Aren’t Messing Around
Matthew is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Have you noticed how sensitive stocks can be? They can move up or down wildly based on the contents of a press release. All too often what’s in that press release doesn’t contain enough information relating to the true value being created or destroyed by the company’s management.
What typically happens is that the information didn’t jive with the perceptions of market traders who reacted instead of processed the new information. Not only can stocks be sensitive to company specific information but as we’ve all painfully learned over the past few years macroeconomic and political news can have an even greater impact on the value of stocks in the market.
Lately we've seen a very macro driven market as in the three half months since I launched my virtual “No Drip, No Mess” Portfolio the market as measured by the S&P 500 is up a staggering 11.23%. Taken as a whole, the stocks I’ve invested my virtual dollars in have produced a 9.13% return which isn’t bad considering I’ve been adding positions over time. I want to look at five of them that aren't just riding the macro wave higher but instead have been working to build a great business. Take a look at the returns so far:
|Ticker||Origional Investment||Shares||Average Purchase||Current Price||Market Value||Dividend Income||Return||Return on Investment||Current Dividend||Annual Income||Yield|
|AAPL||$ 3,084.43||5||$ 616.89||$ 691.24||$ 3,456.20||$ 13.25||$ 385.02||12.48%||$ 2.65||$ 53.00||1.72%|
|ARCO||$ 1,000.30||73||$ 13.70||$ 14.40||$ 1,051.20||$ 4.36||$ 55.26||5.52%||$ 0.06||$ 17.43||1.74%|
|ATVI*||$ 2,335.00||200||$ 11.68||$ 12.00||$ 2,400.00||$ 65.00||2.78%||$ 0.18||$ 36.00||1.54%|
|BIP||$ 2,020.50||60||$ 33.68||$ 35.24||$ 2,114.40||$ 93.90||4.65%||$ 0.38||$ 90.00||4.45%|
|F*||$ 2,844.00||300||$ 9.48||$ 10.17||$ 3,050.00||$ 15.00||$ 221.00||7.77%||$ 0.05||$ 60.00||2.11%|
|LOW*||$ 2,777.00||100||$ 27.77||$ 28.00||$ 2,800.00||$ 16.00||$ 39.00||1.40%||$ 0.16||$ 64.00||2.30%|
|MPW||$ 3,631.50||400||$ 9.08||$ 10.77||$ 4,308.00||$ 80.00||$ 756.50||20.83%||$ 0.20||$ 320.00||8.81%|
|Invested||$ 17,692.73||1138||$ 1,615.68||9.13%||Annually||$ 640.43||3.62%|
|* Denotes shares are covered by a options that are currently in-the-money|
My best recommendation by far has been Medical Properties Trust (NYSE: MPW) as it’s up 21%. This real estate investment trust own hospitals and leases them back to top notch operators. The company reported a decent first quarter as part of the portfolio, but what really has sent shares higher was the Supreme Court ruling on Obamacare. By eliminating the uncertainty investors saw this as meaning a clean bill of health for hospital companies who’ll benefit from this law. While this wasn’t part of the original thesis of an investment in MPT, it is certainly a plus for the company. Where value has been created is their steady hospital acquisition program which is beginning to add to their bottom line.
Shares of Apple (NASDAQ: AAPL) are also up double digits for both of my buy recommendations. While they missed estimates in their last quarter, enthusiasm over the launch of the iPhone 5 has sent the shares much higher. At just sixteen times earnings and over a hundred billion of cash on their balance sheet Apple’s shares look unstoppable at the moment. If they can ever gain traction in the PC market watch out trillion dollar market cap.
The only real news out of Ford (NYSE: F) since I recommended this iconic brand was an in-line quarterly report. Shares though have been steadily driving higher on improved operational performance. However, after the Fed announced another round of Quantitative Easing this might put a slight wrench in my plans of using the company’s stock as an options income generator. I thought I’d be adding to my shares this week as my covered strangle on the stock expired. Right now it’s looking like the Ford shares I do own will be called away and I’ll have to try another way to generate income.
As the golden arches of Latin America, Arcos Dorados (NYSE: ARCO) has a lot to live up to. Since going public they haven’t done much other than disappoint investors. However, their last quarter was appetizing enough for investors to scarf up shares. Concerns about the economy in Brazil which is their largest market as well as currency fluctuations throughout the rest of Latin America will continue to have an impact on their bottom line. The long term outlook for the company is still very bright, and I’m glad I was able pick up shares when I did.
Global infrastructure owner Brookfield Infrastructure Partners (NYSE: BIP) has been busy adding to their portfolio of infrastructure assets. Since I picked up my shares they added to their interest in a Chilean toll road which investing in another toll road operator in Brazil while also acquiring a regulated distribution utility in the UK. They continue to acquire or build great irreplacable assets that will drive cash flow back to unit holders.
I’m very pleased with the companies I’ve added thus far as they are some truly great companies with world class assets or brands. While the returns I’ve seen over the past few months are excellent, it’s the returns I expect over the next few decades that have me especially excited. While I might be investing virtually in this exercise one glance at the disclosure at the end of this article will show that I own most of these companies in real life. Owning great assets and great brands are two secrets I’ve learned in my journey to invest better.
latimerburned owns shares of Apple, Medical Properties Trust, and Arcos Dorados and has the following options: Apple. The Motley Fool owns shares of Apple, Arcos Dorados, Brookfield Infrastructure Partners, and Ford. Motley Fool newsletter services recommend Apple, Brookfield Infrastructure Partners, and Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.