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Sunday, July 19, 2015

It's been a while.

I have neglected this for far too long now. It's been what, a month and a half since my last post?

It's not like I've been sitting around all this time remaining idle, however. I've not neglected my investing activities. 

So this is just going to be a little rundown of what has happened so far since May 27th, my last entry, in chronological order.
  1. The simulator has died already. It's somewhat depressing, and I guess it speaks to the consistency needed to perform well or something. I was far and away in first due to my speculative bets with like a 15% return while the next guy had a meager 4%, and I was getting really bored. I checked my competition's portfolios and some of them were doing really boring stuff, like investing maybe 5% of their entire portfolio in Apple or something. So their portfolios each day would fluctuate under a tenth of a percent each day, which I guess is a safe way of going about it, but it definitely translates into an uneventful experience. I already stopped doing it for a while; I'm now just doing my own thing.
  2. I got the internship. It's been pretty awesome so far. I'm halfway through it, but it has been thoroughly enjoyable. Nothing really much else to say about it, really. It's been much better than what the stereotypical internship experience would have one assume.
  3. Modified my portfolio. That's what I'm going to talk about most.
I have three holdings. 50% of it is in VBR, the Vanguard Small-Cap Value ETF. Holding period - indefinite unless significantly overvalued or breaches 10% trailing stop

VBR  Vanguard Small-Cap Value ETF daily Stock Chart

This is because out of the following stock cap categories and trading philosophies: Large-Cap Growth, Large Cap Value, Mid-Cap Growth, Mid-Cap Value, Small-Cap Growth, and Small-Cap Value, Small-Cap Value funds outperform all of the rest over a longer period of time.

You can read more about the back testing of this claim here.

I also want some more exposure to small caps than what I have right now, as my other two holdings are large cap.

So here are my two other holdings:

GILD, holding period - indefinite unless significantly overvalued or breaches 10% trailing stop

GILD Gilead Sciences Inc. daily Stock Chart

Some financial highlights I have to mention that are pretty important:

Good:
  • Low PE and FWD PE, at 13.44, and 10.69, respectively.
  • 0.65 PEG Ratio
  • Pays out a dividend. Indicative of steady financial management and long-term cash flow management
  • I predict steady and solid earnings growth as the time goes on
  • 42.7% Return on Assets, 91.3% Return on Equity, 44.8% Return on Investment
  • High target price, generally high analyst outlook
Bad:
  • 10.24 PB Ratio.
  • Somewhat high debt to equity levels, around 0.7
But nonetheless, I think the pros seriously outweigh the cons here. This isn't necessarily an undervalued stock, but it is undervalued in terms of its future growth, at least in my opinion.

Plus, the quarter's earnings will be out this Wednesday, so this is also somewhat of a speculative play. 

I am also holding GM, holding period - indefinite unless significantly overvalued or breaches 10% trailing stop

GM General Motors Company daily Stock Chart

Another large cap, so it's going to be relatively more stable.

Financial highlights:

Good:
  • Low PE and FWD PE, at 14.26, and 6.07, respectively.
  • 0.77 PEG Ratio
  • Pays out a dividend. This one's pretty high, at 4.7% Indicative of steady financial management and long-term cash flow management.
  • PB ratio not too high, at 1.36
  • High target price
  • Relative Strength Index indicator pretty low, at 26.59 - this means recent price action movements has pushed the stock to a point where it is considered "oversold" at least in a short term perspective.

Bad:
  • ROA, ROE, and ROI could be better. They are positive, but generally not to at the level I normally like.
  • High debt to equity levels, around 1.15
  • American auto market is known to be a bit iffy in terms of maintaining a strong presence in the auto market.
This is more of a long-term value play, so to speak. I don't expect it to rocket higher in price but I think a company this large has been hammered a bit too hard recently.

That's it.

Will post again soon. Maybe I'll look specifically into a company or talk about an important tip or issue at hand. 

Kevin
 

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