Year in Review – Part 3

2013Today I will conclude my look-back as to what progress was made in the aggressive portfolio in 2013.  But first, I would recommend that you take a look at my introductory paragraph of last week on annual performance assessments, if you have not already.

The results in the aggressive list could have been better, but these choices tend to be value-oriented stocks and sometimes out-of-favor securities that will take time to develop and appreciate in price. In the case of Applied Materials, the shares finally had a good year posting a 48% gain along with a 2.3% dividend; so clearly a candidate that made the “plus column”. Rail and intermodal carrier CSX Corp. also moved ahead with a nearly 38% rise and paid investors about 2% on average in dividends. I can’t complain about DIRECTV Group either. Although not a dividend payer, the shares were ahead by a bit better than the market averages with a 35% gain in 2013. Dow Chemical Co. was a surprise. I did not expect the nearly 30% gain in the shares for last year with business being good, but not great. Nevertheless, investors were probably looking further out for DOW to do well in future periods and bid the shares up in expectation of a healthy 2014-2015. Dow also provided a nearly 3% dividend payout last year. Information and communication technology company Harris Corp. hit an all-time in 2013 in a budget cutting operating environment moving ahead about 38% and paying out a handsome 2.4% dividend. Even oil and gas company Hess Corp. finally gained some traction after a busy year of shedding assets and turning itself into a pure play exploration and production company. The shares were ahead by about 46% and the company raised its once puny dividend to a more reasonable 1.25% level. Despite all the legal problems at JPMorgan Chase, the shares were ahead a respectable 29% and the company paid an above average dividend along the way of nearly 2.6%. Manitowoc Co. was one of thebuttonwoodproject better performers last year rising 36% on an improved construction outlook for its crane business and a pickup in spending by restaurants for its food service gear. Nothing to write home about on its 0.35% dividend, however, as the company needs to keep an eye on cash for long-term debt reduction. Newmont Mining Corp. was the worst S&P 500  stock in 2013, although I see some positive signs for the company this year; but clearly a negative for the portfolio off about 47% since the beginning of last year as gold prices plummeted. NEM paid out about 3.5% in dividends, but hardly an offset. Newcomer Qualcomm was up about 13.5% since introduced to the list in July, so it did fairly well in the past six months, but certainly QCOM is a long-term proposition. I can’t take any comfort in the shares of the SPDR BRIC 40 ETF which was off nearly 10% on the year. But for those willing to see eventual growth in the four emerging markets BIK represents, long-term holders should do well in time. Teva Pharmaceutical did not have a good year struggling with management issues and continued reliance on its Copaxone drug, which will be losing exclusivity sometime in 2014. The shares managed a 6% gain and paid out a respectable 3.2% dividend on its shares, but clearly not a plus for the portfolio. I prematurely closed out Google in the summer of last year at $910.68 providing investors with a total return of nearly 50% while on the list, but the shares are now trading at $1,134 or about 25% higher. Ouch! The shares appeared to be getting a bit too pricey and I took the profits and moved on, substituting the more conservative Qualcomm position. Selling is never an easy decision. 

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