Aggressive · Stocks to Consider and Updates

Allocation Model – Aggressive

Building Risk  I am making a few adjustments to the allocation model for the aggressive portfolio today to better tailor the list for the next six months. There have been two newcomers to the portfolio since my last update: Jabil Circuit and Cerner Corp. I am maintaining my initial allocation of Jabil Circuit at 8%, but am moving Cerner up a notch to 9%. Shares of JBL have been under pressure following its second quarter earnings disappointment and the ongoing slower-growth forecasts for Apple products, which are in part produced by Jabil. However, the long-term story remains intact and the shares are reasonably priced at current levels. Meanwhile, Cerner remains well-positioned in the clinical information systems and services business and, while growth may moderate some from here, I believe much of the slower top-line advances are reflected in the stock’s current valuation. Therefore, I feel the shares deserve a bit more exposure. Although Harris Corp. has accumulated some nice defense contracts both here and abroad lately, some steam is running out of the stock and the shares have been in a trading range for the past several months since making a new all-time high back in late December. The company has done a good job in integrating its acquisition of Exelis and the well-covered and above-average dividend has been growing thanks to generous cash flow. Nonetheless, the political climate is not in the company’s favor at the moment and I am moving HRS down one percentage point in the pie to 10%. Although Newmont Mining Corp. posted a new 52-week high last week, doubling in price since last September, I don’t believe more than a 5% allocation in the gold and copper miner is warranted at this time. Here is the latest update:


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