Aggressive · Other

Hits and Misses – Aggressive Portfolio

Building Risk Today I will wrap up the feature of stocks that hit the mark and those that missed in 2016. As you would expect, the pluses and minus were substantial for those investors willing to accept more risk in their portfolio. Here are the results: 

       We start with chip equipment manufacture Applied Materials that had good second-half numbers and offered positive guidance for the first half of 2017. AMAT was higher for the year by a whopping 74% and added another 1.25% in dividend payouts. East coast rail carrier CSX participated in a strong transportation sector and made investors happy with a 42% pop in price and a total return of 44%. I was a bit premature in 2015 with the addition of clinical information provider Cerner Corp. that was negative by about 17.6% this past year as it has failed to provide the momentum that Wall Street was expecting. Like many names on the list, CERN will take a bit longer to produce, but I am holding it for now. Athletic footwear company Foot Locker has been bucking the trend with fellow brick-and-mortar retailers and showed a 12% gain in price last year. However, another negative for the group was Gilead Sciences that was taken down by drug pricing issues, declining growth in its hepatitis portfolio along with a generally weak biotechnology sector. GILD gave up 22% in 2016, but provided a modest dividend return of about 2.5%. A well-needed acquisition may provide a catalyst for the stock in 2017.

      Defense and communications equipment manufacturer Harris Corp. was another “hit” for the portfolio with a total return last year of nearly 20%. And energy exploration and production company Hess Corp. rebounded on higher oil prices and returned about 30% on the year including dividends. The iShares Emerging Market ETF performed well in an otherwise chopping international equities market with a total return of 16%, year-on-year. Thanks to an interest rate hike and the prospect of reduced regulations for the financial industry, money-center bank JPMorgan Chase had a total return in 2016 of about 39% and still remains reasonably valued. Electronics manufacturing provider Jabil Circuit followed Apple’s lead and was unable to execute as well as I had expected. The stock under-performed the market with a total return of about 5%, but I believe a longer-term stance will prove more rewarding for JBL. Another “miss” for the year was chemical giant and refiner LyondellBasell that fell victim to a slowing global economy and the stock only managed a total return of 5.6%, although the shares recovered nicely in the fourth quarter of last year. And finally, gold and copper producer Newmont Mining saw a recovery of nearly 89% in 2016, as commodity prices firmed along with the price of gold.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s