Portfolio Update May 2010


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Old School Value Stock Portfolio Performance

May was a brutal month in terms of performance. Down 13.76% in May. The S&P was down 8% and the Russell 2000 down 7.59%.

This brings my YTD portfolio performance down to negative territory at -3.13%.

Portfolio Movers

Where to begin for May. Basically I’m sure you experienced it as well but mostly everything was down.

My biggest holdings were especially hit hard.

  • ROIAK [[ROIAK]] down 20%
  • GGP [[GGP]] down 12%
  • VVTV [[VVTV]] down 28%
  • GRVY [[GRVY]] down 8%
  • INSM [[INSM]] down 26%
  • BOLT [[BOLT]] down 24%
  • MHH [[MHH]] down 12%

Ouch.

I’m planning to slowly sell out of VVTV and start reducing the size of ROIAK.

GRVY just released their full year earnings and the report looks good. Increase in royalties, full year profit, increased cash, strong balance sheet. You may want to check out GRVY if you haven’t done so.

INSM fell sharply after the company released earnings in the first week of May. Reason being that the previous comparable quarter was when INSM sold their assets to Merck for $125m. Nothing has changed, just market jitters and at current levels in the 80c range, this is below cash value and NCAV. Plenty of margin of safety to hold.

With all that is going on with the oil spill and BP, BOLT has been affected like most companies related to the oil industry. I did mention that BOLT’s latest quarterly report were not impressive and I still hold to my thesis that the company is managed well. The financial health of the company is outstanding and although BOLT has mentioned several times that they will acquire a company to provide extra growth, I see the lack of merger activity as management performing excellent due diligence and carefully seeking the right company to merge with.

Portfolio Trades

Bought BAMM

Full discussion on BAMM available in the formums. Stock analysis to come later.

Sold small position in BOLT

Needed some extra cash and took a small amount out of BOLT at $10.10

Sold out of SVT for a 31% gain

The stock jumped after earnings  annoucement in May and my sell order that I forgot about was triggered. Looking back, to try and eliminate greed or fear from my investing, I’ll try to implement pre determined sell limits as well as stop limits to protect gains.

If SVT comes back down further, I’ll have to consider buying again.

Bought more APNC

As I mentioned last month, I have taken a new position and I added to it a couple of times this month. Despite a fantastic quarter, APNC remains undiscovered with big drops recently on low volume. If you compare the stock price to the potential, the market is ignoring all growth and even the potential to maintain their current FCF levels.

Bought more INSM

Just couldn’t help myself. Selling below NCAV and the fact that there has been no updates on the strategic alternatives is causing jitters with current holders.

Stock Screeners and Free Stock Tools

The stock screens are updated every few days and with so much volatility, the list is continually changing.

I’ll also add an Altman Z and Piotroski screen this month and don’t forget you can also grab a free copy of the automatic Altman Z spreadsheet and Piotroski spreadsheet for unlimited personal use.

Check out the list of free stock valuation tools as well.

Disclosure

I hold all stocks except sold out positions.

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10 responses to “Portfolio Update May 2010”

  1. zehua says:

    Hi Jae,
    I have been interested in INSM for a while, but I think they currently have no major business, right?
    I bought more on APNC as well, as well as CWBC and FBMI, two community banks that are realy cheap and doing really well compared with many other banks.
    Currently, the oil companies are still expansive. I think that is the problem with most large cap companies. Unless one or two filed for bankruptcy, the other oil companies are still not cheap enough to enter. I think some time ago, you wrote a post about Buffet’s holdings. They include Exon mobile and Concophilly. Do you remember when he bought them, and what are the entry prices?

    Thanks,
    Zehua

  2. vaidas says:

    Take a look at Cal-Dive Intl (DVR) if you are into oil equipment companies. Looks real cheap.

  3. Jae Jun says:

    @ Zehua
    Yes INSM is a shell company. Lots of cash, no operations. It’s a matter of whether they capitalize on the cash they have to acquire a good business.

    I can’t recall Buffett’s purchase from memory but yes he did buy Exxon and Conoco. Buffett admitted that COP was a mistake though. I’m sure he bought way too high like in the $70’s

    @vaidas
    Thanks for the idea. I’ve heard of DVR before.

  4. Ori says:

    Hi
    Regarding GRVY. the financials are great What is your take of not seeing any insider activity there?

  5. Derek says:

    May was indeed a very unkind month. How much more downside do you think BOLT might have, Jae? Price-wise it is looking attractive at this point but the six-month moratorium on new drilling in the Gulf is likely to keep this stock lagging for some time to come, I fear.

  6. Alex says:

    Just wanted to let people know, I’ve started a forum for value investors. This is not a business, the site will never be monetized (purely fun.).

    http://letstalkvalue.com

    Thanks!

  7. Jae Jun says:

    @ Ori,

    Yea GRVY financials are great but the I can’t say anything about insider buying. Many cheap companies don’t have insiders buying.

    @ Derek,

    I agree the short term does not look good for BOLT. If deep drillers cant dig, then BOLT won’t be able to sell. At current prices however, it doesn’t make sense to sell unless I find something so compelling I need the cash.

    @ Alex,

    Thanks will take a look.

  8. rommelacosta says:

    @ zehua: Buffett’s purchases of COP were likely in the mid-80’s level.

    @ Jae: At what point would you say GRVY is fairly value? Cash per share or slightly above it?

  9. Jae Jun says:

    @ rommelacosta,

    The last quarterly report showed negative earnings and figures. The company actually lost money. I was thinking that it would break even or profit as it has been doing lately and not so.

    At this point, I think NCAV is the minimum and think $2.50 is the likely number. If RO2 is released and is successful, it is definitely worth more.

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