Results: 13 Stocks for 2013 Gain 60%

I started a mock portfolio on January 1, 2013, for fun, on stocktwits and twitter for the year 2013. I have owned and currently own several names but always clarified that I was not holding all 13 at any one time nor did I own every stock listed throughout the entire year. The purpose of the exercise was to develop a mock portfolio on social media which would be held for all 365 days without buy or sell rules to see if high quality growth stocks could outperform the general market without lifting a finger.

Well, SUCCESS:

As it turns out, the 13 handpicked stocks easily outperformed the major indices with a whopping 60.47% gain vs. a 31.80% gain for the S&P 500. This mock portfolio essentially doubled the average of the S&P 500 for the calendar year 2013.

2013_12-31_13-for-2013 Results

First tweet: #13for2013
10:04 PM – 1 Jan 13
13 Stocks for 2013: $SSYS $DDD $DNKN $RAX $LNKD $KORS $MOV $FLT $INVN $NTSP $SLCA $V $SCCO

Let’s take a look back as to why I selected these 13 stocks so we can use a similar strategy to select 14 stocks for 2014.

DDD – 3D Systems Corp.
The company manufactures and markets 3D printers, print materials, on-demand custom parts services, and 3D authoring solutions for professionals and consumers.

The entire 3D industry started to explode in 2012 and I felt the trend would continue strong into 2013. That thinking was correct as DDD led the portfolio with a 161.26% gain. I believe this industry is still within its infancy with room for further growth and will likely select at least one 3D stock in the 2014 portfolio. Many stocks within the group are extended so be careful with your selections and wait for pullbacks (low risk / high reward). Some analysts believe that this industry is “gimmicky” but I am not completely sold on that notion. The industry is young and the true leaders will take time to establish their position but I do believe 3D printing is here to stay (in one form or another).

2013_12-31_DDD

DNKN – Dunkin’ Brands Group, Inc.
Dunkin Brands Group, Inc., together with its subsidiaries, owns, operates, and franchises quick service restaurants under the Dunkin Donuts and Baskin-Robbins brands worldwide. The company has approximately 10,800 Dunkin’ Donuts restaurants; and approximately 7,000 Baskin-Robbins restaurants.

I liked the stock and still own shares today because those 10,800 stores are mostly concentrated in the north east. The company still has room for expansion which was my thought last year as the west coast is wide open, as well as international markets. This is a $60-$100 type stock over the long term based on Dunkin’s strong brand and loyal following. Even better, the stock pays a dividend. Bullish on this stock long term.

2013_12-31_DNKN

FLT – FleetCor Technologies, Inc.
FleetCor Technologies, Inc. provides fuel cards and workforce payment products and services to businesses, commercial fleets, oil companies, petroleum marketers, and government entities in North America, Latin America, and Europe. It sells a range of customized fleet and lodging payment programs; and offers various card products to purchase fuel, lodging, and related products and services at participating locations.

It’s a generic description from Yahoo Finance but that’s what caught my attention as this is such a great concept in a huge industry. The stock has had a heck of a two year run but can be considered for additional buys anywhere above the 200-d ma in the future. I am big supporter and buyer of “payment” solutions going forward (whether it is specialized in an industry or in general such as a credit card). I maintain my bullish outlook on this stock and the industry.

2013_12-31_FLT

INVN – InvenSense, Inc.
InvenSense, Inc. designs, develops, markets, and sells micro-electro-mechanical system (MEMS) gyroscopes for motion tracking devices in consumer electronics. The company delivers motion interface solutions based on its multi-axis gyroscope technology that target smartphones and tablets, console and portable video gaming devices, digital still and video cameras, smart televisions, 3D mice, navigation devices, toys, and health and fitness accessories.

The key terms here are “wearables” and “sensors”. Just about everything we will use in the future will contain sensors to some degree so that is why I have been extremely bullish on INVN since 2012. It’s hasn’t worked out as smoothly as I wanted since my first purchase in 2012 but it has been profitable over the long term. The past year has been more profitable but it has also been extremely volatile. The stock made a strong late year push but needs to deliver consistent earnings to reduce the volatility. If it can do that, I can see this stock trading above $30 per share in 2014. I am still bullish on INVN going into 2014 and hold shares today (the entire industry is just beginning to explode).

2013_12-31_INVN

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13 Stocks for 2013 – 2nd Half Portfolio

The original #13for2013 will remain but due to the popularity on twitter and stocktwits, I have decided to put together a new list of names, 13 to be exact, for the 2nd half of 2013. I’m a bit hesitant to develop a new list half way through a year, without using any buy rules, sell rules or the typical money management techniques that I would employ for actual positions but this is the social web, so let’s do it.

The market may be headed for an extended correction due to the weakening NH-NL ratio and also due to the great run it had during the first six months of the year but you never know (trends last a lot longer than anyone can imagine). In addition, the stocks that I have decided to put together are all young, growth companies that can be extremely volatile at times so please proceed with caution and perform your own due diligence. Several of the names listed below are definitely extended from proper buy-points but this is for fun, so what the hell.

Ultimately, I will be looking to place positions in several of these stocks over the next 6 months or longer because I love their products or services and believe that they are in the beginning stages of a prolonged run over the next several years.

For example, I love the idea of gyroscopes and their potential for handheld devices, wearable technology and industrial capabilities. INVN is my top play in this category.

3D technology fascinates me. Some say it’s a bubble but I believe the industry is just scratching the surface. Now, with that said, the stocks in this industry appear to be extended but I am including three candidates on the 2nd half list: XONE, PRLB and DDD (SSYS remains on the original #13for2013 list).

Data, big data and instant data analysis: this category appears to be all the rage these days so why not jump on the train. SPLK is extended from a proper buy-point but “why not”, let’s see if it continues to run higher with strong and increasing institutional support.

Fracking – love it or hate, good or bad, it’s most likely here to stay and may provide the necessary natural resources for centuries to come. Silica is used as fracturing sand in connection with oil and natural gas recovery so SLCA covers this base. OAS is engaged in the exploration and production of oil and gas in the northern US so I have decided to include them on the list as the chart may be gaining some slight momentum.

I own Visa (love the business model) and have for years so why not pick up on two younger companies engaged in a similar business, such as VNTV and XOOM. Whether making an electronic transaction or sending money via the web (to a foreign country), this industry will continue to profit and expand (paper money is a thing of the past). And with all the online & electronic transactions taking place, why not protect your identity and insure yourself from fraud with LOCK.

These are some of the reasons as to why I put this 2nd half list together. The stocks on this list will probably perform well beyond the market if we took a look a few years down the road but for this exercise, we only have 6 months so let’s see how they turn out. The first six months was a huge success so why not repeat that performance with some great companies and even better technologies/ products/ services!

2013_06-30_Week 01

Portfolio Prices on June 30, 2013:

$INVN – 15.38
$SLCA – 20.78
$LOCK – 11.71
$NOW – 40.39
$SPLK – 46.36
$DDD – 43.90
$KORS – 62.02
$PRLB – 64.97
$XONE – 61.72
$REGN – 224.88
$XOOM – 22.92
$OAS – 38.87
$VNTV – 27.60

2013_06-30_DDD

2013_06-30_INVN

2013_06-30_KORS

2013_06-30_LOCK

2013_06-30_NOW

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13 Stocks for 2013 Mid-Year Results

In the blink of an eye, 26 weeks have flashed by and we’re already at the mid-year point. At the start of the year, I posted a partially owned, partially mock-portfolio that I said I would throw out there on the “twitter-world” and let it ride. No new buys, no sells and no rules – just ride the ups and down on 13 stocks that I felt were poised for big things in the 2013.

Here are the results at the end of Week #26 for my #13for2013 portfolio:

2013_06-29_Week 26

  • 11 of the 13 stocks show a gain
  • Collectively the group of 13 stocks is up 18%
  • The 11 positive stocks are up an average of 28.54%
  • 9 of the 13 stocks have current gains above 20%
  • Comparatively, the Dow, S&P, and NASDAQ are all up between 12% and 14% so this mock buy-and-hold portfolio easily beat the market averages
  • Several of the stocks hit performance highs much greater than their current levels, for example, FLT and LNKD peaked above 60% while SLCA peaked above 50%.
  • Two stocks bombed out with RAX a total bust, currently down 49%.

All-in-all, it’s a solid portfolio of stocks as we stand here today. Take a look at the performance snapshot and daily (year-to-date) charts below. Several of these stocks will make my 2nd Half #13for2103 portfolio, because I believe their upside still has more to come.

Disclosure: as of today, I own shares in INVN, DNKN and V.

Portfolio Prices on January 1, 2013:
$DDD – 35.57
$DNKN – 33.18
$FLT – 53.65
$INVN – 11.11
$KORS – 51.03
$LNKD – 114.82
$MOV – 30.68
$NTSP – 11.82
$RAX – 74.27
$SCCO – 37.86
$SLCA – 16.73
$SSYS – 80.15
$V – 151.58

Charts:

2013_06-28_DDD

2013_06-28_DNKN

2013_06-28_FLT

2013_06-28_INVN

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The Future (Opportunity) of 3D Printing

What if you could print the broken piece on your coffee maker rather than make a trip to the repair shop? What about skipping Black Friday madness by printing the latest toy for your child? How about printing that new pair of jeans you tried on at the mall but didn’t fit quite right (your body scanned for a perfect fit)?

Would you say that’s “crazy”?

Perhaps but that’s the direction the world is headed.

“Printing goes beyond product that you can see and touch”. Guitars, tables, board games — those objects can be printed today. But food, organs, bones, houses? Those “will take probably 10 years to come,” – says Geomagic’s Ping Fu

General Electric is “So Stoked About 3D Printing, They’re Using It To Make Parts For Jet Engines”

As Business Insider noted: “CONFIRMATION as to how seriously some companies are taking additive manufacturing, popularly known as 3D printing, came on November 20th when GE Aviation, part of the world’s biggest manufacturing group, bought a privately owned company called Morris Technologies.

Many manufacturers already use 3D printing to make prototypes of parts, because it is cheaper and more flexible than tooling up to produce just one or two items. But the technology is now good enough for it to be used to make production items too.

GE sees the purchase as an investment in an important new manufacturing technology. “Our ability to develop state of the art manufacturing processes for emerging materials and complex design geometry is critical to our future,”

Printing parts for jet engines is already here but the jeans, well, that may take some more time before its commonplace but it’s not out of the question.

So how can you invest to capitalize on this new industry?

Two stocks catch my eye in the world of 3D printing and rapid prototyping:

  1. Stratasys, Inc., SSYS
  2. 3D Systems Corporation, DDD

I don’t intend on spending this blog post describing the detail of the technology itself as plenty of that exists through a simple Google search, however, I will include basic company descriptions from Yahoo Finance (see bottom of post).

Several things stand out while researching these two stocks (see charts):

  1. Year-over-year EPS growth
  2. Double digit quarterly growth for sales and earnings (going back 8 quarters)
  3. Increasing Intuitional Sponsorship

In addition to the fundamental items above, the daily and weekly charts for both SSYS and DDD show some solid technical setups for the long term (I am not writing this post from a short term perspective). We’re talking 2-5 years out as this game is only in its infancy with Wall Street.

SSYS has been trending higher for the past year showing a 170% gain since last November. The recent weekly pattern clearly shows a breakout point to new highs above $73.32. Considering the overall environment of the market, I would prefer a better risk-to-reward buying opportunity closer to the 50-day or 200-day moving average. Due to its technical strength, the 50-day moving average looks to be the ideal pullback area for accumulation.

DDD has pulled back more than SSYS and may provide investors with an opportunity sooner as it trades just above the 50-d moving average. Like SSYS, DDD has given early investors a great return on investment with a 193% gain over the past 12 months. I’d be suspect of the large distribution week, two weeks back, but as long as the 200-d moving average is not violated, an initial entry could be warranted.

As of this post, I do not own shares in either company but I plan to accumulate both as we head into 2013. Both the action of the individual stocks and the general market will dictate when I start the accumulation so please perform your own due-diligence. Follow me on twitter for my latest updates.

Lastly, as Stratasys notes on its home page, 3D printing is “ADVANCING INDUSTRIES” to which it highlights the following:

  1. Aerospace 3D Printing
  2. Automotive 3D Printing
  3. Commercial Products 3D Prototyping
  4. Consumer Products 3D Prototyping
  5. Educational 3D Printing
  6. Medical Device Prototyping
  7. Military 3D Printing

Yahoo Finance:

Stratasys, Inc., together with its subsidiaries, engages in the development, manufacture, marketing, and servicing of three-dimensional (3D) printers, rapid prototyping (RP) systems, and related consumable materials for office-based RP and direct digital manufacturing (DDM) markets. The company offers its products as integrated systems consisting of an RP machine and the software to convert the CAD designs into a machine compatible format, and modeling and support materials. Its products enable engineers and designers to create physical models, tooling, jigs, fixtures, prototypes, and end use parts out of production grade thermoplastic directly from a CAD workstation. The company also offers rapid prototyping and production part manufacturing services; and maintenance, leasing/renting, training, and contract engineering services for 3D production systems and 3D printers.

3D Systems Corporation, through its subsidiaries, engages in the design, development, manufacture, marketing, and servicing of 3D printers and related products, print materials, and services. The company’s principle print engines comprise stereolithography, selective laser sintering, multi-jet modeling, film transfer imaging, selective laser melting, and plastic jet printers. Its 3D printers convert data input from computer-aided design software or 3D scanning and sculpting devices to produce physical objects from engineered plastic, metal, and composite print materials. The company also blends, markets, sells, and distributes various consumables, engineered plastics, metal materials, and composites; and offers various software tools, as well as pre-sale and post-sale services, including applications development, installation, warranty, and maintenance. In addition, it provides custom parts services, such as precision plastic and metal parts service and assembly capabilities. The company markets its stereolithography materials under the Accura and RenShape; laser sintering materials under the DuraForm, CastForm, and LaserForm; and materials for professional printers under the VisiJet brands.

Invensense (INVN) Update

I’ve been asked the following question (one way or another) numerous times:

“Why do you like Invensense so much?”

My answer: It’s an investment in the technology and I believe this is the company to take that technology to the next level. I always follow that response by emphasizing this: Do your own due diligence and NEVER make an investment based off of what I do.

I am not a short term trader but I do follow rules while making trades and one of the most important of these rules is: CUT LOSSES!

As several of my twitter followers have pointed out, I have violated that rule with INVN. That’s true, I didn’t cut the loss when is violated my mental stop. In fact, I dollar-cost averaged my original position. The follow-up purchases have taken my original position to a maximum position size. Now, I sit here writing this post stating that I DO NOT violate “position sizing” within my portfolio. That may be difficult to believe if I just violated another rule but as of today, I have not violated that one. My cost basis is higher than Friday’s closing price for INVN and it took a lot of strength not to buy another block of shares when it dropped below $10 (as low as $9.06 to be exact).

Think about it, a purchase below $10 is showing a gain anywhere from 10%-20% in two weeks. I knew it was a fantastic level to enter and my cost basis would have dropped but I am maxed out – I CANNOT increase my risk against my overall portfolio. That’s how you GO BROKE (especially if you turn out to be wrong – and I may be wrong with Invensense).

That’s the beauty of trading and investing. Your ideas prove to be right or wrong based on making money or losing money. As of today, I show a loss in INVN. So why do I still hold on?

Two reasons

  • The technology: INVN is a leading provider of MotionTracking™ devices for consumer electronics products such as smartphones, tablets, game controllers, smart TVs, and wearable sensors. I see a big future here and I’m betting that INVN is the leader or one of the leaders.
  • The fundamentals (specifically: sales and earnings growth)

I am a technically based trader on a longer term time-frame but for now, I am not trading the chart. Although one may argue that the recent price action suggests that support has been established – it’s still debatable based on the number of shares sold short. The IPO lock-up period has passed, the lawsuit is open knowledge, supplier product shortages have been discussed and the market has not performed well so INVN has paid consequences. I’d like to believe that all of that BAD news is priced in.

The pending lawsuit from their main competitor, STMicroelectronics, does keep me a bit worried on the fringes but I have no control there, other than to sell (that can screw up everything, regardless of fundamentals and technicals).

Let’s take a look at the numbers:

Earnings (YoY):
2008: -0.09
2009: 0.01
2010: 0.19
2011: 0.13
2012: 0.47
2013: 0.61 estimated +30%
2014: 0.85 estimated +39%

Earnings (QoQ):
June 30, 2011: 0.11 vs. -0.01
September 30, 2011: 0.15 vs. 0.04 | +275%
December 31, 2011: 0.13 vs. 0.06 | +117%
March 31, 2012: 0.07 vs. 0.03 | +133%

INCOME STATEMENT | FY2012 (April 1, 2012) vs. FY2011 (April 1, 2011)

Current Period Prior Period % Change
  4/1/2012 4/1/2011  
Sales (Income) $152,967,000 $96,547,000 58%
Cost of Sales $67,246,000 $43,386,000 55%
Gross Profit $85,721,000 $53,161,000 61%
Gross Profit Margin 56.04% 55.06% 2%
Net Operating Income $47,014,000 $21,478,000 119%
Net Operating Income Margin 30.73% 22.25% 38%
Income Available to Common $16,329,000 $1,631,000 901%

BALANCE SHEET | FY2012 (April 1, 2012) vs. FY2011 (April 1, 2011)

Current Period Prior Period % Change
  4/1/2012 4/1/2011  
Cash $157,772,000 $38,075,000 314%
Accounts Receivable $11,931,000 $10,678,000 12%
Inventory $12,240,000 $15,208,000 -20%
Total Current Assets $186,131,000 $65,297,000 185%
Total Assets $193,318,000 $70,746,000 173%
Accounts Payable $13,172,000 $10,786,000 22%
Total Current Liabilities $13,200,000 $11,012,000 20%
Total Liabilities (Total Debt) $16,441,000 $11,605,000 42%
Total Equity $176,877,000 $59,141,000 199%

INSTITUTIONAL ACTIVITY (as of May 28, 2012):

Institution Type
  13F (Money Market) Mutual Fund Other
Number of institutions 100 101 7
Number of new positions 47 61 5
Number of positions sold out 11 4 1
Shares held 15,879,598 8,357,405 118,315
Shares held previous period 11,958,005 1,790,387 62,656
Shares bought 9,209,721 6,724,972 84,315
Shares sold 5,288,128 157,954 28,656
Value of shares held $159,431,164 $83,908,346 $1,187,883
Value of shares bought $92,465,599 $67,518,719 $846,523
Value of shares sold $53,092,805 $1,585,858 $287,706

Two things stick out:
1. The increasing number of institutional investors (including large quantities of shares bought)
2. Increasing earnings, year-over-year and quarter-over-quarter.

Time will tell and my account balance will let me know if I am right or wrong. As for now, I am long $INVN – betting on the technology, industry growth, earnings growth and sales growth. In addition, I would like those institutional investors to continue buying!