Comment
0
Tweet
0
Print
RSS Feeds

One Person's Trash Is Another Person's Treasure Portfolio

Friday - 3/22/2013, 9:46am  ET

In November 2012, I announced my intention to create a portfolio of 10 companies that investors had effectively thrown away and given up on, in the hope of showing that deep-value investing and contrarian thinking can actually be a very successful investing method. I dubbed this the "One Person's Trash Is Another Person's Treasure" portfolio, and, over a 10-week span, I highlighted companies that I felt fit this bill and would expect to drastically outperform the benchmark S&P 500 over the coming 12 months. If you're interested in the reasoning behind why I chose these companies, then I encourage you to review my synopsis on each portfolio selection:

Now, let's get to the portfolio and see how it fared this week:

Company

Cost Basis

Shares

Total Value

Return

Exelon 

$31.25

31.68

$1,067.30

7.8%

QLogic 

$11.46

86.39

$1,047.05

5.8%

Dendreon

$5.97

165.82

$870.56

(12%)

Dell

$13.37

74.05

$1,061.14

7.2%

Staples 

$13.48

73.44

$992.17

0.2%

Arkansas Best 

$10.83

91.41

$1,142.63

15.4%

Arch Coal

$7.03

140.83

$774.57

(21.8%)

Skullcandy

$6.71

147.54

$821.80

(17%)

France Telecom

$11.64

85.05

$938.10

(5.2%)

Xerox 

$8.16

121.32

$1,062.76

7.4%

Cash

   

$0.06

 

Dividends receivable

   

$20.85

 

Total commission

   

($100.00)

 

Original investment

   

$10,000.00

 

Total portfolio value

   

$9,798.99

(2%)

S&P 500 performance

     

3.8%

Performance relative to S&P 500

     

(5.8%)

Source: Yahoo! Finance.

This week's winner
France Telecom
was off to the races this week, gaining better than 7%, just two weeks after Zacks issued a report that upgraded its rating on the service provider from "underperform" to "neutral" with an $11 price target. As usual, I wouldn't pay too much attention to the day-to-day analyst rumblings. Instead, I'd pay closer attention to management's comments made Tuesday that the company's Orange business unit is on pace to generate roughly 500 million euro in revenue from cloud computing by 2015, or the report from The Wall Street Journal that Yahoo! is in talks to purchase up to 75% of France Telecom's Dailymotion. 

This week's loser
Bringing up the caboose in this generally positive week was biotechnology company Dendreon , which dove more than 7%. It appears the impetus for the fall was a settlement reached just days ago regarding a class action lawsuit brought against the company for making false or misleading statements to investors regarding Provenge between April 29, 2010, and Aug. 3, 2011. The settlement totaled $40 million, but Dendreon's insurers are footing the bill for all but $2 million of that amount. Investors never like to see settlements work against a company, but with this dark cloud now out of the way, perhaps Dendreon can focus its efforts on reducing costs and getting Provenge approved in Europe.

Also in the news…
Audio accessories maker Skullcandy bounced back a bit this week after announcing the hiring of Hoby Darling as its new CEO. Darling has been the general manager of Nike's Nike+ digital sports unit and should give the company a fresh overhaul with global appeal. I'm personally a bit stunned that interim CEO Rick Alden didn't stick around longer in an attempt to turn around the company he founded, but I like the replacement that was chosen. Apparently investors did as well, with Skullcandy up nearly 6% on the week.

   1 2  -  Next page  >>