The portfolio suffered a poor month in February as it fell 0.7%, net of fees, compared to the S&P 500’s gain of 1.1%. The month was pretty uneventful.
The few earnings reports essentially did little to move the company stocks. One of the hallmarks of good investing is very little activity, in my opinion, and certainly the idea applies to the Long Term GARP portfolio for this month.
The month of March should be interesting because of the ongoing fiscal cliff budget negotiations in Washington. After the few good months the market has had, many believe market participants are looking for any reason to sell. Interestingly enough, business leaders such as Warren Buffett have been buying companies. The Oracle launched a $23 billion buyout of H.J. Heinz
Liberty Interactive (LINTA) is the owner of QVC, Bodybuilding.com, Provide Commerce, Buyseasons.com, Backcountry.com, and large passive minority positions in other large, well known internet based business like the Home Shopping Network.
Liberty gained a majority stake in TripAdvisor when it bought out Barry Diller’s voting shares. The shares are attributed to the tracking stock of Liberty Ventures. Liberty Interactive reported earnings on February 27, 2013 which was in line with expected results.
Iconix Brands (ICON) is the owner of a broad range of well known brands like OP, Mossimo, Joe Boxer, Peanuts, and Sharper Image. Iconix Brands announced the acquisition of 51% of the the Buffalo David Bitton brand for $76.5 million in cash. The company also raised its earnings guidance for 2013. Later in the month, Iconix announced it would buy 100-year-old denim brand Lee Cooper for $72 million in cash
Quest Diagnostics (DGX) is the largest health care diagnostic testing company in the United States. The company reported disappointing earnings and guidance in January, but did raise their repurchase plans for 2013.
Intuit (INTU) reported earnings on February 21, 2013 which were better than expected because of increased market share in their tax preparation software sales and strength in new acquisitions and payments businesses.
Starbucks (SBUX) is the largest coffee and tea company in the world. Starbucks recently opened their first stores in India at the end of October, and in Vietnam on the first day of February. The company reported record results in January
Liberty Media (LMCA) announced it increased its stake in Sirius (SIRI) Satellite Radio to over 50%, and increased its position in Live Nation (LYV). The company also completed its spin off of Starz Media on January 11, 2013. Liberty Media announced earnings on February 27, 2013 which were in line with expectations.
VCA Antech (WOOF) is the second largest owner of animal hospitals in the United States and also owns the laboratories for diagnostic testing of animals. The company had good growth during the 4th quarter earnings report and continues to buy new animal hospitals to build scale. It did write down the value of one acquisition. Still, I believe the improvement in the top line is a nice sign going into 2013.
IAC Interactive (IACI) is the owner of Ask.com, Match.com, Meetic, Service Magic, Vimeo, CollegeHumor.com, and the Daily Beast, among other web sites. The company reported good results , in my opinion, for the 4th quarter of 2012 on February 6, 2013. IAC Interactive purchased Tutor.com for their first entry in the education market.
Moneygram International (MGI) is the second largest money transfer and bill payment company behind Western Union. The company reported fourth quarter earnings on February 6, 2013 which showed better than expected top line growth.
British Petroleum (BP) also announced better than expected earnings for the 4th quarter of 2012. After having a good month of January, the last month was very tough on the stock. I believe the market is digesting the fact that production volumes will be flat to slightly down for the year, along with the continuing legal issues which BP has to deal with.
The most important situation is the gross negligence allegation for violations of the Clean Water and Air act. The trial will play out over a long period of time and many expect a settlement. In addition, I believe the completion of upgrades to the Whiting Refinery in Indiana should begin to show results starting in 2014.
Unilever (UL) gets over half of its nearly $50 billion of sales in the emerging markets of Asia and Africa. The company currently pays a dividend of 3.7% and has the goal of doubling its sales by 2020.
Here is a link to their most recent earnings report, which showed very good top line growth for a company as large as Unilever, in my opinion.
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The investments discussed are held in client accounts as of March 1, 2013. These investments may or may not be currently held in client accounts. The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or investment decisions we make in the future will be profitable.
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