This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Why I'm Holding On To Apple

Stocks in this article: AAPL AER AYR BRCM COH DELL DKS GCI HES HMC HPT INDU MET PMC SFLY STO TA

What a quarter!  Nothing like what any of the pundits predicted. The S&P 500 Index (SPX) was up about 10%, the Dow Jones Industrial Average (INDU) was up over 8%, and the Nasdaq was the laggard at around 5%, during the first quarter.  And all despite the “sequester” coming into force during the quarter.

It was a good quarter for passive investors who were 100% invested in a Dow ETF.  But that’s not the way I manage my money. I typically seek to have a cash cushion even in bull markets. It’s currently about 17% in the PWP Growth and Income model and about 37% on the Global Growth Brands model. Given those cushions, I’m happy with Q1 returns of approximately 4% and 2% respectively.

Apple (AAPL) continues to be a disappointment recently. Not the company, which still makes some of the best and most in demand products on planet, but the stock. I suspect that many, if not all, of the momentum traders are now out of the stock and it has become more of a value play than anything.

AAPL Chart

AAPL data by YCharts

For that reason I’m in no hurry to dump the stock.

On a positive note, I had a good run with Shutterfly (SFLY) in the first quarter. It seems that creating custom Christmas cards and family photo albums were in vogue at the end of last year! Other stocks that I sold in the first quarter: Hess (HES), MetLife (MET) and Dell (DELL).

I continue to look for good value and believe I found it last quarter in Coach (COH), Dick’s Sporting Goods (DKS), Gannett (GCI), Honda (HMC), PNC Financial Services (PNC), Statoil (STO), and TravelCenters of America (TA), all of which had been under pressure. I believe these are all good companies with good brands and good management which are positioned to do well in a healthy economy.

Also added in the first quarter were AerCap Holdings (AER), Aircastle (AYR), Broadcom (BRCM), and Hospitality Properties (HPT), each for different reasons. In my opinion, AER and AYR are conservative ways to play a growth in air travel.

I believe that BRCM is a play on the mobile revolution. And HPT is a way to benefit from the pickup in economic activity while collecting a healthy dividend in my opinion.

I have no idea if the market will continue to grow the rest of the year. On the positive side economic growth should continue to provide a tailwind for the market. On the negative (or flat) side the market may have already factored in economic growth for all of 2013 with its Q1 performance.

Regardless, I will continue to look for companies which I believe represent both value and growth relative to the broader market and the economy as a whole. And I will continue to do so until I feel the bull market is getting long in the tooth, which is not the case today.

Until next time many happy returns!

The investments discussed are held in client accounts as of March 31, 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.

Leif Eriksen

Leif Eriksen

I am a long term investor with experience in both good and bad markets. My success is the result of

null

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,416.85 +225.48 1.31%
S&P 500 2,021.25 +19.09 0.95%
NASDAQ 4,683.4070 +45.4130 0.98%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs