The Long Term GARP investment portfolio rose 1.2% (net of fees) in the month of April 2013, which was better than the S&P 500 Index performance of 1.8%. Many companies in the portfolio reported good earnings and also provided strong guidance for the remainder of 2013.
We believe a primary way to build the asset value of a portfolio is to own companies which grow their revenues and earnings quarter after quarter, year after year. Every portfolio is trying to accomplish this task and those enterprises which show growth with their results ultimately get rewarded. There were a few hiccups this quarter, but in general, the companies in the portfolio had a nice quarter.
Liberty Interactive (LINTA) is the owner of QVC, Bodybuilding.com, Provide Commerce, Buyseasons.com, and Backcountry.com, and has large passive minority positions in other large, well known internet based business like the Home Shopping Network.
Liberty Interactive 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 Group (LVNTA). Liberty Interactive will report earnings on May 8, 2013.
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 strong results for the first quarter of 2013, and increased their guidance for the rest of the year.
Quest Diagnostics (DGX) is the largest health care diagnostic testing company in the United States. The company again showed disappointing earnings and guidance in April, but did raise their repurchase plans for 2013.
Intuit (INTU) announced the tax reporting period for 2013 was a bit soft. The company will report earnings on May 21, 2013. Starbucks is the largest coffee and tea company in the world. It reported strong earnings on April 25, 2013.
Liberty Media (LMCA) has assets inside a holding company structure that includes Starz Media, the Atlanta Braves, 50% ownership of Sirius Satellite (SIRI), almost 20% ownership of Live Nation (LYV), 16% ownership of Barnes & Noble, and a few other non controlling positions of small public and private enterprises.
VCA Antech (WOOF) is the second largest owner of animal hospitals in the United States and also owns laboratories for the diagnostic testing of animals. The company announced good first quarter earnings, continues to buy existing animal hospitals, and announced a $125 million buyback.
IAC Interactive (IACI) owns Ask.com, Match.com, Meetic, Service Magic, Vimeo, CollegeHumor.com, and the Daily Beast, among other web sites. The company announced solid results on April 30,2013, bought back 1.4 million shares during the quarter, and initiated a new 10 million share buyback program.
Moneygram International (MGI) is the second largest money transfer and bill payment company behind Western Union. The company reported good earnings on May 2, 2013. British Petroleum (BP) announced better than expected earnings for the 1st quarter of 2013.
Unilever (UL) is a massive food company based in the UK that gets over half of its nearly $50 billion of sales in the emerging markets of Asia and Africa. Unilever reported a good quarter and raised the dividend by over 10%.
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*A tracking stock is a type of common stock that "tracks" or depends on the financial performance of a specific business unit or operating division of a company—rather than the operations of the company as a whole. Tracking stocks trade as separate securities. As a result, if the unit or division does well, the value of the tracking stock may increase—even if the company as a whole performs poorly. The opposite may also be true.
The investments discussed are held in client accounts as of April 30, 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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