NEW YORK (TheStreet) -- It's been an interesting first month for the "Super Six" portfolio, my self-described anti-value portfolio which is comprised of high-growth stocks that are exceedingly popular with investors. The portfolio includes Facebook
(FB - Get Report), Twitter
(AMZN - Get Report), salesforce.com
(CRM) and Netflix
Each has a unique position in the market; each has brought forth innovations that have been well received by the consumer, including yours truly. As a collective, these companies are light on profits to a varying degree, but investors are willing to pay up for high revenue growth and the prospects of rich future cash flows. While they are of better quality than many from the 2000 era tech wreck, they are nonetheless priced for near perfection.
However, my value-based dislike of these companies due to their current valuations, and risk in some cases of obsolescence, and competition in others, has not been rewarded. As a collective, these six stocks are up nearly 7% since the late December introduction of the Super Six.
All but LinkedIn, which is down 3%, are in positive territory, with salesforce.com the winner so far, up 15%. The portfolio got a huge boost yesterday when Facebook's better than expected earnings report lifted that stock 14%. Revenue for the quarter rose 63% to $2.59 billion, well ahead of the $2.33 billion consensus, while "adjusted" earnings per share came in at 31 cents, four cents better than the consensus.
Facebook is now a $150 billion market cap stock; bigger than Disney
(INTC), Home Depot
(BA) and a laundry list of other quality companies. I can just hear my brother-in-law, who at Christmas chided me for being anti-Facebook. While highly intelligent, he knows little about the markets, but boasted of his Facebook purchase in the low $20 range, saying "I just knew it would go back up!"
Reading between the lines, what he was saying is that all of my designations, degrees, experience and research mean little because I just don't get growth investing. Perhaps he is right; at this point, however, he certainly looks way smarter than I.
My issue with Amazon is that the company's margins are paper thin. As a consumer, I love Amazon, use it frequently and benefit from the marketplace for goods that it has created. I just don't see how current valuations can be justified for a company that has a sub 1% grocery-store like net margin, or how they will ever boost those margins enough to justify high multiples.
AMZN data by YCharts
I can't wait to see Street.com columnist Rocco Pendola's take on Amazon's latest report. Rocco and I don't see eye to eye on much, although his take on high-flying names often challenges my deep value inclinations. As I recall, he and I have a bet on Amazon; that I now appear to be winning. But it's a long time until year-end. At the time of publication the author held no positions in any of the stocks mentioned. Follow @JonMHellerCFA This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.
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