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As we celebrate Memorial Day, I use this column to appropriately memorialize the performance of the holiday portfolio so far this year. Since last we looked at the group of five holiday stocks over the Easter break, there have been a few small changes and a lot of sideways trading.

I'll take a closer look at the five members of the portfolio, but first let's quickly review the purpose of the holiday portfolio.

All Year Long

I created this portfolio three years ago in an attempt to track a concentrated portfolio of core equities for an entire year. In doing so, it gives us a chance to think longer-term about the fundamentals of a company's business and its industry. We follow the stocks in the holiday portfolio throughout the year regardless of their performance. A stock is removed from the portfolio only if it merges with another company or stops trading on a major exchange.

Not only should the portfolio serve as a forum for more in-depth discussion of investment decisions and company strategy, it should also reinforce the importance of ongoing portfolio analysis. In addition, through occasional comments on the stocks in


Columnist Conversation, it provides an opportunity to look at both short-term trading strategies and longer-term investment strategies with the same stocks.

This year's twist is the readers' selection. On

New Year's Day, I asked you to review the stocks you routinely follow and send me your best idea for the portfolio. After a lengthy elimination process, you picked


(PFE) - Get Pfizer Inc. Report

, which we'll call the American Idol of the holiday portfolio.

High Rise Sinking

Before looking at those contributing to portfolio success, I first turn to the challenged names in the portfolio. The first,

Equity Office Properties


, is the largest office-focused real estate investment trust, or REIT, in the U.S. Under the leadership of real estate maven Sam Zell, Equity Office grew from a small Chicago real estate company to a REIT with national reach, currently owning over 700 properties comprising 120 million square feet of office space from coast to coast.

While that's impressive, it's also depressing when there is a glut of office space on the market, especially in areas like Northern California, a market that Equity Office made a large commitment to through acquisitions near the top of the last property cycle. And, as I have noted many times before, the real estate recovery always lags the economic recovery. So, while there is good news on many economic fronts, the Equity Office story remains challenged.

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That said, between Sam Zell and CEO Richard Kincaid, Equity Office is positioning its portfolio to benefit from future growth, selling noncore properties and looking at acquisitions in promising markets. While challenges remain, the company did say that it saw a reduction in tenant improvement costs and early lease terminations in the first quarter, typically a sign of future operating improvements.

This week the company also announced an increase in its share repurchase program, a sign management thinks its own equity is a solid investment. Concerns remain that the company may not earn enough to cover its dividend in 2004. While that's somewhat troubling -- and indicates that the dividend is not likely to be increased anytime soon -- management is committed to maintaining the current dividend level through the downturn, and I remain largely convinced they will.

A sharp downturn in performance would change my mind, but the economic recovery should begin helping the real estate markets later this year. And, with a 7%-plus yield, I remain willing to wait for the recovery. Equity Office also offers a direct stock purchase plan that provides individual investors a very low-cost way to average into the stock and reinvest dividends. A great way to build long-term positions is in income-producing equities like REITs.

The other name in the portfolio that has struggled a little is


(PFE) - Get Pfizer Inc. Report

. However, the company posted first-quarter results above expectations and continues to benefit from blockbusters like Lipitor, Norvasc, Celebrex and Xalatan. On the weak side, Viagra and Zithromax both had lackluster quarters.

The company maintained its earnings guidance of $2.13 per share and $54 billion in revenue for 2004, suggesting the stock remains a value at current prices. While patent expirations are always a concern, the pipeline looks decent for Pfizer, making it a nice big pharma stock for long-term investors.


The best performer in the portfolio to date is


(COP) - Get ConocoPhillips Report

, up more than 10% since January yet still sporting a 2.4% yield. While smaller than an


(XOM) - Get Exxon Mobil Corporation Report


Royal Dutch


, ConocoPhillips is in the sweet spot of the oil and natural gas business. With solid exploration opportunities and a strong midstream and retail component, $40 oil and $6 natural gas provide real profit power for the company. More importantly, the company will post terrific results even with $30 oil and $5 natural gas.

That said, if OPEC boosts quotas and the Bush administration continues to work hard to bring gasoline prices down ahead of the election, this stock may take a breather. No reason to sell, but if you are looking for new positions, you are likely to have an opportunity to buy at slightly better prices in the coming weeks. It remains my favorite integrated energy play.

Also doing well is

First Horizon

(FHN) - Get First Horizon Corporation Report

, formerly known as First Tennessee. Changing its name to reflect its diverse businesses better, First Horizon continues to exceed expectations, beating first-quarter estimates by a nickel. Growth continues in its traditional banking business and its capital markets business. The company keeps improving its financial metrics and should continue to see benefits from an improving economy.

The largest worry was that the

Federal Reserve

would change its policy regarding the use of Trust Preferred Securities in bank capital structure, which could have impacted the company's robust business in those securities. In early May, however, the Fed did not make meaningful changes to the regulations, which was viewed as a positive for First Horizon.

Finally, there is little to say about

General Electric

(GE) - Get General Electric Company Report

since we discussed its prospects in April. The stock hasn't changed much, and neither has the story: It remains a broad-market and economic-recovery play, and should perk up as the market does in the second half of the year.

As Memorial Day begins the traditional summer season, enjoy the holiday and remember the sunscreen.

At time of publication, Edmonds was long ConocoPhillips and Equity Office Properties, although holdings can change at any time.

Christopher S. Edmonds is vice president and director of research at Pritchard Capital Partners, a New Orleans energy investment firm. He is based in Atlanta. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. While Edmonds cannot provide investment advice or recommendations, he welcomes your feedback and invites you to send it to