Spring FadeUntil three weeks ago, the holiday portfolio was moving right ahead with the broader market. Then inflation worries, growth concerns and market jitters began to impact all stocks, especially those in the holiday portfolio. When you get market action like you have seen in the last three weeks and a group of diversified stocks begins to underperform the market, it's important to think about a couple of issues:
Banking on ProfitsThe holiday portfolio is a great example of the power of diversity. While four of the six stocks in the portfolio are lower, the power of Compass Bancshares ( CBSS) has kept the portfolio in the game. A solid credit portfolio, good growth in its core Southeastern markets and recent merger and acquisition activity in the banking world have pushed Compass shares higher. In fact, this week's deal between AmSouth ( ASO) and Regions Financial ( RF) again put the spotlight on Compass as a potential consolidation candidate among Southeast regionals. Finally, while Pfizer ( PFE) is a bit lower than it was during our look over the Easter holiday, the pharmaceutical industry should continue to be a part of a diversified portfolio. Hopefully, as temperatures rise, the holiday portfolio will warm up as well. Regardless, these picks remain a nicely diversified group of operating companies that should, over time, provide solid operating results. Enjoy your Memorial Day weekend.
|Company/Ticker||Recent Price||Price 12/31/2005||Change||Indicated Ann. Div.||Current Yield|
|Chesapeake Energy (CHK:NYSE)||30||31.73||-5.45%||$0.20||0.67%|
|Compass Bancshares (CBSS:Nasdaq)||55.5||48.25||15.03%||$1.56||2.81%|
|General Electric (GE:NYSE)||34.42||35.05||-1.80%||$1.00||2.91%|
|S&P 500 Y-T-D||1.97%|
|Source: TSC Research, Company Reports|