By Sherman LeeThe S&P 500 index returned +3.31% in third quarter of 2016 compared to -6.94% in the same quarter last year. The third quarter return was all attributable to July's performance as both August and September returns were slightly negative. During the second quarter, I added three new positions, and reduced one position in the Prudent Value Portfolio.
The largest of the three purchases was Robert Half International, Inc. (RHI) in the staffing & outsourcing services space.RHI provides specialized staffing and risk consulting services. RHI has staffing and consulting operations in more than 400 locations worldwide.The company's second-quarter earnings per share improved $0.04 over prior year's Q2, but missed analyst expectations by -$0.02.The market reacted negatively by pushing RHI down to 52-week lows where the portfolio was able to pick up shares at a fair price, in my view.
In the Prudent Value With Options Portfolio, I entered into four equity option transactions.The largest transaction was a multi-leg buy-write of American International Group (AIG). The buy-write was deep-in-the money, where the call option was sold at a strike price much lower than the price paid for the underlying stock.