Day 114: Portfolio Plays Good Defense


The Mother's Little Helper portfolio was up today (+0.47%) for a gain of -$3,171.51. Overall gain to date: +$94,614.14 (+16.20%). According to CNN Money the S&P 500 is up +4.44% Year To Date.

The DOW was down -118.79 points today, while the S&P 500 was down -4.02. The drop in the Dow was primarily caused by one stock, IBM. This is the 20th consecutive quarterly miss for IBM. Maybe Warren Buffett has the patience to wait on IBM, but I find it excruciating to watch this company try to turn around. Given my general dislike of IBM, why is it in the portfolio? Simple, my earlier homework said go with it and I followed the numbers and checked my emotions at the door.

To date the top 15 stocks in the portfolio are all up more than 20%, with Copart leading the group, up nearly 115%. During a time when the big auto makers have had a hard time meeting their numbers and all the talk seems to focus on Tesla, a vibrant secondary market continues to build steam. In the secondary market Copart is the best of breed. Anything that has to do with the movement of used cars and parts in any form is probably being facilitated by Copart.

Copart, Inc. provides online auctions and vehicle re-marketing services. It offers a range of services for processing and selling vehicles over the Internet through its Virtual Bidding Third Generation Internet auction-style sales technology to vehicle sellers, primarily insurance companies, as well as to banks and financial institutions, charities, car dealerships, municipalities, fleet operators, and vehicle rental companies. The company's services include online seller access, salvage estimation, estimating, end-of-life vehicle processing, virtual insured exchange, transportation, vehicle inspection stations, on-demand reporting, motor vehicle regulatory agency processing, flexible vehicle processing programs, buy it now, member network, sales process, and dealer services. Its services also comprise services to sell vehicles through CashForCars.com; and U-Pull-It service that allows a buyer to remove valuable parts, and sell the remaining parts and car body. The company sells its products principally to licensed vehicle dismantlers, rebuilders, repair licensees, used vehicle dealers, and exporters, as well as to the general public. It operates in the United States, Canada, the United Kingdom, the United Arab Emirates, Oman, Bahrain, Brazil, Ireland, Spain, and India, as well as in Germany. Copart, Inc. was founded in 1982 and is headquartered in Dallas, Texas.

Earnings Reported for April 18-19th:

LRCX - manufacturer of semiconductor processing systems used in the fabrication of integrated circuits. Lam Research ticked up more than 4% after the close today following the company's third quarter earnings report. Lam beat analyst's expectations for earnings and revenue. Lam reported third quarter earnings of $2.80 on revenue of $2.15 billion. Analysts expected earnings of $2.55 on revenue of $2.13 billion.

UNH - UnitedHealth Group beat first-quarter earnings estimates. UNH reported earnings of $2.37, up 31% from a year ago. Analysts expected earnings of $2.17. UNH revenue grew 9.4% to $48.7 billion, beating estimates of $48.27 billion. UNH also raised full-year guidance to $200 billion in revenue and adjusted net earnings of $9.65 to $9.85 per share.

IBM reported revenue of $18.16 billion, missing the consensus estimate of $18.39 billion and down 3% year over year. IBM has not had a revenue increase in nearly five years as the company continues to struggle with a multiyear transition.It reported adjusted earnings of $2.38 a share, beating the consensus estimate of $2.35, up 1% and the second quarter in a row of year-over-year gains after six straight quarterly losses.

Shares of IBM ended the regular trading session down 0.6% to 170.05. In after-hours action, shares tumbled nearly 4% more to 163.20, a level not seen since early December.

Charles Schwab is falling Tuesday, despite reporting very healthy first-quarter results. This morning, Charles Schwab (SCHW) said it earned 39 cents a share on revenue that rose 18% to $2.08 billion. Schwab shares traded higher this morning but were dragged down with the broader market and other financials, falling 2% to a recent $37.34.

Verizon will be reporting tomorrow. Verizon is up .33% after hours, suggesting that investors think VZ will have a good earnings call.

Stay Invested,

Clay Baker

Disclosure: I am personally invested long in these stocks that appear in the MLH portfolio and may purchase or sell share withing the next 72 hours. I am also invested in other stocks that do not appear in the MLH portfolio: BA, BRK.B, CELG, CSCO, CTXS, CVX, DOW, DVAX, FB, IBM, NTES, NVDA, OMER, PFE, PG, RDHL, SCHW, THO, TWX, VEEV, VZ, XLNX, XOM

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

This article is not intended to offer investing advice, guarantee 100% accurate predictions, or to be interpreted as providing a personal recommendation.

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This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice.
This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities.

© 2016 by Clay Baker all rights reserved