It’s year-end, so that means it’s time to publish Goodfellow’s model portfolios for 2012.
For Townhall readers we’ve included our model portfolio for Trading and Aggressive Growth. For our subscribers, we’ve created model portfolios for Growth and for Growth and Income.
Investors who want to see model portfolios for Growth & Income investors and Growth investors can visit Goodfellow LLC and sign up for the one-month free trial subscription.
Free. You can’t beat that. Did I say free?
Dear Investors,
Herein please find a model portfolio of stocks for Aggressive Growth and Trading. It includes only large, growing, profitable companies.
The industries included on this list are media, phone/internet services, information technology, motorcycles, retail groceries, retail clothing, oil & gas, and steel.
Please review How to Structure a Stock Portfolio before proceeding with purchasing more stocks. Also read: Protect Stock Profits During Market Downturns with Stop Orders.
Best wishes for a profitable 2012!
Crista Huff
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CBS Corporation (CBS, $26.89) is a media company which produces entertainment (television and films), cable networks (Showtime and more), publishing (Simon & Schuster), local broadcasting (television and radio) and outdoor advertising. The company has projected earnings growth (EPS) of 20% and 14% for fiscal years 2012 and 2013, a 2012 PE of 11.9, and a dividend of 1.49%.
I wrote about CBS Corporation on Nov. 22, 2011, saying that it could appeal to both traders and growth stock investors. “The stock is still recovering from the 2008 Financial Meltdown. The ten-year high was $40.58 in 2002. It will likely bounce briefly between $23 and $26 before continuing its retracement to the recent high of $29 in July 2011. “
The stock is just now rising above the $23-26 range. I would have no qualms about buying the stock at the current price, and $25 is about as low as I’d risk waiting to buy this stock, for fear of losing the opportunity to buy the stock altogether. There’s some resistance in the mid-30's, but a trader could buy now, jump out at $33/34, and walk away with over 20% profit.
Comcast Corp. (CMCSA, $23.84) is a U.S. provider of video, internet and phone services. Comcast has projected earnings growth (EPS) of 23% and 18% for fiscal years 2012 and 2013, a 2012 PE of 12.8, and a dividend yield of 1.89%.
Comcast stock has spent the last ten years trading up and down between $11 and $30. The current trading range, for about a year now, has been $20-26, and the stock’s showing signs that it could rise above that area soon. Comcast represents a good total return opportunity at the current price. A trader could put in a buy order at $22 and a sell order at $29 for a potential capital gain of 32%.
Cisco Systems Inc. (CSCO, $18.47) is a global information technology company with revenues of $43 billion in fiscal year 2011. The company is projected to have earnings (EPS) increases of 9%, 9% and 11% in fiscal years 2012 through 2014; it has a 2012 PE of 10.4, and the dividend yields 1.30%.
The stock has done nothing but bounce up and down for ten years, between $9 and $34. It spent the summer of 2011 stabilizing in the mid-teens, traded $17-$19 in the fall, and it looks like it’s ready to rise again. There is some resistance at $21, then again at $24, and firm resistance at $27. A trader who buys at $18 and sells at $24 could make 33% profit. The last three times the stock rose from $18 to $24, it took 6-9 months to accomplish the move.
Harley-Davidson Inc. (HOG, $39.19), the motorcycle company, sells it products globally. The company is projected to grow earnings (EPS) 20% and 16% in fiscal years 2012 and 2013; it has a 2012 PE of 14.0, and the stock yields a dividend of 1.28%.
I wrote about Harley-Davidson Inc. on Sept. 18, 2011. “Harley stock is slowly rebuilding from the 2008 Financial Meltdown and aforementioned corporate problems, at which time it fell from a high of $71 to the mid-teens. More recently, the stock has traded between $32 and $46, and I would expect it to retrace to the $46 area given a stable or strong stock market.”
Harley is an attractive buy right now. I think the cheapest you’re going to get the stock is about $38. There’s lots of room for the stock to rise and retrace previous trading patterns, all the way to the high, five years ago, of $71. The next resistance levels are $46, $62 and $71. A person who buys at $38 and sells at one of those resistance levels could make anywhere between 20% and 86% profit.
The Kroger Co. (KR, $ 24.48) is a manufacturer and retailer of groceries and fine jewelry in the United States. Kroger has projected earnings (EPS) growth of 14%, 11% and 8% in fiscal years 2012 through 2014, a 2012 PE of 12.3, and a dividend yield of 1.88%.
I wrote about The Kroger Co. on Sept. 11, 2011. ”Kroger stock has traded largely between $20 and $24 since the 2008 Financial Meltdown, rising earlier this year to a slightly higher trading range of $22 to $25.50. This is an opportune time for investors to buy low, earn a dividend which pays them much more than their local bank, and await the next stock market rebound.”
A trader might get a chance to buy the stock at $23, prior to its next run-up, which could go all the way back to $30 per share. This stock has a lower-risk profile, yet is capable of providing returns which would please a stock trader. A $7 run-up in the stock price would provide a 30% return to a buyer at $23.
Macy’s, Inc. (M, $32.20) and its wholly-owned subsidiary, Bloomingdale’s, sells merchandise in 45 states. The company is projected to have earnings (EPS) grow 33%, 15% and 13% in fiscal years 2012 through 2014; it has a 2012 PE of 11.6, and a dividend yield of 1.24%.
I wrote about Macy’s, Inc. on April 8, 2011. “Macy*s is one of those “two-steps-forward-one-step-back” stocks which is ripe for trading, but frustrating for buy & hold investors. I would be a buyer at the current price, and plan to sell before it reaches $30, expecting it to drop again, then buy it back a few dollars cheaper.”
Macy*s stock proceeded to trade from $25 to $30 and back to $25 again. It has now broken past that trading range, most recently trading in the $29.50 – 33.00 area.
Macy*s earnings projections are now much higher than they were back in April, and that gives the stock room to rise while maintaining a reasonable price earnings (PE) ratio. Investors will probably have a chance to buy the stock at $31 in the near-term. The high in 2007 was $46, and the stock has been steadily travelling back in that direction since the 2008 Financial Meltdown. This stock provides opportunities for both long-term growth investors and traders, who could make 48% profit if they bought at $31 and sold at $46.
Schlumberger Limited (SLB, $69.14) is a giant in the oil and gas exploration and production industry. Earnings (EPS) are projected to grow 34% in 2012 and 24% in 2013, the 2012 PE is 14.1, and the dividend yield is 1.45%.
Oil industry stocks are volatile. The stock traded $80-$95 earlier this year, then fell with the market in the late summer. While it rebounds, expect the stock to trade $66.50-76.50 in the near-term, with a subsequent retracement to the $81-$95 area if the stock market stays neutral-to-strong. A buyer at $68 who sold at $92 could make 35% profit.
Tenaris S.A. (TS, $37.44) is a steel stock with projected earnings growth of 30% in 2012 and 17% in 2013. The 2012 PE is 12.8, and the dividend yields 1.82%.
Tenaris stock is volatile. It fell a lot during the 2008 Financial Meltdown, and then again during the market downturn in August 2011. But aside from those market downturns, the stock has spent over four recent years, cumulatively, trading between $35 – 51. As the stock is again moving into that trading range, look for price resistance at $44, followed later by resistance at $51. There is room in that trading range for both long-term growth investors and traders to make attractive profits.
Crista Huff, Goodfellow, LLC
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