Archive for December, 2020

  • The 2021 Buy List
    , December 31st, 2020 at 11:14 pm

    Here are the 25 stocks for the 2021 Buy List. It’s locked and sealed, and I can’t make any changes for 12 months.

    For tracking purposes, I assume the Buy List is a $1 million portfolio that’s equally divided among 25 stocks. Below are all 25 positions with the number of shares for each and the closing price for 2020. Whenever I discuss how the Buy List is doing, the list below is what I’m referring to.

    Company Ticker Price Shares Balance
    Abbott Laboratories ABT $109.49 365.330167 $40,000.00
    AFLAC AFL $44.47 899.482797 $40,000.00
    Ansys ANSS $363.80 109.950522 $40,000.00
    Broadridge Financial Solutions BR $153.20 261.096606 $40,000.00
    Cerner CERN $78.48 509.683996 $40,000.00
    Check Point Software CHKP $132.91 300.955534 $40,000.00
    Church & Dwight CHD $87.23 458.557836 $40,000.00
    Danaher DHR $222.14 180.066625 $40,000.00
    Disney DIS $181.18 220.774920 $40,000.00
    FactSet FDS $332.50 120.300752 $40,000.00
    Fiserv FISV $113.86 351.308625 $40,000.00
    HEICO HEI $132.40 302.114804 $40,000.00
    Hershey HSY $152.33 262.587803 $40,000.00
    Intercontinental Exchange ICE $115.29 346.951167 $40,000.00
    Middleby MIDD $128.92 310.269935 $40,000.00
    Miller Industries MLR $38.02 1,052.077854 $40,000.00
    Moody’s MCO $290.24 137.816979 $40,000.00
    Ross Stores ROST $122.81 325.706376 $40,000.00
    Sherwin-Williams SHW $734.91 54.428433 $40,000.00
    Silgan SLGN $37.08 1,078.748652 $40,000.00
    Stepan SCL $119.32 335.232987 $40,000.00
    Stryker SYK $245.04 163.238655 $40,000.00
    Thermo Fisher TMO $465.78 85.877453 $40,000.00
    Trex TREX $83.72 477.783086 $40,000.00
    Zoetis ZTS $165.50 241.691843 $40,000.00
    Total $1,000,000.00

    The five new stocks are Abbott Laboratories (ABT), HEICO (HEI), Miller Industries (MLR), Thermo Fisher Scientific (TMO) and Zoetis (ZTS).

    The five sells are Becton, Dickinson (BDX), Eagle Bancorp (EGBN), Globe Life (GL), Hormel Foods (HRL) and RPM International (RPM).

    Disney (DIS) is our largest stock, with a market cap of $328 billion. The Buy List is mostly large- and mid-cap stocks. Miller Industries (MLR) is our smallest stock with a market cap of $434 million. Stepan (SCL) is the next smallest and it’s six times larger than Miller.

    Only AFLAC (AFL) and Fiserv (FISV) have been on the Buy List all 16 years. This is Stryker’s (SYK) 14th year.

    Here’s a brief description (via Hoovers) of our five new stocks:

    With activities ranging from filling baby bottles to making generic medications and cardiovascular devices, Abbott Laboratories (ABT) is a diverse health care products manufacturer. Its cardiovascular and neuromodulation segment makes products for cardiac rhythm management, electrophysiology, and other areas of cardiovascular care. Abbott’s diagnostics division makes laboratory testing systems and point-of-care tests. The nutritional products division makes such well-known brands as Similac infant formula and Ensure supplements. Abbott also sells branded generic medicines (including gastroenterology and women’s health products) in emerging markets and makes the FreeStyle diabetes care line.

    As one of the world’s largest independent providers of aircraft replacement parts, HEICO Corporation (HEI) helps jets get airborne. Its Flight Support Group makes FAA-approved replacement parts for jet engines that can be substituted for original parts, including airfoils, bearings, and fuel pump gears. Flight Support also repairs, overhauls, and distributes jet engine parts as well as avionics and instruments for commercial air carriers. HEICO’s second segment, Electronic Technologies Group, makes a variety of electronic equipment for the aerospace/defense, electronic, medical, and telecommunications industries. The company generates about 65% of revenue in the US.

    This body builder wants to pump up your chassis. Miller Industries (MLR) makes bodies for light- and heavy-duty wreckers, along with car carriers and multi-vehicle trailers. It serves as the official recovery team at some of the NASCAR races (including Talladega), as well as the Indy 500 races. Miller makes its recovery and towing vehicles at plants in the US and Europe. Its multi-vehicle transport trailers can carry as many as eight vehicles and loads up to 75 tons. Miller Industries’ US brand names include Century, Challenger, Champion, Chevron, Eagle, Holmes, Titan, and Vulcan. The company’s European brands are Jige (France) and Boniface (UK). Miller and rival Jerr-Dan dominate the US market for wrecker bodies.

    Thermo Fisher Scientific (TMO) preps the laboratory for research, analysis, discovery, or diagnostics. The company makes and distributes analytical instruments, scientific equipment, consumables, and other laboratory supplies. Products range from chromatographs and spectrometers to Erlenmeyer flasks and fume hoods to gene-sequencers. Moving into other areas, it offers testing and manufacturing of drugs, including biologicals. Thermo Fisher also provides specialty diagnostic testing products, as well as clinical analytical tools. The company tallies more than 400,000 customers worldwide. Its key markets are pharmaceutical and biotech, diagnostics and health care, academic and government, and industrial and applied research. Nearly half of the company’s sales were generated in the US.

    Whether you have cats or cattle, Zoetis (ZTS) has medicines to keep them healthy. The company manufactures and sells veterinary products such as parasiticides (to protect against fleas, ticks, and worms), anti-infectives, medicated feed additives, vaccines, and other pharmaceuticals for companion and farm animals. Zoetis boasts more than 300 product lines sold in more than 100 countries around the world, making it one of the world’s largest animal health businesses. In addition to medications and vaccines, Zoetis offers diagnostics, genetic tests, biodevices, and a range of services. About half of the company’s total revenue is generated from the US.

  • The 2020 Buy List
    , December 31st, 2020 at 10:17 pm

    The 2020 trading year is on the books! What a difficult year this was for everyone. I’ll admit that I’m not sad to leave 2020 behind.

    Let’s look at our performance. For 2020, the S&P 500 gained 16.26% while our Buy List gained 16.79%. However, once we include dividends, then the S&P 500 gained 18.40% while our Buy List gained 17.93%.

    So we lost to the overall market by less than 0.5%. In our defense, we managed to keep with the market in a very difficult year. We didn’t own any of the tech behemoths that saw tremendous gains in 2020. To give you an example, the S&P 500 Equal Weight index, which weighs every member the same, gained 10.47% in 2020. That means we beat most stocks.

    For the long-term, we’ve done quite well. Over the last 15 years, our Buy List has gained 383.05% while the S&P 500 has gained 311.00%.

    Our biggest winner in 2020 was Trex (TREX) which gained over 86%. Danaher (DHR) and Ansys (ANSS) were second and third, respectively. AFLAC (AFL) was our worst performer in 2020, which is very unusual for the duck stock.

    For people who care about such things, the “beta” of our Buy List in 2020 was 0.9246. The correlation of the daily changes of the Buy List to the changes of the S&P 500 was 96.52%.

    The chart below details our Buy List’s performance. I’ve listed each stock along with the number of shares and the starting and ending prices. For tracking purposes, I assume the Buy List is a $1 million portfolio that starts out equally divided among the 25 stocks.

    Stock Shares 12/31/19 Beginning 12/31/20 Ending Profit/Loss
    AFL 756.14367 $52.90 $40,000.00 $44.47 $33,625.71 -15.94%
    ANSS 155.39412 $257.41 $40,000.00 $363.80 $56,532.38 41.33%
    BDX 147.07505 $271.97 $40,000.00 $250.22 $36,801.12 -8.00%
    BR 323.78177 $123.54 $40,000.00 $153.20 $49,603.37 24.01%
    CERN 545.03338 $73.39 $40,000.00 $78.48 $42,774.22 6.94%
    CHD 568.66648 $70.34 $40,000.00 $87.23 $49,604.78 24.01%
    CHKP 360.49027 $110.96 $40,000.00 $132.91 $47,912.76 19.78%
    DHR 260.62028 $153.48 $40,000.00 $222.14 $57,894.19 44.74%
    DIS 276.56779 $144.63 $40,000.00 $181.18 $50,108.55 25.27%
    EGBN 822.53753 $48.63 $40,000.00 $41.30 $33,970.80 -15.07%
    FDS 149.08684 $268.30 $40,000.00 $332.50 $49,571.37 23.93%
    FISV 345.93099 $115.63 $40,000.00 $113.86 $39,387.70 -1.53%
    GL 380.04751 $105.25 $40,000.00 $94.96 $36,089.31 -9.78%
    HRL 886.72135 $45.11 $40,000.00 $46.61 $41,330.08 3.33%
    HSY 272.14587 $146.98 $40,000.00 $152.33 $41,455.98 3.64%
    ICE 432.19881 $92.55 $40,000.00 $115.29 $49,828.20 24.57%
    MCO 168.48490 $237.41 $40,000.00 $290.24 $48,901.06 22.25%
    MIDD 365.23009 $109.52 $40,000.00 $128.92 $47,085.46 17.71%
    ROST 343.58358 $116.42 $40,000.00 $122.81 $42,195.50 5.49%
    RPM 521.10474 $76.76 $40,000.00 $90.78 $47,305.89 18.26%
    SCL 390.47247 $102.44 $40,000.00 $119.32 $46,591.18 16.48%
    SHW 68.54714 $583.54 $40,000.00 $734.91 $50,375.98 25.94%
    SLGN 1,287.00129 $31.08 $40,000.00 $37.08 $47,722.01 19.31%
    SYK 190.53063 $209.94 $40,000.00 $245.04 $46,687.63 16.72%
    TREX 890.07566 $44.94 $40,000.00 $83.72 $74,517.13 86.29%
    Total $1,000,000.00 $1,167,872.36 16.79%

    Trex (TREX) split 2-for-1 on September 15.

    Here’s how the Buy List performed throughout the year:

    Here’s the data behind the dividend-adjusted returns. I’ve listed each stock’s beginning price, ending price and dividend-adjusted starting price.

    Symbol Start Finish Adju Start Gain Gain w/Divs
    AFL $52.90 $44.47 $51.47 -15.94% -13.60%
    ANSS $257.41 $363.80 $257.41 41.33% 41.33%
    BDX $271.97 $250.22 $268.34 -8.00% -6.75%
    BR $123.54 $153.20 $121.31 24.01% 26.29%
    CERN $73.39 $78.48 $72.59 6.94% 8.11%
    CHD $70.34 $87.23 $69.53 24.01% 25.46%
    CHKP $110.96 $132.91 $110.96 19.78% 19.78%
    DHR $153.48 $222.14 $152.85 44.74% 45.33%
    DIS $144.63 $181.18 $144.63 25.27% 25.27%
    EGBN $48.63 $41.30 $47.36 -15.07% -12.80%
    FDS $268.30 $332.50 $265.73 23.93% 25.13%
    FISV $115.63 $113.86 $115.63 -1.53% -1.53%
    GL $105.25 $94.96 $104.26 -9.78% -8.92%
    HRL $45.11 $46.61 $44.23 3.33% 5.38%
    HSY $146.98 $152.33 $143.85 3.64% 5.90%
    ICE $92.55 $115.29 $91.39 24.57% 26.15%
    MCO $237.41 $290.24 $235.46 22.25% 23.27%
    MIDD $109.52 $128.92 $109.52 17.71% 17.71%
    ROST $116.42 $122.81 $116.06 5.49% 5.82%
    RPM $76.76 $90.78 $75.29 18.26% 20.57%
    SCL $102.44 $119.32 $101.34 16.48% 17.74%
    SHW $583.54 $734.91 $578.43 25.94% 27.05%
    SLGN $31.08 $37.08 $30.63 19.31% 21.06%
    SYK $209.94 $245.04 $207.37 16.72% 18.17%
    TREX $44.94 $83.72 $44.94 86.29% 86.29%
    Total 16.79% 17.93%

  • Every Buy List Stock
    , December 31st, 2020 at 10:01 am

    Here are all 94 Buy List stocks and when they made the cut.

    Stocks ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21
    ABT X X
    ADS X X X
    AFL X X X X X X X X X X X X X X X X
    ANSS X X
    APH X X X
    AXTA X
    BAX X X
    BBBY X X X X X X X X X X X
    BCR X X X X X X
    BDX X X X X X X
    BER/WRB X X
    BIIB X
    BLL X
    BMET X X
    BR X X X
    BRO X
    CA X X X
    CBPX X X X
    CERN X X X X X X
    CHD X X X X
    CHKP X X X X
    CLC X
    CNK X
    CSV X
    CTSH X X X X X X X X
    DCI X X X X
    DELL X
    DHR X X X X X X X X X
    DIS X X X
    DLX X
    DTV X X X
    EBAY/PYPL X X
    EGBN X X
    ESRX X X X X
    EV X X
    EXPD X
    F X X X X X X
    FDS X X X X X X X X X
    FIC X X
    FISV X X X X X X X X X X X X X X X X
    GDW/WB X
    GGG X
    GILD X X
    GL/TMK X X X
    HCBK X
    HD X
    HEI X X X
    HOG X X X
    HRL X X X X X X
    HRS X X
    HSY X X X
    IBM X
    ICE X X X X X
    INGR X X
    INTC X
    JNJ X X X
    JOSB X X X X X X
    JPM X X X
    LLY X X
    LNCR X
    LUK X X X X
    MCD X
    MCO X X X X X
    MDT X X X X X X X X X
    MIDD X X
    MOG-A X X X X X X X X
    MSFT X X X X X
    MLR X
    NICK X X X X X X X
    ORCL X X X X X
    QCOM X X
    RAI X X X
    RESP X X
    ROST X X X X X X X X X
    RPM X X X X
    RTN X
    SBNY X X X X X
    SEIC X X X X X
    SHW X X X X X
    SJM X X X
    SCL X X
    SLGN X X
    SNA X X X X
    SRCL X
    SYK X X X X X X X X X X X X X X
    SYY X X X X X X X
    TMO X
    TREX X X
    UNH X X X
    VAR X X
    WAB X X X X
    WFC X X X X
    WXS/WEX X X X X
    ZTS X

    AFLAC and Fiserv are the only two left that have been on every year. Stryker is on for the 14th year in a row.

  • Morning News: December 31, 2020
    , December 31st, 2020 at 7:09 am

    COVID-19 Shook, Rattled and Rolled the Global Economy in 2020

    China and E.U. Leaders Strike Investment Deal, but Political Hurdles Await

    Chinese Tech Stocks Are in Hot Water. It May Not Last.

    Fewer Companies Caught the Deal Bug in the Year of the Pandemic

    Emergency Cash Calls, Tech IPO Frenzy Push 2020 Banker Fees to Record High

    Wall Street Revives Dream of a Bitcoin ETF With New SEC Filing

    Stimulus Money Should Have Gone to the Jobless, Economists Say

    Homebuyers in U.S. Face Worst Affordability Squeeze in 12 Years

    German Automakers Are Charged Up and Ready to Take on Tesla

    Tesla Short Sellers Lost $38 Billion in 2020 as Stock Surged

    Amazon Buys Wondery as Podcasting Race Continues

    FAFSA’s Expected Family Contribution Is Going Away. Good Riddance.

    The 2020 Good Tech Awards

    Ben Carlson: Animal Spirits: Everyone Knows Everything

    Joshua Brown: Talk Less, Listen More

    Be sure to follow me on Twitter.

  • S&P 500 = 3,737
    , December 30th, 2020 at 2:10 pm

    It’s the second-to-last trading day of 2020. We had more vaccine news this morning. The U.K. government authorized the AstraZeneca vaccine.

    The S&P 500 is up in record territory. The cyclicals are strong today and small-caps are doing especially well.

    The National Association of Realtors reported this morning that pending home sales fell by 2.6% last month. Still, year-over-year contract signings are up 16.4%.

    Tomorrow is the final day of trading in a tumultuous year. This year, we had the second, fifth and 13th worst daily percentage loss in the history of the DJIA. We also had the fourth, 11th and 19th best gains. This all happened in a three-week period.

  • Morning News: December 30, 2020
    , December 30th, 2020 at 7:05 am

    Japanese Stocks Are Soaring. What’s Behind the Surge.

    Drive for $2,000 Checks Bogs Down in Senate Despite Trump Push

    IPOs Paid Out Big for U.S. Investors in 2020

    Bitcoin Jumps to Record $28,600 As 2020 Rally Reaches New Heights

    NFL’s Russell Okung to Get 50% of His $13 Million Salary in Bitcoin

    Human-Run Hedge Funds Trounce Quants in Covid Year

    10 Ways Covid-19 Has Changed the World Economy Forever

    What 2020 Was Like for People in the Retail Industry

    Surprise Ending for Publishers: In 2020, Business Was Good

    China Eyes Shrinking Jack Ma’s Business Empire

    Jack Ma Has Lost $11 Billion in Two Months on China Scrutiny

    Nick Maggiulli: Should You Buy An All-time High?

    Ben Carlson: 9 Questions I Have For 2021

    Michael Batnick: Posts of the Year

    Howard Lindzon: More 2021 Predictions ….Is SnowFlake Overvalued?

    Joshua Brown: How to Avoid Bear Markets

    Be sure to follow me on Twitter.

  • The Battle for $2,000 Checks
    , December 29th, 2020 at 11:20 am

    Here’s the S&P 500 lately: Four straight downs, three straight ups, three straight downs, four straight ups. At least, we’re on pace for our fourth-straight up day which would be another all-time high close for the S&P 500.

    The Buy List and the S&P 500 are neck and neck this year. I’ll have all the details this Friday, on New Year’s Day. It looks like it may come down to the final trading day.

    There’s not much economic news this morning. The Case-Shiller report said that home prices rose by 8.4% over the last year. The House of Representatives voted for $2,000 stimulus checks, in apparent agreement with President Trump. Now it’s up to the Senate to see what happens.

    When asked whether the $600 payments were still on course to go out starting this week as Treasury Secretary Steven Mnuchin previously said, a senior Treasury official said the department expects to make the payments on the same timeline he discussed. If Congress does approve the $2,000 checks, the department will then add to the already issued money.

    In a statement explaining his decision to sign the legislation Sunday, Trump noted that the House and potentially the Senate could move to approve larger cash deposits. However, most Republicans in the GOP-held Senate have opposed even a $1,200 check.

    Trump’s gambit caps a chaotic eight months of efforts in Washington to send another round of coronavirus relief. Americans waited months for more help after financial lifelines that aided them through the early months of the pandemic expired over the summer. Trump’s delays in signing the year-end bill may cost millions of jobless Americans a week of unemployment benefits after two key relief programs briefly expired.

    Update: As I was writing this, the S&P 500 turned negative.

  • Morning News: December 29, 2020
    , December 29th, 2020 at 7:09 am

    A Historic Oil Price Collapse, With Worries Headed Into 2021

    Oil’s Turbulent Year Stirs Debate on Relevance of Benchmarks

    UAE Emerges As Hub For Companies Helping Venezuela Avoid U.S. Oil Sanctions

    The Gospel of Hydrogen Power

    Market Edges Toward Euphoria, Despite Pandemic’s Toll

    In Pandemic, Fed Showed Its Muscle In Markets Still Matters

    A Nation’s Economy Divided: Breadlines vs. Bread Makers

    Stanford Scientists Create a Billionaire Factory

    Qualtrics Files for U.S. IPO Two Years After Sale to SAP

    Tesla to Make India Debut ‘Early’ Next Year

    Fiat Chrysler to Start Building Electric Cars in Poland in 2022

    Ben Carlson: The Biggest Market Comeback of the Year & Type I and Type II Charlatans

    Michael Batnick: Why I’m Not Selling Bitcoin & Two Different Markets

    Jeff Carter: Sometimes They Don’t Work

    Howard Lindzon: Momentum Monday – Anything Goes…This Is Not Your FAANG Market Anymore.

    Be sure to follow me on Twitter.

  • Stocks Jump to New High on Stimulus
    , December 28th, 2020 at 12:06 pm

    The stock market is up again this morning. It’s hard to read the mind of the market, but I suspect that traders are pleased that President Trump signed the stimulus bill into law.

    At one point, the S&P 500 got to another new all-time intra-day high of 3,737.82. The Dow got to a new high as well. Tech is leading and Energy is lagging. Airlines are doing well. Small-caps, which had been doing so well, are also lagging the overall market.

    All the 11 major S&P sectors were higher, with financial, energy and industrials among the biggest gainers.

    The S&P 1500 airlines index added 2.2% as carriers are set to receive $15 billion in addition payroll assistance under the new government aid.

    Cruise operators Royal Caribbean Cruises Ltd, Carnival Corp and Norwegian Cruise Line Holdings Ltd also rose between 3.3% and 4.3%.

    Trading volumes are expected to be thin in the final week of the year that has historically been a seasonally strong period for equities.

    After a sharp recovery from a coronavirus crash in March, the S&P 500 is on track to rise more than 15% this year on the back of a loose monetary policy, high liquidity and a COVID-19 vaccine program.

  • CWS Market Review – December 25, 2020
    , December 25th, 2020 at 2:00 pm

    I hope you’re having a wonderful Christmas. Here are the 25 stocks for the 2021 Crossing Wall Street Buy List:

    Abbott Laboratories (ABT)
    AFLAC (AFL)
    Ansys (ANSS)
    Broadridge Financial Solutions (BR)
    Cerner (CERN)
    Check Point Software Technologies (CHKP)
    Church & Dwight (CHD)
    Danaher (DHR)
    Disney (DIS)
    FactSet Research Systems (FDS)
    Fiserv (FISV)
    HEICO (HEI)
    Hershey (HSY)
    Intercontinental Exchange (ICE)
    Middleby (MIDD)
    Miller Industries (MLR)
    Moody’s (MCO)
    Ross Stores (ROST)
    Sherwin-Williams (SHW)
    Silgan (SLGN)
    Stepan (SCL)
    Stryker (SYK)
    Thermo Fisher Scientific (TMO)
    Trex (TREX)
    Zoetis (ZTS)

    The five new stocks are Abbott Laboratories (ABT), HEICO (HEI), Miller Industries (MLR), Thermo Fisher Scientific (TMO) and Zoetis (ZTS).

    Briefly, Abbott Labs is a diversified healthcare giant. HEICO is a former Buy List member. The company makes replacement airplane parts. Miller has a great niche business. They make and sell towing and recovery equipment. If a car or truck needs to be hauled out of something and then hauled away somewhere, odds are Miller’s got a vehicle that can do it. Thermo Fisher makes all the stuff researchers need for lab work. Zoetis is a major player in animal health.

    I’ll have more details on the new buys in upcoming issues.

    The five sells are Becton, Dickinson (BDX), Eagle Bancorp (EGBN), Globe Life (GL), Hormel Foods (HRL) and RPM International (RPM).

    To recap, I assume the Buy List is equally weighted among the 25 stocks. The buy price for each stock will be the closing price on Tuesday, December 31, 2020. The new Buy List goes into effect on Monday, January 4, 2021, the first day of trading of the new year.

    I’ll send you another email on January 1 with all the performance details for 2020 and the rebalancing numbers for 2021.

    If you’re a shareholder of the AdvisorShares Focused Equity ETF (CWS), all portfolio changes are made automatically. Also, at the end of the year, all the positions are rebalanced automatically.

    I also wanted to touch on FactSet’s (FDS) earnings report, which came out on Monday. For its fiscal Q1, FactSet earned $2.88 per share. That beat Wall Street’s estimate of $2.75 per share. Overall, it was a solid quarter for FactSet. For the coming year (ending in August), FactSet sees earnings ranging between $10.75 and $11.15 per share. You can see more details on the blog.

    Happy Holidays! – Eddy