Archive for December, 2022
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The 2023 Buy List
Eddy Elfenbein, December 31st, 2022 at 9:06 pmHere are the 25 stocks for the 2023 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 2022. Whenever I discuss how the Buy List is doing, the list below is what I’m referring to.
Company Ticker Price Balance Shares Abbott Laboratories ABT $109.79 $40,000.00 364.331906 Aflac AFL $71.94 $40,000.00 556.018905 AmerisourceBergen ABC $165.71 $40,000.00 241.385553 Broadridge Financial Solutions BR $134.13 $40,000.00 298.218147 Carrier Global CARR $41.25 $40,000.00 969.696970 Celanese CE $102.24 $40,000.00 391.236307 Danaher DHR $265.42 $40,000.00 150.704544 FactSet Research Systems FDS $401.21 $40,000.00 99.698412 FICO FICO $598.58 $40,000.00 66.824819 Fiserv FISV $101.07 $40,000.00 395.765311 HEICO HEI $153.64 $40,000.00 260.348867 Hershey HSY $231.57 $40,000.00 172.733947 Intercontinental Exchange ICE $102.59 $40,000.00 389.901550 Intuit INTU $389.22 $40,000.00 102.769642 Middleby MIDD $133.90 $40,000.00 298.730396 Miller Industries MLR $26.66 $40,000.00 1,500.375094 Moody’s MCO $278.62 $40,000.00 143.564712 Otis Worldwide OTIS $78.31 $40,000.00 510.790448 Polaris PII $101.00 $40,000.00 396.039604 Science Applications International SAIC $110.93 $40,000.00 360.587758 Silgan Holdings SLGN $51.84 $40,000.00 771.604938 Stepan SCL $106.46 $40,000.00 375.727973 Stryker SYK $244.49 $40,000.00 163.605873 Thermo Fisher Scientific TMO $550.69 $40,000.00 72.636147 Trex TREX $42.33 $40,000.00 944.956296 Total $1,000,000.00 Here are the five new buys with their starting Buy Below prices:
AmerisourceBergen ($180)
Celanese ($110)
Intuit ($410)
Middleby ($140)
Polaris ($110)The five sells are:
Church & Dwight
Reynolds Consumer Products
Ross Stores
Sherwin-Williams
ZoetisHere are the corporate descriptions of our five new stocks:
AmerisourceBergen fosters a positive impact on the health of people and communities around the world by advancing the development and delivery of pharmaceuticals and healthcare products. As a leading global healthcare company, with a foundation in pharmaceutical distribution and solutions for manufacturers, pharmacies and providers, we create unparalleled access, efficiency and reliability for human and animal health. Our approximately 44,000 global team members power our purpose: We are united in our responsibility to create healthier futures. AmerisourceBergen is ranked #10 on the Fortune 500 with more than $200 billion in annual revenue.
Celanese Corporation is a global chemical leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Our businesses use the full breadth of Celanese’s global chemistry, technology and commercial expertise to create value for our customers, employees, shareholders and the corporation. As we partner with our customers to solve their most critical business needs, we strive to make a positive impact on our communities and the world through The Celanese Foundation. Based in Dallas, Celanese employs approximately 13,000 employees worldwide and had 2021 net sales of $8.5 billion.
Intuit is the global financial technology platform that powers prosperity for the people and communities we serve. With more than 100 million customers worldwide using TurboTax, Credit Karma, QuickBooks, and Mailchimp, we believe that everyone should have the opportunity to prosper. We never stop working to find new, innovative ways to make that possible.
The Middleby Corporation is a global leader in the foodservice industry. The company develops and manufactures a broad line of solutions used in commercial foodservice, food processing, and residential kitchens. Supporting the company’s pursuit of the most sophisticated innovation, the state-of-the-art Middleby Innovation Kitchens showcases and demonstrates the most advanced Middleby solutions. In 2022 Middleby was named a World’s Best Employer by Forbes and is a proud philanthropic partner to organizations addressing food insecurity.
As the global leader in powersports, Polaris Inc. (NYSE: PII) pioneers product breakthroughs and enriching experiences and services that have invited people to discover the joy of being outdoors since our founding in 1954. Polaris’ high-quality product line-up includes the Polaris RANGER®, RZR® and Polaris GENERAL™ side-by-side off-road vehicles; Sportsman® all-terrain off-road vehicles; military and commercial off-road vehicles; snowmobiles; Indian Motorcycle® mid-size and heavyweight motorcycles; Slingshot® moto-roadsters; Aixam quadricycles; Goupil electric vehicles; and pontoon and deck boats, including industry-leading Bennington pontoons. Polaris enhances the riding experience with a robust portfolio of parts, garments, and accessories. Proudly headquartered in Minnesota, Polaris serves more than 100 countries across the globe.
In terms of market value, Thermo Fisher (TMO) is our biggest stock at $216 billion. Danaher (DHR) and Abbott Labs (ABT) are both near $190 billion. Thirteen of the 25 stocks have market values between $10 billion and $70 million.
Miller Industries (MLR) is our smallest stock. Stepan (SCL) is our second smallest, and it’s about eight times larger than Miller.
The 2022 Buy List
Eddy Elfenbein, December 31st, 2022 at 1:47 pmThe 2022 investing year is on the books!
This was a difficult year for Wall Street. The stock market had its worst year since the financial crisis. The S&P 500 peaked on the first trading day of the year, and it was downhill from there.
Investors were rattled by the highest inflation in 40 years and seven Fed interest-rate hikes. Many of the former popular stocks were especially punished this year. The market reached its low in October (at least, its low so far). Along the way, investors were treated to a few bear-market rallies, and each one fizzled out.
The good news is that the 2022 Buy List held up well. We were down, but not as much as the rest of the market. This was our best year relative to the overall market in 12 years. This is especially impressive when you consider that we got off to a rocky start. By April, our Buy List was trailing the market by more than 4%.
Keeping calm paid off. Let’s look over the numbers. For the year, the S&P 500 lost 19.44%. Including dividends, it was down 18.11%. Our Buy List was down 10.42%. Including dividends, we were down 9.28%.
For the 17 years of the Buy List, the S&P 500 with dividends is up 333.17%, while our Buy List is up 435.73%.
The Buy List had a “beta” this year of 0.8274.
Our best stock of the year was FICO (FICO), which gained 38.03% (before dividends). Not far behind that was SAIC (SAIC), a newcomer, which was up 32.75%. In third place was AFLAC (AFL), which has been a fixture of all 18 Buy Lists. The duck stock was up 23.21%.
Seven of our 25 stocks closed higher this year. Our worst stock this year was Trex (TREX). The deck stock lost 68.65% this year. Even if Trex had jumped 90% on the final day of trading, it still would have been our worst stock. Ironically, Trex was our best stock last year and the year before.
I should give a special “Come from Behind” award to Ross Stores (ROST). The deep-discounter plunged during the first half of the year but staged a furious rally in the second to close just barely in the black for this year. ROST finished this year 67% above its 52-week low.
Ross Stores won’t be returning in 2023, but it’s been a big winner. In 10 years, shares of ROST gained 329% for us. Sherwin-Williams (SHW) made 165% in six years, and Church & Dwight (CHD) made 60% in five years.
How did our sells from last year do? Not so well. Middleby lost 32%. Ansys was down by 40%, and Disney lost 44%. Cerner was bought by Oracle, and Check Point Software gained 8%.
I always strive to be as transparent as possible when discussing our track record. Here’s a breakdown of how our Buy List performed in 2022. For tracking purposes, I assume the Buy List is a $1 million portfolio and all 25 stocks are equally weighted at the start of the year.
Stock Shares 12/31/21 Beginning 12/30/22 Ending Profit/Loss ABT 284.212022 $140.74 $40,000.00 $109.79 $31,203.64 -21.99% AFL 685.048810 $58.39 $40,000.00 $71.94 $49,282.41 23.21% BR 218.794443 $182.82 $40,000.00 $134.13 $29,346.90 -26.63% CARR 737.463127 $54.24 $40,000.00 $41.25 $30,420.35 -23.95% CHD 390.243902 $102.50 $40,000.00 $80.61 $31,457.56 -21.36% DHR 121.576852 $329.01 $40,000.00 $265.42 $32,268.93 -19.33% FDS 82.302833 $486.01 $40,000.00 $401.21 $33,020.72 -17.45% FICO 92.236032 $433.67 $40,000.00 $598.58 $55,210.64 38.03% FISV 385.393583 $103.79 $40,000.00 $101.07 $38,951.73 -2.62% HEI 277.354042 $144.22 $40,000.00 $153.64 $42,612.68 6.53% HSY 206.750401 $193.47 $40,000.00 $231.57 $47,877.19 19.69% ICE 292.461797 $136.77 $40,000.00 $102.59 $30,003.66 -24.99% MCO 102.411798 $390.58 $40,000.00 $278.62 $28,533.98 -28.67% MLR 1,197.604790 $33.40 $40,000.00 $26.66 $31,928.14 -20.18% OTIS 459.400482 $87.07 $40,000.00 $78.31 $35,975.65 -10.06% REYN 1,273.885350 $31.40 $40,000.00 $29.98 $38,191.08 -4.52% ROST 350.017501 $114.28 $40,000.00 $116.07 $40,626.53 1.57% SAIC 478.526139 $83.59 $40,000.00 $110.93 $53,082.90 32.71% SCL 321.827983 $124.29 $40,000.00 $106.46 $34,261.81 -14.35% SHW 113.584734 $352.16 $40,000.00 $237.33 $26,957.06 -32.61% SLGN 933.706816 $42.84 $40,000.00 $51.84 $48,403.36 21.01% SYK 149.577444 $267.42 $40,000.00 $244.49 $36,570.19 -8.57% TMO 59.948444 $667.24 $40,000.00 $550.69 $33,013.01 -17.47% TREX 296.230467 $135.03 $40,000.00 $42.33 $12,539.44 -68.65% ZTS 163.914273 $244.03 $40,000.00 $146.55 $24,021.64 -39.95% Total $1,000,000.00 $895,761.20 -10.42% Here’s the data behind the dividend-adjusted returns. I’ve listed each stock’s beginning price, ending price and dividend-adjusted starting price.
Stock Start Finish Adju Start Gain Gain w/Divs ABT $140.74 $109.79 $138.42 -21.99% -20.68% AFL $58.39 $71.94 $56.91 23.21% 26.41% BR $182.82 $134.13 $179.47 -26.63% -25.26% CARR $54.24 $41.25 $53.35 -23.95% -22.68% CHD $102.50 $80.61 $101.28 -21.36% -20.41% DHR $329.01 $265.42 $327.76 -19.33% -19.02% FDS $486.01 $401.21 $481.93 -17.45% -16.75% FICO $433.67 $598.58 $433.67 38.03% 38.03% FISV $103.79 $101.07 $103.79 -2.62% -2.62% HEI $144.22 $153.64 $144.03 6.53% 6.67% HSY $193.47 $231.57 $190.03 19.69% 21.86% ICE $136.77 $102.59 $134.84 -24.99% -23.92% MCO $390.58 $278.62 $386.97 -28.67% -28.00% MLR $33.40 $26.66 $32.48 -20.18% -17.92% OTIS $87.07 $78.31 $85.83 -10.06% -8.76% REYN $31.40 $29.98 $30.43 -4.52% -1.48% ROST $114.28 $116.07 $112.76 1.57% 2.94% SAIC $83.59 $110.93 $82.20 32.71% 34.95% SCL $124.29 $106.46 $122.71 -14.35% -13.24% SHW $352.16 $237.33 $348.82 -32.61% -31.96% SLGN $42.84 $51.84 $42.26 21.01% 22.67% SYK $267.42 $244.49 $264.08 -8.57% -7.42% TMO $667.24 $550.69 $665.77 -17.47% -17.29% TREX $135.03 $42.33 $135.03 -68.65% -68.65% ZTS $244.03 $146.55 $242.25 -39.95% -39.50% Total -10.42% -9.28% The Buy List used to yield much less than the S&P 500, but it’s been much closer in recent years.
Every Buy List Stock
Eddy Elfenbein, December 31st, 2022 at 10:22 amHere are all 102 Buy List stocks and when they made the cut.
Eddy Elfenbein is a Washington, DC-based speaker, portfolio manager and editor of the blog Crossing Wall Street. His