Archive for December, 2024
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The 2025 Buy List
Eddy Elfenbein, December 31st, 2024 at 9:35 pmHere are the 25 stocks for the 2025 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 2024. Whenever I discuss how the Buy List is doing, the list below is what I’m referring to.
Here are the five new buys with their starting Buy Below prices:
Adobe ($480)
Allison Transmission ($115)
Henry Schein ($75)
IES Holdings ($220)
Mueller Industries ($85)The five sells are:
AFLAC
Celanese
Farmer Mac
Hershey
PolarisHere are the corporate descriptions from Dun & Bradstreet of our five new stocks:
Adobe is one of the largest and most diversified software companies in the world. It has been known for brands such as Acrobat, Photoshop, and Adobe Document Cloud. Adobe serves customers such as content creators and web application developers with its digital media products, and marketers, advertisers, publishers, and others with its digital marketing business. Its creative cloud offering is a cloud-based subscription offering that enables creative professionals and enthusiasts alike to express themselves with apps and services for video, design, photography and the web that connect across devices, platforms and geographies. The Americas account for about 60% of revenue. The company was founded in 1982.
Allison Transmission is the world’s largest manufacturer of fully-automatic transmissions for medium- and heavy-duty commercial vehicles and medium- and heavy-tactical US defense vehicles and a leader in electrified propulsion systems. Its products are used in vehicles such as on-highway trucks, transit buses, motorhomes, off-highway vehicles and equipment, and defense vehicles. In addition to the sale of propulsion solutions, it also sells branded replacement parts, support equipment, and aluminum die-cast components, among others. The company also makes electric drives for transit buses and shuttles and its ReTran remanufactured transmissions for aftermarket customers. The US accounts for most of the company’s revenue, but Allison also serves customers in the Americas, EMEA, and APAC regions. The company traces its historical roots back to 1915.
Henry Schein is the world’s largest provider of health care products and services primarily to office-based dental and medical practitioners, as well as alternate sites of care. It provides everything from infection-control products, hand-pieces, preventatives, impression materials, composites, anesthetics, and dental implants to vaccines, surgical products, diagnostic tests, infection-control products, and X-ray products. Other offerings include practice management, business analytics, patient engagement, and patient demand software, repair services, and financial services. The company stocks a comprehensive selection of more than 300,000 branded products and Henry Schein corporate brand products through its main distribution centers. The US accounts for about 70% of its revenue. Founded in 1932 by Henry and Esther Schein as a storefront pharmacy, Henry Schein became a public company in 1995.
IES designs and installs integrated electrical and technology systems and provides infrastructure products and services to a variety of end markets, including data centers, residential housing, and commercial and industrial facilities. Our more than 9,000 employees serve clients in the United States.
Mueller Industries is a leading manufacturer of copper, brass, aluminum, and plastic products. The range of products it manufactures is broad copper tube and fittings, line sets, steel nipples, brass rod, bar, and shapes, aluminum and brass forgings, compressed gas valves, refrigeration valves and fittings, and insulated flexible duct systems, to name a few. It also resells a myriad of products, including brass and plastic plumbing valves, plastic fittings, malleable iron fittings, faucets, and plumbing specialty products. Its operations are divided among three segments: Piping Systems, Industrial Metals, and Climate. The company’s products are used in a wide range of applications including transportation, automotive, and industrial applications, among others. With operations in North America, Europe, Asia, and the Middle East, Muller Industries generates most of its revenue in the US.
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The 2024 Buy List
Eddy Elfenbein, December 31st, 2024 at 2:56 pmThe 2024 investing year is on the books!
This was another good year for Wall Street. In fact, this was the best two-year run the market has had since the 1990s, and it happened despite a lot of scary headlines.
Investors didn’t seem to mind. The S&P 500 notched 57 record closes this year. Not too long ago, many of the smart minds on Wall Street assumed that we’d have a recession. Not so!
In September, the Federal Reserve decided to cut interest rates for the first time in more than four years. Now the Fed seems to be having second thoughts about the pace of those rate cuts.
Higher-risk areas of the market did especially well in 2024. Bitcoin doubled, and gold had its best year since 2010.
This century is one-quarter over. The S&P 500 Total Return index is up 538.76% over the last 25 years, which works out to 7.7% per year (not including inflation), but it’s been a hit-or-miss century. Since the March 2009 low, the S&P 500 Total Return is up over 1,000%. As late as 2011, the market was underwater for the century.
I’m pleased to say that the 2025 Buy List performed well, although we didn’t do as well as the overall market. Much of this can explained by the sharp turn towards risk.
For the year, the S&P 500 gained 23.31%, and with dividends it was up 25.02%. Our Buy List was up 10.36% for the year, and with dividends, the gain was 11.61%. Much of our underperformance came during the last month of the year.
In 2024, the Buy List had a “beta” of 0.7255. That’s unusually low for us. I think this shows us how much risk the rest of the market was absorbing.
For the 19 years of the Buy List, the S&P 500 with dividends is up 583.91%, while our Buy List is up 656.85%.
Here’s a look at our Buy List versus the S&P 500 throughout the year (this doesn’t include dividends).
FICO was our biggest winner this year, with a gain of 71%. Last year, it was our second-biggest winner, and the year before that it was our biggest winner.
Fiserv and Miller Industries did well for us this year. Both gained 54%.
Celanese was our biggest loser this year, but that came after a 52% gain in 2023. Polar and Hershey were also down for us in 2024. Hershey was our biggest loser in 2023.
A year ago, we decided to sell TREX after it gained 95% for us in in 2023. Trex fell 16% this year.
McGrath RentCorp may have had the most dramatic year in 2024. It soared in January after it announced it was being bought out, but the deal dragged on for months as the government took a closer look. Finally, both companies decided to ditch the merger.
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 2024. For tracking purposes, I assume the Buy List is a $1 million portfolio and that all 25 stocks are equally weighted at the start of the year.
Note that Amphenol split 2-for-1 on June 12.
Here’s the data behind the dividend-adjusted returns. I’ve listed each stock’s beginning price, ending price and dividend-adjusted starting price.
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Every Buy List Stock
Eddy Elfenbein, December 31st, 2024 at 2:22 pmHere are all 111 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