Stock Universe Tournament: The First Participant

nvda_us24may16_to_26nov16

Ok, going to start with the first stock that will participate in the tournament. Each subsequent post will then contain a participant until all eight are officially chosen.

Stock Universe Stock Tournament Participants:

1. Nvidia (NVDA) – As can be seen in the chart above, NVDA has been going steadily up since late June. I was able to buy it for a portfolio right after Brexit hit the stock market. NVDA is currently not far from a new 52 week high at its current price of $93.36. The stock is fairly priced here, but it could continue with recent momentum.

This is one of those stocks of companies that I encounter quite often. Since I run GameOgre.com, I encounter most of the newest games in the PC market. These newer games have a high demand on the latest and greatest in graphics. The main provider of those hot graphics are graphics cards and Nvidia is the current king of graphics cards. No other graphic card maker really comes close. AMD is a rival, but it is not near as prominent as Nvidia. Plus, Nvidia does not have all the baggage that AMD has. NVDA shines as a pure play leader in a very important market. Graphics will continue to push the envelope whether they are on PCs or other devices.

Here is a real world of example of the importance of graphics in new PC games, I bought an Alienware computer back in 2009 for $3000. Now I am at the point that I have to pass on new blockbuster hits like Planet Coaster and Overwatch, because those games require DirectX11 and my current graphics card will not support that. Driver updates do not help either. The graphics card will simply not support Directx11. That means I need another card to play those games or I need a new PC. Want to keep my huge $3000 PC so I will probably get the latest Nvidia card that works on it. With its sound fundamentals, good growth possibilities, and soaring stock price, Nvidia enters the stock Universe Tournament.

Uncertain Times?

This week was the historic presidential election and all the markets were in great turmoil leading up to the big day. Although all the polls seemed to indicate a different route,  Donald Trump won the election to become the next President of the United States. However, this should not come as a complete surprise.  The last debate, at least for me, showed which candidate had the most charisma and actually poise.

In fact, it was just one short period. This is when both candidates were asked the most important question of all the debates combined with all the negativity and arguing. A guy from the audience simply asked what was one good thing about the other candidate. This was the perfect opportunity to show character and community. Well, Hilary Clinton said one thing about his kids and then went back to negativity and her own agenda. In other words, she flubbed the crucial opportunity. Donald Trump actually answered the question correctly and stopped at that. I am not a political person and this is not a political site, but that one question and two answers showed me who had the charisma to win the election.

That said, stocks did not plummet as was predicted with a Trump win. Instead, he gave a good acceptance speech and the stock market actually rallied. Now that the election is finally over, some of the uncertain times are past us. Anybody who predicted the doom of the world likely already lost profits in stocks they sold. I was going to buy more if it fell big, but that did not happen.

Going forward, having just elected a president will help drive away uncertainty for the foreseeable future. Yes, there could be road bumps as he did stir the pot among some groups and there have been protests about the victory, but the stock market is clearly taking it as a positive for now. As always, focus on the best companies and their long term strengths and you should be fine.

Stock Universe Tournament

tournaments

Going to try something I have not done for stocks in over 15 years. When I first started writing for WallStreetCity.com, I started to write series of articles on certain industries. The first were game stocks and I started contacting the different game companies. This was before I started a game site of my own at GameOgre.com. Think it started with one article on games and then one of my contacts at that time suggesting a series on different game companies. Then once that series was completed, we did another and then so on. From that, the concept eventually evolved into a tournament to see which was the best company etc. The tournament took a great deal of work and there were skeptics including one who called it a “dog’s breakfast”, but the whole process rewarded me more than any other articles at that time.  At least the ones I remember anyway.

Ok, this return to tournaments will be very short compared to those from many years ago, but they do need to be simple. If it works out, there should be more than the eight stocks we are starting with here. Look for th estocks to be named this week.

The Fourth Stellar Seven Stock

The fourth stock chosen has taken some time, but it was definitely worth the wait with Kraft-Heinz (KHC). The Stellar Seven portfolio buys this stock at $85.69. Kraft Heinz is not only a very strong company with more well known world-wide food brands than any other company, KHC is also a great dividend stock with a $2.30 per share dividend. In fact, Warren Buffet’s Berkshire Hathaway loves it so much as a dividend stock that it amounts for a whopping 20% of its entire portfolio! Besides Buffet being involved with the stock and the extensive brand portfolio, investors should note that the company’s products are recession resistant  and generates considerable cash flow on a regular basis. With this in mind, we are starting to buy at this price and will continue to buy on any short term weakness.

 

The Third Stellar Seven Stock

johnsonandjohnson

Johnson and Johnson (JNJ) joins the Stellar Seven Portfolio on the strength of both excellent brands and strong dividends. In fact, JNJ is one of the best dividend paying companies in the entire world and have been for 53 straight years. Of course, this is not a stock to trade but to invest in. This particular stock falls under the long term investment category as the fundamentals are rock solid and should be for many years to come.

The Second Stellar Seven Stock

campbellssoup

Once again, brand names drive the addition of a Stellar Seven Stock. This time, Campbell’s Soup (CPB) is the stock. Also the same is strength during a down market. In fact, CPB is raising guidance for the fiscal year. That is very impressive in a bear market and should not be ignored. This will mark five straight quarters that Campbell’s has reported better than expected revenue.

The First Stellar Seven Stock

wd40

The stock added to the Stellar Seven Portfolio is WD- 40 (WDFC). Not only is this one of the best brands in the world, WD directly benefits from the lower crude prices since they do use petroleum in their products. The stock is also at a 52 week high as the company continues to roll on with it very high return on equity (RoE) of around 25%.  With a brand portfolio full of recognizable names such as the Lava Soap, Carpet Fresh, 2000 Flushes, No Vac, and the lucrative Wd-40 franchise, WDFC could be one of the safest stocks to own in the current bear market.

The Stellar Seven Portfolio

In Search of the Stellar Seven

Used to have this format for a portfolio on my very first stock site ages ago called GARP Investor. Still have the domain, but the site itself has not been active for many years. Thankfully, around 2000 I saved a copy of it and my own work at WallStreetCity.com (which is also loooong gone). Many of the companies are gone from that time (especially tech) and technologies have definitely had time to evolve.

That said, think it is time to bring this particular portfolio back. These stocks will be from various industries instead of tied to technology like the Shooting Stars Portfolio. Also buying in a nasty bear market that has fed on many weaker stocks across nearly all industries. Some of these stocks will also have dividends for safety. Some were even bought by me around the year 2000. Surviving over 16 years says a lot about a company, especially in the current environment. Stay tuned because the first stock will be selected tomorrow.

Stellar Seven Portfolio

100 Shares of WDFC at $105.73

100 Shares of CPB at $60.90

100 Shares of JNJ at $104.24

Shooting Star Portfolio January 2016

For stocks, 2016 has started off like an automated riding lawnmower through a bunch of weeds. It just cuts through no matter if good flowers are amongst the weeds or not. The Shooting Star Portfolio has certainly been trimmed pricewise as a few of the components are basically ruined for the foreseeable future post mowing. Twitter and GoPro have both fallen to scary levels. A few others like Skyworks and NXPI have also received hefty trims after rising high for most of the past year. Taser has also fallen quite a bit, but is still above where it was purchased for the portfolio.

I like Brian Sullivan’s analogy on CNBC today that this is a Colonel Kurtz market. Basically, I believe the meaning is that people are just selling everything they can and getting out in this new year. That is a very extreme and scary viewpoint, but does not seem to miss the mark as much as it should. In fact, it could be spot on if the selling pace of today and recently continues.

January 13,2016 Portfolio Prices

Netflix (NFLX) – $106.56

Twitter (TWTR) – $18.68

Avago (AVGO) – $123.31

Taser (TASR) – $15.41

Gilead Sciences (GILD) – $92.54

Skyworks (SWKS) – $62.16

Gopro (GPRO) – $14.61

NXP Semiconductors (NXPI) – $74.25

Although a few stocks should have been sold long before this point and a couple are no longer growth stories going forward, none would be sold yet. Gopro and Twitter are the top candidates to be sold on any type of strength. Taser will be kept because still believe in it for the long haul.

Game Industry Stocks Continue to Rise Higher

After running GameOgre.com for over 12 years, I have seen many popular gaming trends come and go. For example, I was able to register FreeMMORPG.com for just $8 because it never been registered before. Before that, I wrote a large stock series on game companies for Telescan/WallstreetCity.com. Come companies also tend to come and go. Some have been very hot and made investors tremendous profits while others started as laggards and stayed there. Below are the companies that have made it for years and are likely to keep on doing so on the strength of their biggest game franchises.

Game industry Stocks:

TTWO (Take-Two Interactive) – $35.60

  • Grand Theft Auto
  • WWE
  • 2K Sports
  • Evolve
  • Borderlands
  • Bioshock

ATVI (Activision Blizzard) –  $37.51

  • Call of Duty
  • World of Warcraft
  • Diablo
  • Starcraft
  • Heroes of the Storm
  • Guitar Hero
  • Candy Crush Saga (post merger)

EA (Electronic Arts) – $72.42

  • Madden NFL
  • Star Wars
  • Battlefield
  • Mass Effect
  • The Sims
  • Titanfall
  • Dragon Age
  • Crysis
  • FIFA
  • Plants Vs. Zombies

Shooting Star Portfolio Winners and Sells

Winners

Although the portfolio has a few laggards like Twitter and Microsoft, The winners are continuing to expand. Netflix is the biggest winner so far on a dollar per share basis. It is now up a few hundred dollars per share and thinking about offering a stock split again. Other big winners include GoPro, Skyworks, Avago, and Taser.

Sells

The following stocks are being sold from the portfolio because they are no longer viewed as Shooting Stars.

Microsoft (MSFT) – 100 shares at $43.63 is being sold at $45.73 for $4573

Lifelock (LOCK) – 500 shares at $16.42 is being sold at $16.51 for $8255

Qualcomm (QCOM) – 100 shares at $71.89 is being sold at $67.28 for $6728

Alibaba (BABA) – 100 shares at $87.97 is being sold at $88.29 for $8829

These transaction adds $28,385 in cash to the portfolio.

Best Stocks in the $10 to $20 Range

As an individual investor, it sometimes makes more sense to buy shares in companies that trade with a low share price, but pack as much punch as possible. If you only have a $1000 to invest it is not like buying a stock trading for $500 to $1200 per share makes a lot of sense. At best you make get a couple of shares and at worst not even one. However, a stock trading from $10 to $20 can get you between 100 to 50 shares. Those are much better for that type of money, but you still need to try to pick the best stocks possible in that range. With this in mind, here are several stocks that can provide plenty of bang for your portfolio.

$10 to $20 Stocks:

avid

AVID = Avid Technology provides various professional video creative tools. The stock has came back along way from being delisted from the Nasdaq in 2014 as can be seen by its chart above.

afop

AFOP = Alliance Fiber Optic Products has been on a steady rise since early December. The stock has a nice PEG ratio of .62.

kkd

KKD = Krispy Kreme is moving in the opposite direction of the two picks above. It just recently entered this price range. As much as shares have dropped, the valuation is now attractive with a PEG Ratio .85.

lock

LOCK = LifeLock is the one stock in this range that was also bought for the Stock Universe portfolio. The company narrowly beat estimates this quarter, but the stock has been down for nearly all of 2015 so far.

bcor

BCOR= Bluecora, formerly InfoSpace, operates various Internet businesses including Dogpile.com, WebCrawler.com, and HowStuffWorks.com. The company most recently beat earnings estimates by 12 cents and packs the lowest PEG Ratio here with a .61. This one could end up being the best of the five.