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Three companies are slated for sale in the portfolio due to negative earnings growth relative to prior quarters. Note that this is *growth*, not the raw numbers. The companies are:
JPM
ROK
STT
JPM has been on the radar for a couple of weeks and has been a a tear since it reported earnings. The ratchet-method that I use to get out of a stock has been applied here and works well -- you can see that as the stock has advanced the stop-market sell ratchet keeps catching the gains and as a result, I'm still holding:
Selling Rationale
JPM EPS dropped -37% on a YoY basis.
ROK has slowed -19% in trailing twelve-month EPS values, which is a criteria for sale. STT had a bad quarter compared to the same quarter a year ago, reporting a 30% drop in EPS relative to the same quarter a year ago, also triggering sale.
Dividend Impact
JPM went xDiv on 1/4, record date of 1/5, and a pay date of 1/31. I am expecting $0.54/share. We bought JPM on 1/3.
ROK ownership is outside the xDiv and record dates so we expect no dividend payment.
STT ownership was just after the xDiv and record dates, so again, we expect no dividend payment.
Replacement Positions
I've removed buy orders for replacement purchases; as cash is freed up I will post new screen outputs and rationale why new positions are being added.
Performance to Date
Open profit on the account ($98K invested) is $4.8K, as of 10:25 a.m. ET the morning of 1/25. This could all vaporize with a significant down day, but part of the portfolio construction concept (optimize Sharpe Ratio) maximizes return vs. volatility ratio, so the overall portfolio should be less volatile than the market. Because this is driving via the rear-view mirror, there is no guarantee that this will actually be the case. The exponentially-weighted volatility/beta calculation is 1.2, meaning that if the benchmark S&P 500 is 1, the existing portfolio is expected to vary 20% more than the volatility of the S&P 500, and this could be either up or down in performance.
Using the most recent rear-view-looking data, the existing portfolio holdings are projecting a 14.12% return with 8.6% volatility, resulting in a most recent holding (non-optimized) SR of 1.50. The 14.12% expected return is on a baseline of 12% for the S&P 500, so the expected alpha is ~ 2.12% (or so).
Onward and upward....
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As with all my ramblings, you are responsible for your own investment decisions and I am not. Please do your own diligence, and please take ownership for your actions.
Regards,
pgd
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