This week, manager Andy Schornack added a few new positions to his portfolio. Andy uses a bottom-up approach to investing, which means he looks at the strength of individual stocks rather than predicting what sectors might be affected by the broader economy. He also focuses on the real estate and financial services stocks, two sectors which have been hit extremely hard over the past few years. But his instincts and analysis have done well since he has outperformed the S&P 500 since March.
With a low price to earnings ratio, steadily increasing stockholder equity and low price to sales ratio, Universal Insurance Holdings Inc (AMEX:UVE) is an attractive pick for a bottom-up portfolio. As we head further into the anticipatedly busy 2010 hurricane season, it is hard to predict how this company (who primarily handles the underwriting and claims processing of homeowners insurance) will fare.
Another buy that Andy added to his portfolio this week was LaBranche & Co Inc (NYSE:LAB). This broker-dealer has a low price to sales ratio and a reasonable price to book ratio. Over the last 5 years the price of LAB has fallen over 44%, which is a more significant loss than some of its competitors have experienced and in addition their stockholder equity has dropped steadily over the past three years. In January, the broker-dealer was acquired by Barclays PLC (NYSE:BCS) for $25 million, which has increased the stock price significantly from its 2009 pre-acquisition lows.
