Author: Riddhi Ruparelia
Covestor model: Long Term Growth
Disclosures: Long GHDX, IRBT
As I write this on 15th of June, the stock market is shaky and provides another rare opportunity to buy great stocks at very attractive valuations. We believe this is an ideal purchasing time for those with a long term horizon who are willing to accept short term volatility.
Our portfolio is full of strong companies in a solid growth phase. I believe that five years from now, businesses in our model should be considerably stronger, despite all the short term economic uncertainties in the world today.
For example, genetics-based medical diagnostics is clearly a trend that should accelerate at a rapid pace. Our largest position in Genomic Health (NASDAQ: GHDX) reflects our strong belief in this trend and the ability of Genomic Health management to grow with this trend. As Genomic Health’s business model continues to be successful in the U.S. and expand into Europe, we remain confident in our holding in this company.
iRobot (NASDAQ: IRBT), the second largest holding in our portfolio, has market leading products and a strong research team for defense, industrial and consumer applications. Five years out, humanity will likely be using more robots in variety of applications. We therefore believe that a leadership company like iRobot in such an emerging upstart industry is an attractive stock at today’s valuation.
A closing note on the same theme. Given that the model is currently fully invested and we have an extraordinary opportunity presented by the stock market, we will likely be using leverage soon. As long as we are able to pick up great companies at very attractive prices according to our valuation methods, we will buy some more equities with a goal to add around 25% on margin in the short term.
Happy investing to all!
