Author: Volodymyr Khmurych, BTC Impex Ltd
Covestor model: Long-Short Generalist [no longer active, as of 6/14/11]
Disclosure: Long ADM, ARO, CSCO, LRCX, MSFT, MU, NDAQ, WHR
As of the end of May my portfolio was comprised of the following stocks:
Archer Daniels Midland Company (NYSE: ADM). Large producer and trader of agricultural products, especially of oil seeds, major refiner of corn into ethanol in the US. It has acceptable debt/equity ratio and was able to deliver an impressive return on equity for the last 5 years. The current share price decline was caused by the earthquake off Japan, as that nation is the world’s largest importer of corn. An investment in ADM is a long-term bet on agri-industry and biofuels.
Aeropostale, Inc. (NYSE: ARO). Fashion retailer with focus on the teens segment. The stock price crashed recently after missing earnings expectations and cutting forward earnings guidance. The market overreacted to the news I believe, and at that point I purchased shares. As any clothing retailer,Aeropostale is vulnerable to the whims of fashion, but from a long-term perspective the company is sound: no debt, return on equity impressive over the past few years.. In addition, at this valuation I see it as a possible takeover candidate.
Cisco Systems, Inc. (NASDAQ: CSCO). Large producer of network equipment. Unloved at the moment due to weak earnings growth and shrinking margins. I see this as a good value play with limited downside risk. The company is financially solid, with low debt/equity ratio, strong return on equity and significant cash on the balance sheet.
Lam Research Corporation (NASDAQ: LRCX). Producer of equipment for semiconductor industry. A financially healthy company, low debt, high margins and return on equity. I expect the company to benefit from the current demand growth in the semiconductor industry.
Microsoft Corporation (NASDAQ: MSFT). Largest software maker. It’s an unloved name on Wall Street, but the business is still too good and the stock is cheap. A company with low debt, high margins and strong return on equity.
Micron Technology, Inc. (NASDAQ: MU). Another player in semiconductor industry. The company is expected to benefit from rising memory prices. The stock was acquired at low multiple, and I see the company as financially solid at the moment.
NASDAQ OMX Group, Inc. (NASDAQ: NDAQ). Provider of securities listing and trading services. Financially strong with a low debt/equity ratio. The company is pursuing several growth strategies, expanding both product-wise and geographically.
Whirlpool Corporation (NYSE: WHR). Leading manufacturer of home appliances. A financially solid name with low debt and strong return on equity.
