Author: Yale Bock, Y H & C Investments
Covestor model: Long Term GARP
Disclosure: Long GIGM, DGI, CLGX, CASS, DLB, JMBA
The Concentrated GARP portfolio saw another good month of performance as the model’s top five holdings by volume, including CoreLogic (CLGX), DigitalGloble (DGI), Cass Information Systems (CASS), and Jamba Juice (JMBA) reported good results.
Last year, this portfolio did poorly, but as often is the case, patience has started to resolve whatever questions investors have with this model. August is typically a month of low volume and high volatility, and I would expect nothing different this year.
The fifth holding, Gigamedia (GIGM), reported earnings in May and I finally heard a tone that makes me think they believe they are on the right track. Management is cautious and reserved, which is exactly what they should be.
The main reason I continue to believe this is a company worth owning is of the half ownership and development of a MMPORG game with MTV for Spongebob Squarepants. GIGM has the rights to the properties outside of the United States.
If you ever look at cable ratings for television programs, Spongebob Squarepants is consistently in the top 20. Testing for the game began in July, and time will tell to see what happens with it.
DigitalGlobe is a satellite provider of commercial earth imagery and information services and reported better-than-expected earnings and raised their guidance for next year. Also, the backlog in orders is up 35% for next year, and DGI is in the process of acquiring its chief rival, Geoeye (GEOY).
Give credit to a very opportunistic DGI management and hopefully it will be approved by the Justice Department fairly quickly.
Corelogic is an information provider which specializes in data about real estate related industries. A large part of their data centers on property and mortgage information services. In addition, the company provides credit information in a variety of industries as well and announced very strong results and raised their guidance for the rest of 2012. As a result, the stock has had a nice run.
Cass Information Systems: Cass provides information, invoice, and payment processing services to a wide variety of enterprises in the United States. Cass also has a small banking division as well. The company reported better than expected earnings on July 19, 2012.
Dolby Laboratories (DLB) provides audio and video products for the entertainment industry on a global scale. Much of its revenues comes from licensing their technologies on personal computers, laptops, tablets, and smartphones. In addition, the company makes sound systems for a wide variety of customers, from movie studios, theatres, and network and satellite television providers. Dolby reported earnings on August 2, 2012.
Jamba Juice is a health food and beverage retailer with a presence in 26 states domestically, as well as operations in Canada, the Philippines, and South Korea. Jamba Juice reported earnings on August 1, 2012, and the stock continued its upward path in July.
