Sell in May? Maybe not this year

The Concentrated GARP portfolio had a poor month of returns in February as the model lost 3.7%, net of fees, for the month, while the S&P 500 Index (SPX) rose 2.6%. The distinct aspect of this portfolio is focused on companies which we believe are in a good position to grow.

A big part of investing is handling periods of time when your portfolio does not perform or does nothing. In fact, those two situations are usually the norm with investing. However, what happens is after a long while of doing nothing, or worse, your portfolio can have a good week or month, and your returns go from below average or average to very good. So hanging in there is crucial for investing success, just like in other dimensions of life.

We are quickly approaching “Sell in May, and go Away,” the dominant mantra of the last few years during this time in year. So far, that approach has not worked. With the economic tailwinds of low interest rates, a recovery in housing, and lower energy costs and higher energy production, a flipped macroeconomic situation in the United States makes owning stocks a little more palatable.

Gigamedia (GIGM) The company reported a loss again on April 11, 2013,  but said it will be operationally profitable next quarter. The company continues to emphasize the new Gigacloud based business, but the rest of the year will determine how that proceeds.

Digital Globe (DGI) is a satellite provider of commercial earth imagery and information services. Digital Globe closed its acquisition of competitor Geoeye.

Corelogic (CLGX) 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, they provide credit information in a variety of industries as well. The company raised and updated its guidance for 2013

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 earnings in line with expectations.

Dolby Laboratories (DLB) provides audio and video products for the entertainment industry on a global scale. Much of the company’s revenue comes from licensing its 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. The company reported earnings which were better than expected estimates:

Jamba Juice (JMBA) 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.

Cash America (CSH) is the largest operator of pawn shops in the United States. The company reported solid fourth quarter 2012 earnings and announced a buyback.

Build A Bear Workshop (BBW) is a provider of build your own teddy bears for small children.  A value based play on a stock which has been decimated and is dirt cheap. The company pre announced fourth quarter 2012 earnings and the CEO is announcing her retirement. The balance sheet is strong with 45 million in cash and no debt.

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The investments discussed are held in client accounts as of March 31, 2013. These investments may or may not be currently held in client accounts. The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or investment decisions we make in the future will be profitable.