Rebalance & Review of Defensive High ROIC Portfolio

This week we performed our monthly rebalancing. 

This portfolio is made up of the 15 defensive stocks that are trading at the highest Return On Investment Capital (ROIC).  The first week of each month we will review the list, and make any trades necessary to get the portfolio to match the list.  Every week we examine the portfolio’s performance against the S&P 500 and Dow Jones Industrial Average, and reinvest any dividends.  The list of defensive stocks is made by following modernized Benjamin Graham strategies, and ROIC is calculated with a formula based on Warren Buffett’s definition of Owner Earnings and Contributed Capital.

This week we sold Briggs & Stratton Corp (BGG) at $26.98 for $7,139.70, a gain of 9.4%.  We sold Lancaster Colony Corp (LANC) at $43.16 for $7,327.20, a gain of 12.4%.  We sold Stride Rite Corp (SRR) at $13.68 for $7,103.60, a gain of 9.3%.

We bought Reliance Steel & Aluminum Co (RS) at $31.91 for $6,870.65, Masco Corp (MAS) at $26.84 for $6,854.20, and Talbots Inc (TLB) at $21.47 for $6,773.05.

Finally, we reviewed the portfolio for any positions that had fallen below 6% of the entire portfolio.  We discovered that M.D.C. Holdings Inc. had fallen to 5.9% of the portfolio, so we upped our holding in that company by purchasing an additional 20 shares at $40.45.  This rebalanced the portfolio among all 15 stocks on our list. 

The portfolio underperformed both the DJIA and S&P 500 indexes this week, but has slightly outperformed them overall. 

The current value is calculated using prices near close from Thursday.

The snapshot:

Ticker

Total Cost

Current Value

% Gain/Loss

BN $6,450.00 $6,595.40 2.25%
CAE $6,470.20 $6,859.80 6.02%
DHI $6,527.35 $6,681.15 2.36%
FL $6,490.00 $6,485.40 -0.07%
JNY $6,544.00 $6,804.60 3.98%
KBH $6,577.35 $6,262.00 -4.79%
LEN $6,436.95 $6,294.17 -2.22%
MAS $6,854.20 $6,844.20 -0.15%
MDC $7,363.00 $6,876.50 -6.61%
PHM $6,460.00 $6,194.15 -4.12%
RS $6,870.65 $6,860.65 -0.15%
RYL $6,435.60 $6,526.40 1.41%
TLB $6,773.05 $6,763.05 -0.15%
TOL $6,478.80 $6,731.40 3.90%
WEYS $6,543.10 $6,457.50 -1.31%
Cash   $2,721.35  
       
Total $100,000.00 $101,957.72 1.96%

Performance:

 

Last Week

This week

Change

Overall

S&P 1303.82 1294.02 -0.75% 1.75%
Dow 11381.15 11331.44 -0.44% 1.86%
Portfolio 104655.6 101957.7 -2.58% 1.96%

Neither of us holds a position in any of these stocks.  Please review our disclaimer and Our Methods.


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