Review of Defensive Low PE Portfolio

This portfolio is made up of the 15 enterprising stocks that are trading at the lowest PE Ratio.  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 PE Ratio is calculated using an average of the previous 5 years’ earnings per share (EPS).

We have decided to provide our list of Enterprising Low PE companies on a weekly basis.  The portfolio will continue to be rebalanced once a month, but the list will be updated every week.

Here is this week’s list of Enterprising Low PE companies:

BZH BEAZER HOMES USA INC
TOA TECHNICAL OLYMPIC
HOV HOVNANIAN ENTERPRISE
BMHC BUILDING MATERIALS
MHO M/I HOMES, INC.
BHS BROOKFIELD HOMES
CMC COMMERCIAL METALS CO
CTX CENTEX CORPORATION
NX QUANEX CORPORATION
WCI WCI COMMUNITIES INC
ESCA ESCALADE, INC
WON WESTWOOD ONE INC
PCU SOUTHERN COPPER CORP
HOFT HOOKER FURNITURE
SAFM SANDERSON FARMS INC

There were a number of transactions this week as we rebalanced the portfolio.  We sold Avis Budget Group (CAR – previously CD) for $7382.63 at a gain of about 13.5%, Cost Plus Inc (CPWM) for $7591.20 at a gain of about 12.75%, Huttig Building Products Inc (HBP) for $7779.50 at a gain of about 16%, John B. Sanfilippo & Sons (JBSS) for $7000.80 at a loss of about 13.5%, Startek Inc (SRT) for $7058.15 at a gain of about 9%, and Tuesday Morning Corp (TUES) for $7485.00 at a gain of about 15%.

We bought Building Materials Holding Corp (BMHC) for $7529.55, Commercial Metals Co (CMC) for $7465.00, Quanex Corp (NX) for $7484.95, Escalade Inc (ESCA) for $7484.95, Southern Copper Corp (PCU) for $7550.50, and Hooker Furniture Corp (HOFT) for $7526.80.

The portfolio matched the performance of both the DJIA and S&P 500 this week, and has significantly outperformed them both overall.

The snapshot:

Ticker

Total Cost

Current Value

% Gain/Loss

BHS $6,533.00 $8,335.25 27.59%
BMHC $7,529.55 $7,519.55 -0.13%
BZH $7,348.55 $7,106.40 -3.30%
CMC $7,465.00 $7,455.00 -0.13%
CTX $6,436.00 $7,195.50 11.80%
ESCA $7,484.95 $7,474.95 -0.13%
HOFT $7,526.80 $7,516.80 -0.13%
HOV $6,440.00 $7,470.00 15.99%
MHO $6,565.90 $7,412.80 12.90%
NX $7,484.95 $7,474.95 -0.13%
PCU $7,550.50 $7,540.50 -0.13%
SAFM $6,478.65 $8,742.35 34.94%
TOA $6,496.00 $5,968.50 -8.12%
WCI $6,470.00 $6,902.00 6.68%
WON $6,517.50 $6,707.00 2.91%
CASH   $819.13  
Realized   $5,146.48  
       
Total $100,000.00 $111,640.68 11.64%

Performance:

 

Last Week

This week

Change

Overall

S&P 1339.15 1353.22 1.05% 6.40%
Dow 11718.45 11866.69 1.27% 6.67%
Portfolio 110463.50 111640.68 1.07% 11.64%

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


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