Review of Defensive Low PE Portfolio

This week we rebalanced the portfolio. 

This portfolio is made up of the 15 defensive 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 will 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 the list of Defensive Low PE stocks on a weekly basis.  The portfolio will continue to be rebalanced once a month, but the actual list will be posted every week.

Here is this week’s list of Defensive Low PE stocks:

SPF STANDARD PACIFIC
PHM PULTE HOMES, INC.
KBH KB HOME
MDC M.D.C. HOLDINGS, INC
LUK LEUCADIA NATIONAL
RYL RYLAND GROUP, INC
ASH ASHLAND INC
CFC COUNTRYWIDE  FINCL
DHI D.R. HORTON, INC.
LEN LENNAR CORP
TOL TOLL BROTHERS, INC.
ORI OLD REPUBLIC INTL
FNF FIDELITY NAT’L FIN’L
RS RELIANCE STEEL
CB CHUBB CORP (THE)

There were a number of transactions this week as we rebalanced the portfolio.  We sold Blair Corp (BL) for $7369.10 at a gain of about 13.5%, First American Corp (FAF) for $7238.80 at a gain of about 12.5%, MGIC Investment Corp (MTG) for $7307.60 at a gain of about 12%, and Thornburg Mortgage (TMA) for $7191.09 at a gain of about 8.25%.

We purchased Leucadia National Corp (LUK) for $7248.70, Old Republic International Corp (ORI) for $7299.60, Reliance Steel & Aluminum for $7245.80, and Chubb Corp (CB) for $7217.65.

This portfolio underperformed the Dow and S&P 500 indexes this week, but has significantly outperformed them overall.

The snapshot:

Ticker

Total Cost

Current Value

% Gain/Loss

ASH $6,490.00 $6,363.00 -1.96%
CB $7,217.65 $7,207.65 -0.14%
CFC $6,746.00 $7,310.00 8.36%
DHI $6,527.35 $7,515.90 15.14%
FNF $6,458.10 $7,255.60 12.35%
KBH $6,577.35 $6,790.55 3.24%
LEN $6,463.95 $6,641.99 2.75%
LUK $7,248.70 $7,238.70 -0.14%
MDC $6,544.00 $7,296.00 11.49%
ORI $7,299.60 $7,289.60 -0.14%
PHM $6,508.00 $7,218.00 10.91%
RS $7,245.80 $7,235.80 -0.14%
RYL $6,435.60 $6,969.60 8.30%
SPF $6,522.25 $7,090.80 8.72%
TOL $6,478.80 $7,443.80 14.89%
Cash   $3,055.84  
Realized   $3,842.19  
       
Total $100,000.00 $109,922.83 9.92%

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 109133.66 109922.83 0.72% 9.92%

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


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