Review of Defensive Value Portfolio

This week we rebalanced the portfolio. 

This portfolio is made up of the 15 defensive stocks that are trading at the greatest discount to their intrinsic value.  During the first week of each month we will review the list, and make any trades necessary to get the portfolio to match the list.  Each 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 intrinsic value is calculated by a formula based on Graham’s overall philosophy of calculating value with a margin of safety. 

We have decided to provide the list of defensive value stocks on a weekly basis.  The portfolio itself will continue to be rebalanced once a month, but the list of stocks will be updated every week.

Here is this week’s list of defensive value stocks:

 

ASH	ASHLAND INC
LUK	LEUCADIA NATIONAL
MDC	M.D.C. HOLDINGS, INC
BL	BLAIR CORPORATION
CB	CHUBB CORP (THE)
SPF	STANDARD PACIFIC
RYL	RYLAND GROUP, INC
PHM	PULTE HOMES, INC.
LEN	LENNAR CORP
CFC	COUNTRYWIDE  FINCL
WSC	WESCO FINANCIAL CORP
RS	RELIANCE STEEL
BC	BRUNSWICK CORP
MCY	MERCURY GENERAL CORP
DHI	D.R. HORTON, INC.

This week there were a number of transactions.  We sold KB Home (KBH) for $6999.60 at a gain of about 8.25%, McClatchy Co (MNI) for $6347.47 (after a $0.18 dividend was reinvested earlier in the week at $41.48) at a loss of about 1.5%, North Fork Bancorp (NFB) for $6819.42 at a gain of about 3.5%, and Thornburg Mortgage for $7387.60 at a gain of about 14%.

We purchased Chubb Corp (CB) for $7217.65, Countrywide Financial Corp (CFC) for $7137.25, Wesco Financial Corp (WSC) for $7155.50, and Reliance Steel & Aluminum (RS) for $7245.80.

This portfolio underperformed the indexes this week, but has outperformed them overall.

The snapshot:

Ticker	Total Cost	Current Value	% Gain/Loss
ASH	$6,490.00	$6,363.00	-1.96%
BC	$6,427.00	$7,166.25	11.50%
BL	$6,479.20	$7,379.10	13.89%
CB	$7,217.65	$7,207.65	-0.14%
CFC	$7,137.25	$7,127.25	-0.14%
DHI	$6,527.35	$7,515.90	15.14%
LEN	$6,463.95	$6,641.99	2.75%
LUK	$6,505.40	$6,300.35	-3.15%
MCY	$6,443.70	$6,910.80	7.25%
MDC	$6,544.00	$7,296.00	11.49%
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%
WSC	$7,155.50	$7,145.50	-0.14%
Cash		$2,112.88
Realized		$2,238.73
Total	$100,000.00	$107,680.87	7.68%

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	106800.36	107680.87	0.82%	7.68%

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