Review of Defensive Value 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
NI NISOURCE INC
STFC STATE AUTO FINANCIAL
ATG AGL RESOURCES INC
NFB NORTH FORK BANCORP
PGR PROGRESSIVE CORP
ZION ZIONS BANCORPORATION
MNI MCCLATCHY COMPANY
CNB COLONIAL BANCGROUP
VLO VALERO ENERGY CORP
TMA THORNBURG MORTGAGE
TOA TECHNICAL OLYMPIC
BBT BB&T CORPORATION
BAC BANK OF AMERICA CORP
WPS WPS RESOURCES CORP

This week there were a few transactions.  LEN paid a dividend on 11/15 for $0.16, which was reinvested at $48.95.  MDC paid a dividend on 11/21 for $0.25, reinvested at $55.25.  SPF paid a dividend of $0.04 on 11/22, reinvested at $24.21.  CFC paid a dividend of $0.15 on 11/30, reinvested at $39.72.

In addition, there were a number of buys and sells as we tweaked our formulas. 

This portfolio outperformed the indexes during the period and has outperformed them overall.

The snapshot:

Ticker Total Cost Current Value % Gain/Loss
ASH $7,532.90 $7,918.90 5.12%
ATG $7,693.00 $7,683.00 -0.13%
BAC $7,719.65 $7,709.65 -0.13%
BBT $7,738.00 $7,728.00 -0.13%
CNB $7,782.80 $7,772.80 -0.13%
MNI $7,809.60 $7,799.60 -0.13%
NFB $7,729.25 $7,719.25 -0.13%
NI $7,862.80 $7,852.80 -0.13%
PGR $7,777.50 $7,767.50 -0.13%
STFC $7,738.75 $7,728.75 -0.13%
TMA $7,796.65 $7,786.65 -0.13%
TOA $7,810.45 $7,800.45 -0.13%
VLO $7,703.00 $7,693.00 -0.13%
WPS $7,732.70 $7,722.70 -0.13%
ZION $7,727.80 $7,717.80 -0.13%
Cash   $785.43  
Realized   $16,940.28  
       
Total $100,000.00 $117,186.28 17.19%

Performance:

  10/27/06 12/15/06 Change Overall
S&P 1389.08 1425.49 2.62% 12.08%
Dow 12163.66 12416.76 2.08% 11.62%
Portfolio 111571.17 117186.28 5.03% 17.19%

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


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