It has been a fantastic year for the market with the S&P 500 Index (SPX) up more than 14% YTD. My China & India portfolio has under-performed the market since the beginning of the year, but is up 13.3% over the past 90 days as of November 11.
Although I’ve traded in and out of Vera Bradley (VRA), I believe these position adjustments leave the portfolio primed for success for the remainder of 2012.
A while back I predicted that the SPDR S&P 500 ETF (SPY) would close the year at 160. For this to happen it would take a momentous move in the markets in a very short period of time. Although this is possible, it is not probable in my opinion and I have been adjusting expectations for 2013.
My largest holding, GT Advanced Technologies (GTAT) has seriously underperformed and is down 40% YTD as of November 11. After a recent convertible bond offering at 3% and restructuring of the company, in which 25% of the workforce was sacked, I am confident that GTAT has the balance sheet to thrive in the coming years.
I recently added more to my holdings in GTAT and anticipate an opportunity during earnings to add more shares. My new valuation for GTAT has changed after the convertible offering and restructuring.
In my opinion, the company will deliver $500 million in revenues for 2013, compared to $630 million through the third quarter of 2012. I am also factoring .10 per share bump in EPS due to the restructuring. So finally with .85 EPS in 2013 projected I see $4.25 as the new floor in the stock with upside potential to the $10 range.
Disclosure: Performance discussed is net of advisory fees. The index comparisons herein are provided for informational purposes only and should not be used as the basis for making an investment decision. There are significant differences between client accounts and the indices referenced including, but not limited to, risk profile, liquidity, volatility and asset composition. The S&P 500 is an index of 500 stocks chosen for market size, liquidity and industry, among other factors.
The investments discussed are held in client accounts as of October 31, 2012. These investments may or may not be currently held in client accounts.The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or that investment decisions we make in the future will be profitable.
Certain of the information contained in this presentation is based upon forward-looking statements, information and opinions, including descriptions of anticipated market changes and expectations of future activity.The manager believes that such statements, information, and opinions are based upon reasonable estimates and assumptions. However, forward-looking statements, information and opinions are inherently uncertain and actual events or results may differ materially from those reflected in the forward-looking statements. Therefore, undue reliance should not be placed on such forward-looking statements, information and opinions.
- Joe began his career as an equity trader with Chimera Capital. Since 2006, he has traded Indian and Chinese companies, believing that these countries offer the best opportunities for significant returns. He invests solely in the ADRs of these companies. He also prefers sectors with companies that have a physical product to sell, as opposed to banks or Internet companies.