The Stock Diagnostics Model benefited by reinvesting the proceeds from the sale of Berkshire Hathaway Class B (BRK.B) and a few other companies that were sold earlier because it was deemed doubtful that a solution to the “fiscal cliff” would be reached before year end. Two of the stocks repurchased on December 28th were the same ones that were sold : Apple (AAPL) and Berkshire Hathaway.
On January 7th and 8th, the model underwent a more rigorous stock screening process for new companies, reducing an initial screen of 26 companies to just four.
We purchased two of them: Graphic Packaging Holdings (GPK) and Banner Corporation (BANR). Graphic Packaging is a Marietta, Ga.,-based packaging company. Banner Corporation is a banking company based in Walla Walla, Washington. Neither of them are household names because they are relatively small cap companies.
The market has been kind to smaller companies lately, and I believe the model should be moving towards smaller caps while retaining its large cap focus.
The investments discussed are held in client accounts as of December 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 investment decisions we make in the future will be profitable.