September 20, 2019

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Portfolio Breakdown

Year-to-Date Performance

Portfolio Allocation

Positions

%

Target Position Size

Current Position Performance

Boeing (BA)

+540.56%*

1st Buy 2/14/2012 @ $79.58
Current Per-Share: (-$1,053.52)*

Nvidia (NVDA)

+486.38%

1st Buy 9/6/2016 @ $63.10
Current Per-Share: $29.45

Apple (AAPL)

+479.73%*

1st Buy 4/18/2013 @ $56.38
Current Per-Share: (-$27.68)*

Square (SQ)

+471.84%*

1st Buy 8/5/2016 @ $11.10
Current Per-Share: (-$35.39)*

Nike (NKE)

+441.87%*

1st Buy 2/14/2012 @ $26.71
Current Per-Share: (-$21.94)*

Disney (DIS)

+355.59%*

1st Buy 2/14/2012 @ $41.70
Current Per-Share: (-$23.30)*

IDEXX Lab (IDXX)

+175.55%

1st Buy 7/26/2017 @ $167.29
Current Per-Share: $99.50

Take Two (TTWO)

+33.78%

1st Buy 7/30/2018 @ $120.99
Current Per-Share: $97.60

Canopy (CGC)

+33.13%

1st Buy 5/24/2018 @ $29.53
Current Per-Share: $19.20

IBM (IBM)

+29.87%

1st Buy 11/6/2018 @ $120.87
Current Per-Share: $109.24

Salesforce (CRM)

+29.23%

1st Buy 6/11/2018 @ $134.05
Current Per-Share: $120.10

Logitech (LOGI)

+24.62%

1st Buy 11/11/2016 @ $24.20
Current Per-Share: $32.52

Citigroup (C)

+18.85%

1st Buy 10/26/2017 @ $74.06
Current Per-Share: $58.35

JP Morgan (JPM)

+17.99%

1st Buy 10/26/2017 @ $102.30
Current Per-Share: $100.77

Amazon (AMZN)

+11.04%

1st Buy 2/6/2018 @ $1,378.96
Current Per-Share: $1,615.85

Cisco (CSCO)

+4.21%

1st Buy 8/23/2019 @ $47.60
Current Per-Share: $47.60

Berkshire (BRK.B)

+3.05%

1st Buy 8/2/2019 @ $201.96
Current Per-Share: $201.96

Kohl’s (KSS)

-0.13%

1st Buy 6/3/2019 @ $50.45
Current Per-Share: $49.08

GW Pharm (GWPH)

-0.68%

1st Buy 7/25/2018 @ $142.28
Current Per-Share: $129.80

Dow (DOW)

-0.81%

1st Buy 5/13/2019 @ $53.18
Current Per-Share: $47.75

FedEx (FDX)

-2.49%

1st Buy 9/18/2019 @ $152.59
Current Per-Share: $152.59

Pfizer (PFE)

-4.80%

1st Buy 1/28/2019 @ $40.50
Current Per-Share: $38.54

Twilio (TWLO)

-5.43%

1st Buy 8/8/2019 @ $125.71
Current Per-Share: $120.78

Xilinx (XLNX)

-9.56%

1st Buy 5/13/2019 @ $111.57
Current Per-Share: $106.76

* Indicates a position where the capital investment was sold.
Profit % for * positions = Current Gross Profit / Original Capital Investment

Highlights from the Week

Biggest Winners: Take Two Interactive (TTWO) & Twilio (TWLO)

This week’s winners were so close (both in terms of performance and ticker symbols), I had to recognize both Take Two Interactive (TTWO) for bringing home +4.36% and Twilio (TWLO) for bouncing +4.22% this week. While not at all in the same sector, both stocks performed quite well for a week that was mainly flat.

Biggest Loser: GW Pharmaceuticals (GWPH)

While FedEx (FDX) lost -14.54% this week, given that it’s a brand-new position and its fall from grace was part of the reason I added it to the portfolio (I believe it’s undervalued), the real Biggest Loser this week is GW Pharmaceuticals (GWPH) which dropped -8.57% this week alone and is down nearly -35% from its all-time high made less than 5 months ago.

GWPH is getting hit because of the many cannabis ETFs that include it. While it is a cannabis stock in so much that it makes its prescription drugs from the plant, the similarities end there. Anyway, if you’d like to learn more, read on as I also added to my GWPH position this week.

 

This Week’s Moves

Canopy Growth Corp (CGC): Added to Position

Canopy Growth Corporation (CGC), the consumer cannabis play, seemed to have put in a bottom at $22.76, bouncing to $28.74 on Monday. I was taking a more conservative approach to CGC in my long-term investment portfolio, preferring to wait for price stabilization before adding to the position.

On Monday, I added a few shares when CGC pulled down -3.62% from its $28.74 high to buy at $27.70, raising my per-share cost +9.7% from $17.50 to $19.20. While the increase in per-share cost is somewhat substantial, the buy served to increase my position allocation while still maintaining a significant profit margin over my per-share cost.

The temporary floor of support was lost on Thursday when news broke of additional vaping-related deaths. While Canada won’t legalize the use of vaping for cannabis consumption until later in 2019, the negative news stories in the U.S. caused the entire cannabis sector to sell off through the remainder of the week.

My next buy target for CGC will be at a test of its recent bottom, with my target range set around $23.50-$23.60.

CGC closed the week at $25.56, down -7.73% from where I added on Monday.

Dow Chemical (DOW): Profit-Taking/Position Reduction

Dow Chemical (DOW) continued its run on Monday, pushing through my per-share cost and triggering a trailing stop which sold some shares at $49.82, taking a small profit but, more importantly, reducing the size of the position.

Because of Dow’s unusually large dividend, I had allowed myself to get overweight in the position too soon on its way down and it fell much further than I anticipated. In order to better accommodate its new trading range, I’ve reduced my position size.

Monday’s sale reduced my per-share cost -1.73% from $48.59 to $47.75 but served the more important purpose of significantly reducing my position size from nearly 5% of the portfolio to 3.58% (with a target maximum of 4.17% for this portfolio). Freeing up my investment capital allows me to add more to DOW if it pulls back from its current levels to its bottom in the $40-41 range.

DOW closed the week at $48.21, down -3.23% from where I sold on Monday.

FedEx (FDX): *New Position*

FedEx (FDX), the international shipping company, reported a disappointing quarter on Wednesday, causing the stock to plummet nearly -15%, dropping below $150.00 a share. Historically, FDX has proven itself as a bellwhether of the global economy as well as a strong growth performer with a dividend yield in excess of 1.5% at these levels.

A slowing global economy combined with difficult long-term turnaround decisions makes FedEx a long-term investment play. FedEx recently announced it would not renew a contract with Amazon (AMZN) after AMZN continued to develop its own infrastructure shipping play.

FedEx is down more than -45% from its 2018 high of $274.66 with many analysts holding price targets of $200.00 and higher, a growth forecast in excess of 30% from these levels.

However, given the current global economic conditions and FedEx’s tendency to correlate with the performance of the economy, I’m pursuing this position very slowly, opening with only a 1/5 buy when my trailing stop triggered at $152.59 during Wednesday trading.

I’m using longer-than-normal ranges to accommodate for potential negative global catalysts so my next buy target is $130.45, nearly -15% lower than my initial buy whereas I would normally consider adding to a new position down 5-10%.

FDX closed the week at $148.78, down -2.50% from where I opened my position.

GW Pharmaceuticals (GWPH): Added to Position

GW Pharmaceuticals (GWPH) has been in a near free-fall since hitting its $196.00 all-time high in May, dropping nearly -35% and breaking through the $130.00 mark on Friday, triggering a trailing stop order I had in place which filled at $128.62. The buy order replaces shares I sold at $169.30 in February 2019, 24% higher from this level, slightly below my $129.80 per-share cost.

While GWPH trades with the cannabis sector, it’s important to remember that GWPH is not a consumer cannabis play – it’s a pharmaceutical company which specializes in using the chemicals found in the cannabis plant to create prescription medication.

Currently, GWPH only has one approved drug – a treatment for a specific form of childhood epilepsy – and while sales are off the charts for the drug, additional products must come through the pipeline and be approved by the FDA for GWPH to continue its outstanding growth trajectory.

GWPH is a notoriously volatile stock as it dropped nearly 50% last year from its high made in September 2018 at $180 to its low of slightly above $90 made in December.

Because of its volatility, I’m reiterating a few key rules with GWPH:

Never break my cost basis i.e. wait for the stock to pull back below per-share costs to add more to the position. In June, I added a few shares at $167 to replace some shares I sold at $180 in May, and, while that served to lock in profit at the time, I obviously should have waited with a stock this volatile as I could have just replaced those shares at my per-share basis.

Buy in Stages at wide margins. Given its 50% selloff last year, a similar selloff from 2019’s highs would yield a price target of $98. While a move that low is possible, 50% selloffs in GWPH are unusual so my next price target is $109.25, another -15% lower from where I added on Friday and a drop of nearly -45% from its all-time highs.

GWPH closed the week at $128.92, up +0.23% from where I added on Friday.

Square (SQ): Added to Position

Square (SQ) continued to sell off this week, dropping below the $58.00 mark which triggered a trailing stop order I had in place, filling at $57.83 on Monday. This order replaces shares I sold at $68.55, locking in a profit of 15.64%. 

Currently, all information indicates that SQ is a broken stock, not a broken company, and that the management team will be able to return the company to its past growth expectations as earnings continue to exceed estimates with only forecasts causing selloffs in the stock. My long-term investing thesis for Square (SQ) still holds true.

My next buy target is under $40, a very significant drop from these levels. I’m satisfied with my current allocation, but would add more if the price was right.

SQ closed the week at $57.85, up $0.02 from where I added on Monday.

Want Further Clarification?

As always, if you have questions about any of my positions or have positions of your own that you’re curious about – feel free to leave a comment below!

See you next week!

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