Exelon
QLogic
Dendreon
Dell
Staples
Arkansas Best
Arch Coal
Skullcandy
France Telecom
Xerox
Now, let’s get to the portfolio and see how it fared this week:
| Company | Cost Basis | Shares | Total Value | Return |
|---|---|---|---|---|
| Exelon | $31.25 | 31.68 | $993.17 | 0.3% |
| QLogic | $11.46 | 86.39 | $818.11 | (17.4%) |
| Dendreon | $5.97 | 165.82 | $664.94 | (32.8%) |
| Dell | $13.37 | 74.05 | $996.71 | 0.7% |
| Staples | $13.48 | 73.44 | $1,151.54 | 16.3% |
| Arkansas Best | $10.83 | 91.41 | $1,766.96 | 78.5% |
| Arch Coal | $7.03 | 140.83 | $508.40 | (48.6%) |
| Skullcandy | $6.71 | 147.54 | $774.59 | (21.8%) |
| France Telecom | $11.64 | 85.05 | $818.18 | (17.4%) |
| Xerox | $8.16 | 121.32 | $1,085.81 | 9.7% |
| Cash | $0.06 | |||
| Dividends receivable | $77.55 | |||
| Total commission | ($100.00) | |||
| Original investment | $10,000.00 | |||
| S&P 500 performance | 6.7% | |||
| Performance relative to S&P 500 | (10.1%) |
Source: Yahoo! Finance.
This week’s winner
Thanks to concerns about a potential credit crunch in China, and the somewhat imminent paring back of QE3 by the Federal Reserve, it wasn’t easy to find a gainer last week. Taking the top honors was electric utility Exelon Corporation (NYSE:EXC) with a paltry 2.2% gain on the week. Despite no company-specific news, the reasoning behind the move higher is pretty easy to understand. Exelon Corporation (NYSE:EXC) is a necessity stock in that supplies energy, which will remain in fairly steady demand regardless of whether or not we dip back into another recession. With somewhat predictable cash flow, it’s a wonderful safety net for investors to turn to in times of uncertainty.
This week’s loser
Conversely, with China’s Shanghai Composite swooning as much as 15% in a span of five days, commodity stocks absolutely took it on the chin. For the third-straight week, Arch Coal Inc (NYSE:ACI) was the worst performer, shedding another 12.6%, and is now down nearly 50% from late January. The thesis here is that, if China’s growth slows because loans aren’t available, then demand for coal and other materials will fall. Arch Coal Inc (NYSE:ACI)’s growth plan entailed forging export deals to China and Southeast Asia, so China’s slowing growth is certainly a concern.
Also in the news…
In this week’s episode of “Dell Inc. (NASDAQ:DELL) of Our Lives,” we found out more details about Carl Icahn’s latest plans to extract more value from Dell Inc. (NASDAQ:DELL)’s shares. According to Icahn, he plans to finance his $14 per share partial buyout with $7.5 billion in cash currently on the balance sheet, a $5.2 billion credit facility, and $2.9 billion from the sale of receivables according to a Reuters report. Dell’s board still remains skeptical of Icahn’s latest offer as we near the shareholder vote on the proposed Silver Lake/Michael Dell buyout at $13.65/share in three weeks.
Staples, Inc. (NASDAQ:SPLS) shares retreated a bit this week despite receiving a boost from research firm Zacks to neutral. The reasoning behind the upgrade is the expectation of market share gains from its peers via growth in its direct-to-consumer business, expanded product offerings, and tight cost structure. I fully expect Staples will surprise many investors over the coming quarters as it picks up customers soon to be displaced by store closures from the OfficeMax and Office Depot Inc (NYSE:ODP) merger.
Finally, on Monday, we’ll have a new name in the portfolio… technically. On July 1, France Telecom (FTE) (NYSE:FTE) will officially be changing its name to Orange, its wireless division responsible for the majority of its growth. Investors can certainly hope that the name change will disassociate France Telecom (FTE) (NYSE:FTE) from its recent struggles, and turn investor attention to emerging market growth opportunities. I’m still holding my shares, and may be tempted to add to my position if there’s another sizable dip.
We can do better
Due to the poor performance of my foreign and commodity-based value plays, I underperformed the S&P 500 for a second-straight week. However, I have to think that some of these heavily battered names are nearing a bottom, and I still fully expect this portfolio of forgotten and deeply discounted value plays to outperform the S&P 500 over the long run.
Check back next week for the latest update on this portfolio and its 10 components.
The article One Person’s Trash Is Another Person’s Treasure Portfolio originally appeared on Fool.com and is written by Sean Williams.
Fool contributor Sean Williams owns shares of QLogic, Dell, Skullcandy, and France Telecom, but has no material interest in any other companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong. The Motley Fool owns shares of Dendreon, France Telecom, Skullcandy, and Staples. It also recommends Exelon and France Telecom.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
