U.S. markets were mixed last week, with the Dow Jones up 0.73%, the S&P 500 gaining 0.35% and the NASDAQ rising 0.57%. Global stock markets continued their rally, with the MCSI Emerging Markets Index ending the week 2.87% higher.
Your Alpha Investor Letter portfolio had a much stronger week. Big gainers in your portfolio included Skyworks Solutions Inc. (SWKS), which soared 7.89%; Union Pacific Corporation (UNP), which jumped 6.06%; and ICICI Bank Ltd. (IBN), which added 5.70%. Additional big gainers included Actavis plc (ACT), rising 4.16%, and the iShares S&P Global Timber & Forestry Index (WOOD), up 3.26%.
The iShares S&P Global Timber & Forestry Index (WOOD), PowerShares DB US Dollar Bullish ETF (UUP), Skyworks Solutions Inc. (SWKS), Actavis plc (ACT), Market Vectors Biotech ETF (BBH) and ICICI Bank Ltd. (IBN) all hit new 52-week highs.
As a result of the market’s action, several of your positions moved back to a buy. These include Vanguard Russell 2000 Index ETF (VTWO), Markel Corp. (MKL) and Union Pacific Corporation (UNP).
Berkshire Hathaway (BRK-B) slipped below its 50-day moving average and moved to a hold.
Here are a couple of themes so far in 2015.
First, U.S. large-cap stocks are lagging other asset classes for the first time in a long time. A lot of money is also exiting a lot of the large-cap exchange-traded funds (ETFs), up to 11% of the total in just the past month. That’s ironic given the strength of the U.S. economy compared to the rest of the world.
Second, emerging markets stocks have gotten off to a strong start for the year. In fact, they are the second-best-performing major asset class in the world so far in 2015, right behind U.S. real estate investment trusts. And that’s in spite of the remarkable and continuing strength of the U.S. dollar.
Global stocks are long overdue for a rally. Certainly, the launch of a massive quantitative-easing (QE) program by the European Central Bank last week has lit a fire under European stocks. That kind of liquidity can drive asset prices upward for a long time, as we have seen in both the United States and Japan.
As a result, I expect to see several global stock recommendations creeping back into your portfolio over the coming months.
Finally, I look forward to meeting many of you personally at the Money Show in Orlando this year on Feb. 4-7 at the Gaylord Palm Resort & Convention Center. To register for free admission to the investment conference as my guest, click here or call 1-800-970-4355 and mention you are my subscriber. Use priority code 038045.
In addition, I already have private meetings lined up with several of you who are investment advisory clients at my firm, Global Guru Capital. If you are interested in money management services independent of the newsletters I write for Eagle Publishing, please drop me a note at nvardy@globalgurucapital.com.
NOTE: Global Guru Capital is a Securities and Exchange Commission-registered investment adviser, and is not affiliated with Eagle Financial Publications.
Portfolio Update
Vanguard Global ex-US Real Estate ETF (VNQI) gained 1.21% last week. This bet on global (ex-U.S.) real estate had been one of only two unprofitable positions in your Alpha Investor Letter portfolio. However, last week marked VNQI’s third winning week in a row, moving it back in the winner’s column. VNQI has been also paying a dividend all the while, which currently stands at 4.10%. VNQI is a BUY.
iShares S&P Global Timber & Forestry Index (WOOD) rose 3.26%. WOOD closed another winning week, adding an impressive gain as it moved upwards from the 50-day moving average (MA). WOOD also hit a new 52-week high and a level WOOD has not seen since September of 2008. Despite the powerful headwinds in the commodities markets, timber continues to deliver gains. WOOD is a BUY.
Markel Corp. (MKL) added 1.63% over the past week of trading. MKL reported $5.30 earnings per share (EPS) at its previous quarterly report on November 5, 2014. Markel will report last quarter’s earnings on Feb. 11 after markets close. MKL also pushed above its 50-day MA early last week, changing to a BUY in your portfolio.
PowerShares DB US Dollar Bullish ETF (UUP) rose 0.97%. This play on the U.S. dollar made the sharpest jump ever, vaulting to a new 52-week high at $25.21. Although it drifted a bit lower yesterday, the rise of the dollar appears poised to continue. UUP is a BUY.
Skyworks Solutions Inc. (SWKS) soared 7.89% on the back of a strong earnings report last Thursday. SWKS reported $1.26 EPS, beating its own guidance by $0.08 and the analysts’ average estimate by $0.07. Revenue was $805.5 million vs. a $773.59 million estimate, up 59% year-over-year, and also beat Skyworks’ own guidance of $770 million. Up a whopping 67.74% since my re-recommendation in October, SWKS is a BUY.
Union Pacific Corporation (UNP) also jumped 6.06% due to a strong earnings report last Thursday. UNP reported $1.61 EPS versus $1.51 analysts’ estimates. Revenue was $6.15 billion versus an estimated $6.10 billion, representing an increase of 9.3% year over year. The company also reported average quarterly diesel fuel prices came down by 14%. UNP is back to a BUY.
ICICI Bank Ltd. (IBN) added 5.70% for its first week in your portfolio. IBN also hit a new 52-week high last week on accelerating gains as it broke out above a significant resistance level. Recall that I had moved this position off the watch list, adding it to the portfolio in last week’s update, as IBN was poised to move quickly. IBN is a BUY.
Latest Special Report
As a courtesy, I want to bring to your attention the newest version of The Top 12 Stocks for 2015, which features three of my top investment recommendations, as well as bonus picks from each of my fellow investment newsletter editors at Eagle. This report and others are available FREE on my website to you.
