David Fleer
Bristlecone Value Partners, LLC
12301 Wilshire Blvd., Suite 320
Los Angeles, CA 90025 USA
Work 1-877-806-4141

Quarterly Commentary – Fourth Quarter 2011

January 27th, 2012

Investors can be forgiven for wondering whether 2011 was the purest distillation yet of what has become of modern stock markets: all volatility and no return.  Whether it was the wild daily 4% swings the stock market saw in August or the steep 19% drop in the S&P 500 from June through September, investors saw big changes in market prices, yet the S&P 500 ended the year practically where it began, with dividends providing a small positive total return.

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Large Cap Value Monthly Commentary – December 2011

January 7th, 2012

The S&P 500 index was up about 1% in December and finished the year with a return of about 2%, including dividends (total return). The 3 stocks that contributed most to the Large Cap Value model portfolio’s investment returns during the month were Vulcan Materials (VMC), Cintas (CTAS), and Apollo Group (APOL). The top detractors were Dell (DELL), NRG Energy (NRG), and Sprint (S). During the month, our only trade was to increase our investment in Hewlett Packard (HPQ). Not much has changed since we discussed our reasons for this new position back in September so we’ll refer our readers to our news archive.

The reason behind Vulcan’s positive stock performance in December was an unsolicited buy-out offer from its main competitor, Martin Marietta (MLM). The proposal currently on the table is to exchange each share of Vulcan for ½ share of Martin Marietta. Based on MLM’s current share price, VMC’s stock actually trades at a small premium, an indication that the market is anticipating that MLM might raise its offer. We do not expect submitting your shares at this point as the offering price is below our assessment of Vulcan’s value.  We will keep you posted. Read the rest of this entry »

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