Alcoa’s big earnings surprise and a bullish outlook for regional aluminum prices puts Wealth Builders Portfolio holding Century Aluminum in the sweet spot. The small-cap aluminum smelter has gained 43 percent over the past four months, and we see the potential for another 40 percent in upside.
We rotate out of one industrial stock that hasn’t lived up to expectations and add a small-capitalization name that offers superior near-term upside, thanks to its exposure to rising North American crude-oil production and demand for silica sand used in hydraulic fracturing.
Our Lifelong Income Portfolio holdings continue to post strong numbers this earnings season. We review the qualitative and quantitative metric we use to evaluate the health of our positions and review each company's future prospects in light of their quarterly results.
Although a company’s growth prospects and earnings will win out over the long haul, how quarterly results stack up to the market’s expectations will drive stock prices in the near term. The key is distinguishing a company’s temporary hiccups from a bigger malaise.
Baseball Hall of Famer Wee Willie Keeler’s famously advised, “Keep your eye clear and hit ‘em where they ain’t.” This motto has an important corollary for investors: Buy what’s unpopular and hold the stock until the market discovers its value.
The stronger-than-expected revenue growth posted by the S&P 500’s constituents supports our thesis that US economic growth will accelerate meaningfully this year. We also review fourth-quarter earnings from the last two Wealth Builders Portfolio holdings to report results.
All our Lifelong Income Portfolio holdings have reported their results for the three months ended Dec. 31, 2013, and issued guidance for 2014. The prognosis: Expect another year of high yields, reliable dividends and solid upside.
DISCLAIMER: Capitalist Times, LLC is a publisher of financial news and opinions and NOT a securities broker/dealer or an investment advisor. You are responsible for your own investment decisions. All information contained in our newsletters or on our website(s) should be independently verified with the companies mentioned, and readers should always conduct their own research and due diligence and consider obtaining professional advice before making any investment decision. As a condition to accessing Capitalist Times materials and websites, you agree to our Terms and Conditions of Use, available here including without limitation all disclaimers of warranties and limitations on liability contained therein. Owners, employees and writers may hold positions in the securities that are discussed in our newsletters or on our website.