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  1. Home
  2. / Investing
  3. / U.S. Equity

My Model Portfolio Looks Like Cam Newton

'Small Cap Dividend Growers' Stocks took more hits than Panthers QB.
By JONATHAN HELLER
Feb 08, 2016 | 04:00 PM EST
Stocks quotes in this article: CPK, BMI, AEL, CFNL, SCHL

Well, we've gone through another Super Bowl -- unfortunately, one I had no stake in (par for the course if you're an Eagles fan). Still, it was nice to see Denver's Peyton Manning go out on top (if that's what he does). And I'm hoping that my Small Cap Dividend Growers Portfolio looks like a champ this year, too.

I launched this portfolio last month, assembling a group of smaller stocks that are relatively unencumbered by debt, have a good history of dividend increases and the wherewithal to continue growing quarterly payouts.

But it's been a difficult time to put the portfolio to the test. The S&P 500 was down 6.3% year to date as of Friday, while the Russell 2000 (a more-appropriate benchmark) was off more than 11%.

Still, stressful environments are the true test of a strategy's worth, and my Small Cap Dividend Growers Portfolio has held up fairly well (or at least better than I would have expected). It's down 4.75% year to date, although a negative return -- even one smaller than a benchmark -- is never anything to crow about. Still, it's far too early in the portfolio's history to draw any conclusions (positive or negative).

Not surprisingly, most of portfolio's 26 stocks names are in negative territory so dar, although a couple of bright spots exist. For instance, Chesapeake Utilities (CPK) was up 17% as of Friday's close, albeit on virtually no news. Badger Meter (BMI) was also about 6% higher, with much of that stemming from an upgrade from Robert W. Baird last week.

Other portfolio components in positive territory for the year to date period as of Friday's close include:

  • ABM Industries (ABM), up 4.6%
  • Franklin Electric (FELE), 3.1% higher
  • Stock Yards Bancorp (SYBT), which added 0.3%
  • International Speedway (ISCA), ahead by 0.2%

But otherwise, the portfolio has taken more sacks than Carolina quarterback Cam Newton faced last night. American Equity Investment Life (AEL) has been sucking the most wind, down nearly 32% as of Friday's close despite no real news. It doesn't get much uglier for a stock than losing a third of your value during a four-week stretch.

The portfolio's other big year-to-date losers as of Friday included:

  • Cardinal Financial (CFNL), down 16.3%
  • Scholastic Corp. (SCHL), off 12.8%
  • Gorman Rupp (GRC), 9.3% lower
  • Horace Mann Educators (HMN), which lost 9%
  • Aaron's (AAN), which has given up 8.9%

I'll provide another update next month for this portfolio -- hopefully with some better news!

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At the time of publication, Heller had no positions in the stocks mentioned.

TAGS: Investing | U.S. Equity

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