March has gone into the history books as one of Wall Street's best months ever -- but while a rising tide lifts all boats, it doesn't lift all boats equally. The S&P 500 gained 6% during the month, but my "Winning Value Portfolio" rallied by more than 15%.
That takes the portfolio from down more than 8% year to date as of February's close to up 4.1% as of March 31. That's handily beating the S&P 500's 1.1% YTD return so far for 2016:
Our aim is to beat the market indices by more than 3% per year -- and while we're achieving that metric so far, the portfolio still remains significantly undervalued in my view. Consider the fact that:
- An upcoming spinoff at Alcoa (AA) should unlock additional value.
- Cheniere Energy (LNG) has begun to export liquid natural gas, and I believe the cash flow that the company's contracts will generate should unlock tremendous value.
- Sanchez Energy (SN), the portfolio's pure oil play, illustrates the energy sector's potential as crude prices begin to rebound. SN has rallied by nearly 100% over the past five weeks as oil prices advanced to nearly $40 a barrel from the mid-$20s.
- IBM (IBM) and real estate play Seritage (SRG) also performed very well, significantly outpacing the market in March.
But as always, three months isn't a reliable "report card" for any portfolio. Many market experts feel that more pain is due on Wall Street -- and if volatility does return, there's no reason to think it'll spare the "Winning Value Portfolio."
Nonetheless, I still believe the group will do very well against the broad stock market over a reasonable time period.