• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing

Rolling Out My 2020 Triple-Net Active Versus Passive Portfolios

Just 27 names make the cut, down from 48 last year, and 36 from my late September preview.
By JONATHAN HELLER
Oct 16, 2020 | 10:48 AM EDT
Stocks quotes in this article: AIR, PKE, NPK, CIX, CNXN, WIRE, SCSC, REX, PCTI, ACLS, AGX, GSIT, MLR, NTGR, APEI, CULP, DAKT, HAYN, IIN, LAKE, MSGE, NC, RES, SANM, ULBI, UFI, WEYS

Today, I will begin to roll out my 2020 Triple-Net Active Versus Passive Portfolios, with the set of companies that will comprise the 2020 Passive portfolio. On Monday, I will review the final results of last year's portfolios, and on Wednesday and Friday, reveal the subset of names that will comprise the 2020 Active Portfolio. This year, I will take a position in each of the Active names, as I did in this year's Tax Loss Selling Recovery Portfolio.

The criteria are the same as last year:

  • Market capitalization in excess of $100 million
  • No financials or development-stage companies
  • Trading at between 2 and 3 times NCAV (NCAV is calculated by subtracting a company's total liabilities from current assets)

Just 27 names make the cut; that's down from 48 last year, and 36 from my late September preview. No sector really dominates this year, but interestingly there's no representation from retail or restaurants. There are three aerospace and defense names AAR Corp (AIR) , Park Aerospace (PKE) , and National Presto (NPK) . Both PARK and NPK are repeat offender from last year. NPK was also the active portfolio (+8%). I always think of NPK as a small appliance maker, but the company actually derives about 70% of revenue from defense. NPK, by default is not eligible for the active portfolio this year since it was in the mix last year. Repeat offenders are prohibited in the active portfolio only.

There are several other names that were also in last year's Passive Portfolio including CompX International (CIX) , PC Connection (CNXN) , Encore Wire (WIRE) , ScanSource (SCSC) , REX American Resources (REX) , PC Tel (PCTI) , and Axcelis Technologies (ACLS) , Argan (AGX) , GSI Technology (GSIT) , Miller Industries (MLR) , and Netgear (NTGR) . That is a bit concerning; some names for one reason or another just happen to perennially trade at relatively low multiples of NCAV by nature which may imply that they are not actually undervalued. This will make selection for the Active portfolio a bit more challenging.

Rounding out the 2020 Active Triple Net Portfolio:

AAR Corp AIR

American Public Education (APEI)

Culp Inc (CULP)

Daktronics (DAKT)

Haynes International (HAYN)

Intricon (IIN)

Lakeland Industries (LAKE)

Madison Square Garden Entertainment (MSGE)

NAACO Industries (NC)

RPC Inc (RES)

Sanmina (SANM)

Ultralife (ULBI)

Unifi (UFI)

Weyco Group (WEYS)

Portfolio Statistics for the Passive Portfolio:

Average Market Cap: $485 million

Average Price/NCAV Ratio: 2.42

Average Price/Book Ratio: 1.19

Profitable Names TTM basis: 18

Dividend Payers:13

Average Dividend Yield: 1.79%

I am once again looking forward to again kicking the tires on the concept that triple nets can outperform the benchmarks (in this case, I will continue to utilize the Russell 2000 Index, Russell Microcap Index, and the Value components of both as benchmarks), and that an Active approach can outperform Passive. This year, I will have skin in the game.

Have a great weekend!

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Jonathan Heller had no position in the securities mentioned.

TAGS: Investing | Markets | Stocks | Trading

More from Investing

Market Mistrust May Make for a Move Higher

James "Rev Shark" DePorre
May 26, 2022 4:41 PM EDT

This lack of faith in the market could help put more pressure on the upside, here's how.

Raising HAL

Bruce Kamich
May 26, 2022 3:43 PM EDT

Shares of Halliburton have the energy to make new highs, according to the charts.

When the Markets Are a Game of Risk, Keep This Fund in Your Quiver

Mark Abssy
May 26, 2022 3:15 PM EDT

This ETF manages risk in a nuanced way.

At Some Point, Commodities Find Balance, Too

Maleeha Bengali
May 26, 2022 2:23 PM EDT

Don't forget about the importance of timing and demand as we look at wild moves in oil from the Covid lows to now.

AbbVie's Correction Appears to Be Over: Here's Where the Stock Could Be Headed

Bruce Kamich
May 26, 2022 2:19 PM EDT

Should you be a buyer?

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 02:46 PM EDT STEPHEN GUILFOYLE

    We're Shedding Some of This Holding on Strength

    Check out the Stocks Under $10 portfolio here!
  • 11:33 AM EDT PETER TCHIR

    Thoughts Ahead of the Fed Minutes

    Recent economic and earnings issues are convincing...
  • 02:24 PM EDT PAUL PRICE

    An Interesting Chart

    I'm betting heavily that stocks will be way up aga...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login