Just one month to go before I wrap up my 2019 Triple Net Active Versus Passive Portfolio and roll out the 2020 version. While the Active portfolio of eight names (up 26%) fell about 7% since the August update, it continues to outperform the Passive portfolio (up 11% since inception and down 5% since the last update).
Both portfolios continue to outperform both the Russell 2000 Index (down 1.2%) and Russell Microcap Index (up 4.5%). More importantly, given the triple net concept's value orientation -- it includes companies that were trading at between 2 and 3 times net current asset value at portfolio inception -- both the Active and Passive portfolios are crushing the Russell 2000 Value Index (down 16.1%) and Russell Microcap Index (down 12.1%). As a concept, triple nets have worked well, at least over the past 11 months. We'll see if that continues with the next vintage.
Six of the eight Active names remain in positive territory. MarineMax (HZO) (up 63%) relinquished its top-performer status after falling 18% over the past month. That puts Fitbit Inc. (FIT) (up 87%) back on top. I suspect that Alphabet's (GOOGL) planned acquisition of FIT at $7.35 a share still may not be done or may blow up by the time I wrap up this portfolio next month. Dril-Quip Inc. DRQ (down 50%) is by far the worst performer, and dropped 24% over the past month
There's not been much of a change in the performance of the remaining six Active names:
Astec Industries (ASTE) (up 65%)
Crimson Wine Group (CWGL) (down 30%)
Johnson Outdoors (JOUT) (up 39%)
National Presto Corp. (NPK) (up 8%)
LiveRamp Holdings (RAMP) (up 30%)
Twenty-eight of the 48 names in the Passive portfolio (which includes the eight Active names) are in positive territory. The top performers include CyberOptics Corp. (CYBE) (up 108%), FIT and Escalade Inc. (ESCA) (up 75%).
As a preview for the 2020 versions of these portfolios, there are currently 40 names that fit the criteria, with the largest market cap being $1.8 billion. I will unveil both active and passive portfolios for 2020, and this time around (as I did with my Tax-Loss Selling Recovery Portfolio) will take a position in each name in the Active portfolio. I hold just one of the current Active portfolio names after selling FIT shortly after the Alphabet offer, that being Crimson Wine Group, which I might add is the second-worst performer.